Lithuanian Annual Strategic Review

The long-term development of the country's economy and its sectors are determined by different circumstances regarded as long-term factors. The Lithuanian geographical situation is also referred to as one of these circumstances. This is a very specific factor, constant in its content, however, characteristic of various aspects of its importance. Due to this reason, there is a fairly sceptical attitude towards the potential of this factor in developing and implementation of strategies. This paper highlights the conditions under which the geographical situation of the country can become a strategic factor and utilized in development of economy and its different sectors. The first part, which deals with the competitiveness conceptions of the economic entities, suggests that the conditions, under which these entities can function, can be regarded as strategic i.e. long-term development factors, provided these conditions contribute to enhancing their competitiveness and operate within the system of other factors. The second part presents models of competitive advantage and systemic competitiveness of the nations as a potential basis for developing strategies. These models employ the geographical situation alongside with other factors determining economic development. The third part emphasizes that in many theoretical and practical studies, the 'created' factors, rather than the 'inherited' ones, are identified as strategic factors. Despite this, there exist examples in the world-wide practice that it is these 'inherited' factors that play the decisive role in the development of the country. The paper also suggests that it is essential to take into consideration the problem of demand and competition in the sector where geographical situation is to be referred to as one of the strategic factors.