Designing Competitiveness in SMEs

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The state of health of a company, and its competitiveness in the market are reflected in the results achieved following the strategy and objectives, and against the constraints in the internal and external environment in which it operates.

The competitive position depends largely on the level, perceived by the market, of the supply of “competitive factors”, which focus on competition and investment in the sector to which it belongs.

In this context, the creation of “business value” is the consequence of the ability to properly identify, and pursue in a continuous and balanced way, the scheduled targets, not just financial, but also those related to intangible assets, in perspective of all stakeholders (customers, shareholders, employees, suppliers and partners, civil society).

The financial results, however, if you want to set up a project of achieving and maintaining the competitiveness of the company, are late indicators, as they relate to activities in the past, and support the company’s short-term behaviour. It may be inferred, therefore, that the complete and only rely on the economic and financial measures can create a serious risk of sacrificing the “value” in the medium / long term to achieve immediate results.

Hence the need to disseminate to all members the awareness that the real substance and how to increase the company’s value depend to a large extent on the correct interpretation of the indicators of future financial results related to intangible assets mentioned above.

The ability to identify and / or verify the quality of the chosen objectives, to maintain and / or adjust the “right” goals during cycles of activity, is therefore the first objective that the company must set. This can be achieved by defining the “development stage” or “level of competition”, in which it wants, or is forced, to recognize, by appropriately adjusting the objectives, strategies, resources and processes, on the basis of the conditions and opportunities that the environment offers specifically. The stage of development defines the business model and the type of competitive positioning chosen, that is the direction that the company intends to follow to grow and create value, and the identification of direct and potential competitors, the product types on which will be competition and with which rules.

To design the competitiveness in SMEs is necessary to verify the adequacy of operational and strategic choices with respect to the characteristics of the industrial sector to which the company belongs, and specificities of the external system in which it operates.

You should, of course, take account of the stage of development and the previous positioning in terms of “things done” and results achieved. You also should be able to take appropriate corrective action, when necessary, without having to wait for the results of the year.

You can think of expressing the result of competitiveness expected from the pursuit of “best practices” in the government of the company, taking into account the economic environment in which it develops the business, resulting in the positioning of the company following the past choices, and National Economic Policy.

An algorithm, also identified taking into account the analysis performed as part of the World Economic Forum (M.E. Porter), allows you to properly correlate the factors mentioned above.

Source by Gennaro Quatraro

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