A business function approach for measuring enterprise competitiveness: An illustration with Taiwanese listed companies

As the competition within the industry gets increasingly fierce, enterprises must be more competitive to survive and prosper. How competitive an enterprise is compared to other enterprises requires a comprehensive measure to examine; not only from the current performance but also from the future potential. This paper proposes a business function approach stemming from the findings that the major problems causing enterprises to close are primarily related to finance, production, and marketing to design indicators to measure enterprise competitiveness. To make the model more comprehensive, the human resources and research and development functions are also considered in this paper. Nineteen indicators are obtained from the literature that are related to the performance of these five functions. These indicators are categorized into five pillars: productivity, profitability, image, stability, and growth, of which productivity and profitability represent the current performance and the other three indicate the future potential. An enterprise competitiveness index is synthesized from the measures of current performance and future potential via an objective approach. To illustrate how to apply this approach to measure enterprise competitiveness in the real world, data for the 1801 listed companies in Taiwan are collected, calculated, and analyzed. The results shed some light on how to be more competitive for general enterprises.