3. Concept of formation and strategic management of competitive advantages of the mining and chemical company

Management of competitive advantages

Recently experience of management of many Russian companies has shown that most of them aren't ready to effective competitive fight. One of the key reasons of it is lack of the uniform systematized idea of ways and sources of formation of competitive advantages and management of them [25].

For the decision above the presented problem, including in a mining and chemical complex of Russia, it is necessary to carry out, first of all, the analysis of the existing approaches to a concept of competitive advantage.

In the modern theory of strategic management the concept "competitive advantage" is rod. Market mechanisms and the competition stimulate search and development of competitive advantages of the companies, tools of identification and management of which are a subject of strategic management [78].

Recognized authority on the theory of the competition and management of competitive advantages is the founder of school of positioning M. Porter. The theory of competitive advantages of M. Porter is one of dominating in strategic management. In the researches M. Porter comes to a conclusion that competitive advantages of the companies depend on in what makrosreda their activity is carried out, at the same time inevitability of influence of the external environment is estimated by him as the factor defining a condition of the competition.

Many modern writers, such as G.P. Azoyev, A.P. Chelenkov, Yu. B. Rubin, I.B. Gurkov and others, also deal with problems of competitive behavior and formation of competitive advantages of the companies.

Systematization of approaches to definition of competitive advantage is given in table 3.1.

Table 3.1

Main approaches to definition of a concept of competitive advantage

Apparently, many authors hold the opinion that competitive advantages allow to increase the value of the company.

Some authors consider competitive advantages as the system having any exclusive value which gives her superiority over competitors in economic, technical and organizational fields of activity.

According to modern writers, competitive advantages shouldn't be identified with potential opportunities of the organization. They need to be defined how the recorded fact on the basis of obvious preferences of consumers. Therefore competitive advantages are a main objective and result of economic activity of the companies.

According to Azoyev G. L., competitive advantages are a result of achievement by the company of low product cost, high extent of differentiation of goods, effective market segmentation and response to his changes [11].

Also some authors refer to competitive advantages labor productivity level, higher in comparison with competitors, and qualifications of personnel, level of quality, technical skill and technological effectiveness of the made production, the level of management, efficiency of strategic development which affect the economic growth of the company.

However in all approaches the general tendency is observed - competitive advantages carry not absolute, but comparative character and can be estimated only by comparison of these or those characteristics with characteristics of competitors.

In process of evolution of approaches to a concept of competitive advantages, this concept ceases to be defined as static, acquiring characteristics of a dynamic concept.

In this regard competitive advantage can be defined how the objective superiority of certain characteristics of activity of the company over characteristics of activity of competitors capable to bring the companies positive effect (economic, ecological, social, technological, etc.) which can in time change the form and the direction.

M. Porter as a source of competitive advantage allocates low expenses (ability of the company to make and put on the market goods with smaller expenses, than competitors) and differentiation (ability to provide the buyer with special characteristics, the best quality of goods, etc.). Thus, competitive fight in the market forces producers to reduce the price or to increase the consumer value of goods.

As well as any other category, competitive advantages can be classified by these or those signs. Competitive advantages can be classified by rather large number of signs, such as the relation to system, the sphere of emergence of advantage, the maintenance of a factor of advantage and many others.

Some authors as a key sign of classification allocate the relation to system according to which competitive advantages share on internal and external [77].

Other authors (Fatkhutdinov R. A., Karloff allocate to B.) [ 83] as the key characteristic the term of realization of competitive advantages, subdividing them on strategic (the providing advantages of the company in the long term) and tactical (the companies reached as a result of operational activity).

P. Gradov offers classification of competitive advantages by stages of life cycle (a stage of origin, growth, a maturity and destruction) [27]. Competitive advantages (competitive advantage) at a stage of origin are characterized by some degree of uncertainty as it isn't clear whether there will be they steady or not, will be able to be how fast simulated by competitors. However at this stage the company has many opportunities for finding of the most effective competitive advantage and its realization. Competitive advantages at a stage of growth are the most perspective for the company. They provide to the company a certain potential on the future, however demand careful control from the management. Competitive advantage at a maturity stage provide steady functioning of the company, however they can be already simulated by competitors, and, therefore, there is a competitiveness loss threat. Competitive advantage at a stage of destruction are such competitive advantages which have already lost the main functions and don't provide the company of superiority over other participants of the market. The similar situation can occur owing to loss of relevance of competitive advantage or its total copying by all other participants

The allocation of steady and unstable competitive advantages offered by M. Porter [71] is represented especially interesting. In his opinion, a basis of effective activity of the company in the long term is exclusively steady competitive advantage. And though each company in comparison with competitors will have a large number strong and weaknesses as it has been noted, they can possess, according to Porter, only two types of competitive advantages: low expenses and differentiation of a product.

Besides, it is necessary to distinguish competitive advantages from strengths of the company. Strengths of the company are those characteristics of production, the company, service in which the company surpasses the competitors. And competitive advantage is a characteristic which is possessed only by the concrete company.

Competitive advantages possess the following characteristics:

• • importance, i.e. competitive advantages have to be distinguished considerably against the background of the rival companies;
• • visibility, i.e. competitive advantages have to be distinguishable and obvious to consumers;
• • the importance for the consumer, i.e. competitive advantages have to bring him the felt (essential) benefit;
• • stability, i.e. competitive advantages have to keep the importance in the conditions of changes of external and internal environment;
• • uniqueness, i.e. competitive advantages have to be the non-reproducible rival companies;
• • profitability for the company, i.e. the outputs, structure of expenses and market prices of the offered goods have to allow to work successfully in the chosen field of activity and to get sufficient profit.

Compliance to these characteristics does competitive advantages effective and capable to increase operational efficiency of business and competitiveness of the enterprise in the long term.

Important stage of management of activity of the company is management of competitive advantages. It affects both operating activities of the enterprise, and strategic. In a general view process of management of competitive advantages consists of three stages - definition of competitive advantage, search of sources of formation of competitive advantages and realization of competitive advantage.

Some authors adhere to such point of view that management of competitive advantages represents process of formation of competitive strategy of the enterprise. However, according to the author, it is necessary to distinguish several these processes in view of the fact that management of competitive advantages can have tactical and shortterm character.

Formation of competitive advantages has to be based on the basis of the detailed strategic analysis allowing to define a state and tendencies of development of all market in general and activities of separately taken competitors [47].

In this regal'd the detailed analysis of key characteristics of external competitive environment and the factors defining her activity is necessary. The similar procedure will allow to estimate the capacity of the enterprise in this target segment, to reveal the prospects of more rational use of the existing resources in comparison with competitors.

From the point of view of practice the technology of studying of activity of competitors - a key element of the competitive environment [ 11 ] is extremely important.

Currently uniform approach to the analysis of competitors therefore it is often carried out only as a part of the analysis of production economic activity of the enterprise or the strategic analysis isn't created. However the similar analysis doesn't allow to define the purposes and intentions of competitors, extent of their domination in the market, doesn't allow to expect and prevent changes in price and commodity policy of competitors. At the same time without similar information it is impossible to estimate the degree of threat from the competitor and potential opportunities of his advancing in competitive fight.

At the same time it should be noted that finding of competitive advantages doesn't provide their effective use. In view of high dynamism of the external environment, and also dynamism of competitive advantages, management of them has to have continuous and cyclic character (figure 3.1).

Fig. 3.1. Recurrence of management of KP

Process of management of competitive advantages (as well as any management process) has to begin with a formulation of the purposes which the company seeks to reach in the activity in general and in competitive fight in particular. Success of all competitive activity is defined by efficiency of this stage. There is enough techniques of an effective goal-setting, however according to the author, the most important that the purposes has to be very little, besides they have to correspond to system of statement of the purposes SMART, i.e. have to be concrete, measurable, achievable, realistic and are determined by time.

Then, as already it has been mentioned above, the detailed analysis of the competitive environment of the company and its participants is necessary. For this purpose such already known methods as SWOT - the analysis, PEST - the analysis, the analysis of influence of competitive forces according to M. Porter, etc. can be used, and also the technology of search of competitive advantages given above is used. As a result of this stage spheres of the competition, the main competitors, a competitive situation in branch are defined.

Besides, the detailed analysis of own capacity of the company for allocation of those niches in which the company is capable to create the competitive advantages is necessary.

The scheme of process of management of competitive advantages developed by the author is submitted in the figure 3.2.

Fig. 3.2. Scheme of process of management of competitive advantages

After analysis actually capacity of the company and its competitive environment there is possible an allocation of fields of formation of competitive advantages to the company. On the basis of comparison of opportunities of the company and perspective zones of increase in competitiveness in specific branch and market conditions the special card is formed.

Then by means of special technology search of sources of competitive advantages, and also formation of KP is carried out. It should be noted that in the course of formation of competitive advantages their ranging on extent of influence on competitiveness of the company and on controllability degree for more effective management of them is obviously important.

The final stage is realization of competitive advantage with implementation of permanent control and a timely assessment of its relevance and efficiency. It becomes for his timely financial support or formation of new competitive advantage.