Evaluate strategies which may be used by businesses Essay

Evaluate strategies which may be used by businesses and judicatures to advance the combat of a countrifieds goods and serve.Competitiveness is the top executive of a pie-eyed or a nation to offer goods and services that meet the character standards of the local multitude and world markets at prices that be competitive and provide adequate returns on the resources employed or consumed in producing them.Governments perplex an important role for improving the battle of their countrys goods and services. Governments be open to change regulations and appraisees according to what they believe close their countrys state of economy. For example, a government may decide to abate the bow window tax in order to better the fighting of a countrys goods and services. A decrease in the corporation tax go away uphold new substantials to fall up and existing firms to aim. familiarity tax is a levy placed on the profit of a firm with different rates used for different levels o r wage. They argon taxes against profits earned by businesses during a buy the farmn taxable period.If at that place is a decrease in the corporation tax, it style that firms leave behind have an change magnitude retained profit since less money goes to the government r horizontalue. This will supply firms to use this money to mend competitiveness. More spending on investment will be possible which will plus productiveness. If the firms invest on big(p) goods such as machinery that will benefit the firm by producing at lower cost, then the firm magnate able to set lower prices in order to amend price-competitiveness.For example the UK government reduced the headline corporation tax rate from 30% to 28% in 2007 Budget. Reducing corporation tax change magnituded the retained profits for UK firms that tooshie plough back into investment projects. This should help to boost the UK capital stock. It should also help the UK to keep attracting foreign direct investment which improves the competitiveness further much since British firms may gain from the advanced technology and blueprint of foreign multinationals. (Technology transfer)However, if the government decreases corporation tax, there might be rough firms that decide to spare the retained profits instead of spending on investment. This might be because there is a period of recession and firms might find it risky to invest. In improver many firms have chosen not to reinvest as they have been more concerned with making short-circuit term profits rather than investing in the future. If firms choose to save rather than invest their retained profits, a decrease in the corporation tax wouldnt improve competitiveness.Another measure to improve competitiveness is to step-up government spending on education and training. If the government can improve the quality of teaching in take aims and universities and encourage more people to go to university, then this should lead to increase in productivi ty of the men in the future. greater productivity will lead to greater expertness in firms which will in turn lead to lower mediocre costs of production. This may improve the price competitiveness of UK goods and services. In addition it would improve the non price competitiveness since a more educated workforce is likely to be able to be more creative and innovative. Greater innovation should lead to better quality products and the creation of patents, copyrights, brands etc.However, increased spending on education and training by the government does not always lead to increased global competitiveness. It will depend greatly on exactly how the money is spent. For example expenditure for improving school buildings or Ofsted inspections may not necessarily improve the effectiveness of the teachers and the quality of education. On the other hand spending on training teachers and pass on their professional development, might be a more effective means of improving educational stand ards in the future and change magnitude productivity. However even in this case the effects are not likely bump until the longstanding term.Another way in which the government can improve the non price competitiveness and price competitiveness in international markets is to encourage innovation and research. Tax allowances have been made available to businesses spending on innovation and research. However, there has also been a variety of programmes which enable any(prenominal) businesses to gain grants for research and development R & D and to set up knowledge transfer networks and universities. Such measures are likely to be more successful than tax cats since firms are given incentives to research and development with receiving tax concessions and from making connection to universities where they have the opportunity to learn about the latest scientific and technological advancements.On the other hand businesses, are able to introduce a variety of measures to improve the com petitiveness of the goods and services. These accept increasing the level of investment on new technology, on stave training, on ICT, etc . One way by which businesses might improve the competitiveness of their goods or services is by increasing the spending on R & D. By increasing the spending on R & D, businesses will close to probably benefit from product and process innovation.If a business manages to require a unique and different product than the rest products in the market, it would be able to compete much more easily since consumers will take to buy the closely innovated and technological updated products. For example Steve Jobs firm, apple spent $758 million on R&D during the first monetary quarter of 2012. If we take Apple as an example which is one of the most profitable companies, we clearly see that it has benefited from the heavy spending on R & D. It has come up with products such as the iPhone where the sales reached the number of 98,144,000 in the first three quadrants of 2012.However, some businesses prefer not to spend on R & D because they do not think about the longer term. Also there are other firms that fail to spend on R & D. For example the procedure of R & D may direct in no innovative products or procedures that will improve competitiveness and therefore.Another way, by which businesses might improve competitiveness, is by improving productivity. productivity is the production per worker. There are different ways by which productivity can be improved. For example if the firms increase the wages, workers might be prompt to work harder. Also, training can improve the knowledge and skills of staff.Improved recruitment and selection may have the same effect which will increase productivity in the short term. If the business increases spending on training, workers will be more educated and informed about their job. This will increase the productivity since they will be able to produce more take at the same working hours and w ages. If the productivity is increased, it means that more output will be produced at relatively the same costs. This will allow the firm to get bigger in size, lower the running and useable costs, increase income and gain a greater share of the market. This will increase some(prenominal) price and non-price competitiveness.However productivity doesnt always improve competitiveness. For example if training isnt done effectively, and workers do not give attention or really care about the job, then they wont improve their knowledge and skills, training will not improve productivity, and therefore productivity will not improve competitiveness. In addition, productivity might not improve competitiveness because in the case of increasing the wages in relation of the output the worker producers, there are workers that wouldnt be motivated by an increase in their pay and therefore will not produce a greater output.productiveness can be used as a measure to improve competitiveness only i f it is used correctly and it can increase both price and non-price competitiveness. It can improve price competitiveness by allowing the businesses to set lower prices and improve non-price competitiveness by expanding as a firm and increasing its popularity.