Assessment of the competitiveness of enterprises
Assessment of the competitiveness of enterprises

Summary/Abstract: Introduction. Competition is a unique phenomenon which reveals specific competencies of business entities and allows them to realise their potential. However, businesses need a method for assessing the level of their competitiveness, which would use an integral index calculated on the basis of their financial statements and allow identifying ≪bottlenecks≫ of their economic activities and relate enterprises to specific economic sectors. The purpose of the article is to formulate a method for assessing the competitiveness of enterprises by using an integral index. Results. The study proves that the competitiveness of a company takes into account the three major types of economic activity: supply, production and sales. Each of the abovementioned types can be further assessed by using independent indicators, which characterises the whole economic activity of the enterprise. An integral index of enterprise competitiveness should include indicators that directly describe the production process, the financial status, the use of staff, the level of innovations, etc. The proposed approach involves determining the growth indices which аre then used as the basis for calculating the average weighted competitiveness of each type. The testing of the proposed method has been demonstrated by using the performance results of four big enterprises of metallurgical and machine building industry of Ukraine. The enterprises are contractors with established long-term relations. For example, PJSC ≪Dniprovsky Metallurgical Plant≫ is a manufacturer of cast iron, steel and ferroalloys, further used by PJSC ≪Interpipe NTZ≫ for the production of pipes, wheels, etc. A separate group includes machine-building enterprises, which are PJSC ≪Dnipropetrovsk Aggregate Plant≫ specialising in the manufacture of air and space aircraft, electric motors, generators and transformers, hydraulic and pneumatic equipment and the enterprise PJSC ≪Dniprovazhmash≫ which produces railway locomotives, machinery and equipment for extractive industry and construction. However, these manufacturers are connected not only by the raw material chain and integrated sales channels, but also by the joint processes of using and introducing innovative developments and the modern expertise of specialists. The enterprises under consideration differ in the scope of economic activity: the average number of employees varies from 1,500 to 4,500 people, while the sales proceeds vary over the range of 13 to 500 million Euros. When investigating supply, we can see that the competitiveness of this process in all the enterprises is more than one, with the exception of PJSC ≪Dniprovazhmash≫, which is explained by a significant improvement in the turnover of production stocks and positively characterises the procurement of raw materials. The analysis of the production shows that the least value of this process competitiveness is demonstrated by PJSC ≪Dniprovsky Metallurgical Plant≫ (0.883) and PJSC ≪Dniprovazhmash≫ (0.854), though PJSC ≪Dniprovsky Metallurgical Plant≫ shows a gradual recovery from the crisis situation, an increase in sales proceeds and increase in net profit. As for PJSC ≪Dniprovazhmash≫, the analysis revealed a deterioration of most indicators of financial and economic activity, which requires an immediate correction of the production program. Conclusion. The proposed method for assessing enterprise competitiveness allows adjustments of the quantity and quality of indicators, use of public statistics, development of measures to improve a particular process; it also provides clear and convincing comparison results. The advantages of the proposed method prove its universal nature and ease of use. Practical testing of the proposed method has revealed that all the selected enterprises had an integral competitiveness index of more than one. The best results in all the processes were shown by the metallurgical enterprise PJSC ≪Interpipe NTZ≫. The findings may indicate a gradual recovery of the enterprises from a system crisis and positively characterise their development, which, in turn, increases the investment attractiveness of not only specific entities, but also of the metallurgical and machinebuilding industries in general.

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