Competitiveness of Firms: Review of Theory, Frameworks and Models

Abstract

Turbulent start of the new century has brought new challenges for firms, industries and countries. Success in such times is demanding new perspectives on competitiveness: the ability to compete. Detailed structuring of competitiveness related problems of software firms in India identified weaknesses in understanding about the concept and its implementation as root causes. Review of competitiveness-related literature, by classifying it at three levels, clearly indicated the importance of the firm level. The focus of this paper is on review of literature at the firm level and study of competitiveness-related frameworks and models. The studies are further classified on the Asset – Processes – Performance (APP) framework. Key criteria and sources of competitiveness at the firm level are synthesized and depicted graphically as connotations of competitiveness. Select frameworks and models of competitiveness were reviewed and categorized. A sample matrix that can help select frameworks and models is demonstrated. Utility of the APP framework as a tool for integration competitiveness and strategy is explored. Finally, learning from the review and their implications are listed.

Keywords: Industrial Competitiveness, Strategy, Firm, Competitiveness processes, Sources of Competitiveness, Flexibility, Frameworks and Models, APP

JEL Classification: L20, L21