The Unites States remains on top in the annual ranking, ahead of Hongkong and Singapore, which overtook Switzerland.
Canada (fifth), Norway (seventh), Denmark (eighth), Sweden (ninth) and Germany (tenth) remain in the top ten, while Luxembourg moves to sixth from 11th place in 2014.
The rankings of 61 countries are based on statistical indicators, as well as a survey of 6,234 international executives.
One of the crucial factors in the ranking is the “question of business efficiency,” IMD said.
This concerns “the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner”.
IMD assess this through indicators related to productivity such as the labour market, finance, management practices and the attitudes and values of the business environment.
"Simply put, business efficiency requires greater productivity and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time," Professor Arturo Bris, IMD World Competitiveness Centre director, said in a statement.
The strengthened franc undoubtedly has cast a shadow on Switzerland's competitiveness.
The latest ranking came out on a day when a survey of economists by the ATS news agency showed the Swiss economy stagnating this year.
The negative effects of the Swiss National Bank's abandonment in January of a euro floor of 1.20 francs is expected to be felt in growth figures for the next few quarters, most economists said.
Foreign exchange traders have reacted to the SNB's decision to stop intervening in FX markets to prevent the franc from strengthening by driving up the Swiss currency to near parity with the euro.
This is bad news for Swiss exporters in particular, making their products more expensive for customers in the eurozone.
“Overall, the Swiss economy will have to contend with a quite marked competitive slowdown in 2015, with two consecutive quarters of negative growth likely,” Bernard Lambert, chief economist for Banque Pictet told ATS.