Metal processing industry is one of the branches of the manufacturing industry, which has the biggest impact on the economy in the Republic of Croatia. Historically this is one of the most developed industries, which today experiencing stagnation and decline of activity in comparison to the previous state. Competitive advantage is one of the principles of modern economics and strategy is a tool by which is achieved competitive advantage. These models must be used to improve the company's business in the metal processing industry. According to previous research, for solving the problem of poor competitiveness of the metal processing industry, as well as the industry as a whole, it is necessary to systematically explore and analyze the metal processing industry, as well as strategic models and methods that will contribute to the prosperity of the economy, that will meet the current needs of the market, and Croatian position as a competitive country in region. The paper is structured in ten chapters, which roughly can be divided into two groups: the theoretical and research part. The first part explored the fundamental determinants of strategies and models and methods based on which the company achieved competitiveness. Competitiveness is one of the fundamental concepts in the modern economy. Therefore, the paper gives guidelines on which strategy company can gain a competitive position in the market. Second, the research part of the work is devoted to analyse engineering industry in the Republic of Croatia (with special reference to the metal processing industry in Brod Posavina County). The study was conducted on a sample of 508 companies (small, medium and large) in the metal processing industry. Concept of engineering industry in this paper implies the following three sectors: C24- Metal production, C25 Manufacture of fabricated metal products, except machinery and equipment and C28- Production of machinery and equipment. A sample of companies is from all counties in the Republic of Croatia and is proportional to the number of enterprises registered in each county. Information about companies have been taken over from the portal Business Croatia, and research includes 39 different indicators for each company. The mere analysis of the data is processed by the statistical method. Categorical data are presented in absolute and relative frequencies. Numerical data are described median and limits interkvartilnog range in case of distribution that does not follow a normal distribution. The normality of the distribution of numerical variables was tested by Kolmogorov-Smirnov test. Differences normally distributed numerical variables between the two groups were tested for departure from the normal distribution Mann-Whitney U test, and in the case of three or more groups were tested by Kruskal-Wallis test. The link between numerical variables was assessed by Spearman correlation coefficient ρ (rho). To study the influence of individual predictors of the dependent variable, and the impact of the model as a whole, was used univariate and multivariate regression analysis. All P values are two-sided. The level of significance was set at α = 0.05. For statistical analysis of the statistical program SPSS (version 16.0, SPSS Inc., Chicago, IL, USA). Based on extensive analysis conducted, it is spotted the significance of engineering industry to the manufacturing industry, and on the overall economy in Croatia. Research has shown that the metal processing industry has great potential, and it is important to implement strategic methods and models so that industry could achieve competitive advantage.