AN EMPIRICAL ANALYSIS OF COMPETITIVENESS FACTORS OF THE REGION’S AGRARIAN SECTOR

Abstract

Purpose. The analysis of theoretical concepts of sustainable competitive advantage, the assessment of the competitive advantages of the agricultural sector in the region and identification of the opportunities to provide competitive advantages under conditions of instability as well as a changeable business environment. Results. Two opposite concepts of sustainable competitive advantages’ sources are analyzed. The first one is resource-oriented, the second one – based on the influence of the external environment on the competitive position of the company. It is found out that in modern conditions, the concept based on the resource approach is more adequate for the agrarian sector as the business features in agriculture predetermine the considerable resources’ immobility. In agriculture, due to the specificity of rural settlements, the combination of the basic resources (land, machinery, people) causes a quite rigid configuration that cannot be changed quickly enough. But the resources themselves are not a source of competitive advantage; the ability to use available resources effectively is important. The authors propose a method for comparing the security and efficiency of the basic resources’ usage in agriculture by region. Under the framework of the methods, it was put the index method that allows comparing individual indicators and defining the integral index. The authors used such indicators as energy capacity, tractors and labour resources per one hectare of agricultural land to estimate resource availability. Resource efficiency is characterized by labour productivity indicators (gross production per one average annual employee) and land productivity (gross production per one hectare of agricultural land). The integral indices were calculated based on the geometric mean. There was done the comparative analysis of the provisions of basic resources and the efficiency of their usage by agricultural enterprises of Sumy region, neighbouring regions as well as the average industry indicators based on the proposed methodology. The analysis confirmed the existence of sustainable competitive advantages in the regional context and found that the leading resource is not natural characteristics, but effective management, which provides the highest efficiency of management. Conclusions. Taking into account the rapid changes in the business environment, any competitive advantage can quickly turn from sustainable to unstable. An assessment of the competitive advantages of the agrarian sector in the region has shown that to provide a sustainable position, it is first and foremost necessary to focus on reducing the costs and use innovations. Under conditions of rapid technological change, the main resource is human ones that can produce certain knowledge and innovative solutions. The proposed method of calculation of the integral indicators of resource availability and efficiency of their usage allows evaluating the existence of competitive advantages objectively and can be used both for the development of competitive strategies of agricultural enterprises and the preparation and decision-making at the level of central and regional authorities

Keywords

• competitive advantage, resource efficiency, agrarian sector, competitive advantage assessment, competitive strategies