GLOBAL

COMPETITIVENESS

AND

STRATEGIES FOR SSIs

PRESENTED BYDEBASISH ROUTMARY SUMITA BARASITUN MOHANTY

WHAT IS COMPETITIVENESS?

Competitiveness of an organisation can be defined as its ability to sustain its long-

term performance better than its competitors in the market. It can not be

judged only by certain financial performance measures

FACTORS AFFECTING COMPETITIVENESS

• INTERNAL FACTORS

• EXTERNAL FACTORS

• INFLUENCES OF ENTREPRENEUR

• FIRM’S LONG TERM PERFORMANCE

FRAMEWORK FOR COMPETITIVE ANALYSIS

ASSETS

PRESSURE AND CONSTRAINTS

STRATEGY DEVELOPMENT

COMPETITIVE PRIORITY

PROCESS

PERFORMANCE

THE GLOBAL COMPETITORSTOTAL NUMBER OFSME’S

AVERAGE VALUE OFEXPORT PERCOMPANY IN USD

SINGAPORE 9296 6.74 million

MALAYSIA 28,840 2.05 million

SOUTH KOREA 45000 2.9 million

INDIA 4000 2.6 Million

ASSETS OF INDIA

• Abundance of natural resources

• Extensive Industrial infrastructure

• Large pool of technical manpower

• Highly capable entrepreneurs and managers

• Low cost of labour

INDIA’s COMPETITIVE ADVANTAGES

• Same type of plant & machinery and technology • Advantage of indigenous sources of raw

materials at much cheaper rates • Labour cost ¼ th or 1/5 th of the labour cost

as compared to South East Asia, USA & Europe.•World class engineers and managers

THE GREAT PARADOX

In spite of so many advantages, our SME’s arenot able to compete on quality and cost with

SMEs in other countries

WHY ?WHY?

CASE STUDY• SL Limited (SLL) - was established in 1985 in technicalcollaboration with Denso Corporation, Japan to manufactureautomotive air-conditioning systems .

• Presently, SLL has about 70 % market share in India.

• Capability to manufacture compressors, condensers, heat exchangers and all the connecting elements that are required to complete the AC loop

Assets• Lower Cost than competitors.• Growth conducive organisation culture.• Relationship with suppliers and customers.• Employees’ awareness and commitment for competitiveness.• Higher Level of IT applications.• Higher level of investment in R&D Technology, HRD and

Marketing.

Pressures & Constraints• To reduce cost• To reduce delivery time• To improve quality• To cater frequent changes in supply schedule.• To increase range of products.• To deliver in small lots• Shortage of technical manpower• Under utilisation of capacity• Poor infrastructure for training• Unreliable vendors• Lack of quality consciousness• Lack of support from customers• Poor R&D infrastructure• Poor financial position.

Competitive Priorities• Improvement in Product quality• Effectiveness of value chain• Reduction in Product cost• Leaner organisation structure• Timely delivery• Labour productivity• Flexibility in production system• Total productive maintenance• Vendor development• Environment protection• Human resource development.• Employees’ welfare

REASONS FOR POOR COMPETITIVENESS• Lack of Interest by owners• Production•Marketing•Material Management• Equipment maintenance• Quality Control Department• Lack of Technical Discipline

STRATEGIES TO MEET THE GLOBAL COMPETITION

• CLUSTER DEVELOPMENT APPROACH• ACHIEVING BUSINESS EXCELLENCE• DEVELOP CAPABILITIES• GLOBAL NICHE STRATEGY• BY-PASSING• CO-OPERATION STRATEGY• FLEXIBLE SPECIALISATION• INSTITUTIONAL SUPPORT

CASE STUDY• THE KNITWEAR CLUSTER OF TIRUPPUR - a small town in the

Southern state of Tamil Nadu.• Tiruppur’s producers clearly benefit from the availability of

local cheap labour, the overall competitiveness of Tiruppur’s knitwear sector is rooted in a localised tradition of cotton weaving and a production organisation system, based on sectoral clustering.

• The textiles sector accounts for the bulk of manufacturing employment in Tiruppur.

• Export to many foreign locations.

THANK

YOU