CR20128 Specification for Business competitiveness in industrial sectors and the role of carbon pricing policy in the UK, Phase 2: Industry competitiveness model development

**THIS IS NOT A CALL FOR COMPETITION** This Award was made under Crown Commercial Services Research Marketplace Dynamic Purchasing System RM6018.

Prospective contractors for this project should review the Phase 1 outputs in detail and use this to inform their bids - in particular the conceptual framework developed, which we expect the model to fully incorporate. A high-level summary is provided below.

The framework defines competitiveness as the capacity and ability of a firm or sector to gain and maintain a profitable, sustainable market share relative to rivals in domestic and international markets.

The framework is composed of three main components, which interact in various ways: • Conditions: these form the basis for establishing a sector's competitive edge and inform opportunities and constraints for its conduct. These are categorised into costs, and markets and products. • Conduct: this consists of the actions a firm can take in the market, underpinned by its market strategy and managerial and organisational ability. • Performance (i.e. competitiveness): this is affected by both conditions and conduct and measured by market share and profitability over time.

The framework also takes into consideration the broader macroeconomic and domestic policy environment, which can affect each of the three components above in various ways.