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THE MAIN FACTORS OF SUCCESS IN COMPETITIVE STRUGGLE
Andijan State Technical Institute
Automotive and transport
teacher
Akhmadjanov Abrorbek Akbarjan ugli
Abstract:
This article examines the fact that there is no single strategy for business, each
enterprise is unique, therefore the process of choosing a strategy depends on the position of the
enterprise in the target market, the current dynamics of its development, production capacity,
the characteristics of competitors' behavior, the specifics of the goods produced or services
provided, and the level of development of the national economy achieved.
Keywords:
Key Success Factors (KSF), market, economic, professionalism, SWOT analysis,
important, business, production.
One of the most important tools to ensure a reliable win in competition between businesses in
the target market is to identify and manage key success factors (KSFs).
Key Success Factors (KSF) — a certain composition of system elements that can give a
significant economic effect to an enterprise as a result of commercial activities in the target
market (industry).
The composition of an KSF largely depends on the target market in which this entity operates,
as well as the competitive strategy adopted by it. The economic importance of each individual
KSF for an enterprise is different and will change over time. First of all, it is necessary to
rationalize and automate the business processes (the main ones) on which the commercial
success of the enterprise directly and fundamentally depends. The main success factors
determine the company's competition strategy, goals and objectives of its activities.
The KSF of common character includes:
- the competition strategy adopted for execution;
-the characteristics of the goods, through which consumers choose a brand or a non-brand
supplier;
-necessary in terms of the volume of investments attracted in the production sector and factors
that ensure the company's victory in competition in the target market;
-professionalism and practical experience of managers and performers, which ensures a
sufficiently high level of labor productivity;
-The most effective methods of market behavior that create a stable and long-term strategic
competitive advantage.
Classifications of the main factors of enterprise competitiveness are presented differently by
scholars from different countries. In particular, according to the French economists A. Olive, A.
Dayan and P. Urse, such factors should be eight:
1. The concept of goods and services, on which the Company operates;
2. The quality expressed in the conformity of the products to the high level of the market
leaders' goods and determined through surveys and comparative tests;
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3. The price of goods with probable increment;
4. Both own funds and borrowed funds;
5. Trade - in terms of commercial methods and means of activity;
6. After-sale service, to keep the company with regular customers;
7. The company's foreign trade, which allows it to positively manage optimization with the
authorities, the press, and public opinion;
8. Pre-sales preparation that shows an enterprise's ability to not only anticipate the needs of
future consumers, but also to convince them of its unique capabilities to meet those needs.
M. Porter identifies the five most typical innovations that give competitive advantage as key
factors of success:
-new technologies;
-new or modified customer requests;
-the emergence of a new market segment;
-changes in the price or availability of production components;
-a change in regulation by the government.
The main success factors specific to each target market are product consumption characteristics,
accumulated practical experience, professional knowledge, competitive opportunities, and
commercial success. In other words, everything that increases the profitability (operational
efficiency) of an enterprise is owned by the KSF. Table 1 of the dissertation lists the most
common key factors of success.
Table 1
The most common key factors of success
Business Scope
Name of factors
Production
-low cost of products;
-high quality of products;
- intensive use of basic tools;
-convenient location of the enterprise;
-a constant flow of qualified personnel;
-high labor productivity (important for industries requiring serious labor
resources);
-reduction of production costs (lower costs for the design and execution of
products);
-ability to produce products to order (possibility of receiving additional
profit)
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Technologies
-the quality of scientific research (the important importance is especially in
the pharmaceutical, medical, space and other high-tech sectors);
-innovations in the production process;
-systematic development of new products;
-mastering modern technologies;
-using the Internet for commercial activities.
Sales
-a wide network of wholesale distributors (dealers);
-wide access to retail outlets;
– the presence of a developed system of retail outlets;
-low costs for the sale of products;
-accurate fulfillment of customer orders;
-prompt delivery of goods to the buyer;
-optimal prices for goods (services);
-the share of the developed target market;
-the relative market share (divided by the company's market share divided
by the market share of the most dangerous competitor);
-convenient location of outlets (especially in retail trade);
-goodwill of all employees in contact with consumers
Marketing
-very fast and convenient technical support;
-a high level of customer service;
-Correct execution of customer orders;
• a wide assortment of groups (types) of assortment of goods;
-highly qualified sales staff;
-attractive design (packaging);
-guarantees for customers (especially in catalog sales, e-commerce, selling
expensive and new products);
-highly effective advertising;
-effective marketing communications;
-discipline and self-control
Professional
preparation
-high professionalism of employees;
-know-how in quality control of products;
-design skills (especially in the high-fashion industry and in the production
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of clothes; moreover, this is one of the factors that reduce production
costs);
-a lot of practical experience in a particular technological field;
-the development of innovative and modernization of existing products;
-relatively rapid introduction of new products into production
Organizational
capacity
-use of business process reengineering;
-advanced information systems;
- quick reaction to a changing market situation;
-use of the Internet for business (commerce);
– quality management (provided by attracting highly qualified employees);
-quick renewal of the range of products and quick response to new
customer requirements;
– successful organization of logistic support (by choosing the most efficient
means of transport and directions of delivery);
– the implementation of highly effective innovative venture (high-risk)
projects, which are distinguished by high cost efficiency of
implementation;
- introduction of a universal quality management system;
-insurance of various types of risks;
-economic security of entrepreneurship;
-access to financial markets;
-patent protection
In many enterprises, the potential for value creation is provided through new knowledge,
system innovations, and the use of specialized enterprises (organizations).
The above classification of KSF can be supplemented by new factors (Table 2).
Table 2
Additional Recommended Success Factors in Competitive Combat
Business Scope
Name of factors
Organizational
– continuous professional development of employees;
- effective management of changes in the enterprise;
-benchmarking;
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-outsourcing;
-production leasing;
-personnel leasing;
-control;
-strategic alliances - continuous professional development of
employees;
Sales
-trademark;
-product design;
-brand;
-operational brand support;
-the location of the point of sale (store);
-form of distribution;
- qualifications of employees;
-formation of a regular and loyal customer base;
-a good reputation of the company among customers (goodvill);
-Public relations (PR)
Information support
-modern information technologies;
-production management information systems;
– information systems of competition management;
-Information systems of personnel management
In different markets (industries), the key factors for success change over time. Therefore, they
must be adjusted in accordance with the changes in the external and internal environment.
Managers need to deal with the key factors that determine commercial success in the long term
when implementing competition.
The following calculation methodology can be used to calculate a comprehensive indicator of
competitiveness.
In the first phase, the KSF that is most important for success in the market segment under
consideration is selected. The expert assigns a weight to each KSF among all selected indicators
(factors) corresponding to its level of importance. Their sum should be equal to 1.
Within the framework of the competitiveness analysis of the enterprise, the relative strength of
the business is calculated. It calculates the business strength of a particular enterprise as the
ratio of the business power of the most dangerous (usually the largest) competitor.
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The key factors (metrics) by which an entity lags behind its primary competitor (or a number of
competitors under consideration) reflect its weakness, and conversely, the factors that are ahead
of the competitor create advantages for it.
The problem of selection of a competitive strategy of industrial enterprise development
There is no one, one-size-fits-all strategy for all businesses and all the time. Each enterprise is
unique in its own way, therefore the process of choosing a strategy will depend on the position
of the enterprise in the target market, on the current dynamics of its development, on real
human and production potential, on the characteristics of competitors' behavior, on the specifics
of goods produced or services rendered, on the degree of development of the achieved national
economy and much more.
The stage before choosing the appropriate competitive strategy of the enterprise is to determine
the composition of parameters, indicators, structural elements, with the help of which it is
possible to determine its position in the target market. This location serves as a strategic
competitive advantage inherent in this enterprise.
The direction of the competitive strategy is determined by four choices:
- Scope of activity – the markets that need to be served and the consumer segments that need to
be captured;
- Competitive advantage is a position that distinguishes a business from competitors;
- market presence – the availability of communication and distribution channels used to access
a particular market;
- types of activities - determination of the appropriate scope and volume of activities to be
carried out.
These choices are largely interdependent, and a change in one of them will cause the remaining
elements of the strategy to change.
The choice of the best course of action depends on the ability of the management to correctly
understand the many events, trends, and conflicting facts, as well as fully considering how the
situation around them will change over time.
The following basic rules should be considered while choosing a competitive strategy.
1. Competition strategy should strengthen existing competitive advantages in the enterprise and
serve to acquire new ones.
2. One should strive to be a leader in all aspects of competitive struggle.
3. A competitive strategy should be formed taking into account the shelf life of the goods
produced and sold on the market. This rule is especially important because shortening the shelf
life of a product, increasing the range of products, increasing the rate of technology changes,
changing the demographic characteristics of the market, changing the political situation in the
country, etc., this complicates the assessment of the time to start the implementation of the new
strategy and the period of its use.
4. The competition strategy should be selected taking into account the assessment of the
company's capabilities to implement it with the human resources potential of the enterprise.
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5. The fight against the main competitors must be pursued purposefully for the demand of
groups of potential buyers that have a payable leg. Therefore, the main meaning of competition
is not only in actions against competing businesses, but also in gaining specific consumers who
use the services of competitors.
6. A competitive strategy should be formed not only from above (that is, at the initiative of the
top management of the enterprise), but also from below, involving ordinary employees. The
effectiveness of the implementation of the strategy largely depends on a clear understanding of
the strategic direction by all employees of the enterprise.
The selection of the most effective competitive strategy that corresponds to the internal
parameters of the enterprise and its position in the target market is based on the results of
SWOT analysis and is carried out on the basis of the decision-making matrix.
A SWOT analysis shows that an enterprise has significant internal forces, but the external
environment creates few favorable opportunities for an effective business and presents many
potential threats. In this case, the point corresponding to the position of the company is in the
lower left corner of the matrix. Strategies aimed at diversifying external threats in the market,
i.e., developing new markets, integrating with competitors to mitigate the threats arising from
them, are the most effective strategies.
Brand competitiveness.
A brand's competitiveness can be determined by comparing it with its competitors-analogues as
an opportunity for profitable commercial sales in a competitive market. In other words,
competitiveness is a relative concept that is clearly associated with a particular (target) market.
The structure of the parameters of competitiveness also depends on the necessary accuracy of
the assessment, the purpose of the study and other external factors.
The modern concept of management of the brand competitiveness provides an integrated
approach to the management at all stages of the product life cycle.
The starting point for the formation of the competitiveness of a new product is the formation of
the concept of a new product, including the formation of its technical and economic
characteristics, which is the terms of reference for research, design and production departments
of the enterprises to materially compete with potential customers.
The next stages of the life cycle provide satisfaction of consumer needs in the areas of
realization and consumption (use) of the product.
Service has a special role in ensuring and maintaining the competitiveness of goods – in its
absence the product loses consumer value (or part of it), becomes uncompetitive and is rejected
by the consumer. On the contrary, a well-organized service, firstly, helps the producer to form a
promising, sufficiently stable market for his goods, secondly, increases the competitiveness of
the goods, thirdly, it is a beneficial activity in itself, and fourthly, it is an important condition
for a high reputation (image) for a high commodity producer.
Particular attention is paid to reducing the cost of consumption of goods: world practice shows
that this parameter is often critical to the commercial success of a new product, even if it is sold
at a significantly higher price.
In the process of evaluating the competitiveness of products, the following principles should be
followed:
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-contradictions of the goals and means of market entities;
-taking into account the characteristics of different market segments;
– quasi-stability of market conditions during the research period;
-Mostly rational behavior of market participants.
The market is dominated by the brand, which is the main element of the market.
There are a variety of ways to assess product competitiveness, and an expert assessment is the
most convenient way to assess a product's competitiveness.
The expert-based methodology for assessing the competitiveness of goods is much more
universal than all other methodologies for calculating the competitiveness of goods. This
method can be applied for both consumer and production-oriented goods. It is also possible to
assess the goods in the feed direction.
By the examination method, the competitiveness of the goods is determined using the following
formula:
K
T
=
i=1
n
B
ij
n
5
×α
j
where is
K
T
-the competitiveness of the commodity;
n - Number of experts;
B
ij
- expert assessment of j-factor of brand competitiveness by i-expert;
The swing of
α
j
- j-factor;
5- The highest score of a factor.
To do this,
α
j
- the key of factors of brand competitiveness is determined.
This is the connecting joint of all growth factors, in the words of Professor S. Cousnes, "the
mass application of technical innovation". It provokes an increase in social output, a part of
which goes into new scientific and technological developments, which in turn will further
accelerate economic growth and the whole process will acquire a repeatable character in itself.
In the digital economy, innovation is a weapon of competition, as innovation leads to lower
costs and prices, increased profits, creation of new needs, cash flow, increased image of a
producer of new products, and the opening and conquest of new, including foreign markets.
An innovation is a result of investing capital in a new product or operation (technology, process)
realized in a market. Cost effectiveness of innovation means that in the process of investing and
investing all resources (money, material, information, labor) into a new product or operation
(technology), the result obtained will have a certain useful effect (profit).
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Comparison of the goals of innovative development of business entities with the existing
capabilities of the innovation portfolio and the conditions for its replenishment, as well as the
capabilities of other participants in the innovation process and assessment of their suitability is
a rather long and time-consuming process. In the process of its implementation, the scale of
innovative activity and indicators describing its effectiveness in the field of science and
technology are analyzed with similar indicators reflecting the innovative activity of economic
entities in other sectors and sectors of the economy.
The set of elements that make up the quality system in each individual enterprise is individual
and specific. As the most important points can be highlighted:
-the conceptual component of quality, that is, the quality of the development of a promising
strategy and the choice of a common idea for the creation of a new product,
– the project component that defines the design and design foundations of quality;
• the constructive component of quality depending on the thoroughness and details of the study
of nodes and aggregates,
- the technological component of quality, which consists in compliance with design and
technological requirements,
- an exploitative component of quality, which determines the ease of use of the product,
- "Saldo" of labor and material costs in the form of income received, the quality of direct
marketing activities.
Thus, integrated product quality management is a product quality management mechanism to
develop actions to control the processes for product formulation, production and targeted use:
- management of all elements of social production, determination of the quality of their
products (labor, labor subjects and means, technical documentation);
- the use of feedback with previous stages at the next stage of the life cycle;
-the active role of the customer (consumer) in quality management through the formation of
scientifically based requirements for the assortment and quality of newly developed products.
At the present stage, the innovation in the organization of quality improvement works is the
transition from the implementation of special measures related to the improvement of quality of
products to the quality management system. Quality management system is aimed at organizing
and supporting on the basis of systemic transformation of the required level of product quality
in the process of its development, production and use, as well as targeted influence on its
conditions and factors.
The most important factor to increase the competitiveness of products in the world market is the
creation of a certification system. Certification is widespread in the world practice. In addition
to national systems, international systems also work. For example, the International
Organization for Standardization, the International Electrotechnical Commission, the Economic
Commission for Europe, etc.
List of References.
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