Prospects And Strategies For International Competitiveness

Published Date: 02 Nov 2017

Summary

The new business environment after the crisis will be different. Will

bring new balance to purchase products and services.Their emerging

trends, Greek enterprises will face more intense competition in

market s targeting, ie combinations of intermediate value for money.Opportunities

will occur mainly in traditional, but also in other sectors.But

how many and which companies will use is uncertain.

The successful adaptation of enterprises to the new conditions will be judged

eventually the international competitiveness of the country.Namely whether Greek

products and services will exist in open markets.In the competitive

markets, the ability of firms and entrepreneurs will be more important

factors rather than the national environment.Crucial is the strategy of

business.That is how we offer attractive and offers quality

pressed today to lower consumer costs.

In an effort to help the continuous introduction of innovations in the series

offered, albeit marginal in nature or even simple adjustments.M

innovative activity can draw inspiration from the international market and

Greek tradition, and rely on the creativity of the Greeks.

Given the business practice, it is more feasible for the Greek

companies to adopt a model of "open innovation" rather than a

model-driven Research and Development.The Greeks were always open

the acquisition, adaptation and dissemination of ideas.

In the new context, public policies can contribute more if

focus on the support of open innovation and diversity.In

culture culture creation and entrepreneurship, internationalization

frames of reference and comparison.

1The Greek companies after the crisis:

Prospects and strategies for international competitiveness

"These people were some kind of solution" (C. Cavafy)

Sp Lioukas, Professor of Economics, University of Athens

December 2010

1. Introduction

What will be the future of Greek companies after the crisis? What

will survive and in what form?What new will emerge? Definitely not the future

will be the same, will have profound changes.But it is hard to do

Provisions There will be surprises along positive to negative.

The problem of competitiveness of Greek businesses and

Greek business environment is structural.Has characteristics

have been established for years.The crisis making companies to discover

limits of their endurance.For more brings them before the chronic weaknesses

their lack of competitive advantage.Some, capable

adaptation have already reacted before, cutting unprofitable

activities, reducing costs, going where there is demand in-

international markets. The most insightful find opportunities in crisis. Opened

new activities internationally, addressing the lack of liquidity in international

approaches and collaborations.Learn and change as they encounter new

clients and new conditions in other markets.

The competitiveness of the economy will be judged Elinikis at micro level.

At the level of the ability of business units to place

offerings and claim a role in the new, more open and competitive

environment that is under redevelopment.From small and ecosystem

SMEs to develop an international orientation.A

behind it, the propensity and ability of individuals to take

action and try to distinguish patterns with international comparison.

2The state in the process of adaptation of firms and

emergence of new entrepreneurship plays a role.It may help to direct

and indirect ways.Directly, through practical measures, improving the institutional

business environment and focusing support to yield

a competitive business ecosystem.Not necessarily in grants and

privileges, since the resources are scarce.Indirectly also with actions

related to the formation of positive attitudes in business and international distinction.

But expectations of the state should be realistic. To

more cushion to adapt to new conditions.But to

express a new development model, a different policy framework.

Furthermore with the increasing internationalization of business

changing role of the state.On the international scene and to open for business

competition more role playing and will play agents of the company,

rather than the rule (Hawawini et al., 2004).The internationalized enterprise exposed

in many national contexts.The role of the country of origin is less

important.Access to international resources and opportunities for wider

expertise.In contrast, the closely oriented home business will

deal more difficult financing conditions, along with more intense

competition in domestic markets themselves.Foreign products flooding the already

domestic market.

2. The new business environment

After the crisis, the international business environment will be different.

First, because changing consumer preferences and emerging new

standards.Consumers 'moderate' their money and looking for ways to

satisfy the same needs smarter solutions.Reduces markets, but

and turns into more affordable products while maintaining high requirements

for quality. Gives less value to classic brands. Thus the

brands of multinationals are under pressure.The brand loyalty has declined by

much (Gerzema, 2009).The private label products is on the rise, while

intermediate products that combine quality with lower cost broaden

their space.Offer more affordable solutions depressed consumer without

essential off other qualitative properties of the product.They value

3ligotera money from that strong names in top quality ranking

(Value-for-money products).

Second, global competition intensifies and supply

change the traditional structures of industries.Emerging multinationals

companies from low-cost countries dynamically entering international markets and

changing the balance.While in the past the flow was from western multinationals

in developing countries, now extended reverse flow products.Companies

from countries such as the BRIC and other smaller (eg Turkey in our neighborhood)

internationalize and invest in developed countries (Athreye and Kapur, 2009;

Madhoc, 2009).These companies quickly improve the quality of

offered absorbing Western technology.Simultaneously inventing solutions

for consumers with low incomes.Innovate cost

radically reduce the prices of their bids.

To address competition and new conditions

traditional multinationals moving to lower prices for the same products.

Reduce the cost of rearranging their production chain to

global arena. Seize opportunities for production to low cost countries.

Even transporting high-value functions in emerging countries such as

research and product development.So, but reinforce the technological

potential of these countries and reduce the advantage of established

companies in innovation (Rothenbuecher, 2008).Indirectly it strengthens the emergence

new national brands from emerging nations (ethnic branding).But

buy cheap national companies who have difficulties coping with the

crisis.So it can be strengthened previous positions and provide

oligopolistic situations, at least there not effectively supervised

the competition.

At the same time, smaller companies focused on clusters market (niche

players) innovating and moving worldwide."Hidden Champions" from all

countries, even from Greece, expand their markets internationally.So

balances the competitive advantage is reversed.

Overall, in open market competition is likely to equilibrate to

lower prices, price differentials will be reduced.The interim deals

cost-share gain modulation (see Figure 1). We apply these

4stin Greece?Or overcome by strong market concentration in a few

multinationals?

Figure 1: With the crisis, companies tend to move in the intermediate

Third, the social and economic environment is changing permanently.The

societal demands for corporate accountability become more powerful.The

Consumers are more informed and with the internet knows more about

what to buy and the one who offers.Businesses that meet

proactively to new demands for accountability acquire social capital

and competitive advantage.Mere compliance with social rules for

occupational, environmental and ethical behavior are no longer sufficient.Trends

they open up new horizons for innovation and diversification of tenders

(Eg "green" products, ethical actions, etc.).

The leading companies after the crisis will be very competitive and

different. The simple structure and low cost. Committed to

innovation, more accountable with "social" differentiation.Perhaps with different

business model, focused on different market segments and new

consumers themselves.With a global presence, and quite possibly, with a growing presence in

emerging markets (BRIC countries and others).In the course will have developed

internal capabilities and social capital that will ensure

competitiveness.Keeping dedicated staff in key areas will

5einai in a better position to exploit the opportunities that will emerge after

crisis.

How many Greek companies will be in this category? Even a few

be will have knock-on effects oikonmomia Greek.Will contribute

employment, the creation of tangible and intangible value to Greece.We

such a number of Greek companies, even small in size, invisible

champions who will successfully place their products in the open

global markets.Moreover, the competitiveness of countries so designated by

this is: Since the presence of national products in international markets.So

competitiveness is defined in the OECD (see OECD, 2001).

3. The strength of Greek businesses in crisis

The strength of Greek businesses in crisis depends on

ability to build and sustain competitive advantage

lower cost.To offer quality products at more affordable

(Not necessarily cheaper) prices.With the comparison may be made ​​at most

in open international markets.Whether you are moving domestically or internationally, most

markets are now open to competition from Greek and foreign

businesses.Depends how even by how early will

adapt, flexibility and agility that will demonstrate.How to use

technologies, innovative and will order their resources.Certainly

many will they succeed, but there will be others who will rise to the

circumstances.The crisis will be a degree of culling, provided the balance

"Birth-death" at the end is positive.

It is difficult to predict which companies and which areas

come out strong after the crisis. There will be surprises. An important role will be

play existing skills and previous position.But

the capacity of government to understand the crisis and act

proactively. The leadership has always been and will be critical. Compared

other European countries, the former competitive ability

business is low, while the ability of middle managers (see International

6katataxeis in Figure 2). These data suggest that there are exceptional

adjustment difficulties.

Figure 2: The ability of businesses

Source: The Global Competitiveness Report 2010-2011 - IMD World Competitiveness 2010

However, the Greek companies, the vast majority of micro-

medium, have shown considerable resistance to the crisis.Positive factor may

to prove the family form a strong culture that governs temporal

their action.The whole family makes sacrifices and bears the burden to

cope.Indicative is the index of bankruptcies in 2009, which was

lower in Europe (see Table 1). The Greek businessmen trying

to keep the business.Perhaps because their experience has shown them that they

have no other alternative.To avoid the stigma of bankruptcy,

lack of second chance?This is a strong factor that is widely debated.

Indeed, the institutional functioning of the Greek market (personal guarantees,

lack of alternatives) does not help to disentangle.While the market for control

business is shallow, the sales potential is small.But the question of

resistance to the crisis of family businesses is broader and requires study.

7It should also be noted that these statistics are expected to worsen for

Greece, and deepens the Greek crisis now, while others leave

this.

Table 1: Index of bankruptcies in Western Europe (2009)

HO hours

Mean number n n A to chefseo

10,000 businesses

E REECE 4

ES boredom 16

Italy 23

Portugal W 40

Ireland 87

M large B retania 90

Germany 96

103 W inlandia

105 E lvetia

109 N orvigia

Sweden 131

The llandia 165

B ELGIUM 165

183 W boredom

France 188

A three 236 ug

L Luxemburg 242

M average 116.6 g Pc

Source: isotimia.gr, 28/04/10

In traditional Greek industries with strong intrinsic advantages will

survive many businesses will have opportunities for growth post

crisis.Mainly in the following sectors:

• In tourism and its related services, but in most

qualitative basis and at more affordable price levels.

• The quality food, combined with technology and innovation,

but with healthy eating trends.

• In shipping and associated with this service, if they

be competitive with other countries.

• In industries dependent on national and Community policies, such as

the soft energy and solar energy applications.

• In new fields of technology, combined with participation in international

networks or cooperation activities and integrated in international

value chains will have a great chance of success.

8Alla and other declining traditional manufacturing sectors will

be opportunities for some businesses and even surprises.For

example, textile companies that have differentiated in quality

products and international collaborations will have opportunities.In part these arise

the closure of more expensive European companies.Other and imagination

administrations for new diversified offer.

4. Which strategy?

Competitive strategy will play a more important role in the period after

crisis because yperantagonismou balances and overturning.The broad lines

strategy is known and discussed last.You will need:

• More nuanced deals with quality and

innovations at lower cost.Comparison with reference

international rather than local level.

• More intensive entrepreneurship with new models, new ventures, with

local diversity.Liberation of inventiveness

manpower and bubbling in the creation and

commercialize new offerings to push consumer.

• Extraversion not only with the traditional exports, but

and advanced forms of internationalization (collaborations,

ventures abroad, international networking).Harnessing international

sources of innovation and opportunities for resource acquisition internationally.

Strategies to target customers who are satisfied relatively easily

mainly in the domestic market, with little innovation and weak, locally

names would not yield (see Figure 3a and 3b).

The lower cost is important, but not sufficient without other evidence

differentiation.Already the increase in unemployment and the current review

institutions and policies in the framework of the Memorandum has launched a degree

reducing labor costs, mainly wage and not less than

wage.In Greece they are now well educated staff with low

9apodoches (the lowest in the EE15 It is up to businesses to introduce

other innovations costs across the value chain in their business model.

Negotiate with suppliers, rationalization of product mix, decrease

prices of brands, focusing on new products more economically, focusing on

introducing innovations and keeping talent to push such are

indicator moves.Ideas and experiences from low-cost countries can

contribute, eg from their subsidiaries in countries of South Eastern Europe and

elsewhere.Simply transfer companies in these countries for exploitation

conditions favorable cost if not accompanied by a change in strategy is

a temporary solution.We need a sustainable competitive advantage in international

scale, because there markets are open to competition.

Figure 3a: What strategies fit

Figure 3b: What strategies do not match

10Endeixeis that we attach such strategies and empirical

investigations before the crisis.In a sample of 800 SMEs, those who have more

innovation, expertise, quality, marketing (service level, closer

the client) and organization accompanied by better, on average,

results (see Figure 4 also Spanos, Lioukas, and Zaralis, 2004).

Figure 4: Companies with better performance have diversification strategy

7.3

8.6

8.5

8.1

7.8

{0}5.{/0}{0}1.{/0}

8.5

9.3

9.2

9.0

8.8

6.7

3 4 5 6 7 8 9 1

Organization

Close to the customer

Level of service

Quality

Expertise

Innovation

0

Over their competitors (500) Medium or lower performance (286)

Source: Quantitative Survey EOMMEX a sample of 800 firms, SLC (2008).The scale is

10vathmia, discounted Likert-type questions

11H innovation in offerings and production process,

become even more critical after the crisis.Greek companies

should invest in it, to achieve continuous variations in

offered.There is no need to invest in large innovations

pose elevated risk.Not in large portions and Research

Development that cost. Sources of ideas can be found in the market by

customers primarily, but also partnerships and networking, and by their own

employees.This new type of "open" innovation fits well in

Greek business practice.The Greeks were always open to

recruit, assimilate, adapt and create.The acquisition

ideas from the market, most likely by international, and their application to local

Adaptation is a proven recipe.Does not necessarily mean that we

"Second" or "following".Can lead to a series of small innovations

often commercial in nature, which, although unnoticed shaping successful

course.

International comparisons of innovation indicators confirm that Greece, while

is very low in Research & Development (R & D), though it is high in "new

for the market "or" new to the firm "products (seeFigure 5 and Figure 6).

That is despite a small R & D provides new products and new designs. Although

exception appears in the depressing picture of international comparisons in

However this result has been confirmed by several studies last.But

has not received sufficient attention and use of the public debate (Lioukas

and others, 2009).

It seems that a Nordic type model with intensity in R & D

fits the Greek business practice.In addition to R & D is so

much that we can hardly assert position between small

leading countries (egSweden, Denmark, Switzerland, Israel, etc.).It would take

long-term effort and support from the state, but guarantees more

direct effects on corporate competitiveness in the next 2-3 critical

years.

Some limited, say, empirical results show that in

Greek businesses delivers the networking market.The more dense networks

greater innovation and growth, but also lower the

12epidrasi the crisis (see Table 2). These indications suggest even indirectly

for investing in "open" type of innovation.

Figure 5: Classification of Greece innovation indicators (EIS 2009)

* Rank of 27 EU countries

Source: European Innovation Scoreboard 2009

Figure 6: Greece excels in Open Innovation (EIS 2009)

13Dapanes Q & A

New on the market

products

Source: European Innovation Scoreboard 2009

Table 2: Companies with better performance are more densely 'boy network "

Businesses with

high performance

Percentage of companies with

dense networks

(With ties ≥ 4)

Percentage of companies

with sparse networks

(With links 1 to 2)

High rate

development

62% 12%

7 high innovation1% 3%

Little effect

crisis

73% 10%

Source: OPA in a sample of 120 firms

The sustainable development approach, particularly the ecological dimension

contributes substantially to innovation.Opens in a new cognitive framework

14epicheirimatiki action and develops innovative capabilities. The role of

"Green" optical confirmed by Greek standards.Businesses with

achieve higher environmental action more cost savings

production and use of raw materials, improve their image and their relationship with

social groups, while significantly prior to product innovations (Figure 7).

These differences arise on average six industries. The

Greek businesses can claim significant innovations through

"Green" strategies, at least in some sectors.Acquire additional

production capacity with prospects of continuous innovation

Figure 7: Companies with more intense "environmental action" have advantage

5.42

6.02

5.66

5.97

5.13

4, 73

3.6 TELEMATIC DEPOT

3, 78

3.7

4, 78

4.2

3.94

3 4 5 6

Product Innovations

Image Enhancement

Improve relationships with

interested groups

Reducing pollutants

Reducing energy raw materials

Cost Reduction

production

Low

High level

Source: Quantitative Survey of sample of 160 firms, SLC (2008).The scale is 7Primary type

Likert.

5. National environment and public policies

The economic environment is more dynamic in the future in terms of

business support, lack of resources.The institutional environment and

functioning product and labor market is expected to become more flexible and

according to the philosophy of the Memorandum of interventions most favorable to

15epicheirimatikotita.Existing companies will be pressed by tight

funding and the sharp drop in demand, as mentioned above.

In this environment, many companies will look to international markets, there

where there is demand.But to find more favorable conditions for survival and

development.

It could be argued that the skills and strategy

business is more important than the national environment in the new landscape.That.

consistent with the results of international research.Existing studies have

show that before the crisis, the factors of home business

is less important than factors of the business itself (Hawawini et al,

2004).Indeed, in order of importance interpretive existing studies

highlight the following factors:

(1) Company

(2) World Environment

(3) National Environmental

The effect of national environment depends on how favorable is

compared with other countries to establish and attract business.Already

made steps to improve the regulatory and institutional framework.Yet

both starting from a comparatively low position (see Figure 8). As long as

quickly resolve difficulties in establishing and running businesses both will

increase the number of enterprises but also the choice of Greece as a seat.More

will give way to innovation and creativity.It will also increase the

employment around business services.

The image of Greece with the crisis is certainly not conducive to promoting

national brand abroad.Unless, of course, for some traditional

industries and the cultural sector, where the name is the Greek root.At

other sectors, eg technology, businesses should develop itself

corporate branding and product names, seeking international

awareness.

Figure 8: Regulatory and institutional environment for business

16Ease of doing business

Institutions

Source: Doing Business, World Bank, 2010-The Global Competitiveness Report 2010 -

2011

Public policies against businesses evolve. On the

was previously fragmented, scattered across many agencies and programs without

integration (Lioukas et al, 2009).And most had no orientation

a clear model of innovation, entrepreneurship and competitiveness.For

example, policies and programs for innovation, research and technology

and entrepreneurship have evolved independently.The innovation is lagging behind the

other two, while supporting the general entrepreneurship rather than innovative.A lot

bodies involved in promoting their respective programs, while the ambiguity

the competitive strategy of the country restricts their completion.

An overhaul of policies and programs with a focus on

promote a diversification strategy to guide the international comparison,

enhancement of national identity and individuality.Focus on innovation,

diversification offers, extraversion, international comparison locally

enhance the acquisition, adaptation and diffusion of technology, utilizing

Greek perspective, the Greek tradition.Supporting international networking and

partnerships, mechanisms and capacities of firms to absorb,

the creation and commercialization of innovative offerings in international markets.

Steps are being taken in this direction (egNSRF investment purposes,

Special Programmes). We need, however, more focus and concentration

resources.

17The bulk, however, the benefit will come from a social intervention

system of values ​​and cultivating a culture of creativity and

"Business".With expansion and social entrepreneurship, non-

speculative.In accepting ideas as international competitiveness,

Greece ranks rather low. At levels similar to those of southern

EU, while the North excels considerably. And it comes with correspondingly low

overall levels of innovation (see Figure 9). After our national culture

akin to the model acquisition and diffusion of ideas, at least let

strengthen its corresponding values.As confidence in man,

sharing ideas and knowledge, intercultural education and the cultivation of values

creation / creativity.One such effort touches all levels

the educational system, especially the first, but also the family.Wants

time to perform, but will release the creative potential of the Greeks.

Figure 9: Accept values ​​of competitiveness and innovation

Value system

Innovation

Source: IMD World Competitiveness 2010 - European Innovation Scoreboard 2009

186. Summary - Highlights

The new business environment after the crisis will be different. With

knowledgeable and demanding consumers who want to meet

same needs for less money and with yperantagonismo on offer.Will

there is great pressure from emerging multinationals from low-cost countries in

intermediate products with price-cost combinations, ie where there seeking

positions of Greek products.The internationalization will increase with foreign products to

increase their presence in the domestic market.

Alongside the demands for social responsibility of business will

intensified.This will give opportunities for some firms to diversify

their bids, the most innovative and socially and ecologically sustainable

solutions.

Within these trends many Greek companies will try

their limits.Some, more insightful and adaptability, will find

many opportunities after the crisis.The balance at the enterprise level, between

those that will emerge strong from the crisis and those who will not endure, will

considers the international competitiveness of the country.Namely whether Greek

products and services will exist in open markets.Opportunities will be

mainly traditional, but also in other sectors.

Crucial is the business strategy. Intensity

diversification with innovation and quality, but at a lower cost

seems to be the recipe for success.But the prescription must be

implemented at the micro level, by business, by individuals.The question is how

local diversity and creativity can be expressed in products

for the modern consumer with their target markets.

Furthermore, the successful firm will be compared with international offerings,

promotes advanced forms of internationalization and utilize resources and

opportunities internationally. The dependence on the domestic market and the state will decrease.

Ideas and experiences from the international market leading innovations in cost.

The successful companies will intensify their efforts for continuous

introducing innovations in the offered mainly by drawing ideas from customers

suppliers and other partners in the international market.That would follow a

model of "open innovation."There is no need to invest significantly in

19Erefna and Development. Small marginal innovations, often in the application is more

appropriate for the Greek business practice.The Greeks were always

open to acquisition, adaptation and dissemination of ideas.

The sustainable development approach, particularly the ecological dimension

provides opportunities for Greek companies to innovate in conjunction with

tradition and the specific elements of Greek creativity.

The capabilities and business strategy will be even more

important after the crisis than the national environment and public support

policies.The factors of the country of origin are less important for

internationalized enterprise has access to most national contexts.

Public policies can contribute more if they focus on

a clear strategy for international competitiveness of firms, based on

innovative differentiation.By strengthening the mechanisms and acquisition

implementation of ideas, international networking and extroversion.Focusing

resources and programs in spikes technological diversification despite a general

Support.

At the social level, an important benefit resulting from cultivation

culture and creation of "business".By opening up to new ideas,

multiculturalism, internationalization of frames of reference and comparison.

Reports

Lioukas S., Voudouris, E., Gouras, A. and P. Lantzouni (2009). "Innovation

in Greece, "Kokkalis Foundation.

Athreye, S. and S. Kapur (2009), "Introduction: The internationalization of Chinese

and Indian firms - trends, motivations and strategy ", Industrial and Corporate

Change, 18, 209-221.

20Bert, A., K. Ficery and K. Sykes (2009), "The new face of global M & A", Accenture.

Cho HJ. and V. Pucik (2005)."Relationship between innovativeness, quality,

growth, profitability, and market value ", Strategic Management Journal, 26, 555-575.

Dimitratos P., Lioukas, S. and S. Carter (2004). "The relationship between

entrepreneurship and international performance: the importance of domestic

environment ", International Business Review, 12, 19-41

Gerzema, J. and E. Lebar (2008). "The Brand Bubble", Jossey-Bass.

Hawawini, G., Subramanian, V. and P. Verdin (2004). "The home country in the age

of globalisation: how much it matter for firm performance? ", Journal of World

Business, 39, 121-135.

Madhok, A. (2010), "Acquisitions as entrepreneurship: Internationalization,

acquisitions and multinationals from emerging countries ", Working Paper, Schulich

School of Business, York Univ., Canada.

OECD (2001), "Glossary of Statistical Terms", OECD. Paris.

Rothenbuecher, R. and J. von Hoyningen-Huene, (2008), "The rise of emerging

markets in mergers and acquisitions ", AT Kearney, Inc.

Spanos, Y.E., Zaralis, G. and S. Lioukas (2004), "Strategy and industry effects on

profitability: Evidence from Greece ", Strategic Management Journal, 25 (2), 139-165.

Williamson, P. and M. Zeng (2009). "Value-for-money strategies for Recessionary

Times ", Harvard Business Review.

21Efcharisties: Thank fellow professors Yannis Spanos and Peace

Voudouris for their comments. Also Iro Nikiforos and Julie Sapouna

for their assistance in data processing and creation

charts and tables.