En microeconomía, the ideal market situation, is that of perfect competition. That is, when some companies compete with others in order to provide the goods and services demanded by the market. The same can be said for the different economic units that are part of the market itself, such as individuals or households, who are also in a competitive situation to offer their services and allocate their limited resources to meeting certain needs.
When it comes to competitiveness, it is said that a unit within the market, generally a company, is in a position to obtain better results than the rest of the competing units, on the basis of some competitive advantage that has. Competitive advantages can be related to resources, skills, technology, among others. It results from the above that a competitive company, then, is able to position itself with an advantage in the market compared to its competitors.
When we talk about economics and business, competitiveness is usually related to greater profitability, which, in turn, can be associated with various variables. Thus, it is possible that due to its market situation, a certain company is able to offer products or services at a lower price than others, so it will be able to sell more of the product or service. But, it can also be that the product or service offered by said company has special characteristics, is of higher quality, manufacturing is less expensive, etc ... Or even several of the above.
Competitiveness in macroeconomics
The term competitiveness can also be used from a macroeconomic point of view, relating it to a certain State. In these cases, we are talking about the amount of exports carried out by said State, in the face of imports. As well as, its outstanding positioning compared to other countries, in relation to various macroeconomic variables, which, ultimately, have an impact on the well-being of its citizens.