Which one is not a necessary condition for competitiveness of a firm ?

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Comparable quality of the product with that of rivals

Competitive price with rivals

Adequate returns to the firm

Economical use of resources by the firm

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This question was previously asked in

UPSC SO-Steno – 2017

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The correct answer is C. Adequate returns are a result, not a necessary condition, of competitiveness.

Competitiveness of a firm means its ability to perform successfully in the market against rivals. Necessary conditions for this often include offering comparable or superior quality (A), competitive pricing (B), and efficient use of resources (D) to control costs and improve quality. Adequate returns (profitability) are typically an outcome or consequence of being competitive, rather than a prerequisite for competing. A firm might be highly competitive (e.g., gaining market share) even while making low or negative returns initially due to strategic pricing or heavy investment.

Competitiveness is about a firm’s ability to deliver value to customers more effectively or efficiently than rivals. This value can be delivered through lower costs (cost leadership) or superior product/service differentiation. Resources (like capital, labour, technology) must be used economically to achieve either of these. Quality and price are key aspects of the product/service offering relative to competitors.

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