Page 38 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.79, # 1, 2022, pp. 34-49

2,2,1 Competitiveness
The competitive manufacturing industry can be defined as it is the ability to create,
innovate, produce quality products, and optimal sales of goods and services at
reasonable prices on national and foreign markets (Drwillo,2002) and the firm’s
capability to survive in the competition against its competitors. To enhance
competitiveness and export capacity in the light manufacturing sector in developing
countries like Ethiopia faces critical barriers in penetrating export markets, including
the inability to meet international standards (in terms of price, quality, delivery,
health, labor, and environment), lack of marketing capacity and knowledge, and
insufficient understanding of international networks, and weak managerial skills and
entrepreneurial spirit and capacitates both in theory and practice, and a motivational
system like tax and subsidies. Thus, SMEs can be capable to produce high-quality
products, and innovation to meet market demands. They could design a strategy to
participate in a competitive market, enhance their production capacity, and then
increase the quality of their products demanding the international market. Thus, the
economic integration of SMEs is achieved with medium- and long-term objectives
(Marinov,1999) but, Helleiner, 1999 argues that small and medium enterprises are
lacking to compete in the larger market due to skill and knowledge constraints. In
some countries, government procurement practices are a form of state aid, with the
state purchasing goods and services from favored enterprises at higher than market
prices. The competition office can urge that government procurement be conducted
in a transparent and competitive fashion that gives all qualified sellers an equal
opportunity to compete. The agency can help to develop procurement procedures
that ensure competitive outcomes. It can also assist the government in adopting
measures that help to prevent bid rigging and price-fixing on government contracts.
In virtually all countries, cartel conduct in government procurement is a serious
problem (Hans et.al, 2012).

2.2.2 Enabling Business Environment
Donor Committee for Enterprise Development (DCED) describes the business
environment as the complex interplay of policies, laws, and regulations that affect
business development in each place (ADB (2014). One of the roles of strategy
implementers is to make the working area free play for the operators. A conducive
environment helps business operators’ easy entry and out of the business. The
existence of a strong supportive government institution helps to search the new
market, demand forecasting, and market information (Berhun et al., 2014; A weak
enabling business environment is the key constraint on the development of the SME
sector.

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