After a long period of protected development, Brazilian industry is facing the new competition. An analysis of manufacturing-based competitive strategies in developed countries shows a trajectory of development of competitiveness, starting from price and moving through quality, time, diversity and uniqueness. The competences needed for each element are cumulative. This poses challenges for firms in developing countries which are faced with a sudden exposure to new standards of competitiveness. They may recognize the need for better quality or diversity, but not have the basis for achieving them. The problems facing firms in Brazil as they wrestle with these problems in a liberalizing economy are discussed.