MODEL OF SYSTEMATIC ASSESSMENT OF COMPETITIVENESS IN BRANCHES OF ECONOMICS. ITS APPLICATION IN THE FOOD SECTOR

Assessment of competitiveness in different branches of economy still remains to be a problem both in theory and in practice. The earlier introduced models were either too complicated to implement or did not meet the management objectives based on strategic marketing. Competitiveness in the aut hors' model is measured by economic indicators, since they enable to assess most accurately the com petitiveness of any kind of production. Though the present model is based on the food sector, it may be successfully used in other branches of economy. The results presented in the paper may be applied for developing short- or long-term strategies in the food sector.


Introduction
Assessment of competitiveness is rather important in the meantime, since business competitiveness is directly related to strategic management and its perfection is particularly significant for Lithuania as a fledgling EU country.
Before, competitiveness was assessed either on the state scale (The Global Competitiveness Report: The World Economic Forum, Dafous -Switzerland -researches which assess the competitiveness index by more than 300 indicators) or on the enterprise scale (in many countries, including Lithuania, centres for business competitiveness assessment have been set up; these centres are meant for enterprises and they mainly use the Benchmark Index calculation methodology developed by the Department of Economy of the United 24 Kingdom). Regarding the competitiveness assessment of separate products or economic sectors (grain, meat, milk, etc.), it has been poorly researched yet, particularly in the sense of the relation of competitiveness with strategic management and strategic marketing. The analysts of competitiveness of economic sectors base on the research of separate competitiveness raising factors (price level, production costs, size of the economic sector, efficiency, gross value added, etc.) (Hein, 2004; Radzevi-<:ius, 2004; Jasjko, Miglavs, 2004). Models of competitiveness assessment by the economic sector (Porter, 2001;Heckscher-Ohlin, 2004;Fathutdinov, 2oo2) incur some difficulties in their application, and according to some researchers (Smilga, Cicinskas, 2003) they have quite a number of disadvantages, particularly regarding systematic strategic marketing based competitiveness assessment of the inward and outward environment of the economic sector or any branch of it.
The objective ofthe presented research was to work out a true model of competitiveness assessment that might be also used for competitiveness assessment in other economic sectors and not only in the food sector. Since the model is underpinned by strategic market instruments, the results attained may be used for the purposes of strategic management of either any branch of the economic sector or the whole economy of a country.
The following tasks of research were pointed out: • to obtain methodological assumptions and principles for assessing competitiveness in agriculture and manufacture of food in the environment of economic globalization; • to prove that the structure of the competitiveness assessment model in agriculture and manufacture of food is trulyeligible; • to set concrete indicators enabling to assess competitiveness from the points of view of a market sample and the intensity of the market control and possibilities of its further expansion; • to ground the principles and the instruments of fixing the general indicator of assessment of competitiveness in the food sector. The research was based on an analysis of resources and comparison and on the methods of statistical and mathematical analysis.

Methodological assumptions of competitiveness assessment in food sector
Scientific researchers (Fathutdinov, 2002;Porter, 2001; Thompson, Strikland, 1998) attempt to practically assess competitiveness in agriculture and the manufacture of food products (Boyle, 2004;Hein, 2004;Jasjko, Miglavs, 2004;Thompson, Strikland, 1998) witness that it is rather complicated and connected with the assumptions as follows: 1. When assessing competitiveness of an economic sector, input effectiveness indicators and production quality as well as motivation of competitiveness are very important in all phases of the lifetime of manufactured products. 2. Agriculture is a specific economic activity where economic efficiency is calculated by the value added per one employed and depends not only on the technologies applied and personnel qualifications but also on climatic-environmental conditions, usage of land, state of the soil, raising conditions of the cattle and their protection against diseases, as well as on financial support and the peculiarities of the insurance system. 3. Competitiveness assessment in agriculture and manufacture of food products, particularly in countries with highly developed agriculture, can be based on assumptions of extensive development of agriculture ensuring an economical and caring usage of agricultural resources rather than on the criteria of productivity intensification. 4. Rivals or rivaling groups in agriculture and food manufacturing, in order to control a larger part of the market, affect segments of the market rather specifically, i.e. their strategies are aimed not at a possibly high reduction of prices or a possibly high increase of production funds, but at the expansion of production scales, acquisition of certified multiplication material of vegeta-tion, improvement of the genetic fund of animals, production of organic products, i.e. attention in agriculture and manufacture of food products is focused on quality input-output indicators. 5. In the environment of economic globalization, the economic indicators characterizing competitiveness shall assess the peculiarities in agriculture and in the manufacture of food products not only within the country but also, and even on a larger scale, on the functioning of the food economy at the international level. Owing to the assumptions mentioned above and the advantages of integration of Lithuanian agriculture into the EU (substantial aid from the EU funds, free movement of capital, goods and labour in the united EU market) as well as its disadvantages (contracting volumes of local agricultural production, bankruptcies of small manufacturers, unemployment growth in the rural areas), the modeling of competitiveness assessment in agriculture and food manufacturing should be based on the following principles:

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• competitiveness assessment shall be related to the tasks of strategic management in the field that is actually a connecting chain between the strategic goals of the country aimed at the development of agriculture and food manufacturing, and between the activation (support of organic farming) or inhibition (e.g.; quotation of some products) of certain segments of the market; • competitiveness of a concrete field must be analyzed in connection with reproduction peculiarities of agriculture, i.e. it must be underpinned by peculiarities of reproduction cycles in agriculture and animal production under present conditions (advantages of cereal crops production depend not only on input amounts of operating leverage and variable overheads per I ha of crop area, but also on the scale and effectiveness of application of marketing means as well as on weather-climatic conditions, etc.); • assessment of competitiveness in the food sector must be systematic, i.e. it must fully determine the impact of macro and micro environment on the manufacture of certain products with regard to the influence of other factors (concentration of manufacture, specialization, usage of production funds, labour productivity, capital expenditures, profit, exports and imports of production) on competitiveness; • competitiveness in agriculture and food manufacturing should show competitiveness dynamics in the field over a period of several years. Dynamic competitiveness assessment enables adjustment of the functioning and development of strategies in the field in response to the changing conditions of farming; • the indices used for assessment of competitiveness in agriculture and food manufacturing should be expressed in terms of comparable countries. The competitiveness level indices should not be mixed with the factors of competitiveness rise, since the latter do not measure the level of competitiveness but just provide favourable conditions for competitive advantages to turn up; • the said principles of definition of competitiveness in agriculture and food manufacturing should be accounted for while developing the competitiveness assessment model which must be based: -on quality competitiveness characteristics, and -on quantity competitiveness assessment.
Quality competitiveness characteristics describe the main factors affecting the fonnation of a strategy aimed at the functioning and development of agriculture. These characteristics are based on criteria used as vantage points for analysing the possibilities of competitiveness in agriculture and food manufacturing. The main criteria are as f{}llows: business environment, advantages of quality production, factors prompting competitive advantages of certain products, as well as support of agriculture and food manufacturing.
Based on the aforementioned criteria, the situation of a certain economic activity in the market is analyzed and assessed (whether it is dominating, stable, favourable, flabby or feeble), and on such groundings proper strategies are worked out: • expansion of the share in the market; • protection of the controlled part of the market; • assessment of radical novelties by both price and non-price competitiveness methods and finding a niche in the 10-ca~ regional or world market. These strategies foresee the further development trend of the food sector, assuring a certain competitiveness level which, in turn, stimulates the development of new alternative strategies, which in their turn are indispensable for a well-grounded strategic control of agriculture and the manufacturing industry (Thompson, Strikland,1998).
The quantity competitiveness assessment of agriculture and food products must be also based on the aforementioned principles of competitiveness expression. Upholding this provision, competitiveness assessment indicators should reflect the reproduction process (production volumes, costs, production sales prices, consumption rates of certain products, possibilities of expanded reproduction). The principle of dynamics in quantity measurements is achieved by comparing competitiveness indicators in series. Systematic assessment is achieved by an integrated competitiveness measurement method, i.e. assessment by a market sample, intensity of its assimilation and the estimated perspectives of its further development.

Application of the competitiveness systematic assessment model in the food sector
In line with the intensification of economic globalization processes, the conception of competitiveness in the manufacture of food products has changed from the ability to control the major part of the local market (Jasinskaite, 2003) to the extent of control not only on the local but also on the international market. Hence, competitiveness in agriculture and food manufacturing means also a capability of a country to produce the agricultural and food products that would not only satisfy international market demands but also ensure and increase the real income of its own citizens.
According to this conception, the competitiveness assessment model in agriculture and food manufacturing shall estimate the competitiveness of a certain country among other countries by its sample of the market, the intensity of its assimilation and the possibilities of further development. The estimation should follow certain criteria shown in Fig.l. Criteria included in Fig.l enable to assess the priorities of marketing-based competitiveness of the food industry by state strategic management. The criteria show that competitiveness in agriculture and food manufacture will be assessed by an integrated method, i.e. on the quantity and quality principles.

. Main criteria of competitiveness assessment in food sector
In case a certain country is ascribed to those with highly developed agriculture, quality research of its competitiveness in the food industry should reflect agrarian activity characteristics in the country rather than the reasons for production volume expansion. Agrarian activity in the country is assessed by the dynamics of the standard of life in the rural area, organic production, protection against pests, the quality of agriculture and food products versus the best standards. Such research might be helpful in fulfilling the policy of effective investments in the rural area with the support of the EU cohesion funds.
The quantity competitiveness characteristics of a certain country in agriculture and food manufacture should be expressed through the economic indicators assessing the sample of the market, the intensity of its assimilation, 28 and advantages of the possibilities of further development with reference to other comparable countries or regions. These advantages may be best expressed through proper indices which according to scientific-statistical researches rather accurately reflect quantity distinctions.
Most important is the market sample index of a certain product. It is calculated by estimating the sales volumes of the product in foreign markets and its capacity to resist the import of the product by assessing its export and import volume. It might be described mathematically by the following formula: where: iR -index of the market sample of a certain product; ep -export value of a certain product from a certain country; e -export value of all products (including food and non-food) from a certain country; Ep -export value of a certain product all over the world; E -export value of all products (food and non-food) all over the world; ip -import value of a certain product to a certain country; i-import value of all products (food and non-food) to a certain country; Ip -import value of a certain product all over the world; I -import value of all products (food and non-food) all over the world.
The indicator enables to define quite accurately the market sample of a certain product since it estimates the export and import values of a certain product when accounting for its share in the export and import of all products, both within the local and on the world market.
The obtained value of the indicator reflecting the market sample in a certain country may further be compared with the values of the market sample of other countries. As a result, indices are obtained that show the competitiveness of the country among other countries. If the value of the index is higher than unity, the manufacture of the product in a certain country is competitive among other countries.
One can see that competitiveness is measured for the main agricultural and food products, but for not all of them. It serves the purpose of simplicity. Also, a systematic assessment model enables to estimate the competitiveness of the food industry of a certain country in comparison to other countries whose number in model estimations is not limited (e.g., all 25 EU member states may be included; the measurement itself can encompass a wide range of products as well as a full range of them).
Assimilation intensity of production in the domestic market of a certain country versus other countries can be characterized by the purchasing power of agricultural and food pro- where: iIthe assimilation intensity index of the domestic market; Ga, Gb -purchasing power parity in countries a and b; ya, yb -the share of the population income meant to buy food in countries a and b; Qa, Qb -production volumes of certain agricultural produce in terms of value in countries a and b; la, Ib -the production costs value of certain agricultural produce; IPa, IPb -the production cost price index of certain agricultural produce; PRa, PRb -price paid for producers of agricultural production for raw material provided to manufacturers in countries a and b;

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Pa, Pb -producer wholesale price (manufacturer's price); Ecurrency exchange rate in the country in reference to country b.
The latter index shows the assimilation intensity of the domestic market of certain agricultural and food products. Here, economic indicators characterize not only the consumption and production volumes of certain products but also their productivity and effectiveness estimated by certain costs, their dynamics and prices of the sold production in the comparable countries. If the index is higher than unity, the product produced in a certain country is more competitive among other countries, and the higher the value of the index, the more competitive manufacture of the product.
The competitiveness of agricultural and food products by development possibilities of their production in comparable countries is assessed by the index of investment return. It can be expressed mathematically: where: iG -the return index of investment in a certain sector of production; Oa, Ob -comparable production output in countries a and b; la, Ib -investment in the sector of comparable production in countries a and b.
The higher the value of the index iG, the more competitive is production in country a compared to country b.
The total competitiveness index ik of agricultural and food products in a certain country versus other countries is obtained considering all three indices (iR, iL, iG). The total competitiveness level of certain agricultural and food products can be expressed by summing up the index values of iR, iL and iG counterbalanced by the respective 0.5, 0.25 and 0.25 coefficients showing the impact of an index on the total competitiveness index ik. The values of the coefficients are based on experimental researches carried out by the authors of the article and researchers of the Department of Economy of the Warsaw University (Zawalinska, 2004). Also, the total competitiveness in-dices may be obtained on deriving the weighted arithmetical average of any product. They characterize the competitiveness of certain agricultural and food products in any country versus other countries.
We see that certain agricultural and food products (wheat, milk, beef, pork, vegetables and fresh fruit) were competitive in Lithuania over 2001-2003 compared with those in Latvia, Estonia and Poland, except fresh fruit which (due to their small market sample) were almost half as competitive as the Polish fresh fruit.
Thus, the development strategy of the Lithuanian food industry should be focused on crop products (wheat, vegetables) and production of animal products (milk, beef, pork) since, firstly, production of the said products has the competitive advantages that have been measured by the demand of the market, the intensity of expansion of the market, secondly, it strengthens the economic potential of the country and adds to employment in rural areas.
However, the derived value will not accurately enough characterize competitiveness in agriculture and food manufacture in a certain country, because the aforementioned case provides neither horizontal (among index values) nor vertical correlation assessment (among compared products). To have a more accurate competitiveness characteristic of agriculture and food manufacture in a certain country, a polynomial regression and multicollinearity analysis should be performed. Accordingly, the proposed model of competitiveness assessment in agriculture and food manufacture outstands the known models of M. Porter (Porter, 2001), Heckscher-Ohlin (Boyle, 2004) and R. A. Fathutdinov (Fathutdinov, 2002), since this model provides a combined assessment, i.e. it integrates the impact on the competitiveness exerted by production exports-imports, production costs and price level and productivity. Its practical application does not require additional economic researches, except analysis of quality advantages. The recommended model enables to base the assessment of agriculture and food manufacture on the indicators officially released in statistical publications and con-32 solidated economic reports on agriculture. Therewith, the measured competitiveness level in agriculture and food manufacture and its dynamics enable more effective strategic ways not only to increase the competitiveness of products in future, but also to work out truly effective business and social development strategies for the rural regions of Lithuania both for the near and distant future.
Last but not least, the model enables to assess the competitiveness not only of agriculture and food manufacture in a certain country, but it can also be used in assessing the competitiveness of other economic sectors in a country. Such assessments are highly important when working out investment programs, specifying the priorities and allocating the budget means.

Conclusions
The economic development of a country as well as the competitiveness of its products and services shows how effectively the management institutions of the country apply the strategic management based on strategic marketing. Thus, competition on the international scale preconditions assessment of competitiveness of economic sectors of different countries based on the usage of strategic marketing instruments, their criteria and indicators. To assess the competitiveness of certain economic sectors of different countries, a special competitiveness assessment model was created. It is based on the competitiveness assessment of the food sector in Lithuania with reference to neighbouring countries.
When assessing competitiveness in agriculture and food manufacture, certain assumptions must be made; also, assessment rests on the principles characterizing the specific traits of agriculture and food manufacture in a country.
The proposed model of competitiveness in agriculture and food manufacture integrally specifies the market sample of the said products, the intensity of their assimilation and possibilities of their further development. The three factors suggest an integrated assessment of competitiveness of a certain country versus other countries, and this is advantageous in the conditions of globalization economy.
The competitiveness level of the food sector in a certain country is reflected in the economic indicators that guarantee the most accurate assessment of the impact of marketing means on the market development.
The model of systematic competitiveness assessment of the food sector in a certain country may be applied not only to agriculture and the food industry, but also to other sectors of economy; in addition, data on the competitiveness of certain sectors of economy can be compiled to show the total competitiveness indicator of a certain country versus other countries.
The indices of competitiveness are highly important for drafting investment programs and specifying priorities when allocating the budget means of the country.