COMPETITIVENESS OF PRODUCT, FIRM, INDUSTRY, AND NATION IN A GLOBAL BUSINESS

Abstract

Competitiveness is often confused with productivity. Productivity refers to the internal capability of an organization, while competitiveness refers to the relative position of an organization against its competitors. These two important concepts are often confused and interchangeably used. For example, in his famous book, The Competitive Advantage of Nations. Porter (1990, p. 6) says that the only meaningful concept of competitiveness at the national level is national productivity. Competitiveness may also have a distinctly different meaning at different levels of analysis — product, firm, industry, and nation. Porter (1990, p. 33) says that the basic unit of analysis for understanding competition is the “industry,” while the title of his book refers to “nations.” He also says that firms, not nations, compete in international markets.