COMPETITIVENESS

AND EFFICIENCY
LESSON 3.7
WHAT IS COMPETITIVENESS?
COMPETITIVENESS

• Company or Competitiveness, pertains to the

ability and performance of a firm, sub-sector or
country to sell and supply goods and services in
a given market,
6 FACTORS OF COMPETITIVE
ADVANTAGE
• Turnaround • Selection
• Price • Quality
• Speed • Service
WHAT IS EFFICIENCY?
EFFICIENCY
• Efficiency signifies a level of performance that describes a process
that uses the lowest amount of inputs to create the greatest
amount of outputs.

• Efficiency relates to the use of all in producing any given output,

including personal time and energy.

• Efficiency is a measurable concept that can be determined by

determining the ratio of useful output to total input.
3 TYPES OF EFFICIENCY
ECONOMIC EFFICIENCY
• Economic efficiency refers to the optimization of
resources in order to best serve each person in that
economic state. There is no specific threshold that
determines the efficiency of an economy, but
indications include goods being produced at the
lowest possible cost and labor being performed
with the greatest possible output.
MARKET EFFICIENCY

• Market efficiency reflects how accurately stock

prices reflect all available information. Similarly,
operational efficiency occurs when stock prices
accurately reflect the costs required to provide
them.
OPERATIONAL EFFICIENCY

• Operational efficiency occurs when stock prices

accurately reflect the costs required to provide
them. The greater the operational efficiency, the
more profitable the firm or investment.  
WHAT ARE THE IMPACTS
OF EFFICIENCY?
IMPACTS OF EFFICIENCY
1. An efficient society is better able to serve its citizens and operate in a
healthy manner.
2. When goods are produced efficiently, they are often able to be sold at
a lower price.
3. Efficiency results in a sharp drop in hunger and malnutrition.
4. More work can now be performed in a shorter amount of time.
5. Advances as a result of efficiency have facilitated higher standards of
living such as supplying homes with electricity, running water and
giving people the ability to travel.
ECONOMIC EFFICIENCY
• Implies an economic
state, in which every
resource is optimally
allocated to serve each
individual or entity in the
best way while
minimizing waste and
inefficiency.
PRODUCTION EFFICIENCY
• An economic level at
which the economy
can no longer produce
additional amounts of a
good without lowering
the production level of
another product.