The path to profits for Canadians enterprises—small, medium and large—is increasingly complex. As any entrepreneur or manager who has top and bottom line responsibilities can attest, this path is rarely straight or 100 per cent certain. There are absolutely no gimmes in business. Competitive advantage and its associated economic rewards are attained if a number of elements come together that enable the enterprise to effectively compete and prosper (i.e. realize sustainable growth).
Over the years, I have had the opportunity to work with, compete against, or analyze hundreds of companies in Canada and abroad, across industry, on matters pertaining to exporting, sourcing, direct investing, and market and project development. While each enterprise, industry, and market is unique in its own right, there are a set of factors that are common to all firms that have a direct and material impact on the ability of the enterprise to realize revenue and earnings growth. I refer to these factors as the:
10 Cs of Global Competitiveness
In the global economy, the objective is to ensure that all 10 Cs are at levels that meet or surpass industry benchmarks. Similar to the Own the Podium philosophy that guided Canada's 2010 Winter Olympic and Paralymic efforts, there is really only one standard in the 10 Cs’ world, though, and that is the global standard.
A brief synopsis of each C is as follows:
1. Competitive Products and Services
Price, quality, commercial and delivery terms, customer service support—the list goes on—are all component parts of a buying decision. Whether a company is selling goods or services domestically, or to clients abroad, it must have a clearly defined value proposition that meets or exceeds customer's requirements.
2. Critical Mass
Canada is a nation of small and medium-sized enterprises. Of the approximately 1.1 million employee businesses in this country, over 99 per cent are small and medium-sized enterprises (SMEs defined by Innovation Science and Economic Development Canada are companies having fewer than 500 employees). To compete effectively over the long term means having sufficient human and financial resources, and operational capacity to do so.
In this case, it refers to the demonstrated commitment by management and employees in planning and implementing commercial activities. If the director of business development in Company X, for example, is spending more time selling the benefits of Market Y to his/her superiors versus selling the company's products or services to prospective clients in the Market Y, the chances of Company X succeeding in Market Y are limited.
The availability of capital, and access to it, is a critical element in building a healthy and viable enterprise. Not surprising, one of the main areas that is always cited by SMEs as being a particular challenge in their operating environment is access to financing. This challenge will impede business growth—domestically and internationally.
Connected in this case has two component parts:
- Business connections/networks
- IT readiness or "connectedness"
Building a globally competitive enterprise requires both.
6. Country Acumen
As an exporter, importer or direct investor, it is important to have more than a superficial understanding of the country that your company is doing business with or in. Successful management of business risks and the ability to effectively penetrate a particular market requires in-depth knowledge and appreciation of the country's history, culture, political and economic structure and direction, industrial profile etc.
7. Company Plan
Building a globally competitive enterprise does not happen by chance. The plan is the foundation upon which the company will successfully grow. It will also vary, depending on what the specific commercial objectives and goals are of a particular enterprise.
For each new market that a company is planning to enter, in Canada or abroad, a market-specific plan should be developed.
8. Continuous Innovation
Innovation is a key driver in creating productivity. In the case of the 10 Cs of Global Competitiveness, this translates in to sustained and profitable sales. In the global economy, the speed at which business takes place is accelerating, so Canadian companies must keep the wheels of innovation rolling if they hope to remain competitive.
Competitive advantage in the global economy is driven by knowledge, but knowledge that goes well beyond the acquisition of information to include tacit knowledge or know-how. In this case, the issue of competence starts at the managerial level and flows downward. If a company's leadership does not have the necessary skills and acumen to compete at a world-class level, the company will not be positioned to realize sustainable and profitable sales.
In building a globally competitive enterprise, the management and employees of the company must have an unwavering belief in the company's ability to compete at a world-class level. This belief is not based on blind faith. It is confidence that is created as a result of the nine other Cs coming together. While a particular enterprise may have limited or no experience in competing internationally, it can create the winning conditions for commercial success.