The world today is one market and a global political arena. In such circumstances of a globalized world, each country, region or city competes with everyone else to achieve its goals, whether it is competing for the favor of global consumer, attracting foreign investments, knowledge and skilled labor, foreign media attention or respect of other governments and residents of other countries. In this global arena, the image and reputation of the state are often shortcuts that make it easier to make purchasing or investing decisions, help maintain good relations with others, gain support, and form coalitions to set agendas and make policies. Brand and reputation management is a well-known task performed by business organizations globally, but under the influence of neoliberal theory and marketing experts it has increasingly taken off both among states and their governments. On the other hand, a number of authors and practitioners in the field of international relations have a different view of the role of the state and they often place emphasis on political approach, in the sphere of public diplomacy. The main goal of this paper is to explore and gain deeper insights on how public diplomacy can contribute to building a country's competitive identity using the example of the Kingdom of Denmark. The strategic concept of this paper consists of two parts, theoretical and research presentation, divided into nine chapters. For the purposes of the research, a qualitative methodology was used in the form of case studies, online content analysis and interviews.