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ANALYSIS AND EVALUATION OF THE COMPANY'S COMPETITIVE
ADVANTAGES Rinat A.
Rinat Adele - Master's degree Student, DEPARTMENT OF MANAGEMENT AND BUSINESS, UNIVERSITY OF INTERNATIONAL BUSINESS, ALMATY, REPUBLIC OF KAZAKHSTAN
Abstract: the article analyses the concept of competition, competitive advantages, types, and strategies of competitive advantages. It is believed that equally important for are both external and internal factors. These factors determine whether a company is able to defeat its rivals and lead the market. Also, it is important to regularly monitor and examine the target competitors' strategies to quickly respond to their actions in order to grasp how to overcome them and find themselves in the leadership position so that to survive and conquer the market. Keywords: competition, competitive advantages, competitors, strategies.
Competition, as a fundamental characteristic of the market, has a significant impact on the economic activity of the enterprise, makes it strive for superiority over competitors, and therefore have competitiveness. Assessing the competitiveness of an enterprise can clarify the current situation, determine its position in the market, and put forward solutions to urgent problems in production, management, or sales [1, p. 90]. The development of practical recommendations for improving the competitiveness of the enterprise and strengthening its competitive advantages based on the justification of the enterprise competitiveness model will allow us to formulate recommendations for increasing competitive positions. The level of competitiveness of the enterprise should become a barometer of the economic state of the enterprise, one of the criteria for effective management of competitiveness and development of enterprises [2, p. 636].
Every company in the market has a competitive strategy that improves a rapidly changing business environment and globalization to increase profits and customer loyalty. The company is constantly looking for new opportunities and ways to make its operations more efficient. For some companies major important factors are competitive strategies and plans for strengthening the competitive advantage, while others focus on the company's growth, the number of operations, and investigations. Each company seeks to attract new customers, and also to retain them, and look for ways for how better adapt to consumer needs and satisfy them. The company does not need to offer the lowest prices on the market and a better-quality product than the competition, but it is
important to react faster than the competition in a changing environment, adapt to market developments, as well as innovate in the company's activities.
One of the main distinguishing features of the market today is a high level of competition, while Kazakh manufacturers have to compete with foreign companies that occupy leading positions, and their products are often of higher quality and cheaper. In such conditions, the company must have a certain set of competitive advantages to carry out its activities successfully and efficiently.
Competitive advantage is the characteristics of an enterprise as a system that determines its superiority over competitors, and, according to the authors, uniqueness is becoming increasingly important among these characteristics, that is, everything that is associated with the special, most relevant properties of the goods produced, various "know-how". Competitive advantage is formed by the unique tangible and intangible assets of the enterprise, or by special competence in the areas of activity that are crucial for this area of business. Benefits such as low costs and product differentiation are also still important.
The competitive advantage is based on the specific work experience and skills, the professionalism of the company, which competitors do not possess and which they cannot acquire in a short period. In this sense, the formation of competitive advantage is essentially identical to the development of a competitive strategy as a way to achieve superiority in a particular market.
There are two main types of competitive advantage: cost reduction and the ability to offer customers something different from the competition. Thus, the competitive advantage that determines the position of an enterprise in the industry consists either in the ability of the firm to develop, produce and sell a comparable product at a lower cost than competitors or in the ability to provide the buyer with a unique and greater value in the form of new product quality, special consumer properties and or after-sales service [3, p. 130]. In the first case, the company makes a large profit by selling the product at the same price as its competitors. In the second case, when the costs are equal with the competitors, the company receives a large profit from the dictate of a higher price compared to the competitors [4, p. 208].
The competitive advantage of any type gives you higher productivity than your competitors. A company with a low cost of production produces this value at a lower cost than its competitors; a company with differentiated products has a higher profit per unit of production than its competitors. A competitive advantage based on both lower costs and differentiation is inherently contradictory because providing very high consumer properties, quality, or excellent service inevitably leads to an increase in the price of the product; this will cost more than if you just try to be on the level of competitors. Nevertheless, the management of enterprises should pay attention to both types of competitive advantage, although strictly adhering to one of them. An enterprise that focuses on low costs must provide acceptable quality and service. Similarly, the product of a company that produces differentiated products should not be so much more expensive than the products of competitors that it is to the detriment of the company.
Another important variable that determines the position in the industry is the scope of competition or the breadth of the goal that an enterprise focuses on within its industry. It must decide for itself how many varieties of goods it will produce, which sales channels it will use, which range of customers it will serve, and in which related industries it will compete.
A competitive advantage occurs when a firm manages to perform the required actions at a lower total cost than its competitors or to perform certain actions in unique ways that create non-price use-value and maintain the added price. The ability to create customer value depends, in turn, on how the enterprise affects the activities of its channels and end-users.
The set of competitive advantages is divided into external and internal. The first ones are those that create value for the buyer and increase the firm's market power to force the market to accept a higher selling price. External advantages primarily include marketing know-how, knowledge of customer expectations. The advantages of the second group create value for the manufacturer, which allows you to achieve a lower cost than the manufacturer.
Internal competitive advantage is a consequence of higher "productivity", which provides the firm with greater profitability and greater resistance to lower sales prices imposed by the market or
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competition. These advantages include specialization, the scale of production, experience, and operational efficiency.
The value of each advantage can be quantified and analyzed over time. In principle, the more competitive advantages an organization has over its current and potential customers, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to improve the scientific level of management and gain new competitive advantages [5, p. 212].
The company that wants to create for itself an effective marketing strategy must get much information about its competitors. It is important to constantly analyze the differences between the major competitors and their products, pricing, sales support programs, and distribution chains. In carrying out these actions the company determines its potential strengths and weaknesses and becomes more effective in its marketing campaign against the competition.
According to Kotler, in the competition, it is important to develop competitive strategies that would stand out from its competitors, but firstly it is essential to know its market position, goals, capacities, and resources. Kotler distinguishes four different positions:
1. The leader - the company that owns the largest market share in the industry. The Other company adapts to its new products, price changes, product distribution, and support;
2. Contender for the leader its industry is in the second position only to the leaders trying to capture a larger market share, attacking the leader;
3. Follower - the company does not want to change the situation in the market and will maintain the current share of the market, fearing more to lose than gain profit;
4. The niche filler - services to small segments of the market, other companies go unnoticed or ignored [6, pp. 322-365].
This market position specifying the strategy take the company or it could be viewed as a dangerous competitor to the market leader and it only serves the remaining segments, which are not relevant to large companies governing market conditions and constantly seeking to conquer the rest of the market, as the competitive struggle never ends.
Competitive advantage is divided into 3 strategies:
1. Pricing strategy - important for companies that produce and sell standardized products. The idea is to reach a huge market and audience. To take this strategy requires significant investments that help increase productivity, and improved product manufacturing processes of the organization, interspersed products.
2. Distribution strategy - includes the company, which produces and sells strongly individualized goods. As products and services are unique, this strategy allows the firm to strongly dominate and also promote growing attention and an advantage over the competition.
3 Recollection strategy - this strategy allows the company to focus on narrow market segments in which it will try to become superior to the competitors, optimizing the allocation price. These strategies take small and medium-sized firms, to avoid direct contact with stronger rivals [7, p. 139].
In summary, it can be said that competition is the engine that encourages companies to quickly respond to arising situations and adapt to the environment, to follow competitors' actions and mistakes, share and learn from others. This is a business basis, which drives companies to grow, innovate, and of course to meet the changing needs of their customers.
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