A market economy differs from other types of economic models in that participants have the right to choose what they like more than other options. This means that the manufacturer decides for himself what he will do, and the buyer chooses where and what product to buy. Employees will not be forgotten either - they have the opportunity to independently decide where to work. The key concept of a market economy is competition, because it is in such a struggle that success can be achieved. That is, competition and monopolistic activity are the basic concepts that allow developing both at the level of a particular participant in the economic model and the system as a whole.

general information

From the dictionaries of economic terms it follows that competition is a rivalry that different market participants enter into. the main objective, which is pursued by subject competition - Better conditions for the manufacture, sale, acquisition of the widest range of positions.

Competition is a category without which market relations in a developed society cannot even be imagined. The forms and methods are quite different from each other, but the single essence of competition remains. At the same time, competition is distinguished within industries when similar products conflict, as well as between industries.

Cataloging and money

From the point of view of economists, the most correct division into the following forms of competition can be called:

price;
non-price.

Pricing assumes that prices for goods and services are set, focusing on a competitor and trying to offer the buyer more profitable, cheaper positions. The reduction is organized by reducing costs, reducing profits. However, only firms with sufficiently large resources can go for the second option.

The non-price form of competition is based on the idea of providing the buyer with the highest possible quality, the highest reliability. This can be achieved by a manufacturer who creates the best technical conditions for production lines, applies modern technologies, implements effective innovations.

Perfection: achievable or not?

When they talk about legal, illegal types of competition, about methods, methods, technologies, strategies used by market participants, they classify competition into perfect, imperfect. The first presupposes absolute freedom. Depending on which species is observed, the corresponding markets are distinguished.

Perfect competition assumes that individual firms have little influence on the final price of the product, but the market is competitive. At the same time, competition is free. This perfect image, allowing you to work simultaneously with a large number of sellers, independent of each other. All participants interested in purchases have the same rights and opportunities to purchase the presented goods.

Considering positive sides for perfect competition, it should be noted that here firms do not influence the price at which products are offered to retail buyers. This is due to the fact that there are a lot of market participants, each individual organization offers a relatively small volume of the product, that is, it owns a small percentage of the market. However, already from the description it is obvious that it is impossible to achieve such a state of the market within the framework of our civilization 100% - this model is ideal, you can strive for it, get closer, but not achieve its implementation in reality. If we analyze the market that existed in European countries until about the 19th century, then it can be conditionally called precisely the ideal form of competition.

Progress and Economics

In the 19th century there were technological breakthroughs, industrial revolutions, there was a major restructuring of not only production processes, but also the market economy in many countries of the world. STP has a strong impact on the concentration of production. This provoked the organization of large, super-large organizations. Simply put, progress has led to a monopoly. Of course, in each individual country, measures are being taken to limit the monopolization of the market. In particular, 135-FZ "On Protection of Competition" is in force in our country. To some extent it works, but the trends of the world market cannot be completely blocked.

Monopoly - a situation where there is some producer who has managed to gain a dominant position in a chosen area. He dominates in the chosen area, sets the "rules of the game": pricing, production standards, quality, sales, and others. With a monopoly, the company seeks to control the volume of manufactured goods, the prices at which it is sold to customers. In order to maximize profit, the monopolist sets prices that more than cover the cost of production and give him a profit that is much higher than normal. In our country, several normative legal acts have been adopted that regulate antitrust policy states, including the already mentioned 135-FZ "On Protection of Competition", but this does not provide control over the situation to the desired extent.

Imperfect Competition

This term denotes a market in which a form of competition reigns, more or less close to perfect, but not satisfying at least one of its requirements. There are three subspecies of this market situation:

monopoly;
oligopoly;
monopolistic competition.

Monopolistic competition

This term is denoted in the economy by competition, which allows a sufficiently large number of buyers and sellers to work simultaneously. At the same time, the market is facing product differentiation, that is, the emergence broad list qualities, properties of products. This allows the buyer to choose by evaluating numerous parameters, since the positions of competitors differ from each other. The difference can be minor or quite significant. Typically, companies manipulate the following aspects:

quality;
package;
favorable terms of cooperation;
location of the outlet;
service at a high level.

The company that collects the maximum benefits can count on the largest volume of transactions. Monopolistic competition in the economy is a phenomenon when a manufacturer offering differentiated positions captures an impressive part of the market, through which it controls pricing. However, in practice, each individual seller is left with a rather low volume of sales, so many monopolists appear. Each organization controls the cost of goods in a limited sector of the market, which actually allows us to talk about the preservation of competition.

3.1.1. The concept and functions of competition

The key role of competition in a market economy was shown in the 18th century by Adam Smith in his work An Inquiry into the Nature and Cause of Nations. The novelty of A. Smith's theory of competition is as follows:

for the first time, the concept of competition was formulated as rivalry that raises prices (with a reduction in supply) and reduces them (with an excess of supply);
defined main principle competition - the principle of "invisible hand", according to which the "hand" ousts firms engaged in the production of products unnecessary to the market;
a flexible competition mechanism has been developed that instantly responds to any changes in the situation during external environment;
the main conditions for effective competition are defined: a large number of sellers, comprehensive information, the impossibility of each seller to have a significant impact on changes in the market price of goods.

Thus, the main “miracle of the market economy” is that it allows people to act guided by personal gain, but at the same time forces everyone to do what is beneficial for society, that is, human behavior, as A. Smith wrote, is determined by the rule “ invisible hand”, by which he understood the mechanism of the market.

Despite the fact that the work of A. Smith saw the light in the XVIII century, in standing tense There is no established single definition of the concept of "competition".

The following definitions of competition exist:

competition- this is a process by which people receive and transfer knowledge (F. Hayek), (too narrow definition);
competition- this is the desire to satisfy the criteria for access to rare goods as best as possible (P. Heine), (too general definition, since it does not include the seller, the buyer and the product itself);
competition- this is the presence in the market of a large number of buyers and sellers, the ability to freely enter and exit the market (K.R. McConnell and S.L. Brew), (a broader definition, although it does not take into account the conditions for entering and entering the market) ;
competition- a dynamic and evolving process, which results in new products, new ways of marketing, new production processes and new market segments. (M. Poter), (limited definition, since it does not explain what the competition process itself is, but characterizes only its result);
competition- this is rivalry in any field between separate legal and individuals interested in achieving the same specific purpose(G.L. Alozoev), (there is no concept of goods in the definition);
market competition - this is the struggle of firms for a limited amount of effective demand of consumers, conducted by them in accessible market segments (A.Yu. Yudanov).
competition- this is the competitiveness of economic entities, when their independent actions effectively limit the ability of each of them to unilaterally influence general terms and Conditions circulation of goods in the relevant commodity market (Law of the Russian Federation "On competition and restriction of monopolistic activity in commodity markets);
competition is an economic obligation to achieve best results in the field of any activity, the struggle of commodity producers for more favorable business conditions, obtaining the highest profit.

Despite the fact that there is no single concept of “competition” in the world, all economists agree that competition is driving force development of society, the main tool for saving resources, improving the quality of goods and the standard of living of the population, as well as the main incentive for adapting to changes, that is, for introducing changes, improving the structure of the enterprise.

Competition has the following defining features:

is a backbone component of market relations, determining the totality of their inherent elements (production costs, price formation, adaptability of enterprises and organizations to market requirements, satisfaction of demand for goods and services, etc.);
serves as the foundation of market methods of managing the economy, the basis for the formation and manifestation of the competitiveness of products, the economic law expressing the objectivity of the categories of competition (competitiveness) between market entities, affects the nature and forms of relationships between them;
manifests itself in the system of reproduction of technical and economic parameters of products at all stages of its design, manufacture, pre-sale and after-sales service and consumption (operation).

Positive features of competition are that:

it contributes to scientific and technological progress, rational use of resources;
helps manufacturers to respond responsively to changes in demand and make adjustments to production;
helps to reduce production costs, and hence prices;
creates favorable conditions for the manifestation of initiative, stimulates entrepreneurship.

Negative features of competition you can call it:

competition leads to an increase in income differentiation, creates social tension;
causes instability of business and leads to the ruin of a number of entrepreneurs;
causes crises in the markets.

Competition in a market economy does whole line functions. Competition features:

regulating- affects the supply of goods and services so that it meets the needs of consumers;
allocation- ensures the concentration of resources where they will have the maximum return;
innovative- forces all firms to focus on increasing labor productivity in order to increase efficiency and achieve the optimum of the firm;
motivating – provides firms with positive and negative sanctions, that is, enterprises that offer better quality products or produce them at lower costs are rewarded in the form of profits, and enterprises that do not respond to the wishes of customers or violate the rules of competition receive losses and are forced out of the market ;
distribution, insofar as competition not only includes incentives for more high efficiency, but also allows to distribute income among enterprises and households in accordance with their effective contribution, that is, with the principle of remuneration according to results;
controlling- helps to ensure that no single supplier and buyer can take a dominant position in the market.

3.1.2. Mechanism of competition

Competition- this is a form of interaction between market entities, a mechanism for regulating market proportions, a set of methods, an economic process.

As a form of interaction between market entities, competition is a multifaceted process, which is accompanied by rivalry for increasing production volumes, expanding sales markets, and for sources of raw materials and materials.

Acting as a mechanism for regulating proportions, competition makes it possible to determine the magnitude of economic regulators, which are prices, the rate of profit, the rate of interest on capital, and a number of others.

The starting point in the study of competition is the study of the content of its mechanism.

The mechanism of competition in the modern market is deeply disclosed by a professor at Harvard Business School, Michael Porter.

The extended concept of rivalry introduced by Porter proceeds from the fact that the ability of an organization to realize its competitive advantage in the underlying market depends not only on the direct competition that it faces, but also on the role played by various competitive forces, therefore, the essence of competition, in his opinion, expressed by five forces:

The threat of new competitors.
The threat of substitute products, or the threat of substitution of products and services.
Supplier rivalry, or the ability of component suppliers to bargain.
The rivalry of buyers, that is, the ability of buyers to bargain.
The rivalry of existing competitors among themselves, that is, the struggle between existing competitors.

Together, these forces determine the inherent attractiveness of the long-term profits that can be made in the commodity market. It is the interaction of these five forces that ultimately determines the profitability potential of the product (service) market.

3.1.3. Types and methods of competition

For an in-depth study of the category of competition, its detailed detailed classification is necessary. The classification of competition is necessary in order to identify its specific features and take adequate measures to participate in the competition and win it.

Can be distinguished intra-industry And intersectoral competition.

Intra-industry competition- this is the rivalry between producers of one type of goods for the most favorable conditions for production and marketing, for a large share of the market for this product,

Interindustry competition- this is a struggle between manufacturers in different industries for the most profitable areas for capital investment. As a result of intersectoral competition, funds from low-profit industries rush to highly profitable sectors of the economy.

Competition may be due to natural factors, and geographic.

Competition driven by natural advantages, can be caused, for example, by the presence of oil at shallow depths, or by the presence of a high iron content in the ore.

Competition driven by geographic advantage, for example, the presence of lower costs for the transportation of products, etc.

Moreover, competition is subject, subjective, functional, specific, direct, expected.

Functional competition arises due to the fact that different goods or services can satisfy the same need in different ways, for example, the necessary transportation can be carried out by road or rail.

Species competition arises in those cases when goods designed to satisfy the same need differ from each other in their properties, which affect the degree of such satisfaction.

Subject competition manifests itself in the case when enterprises offer customers almost the same goods, for example, cars of the same class.

Subjective competition arises between firms whose stable position in the market is ensured by the chosen field of activity.

Expected Competition begins already at the stage of development or mastering the production of new products that will be supplied to an already mastered or new market.

Direct competition arises in the case of competitive relations without intermediaries.

It is also customary to single out internal and external, regional and interregional, bona fide and unfair, price and non-price, perfect and imperfect competition .

In addition, competition can be classified according to:

objects of competition
subjects of competition
degree of civilization
functioning
degree of openness
market conditions
nature of competition
the number of participants;
competitive situation.

;

TO price methodscompetition relate:

price reduction by reducing production costs, while the quality and range of goods and services offered remains unchanged;
price discrimination, that is, the sale of goods at demand prices (first degree), the use of a discount system (second degree) and consumer segmentation (third degree).

Price methods of competition are widely used in the oligopolistic market. However, in addition to price discrimination, which is widely used in the modern period, monopolistic competition brings to the fore the methods of non-price competition.

To the main methods of non-price competition relate:

release of goods of higher quality or goods with qualitatively new properties;
creation of fundamentally new products;
improvement of services and after-sales service;
the formation of new needs and the development of products to meet them.

A special place among the methods of competitive struggle is occupied by methods and means of unfair competition, which include:

unauthorized use of someone else's trademark;
acquisition of a competitor's trade secret;
dissemination of information about a competitor that could harm its reputation;
incorrect comparison of own goods with the goods of a competitor in advertising, misleading consumers regarding the quality of goods and their properties.

Along with the methods of unfair competition, there are methods prohibited by antitrust laws (for example, the Sherman laws of 1890, Clayton of 1914 and Robinson-Patman of 1936), the so-called methods monopolistic competition.

TO methods of monopolistic competition relate:

imposing on buyers a compulsory assortment of purchased goods and services (“load trading”);
prior agreement between companies to raise or lower prices;
preliminary conspiracy between producers to reduce the volume of production;
establishing discriminatory business conditions for clients and partners.

Unfortunately, the methods of monopolistic and unfair competition have been widely used and are being used today. The state must strictly suppress attempts to use such methods of competition. Without this, the formation and development of full-fledged processes of competition in the economy of the country is impossible.

3.1.4. Strategy and competitive factors

The main element of the business strategy is innovation. All other elements of the strategy depend on it: any of them has a chance of significant and long-term success only insofar as it relies on the use of product innovations already “approved” by the market. The logic leads to the fact that it is legitimate to consider the innovation strategy as a reference for the whole range of problems solved by commodity producers. Competition is the main factor in the susceptibility of an enterprise to product and technical innovations.

Competition in the innovation sphere has the following features:

it contributes to the fact that entrepreneurs are trying to master products of higher quality at market prices in order to retain consumers;
encourages the use of effective ways production;
forces the entrepreneur to constantly look for and find new types of products and services that consumers need and can satisfy the needs of the market.

Analysis of the distant environment of producers should be supplemented by a study of the near environment, that is, the organization's competitors. Quantitative and qualitative data are used to analyze nearby competitors.

quantitative data- this is information about which firms are competitors; what products they sell; how and in what markets; who are their main customers; how goods are brought to market.

Qualitative characteristics are the fame of the enterprise, the qualifications of its personnel, the quality of goods, the commitment of consumers to the brand of the enterprise, the management system, the strategy of activity in the market and other non-formalized parameters, which are quite difficult to assess. Such information will always be subjective. In practice, the activities of competitors are analyzed in the same areas as the company's own activities.

Sources of information can be very different: statistical data; price lists; media; catalogs, brochures, promotional materials; annual reports of firms, opinions of experts and buyers, up to industrial espionage. This takes into account other important factors presented in Fig. one.

Rice. 1. Factors serving the actions of competitors

Assessment of the conditions of competition is the definition of factors affecting competition and their study. A market-oriented organization, according to M. Porter's broad concept of rivalry, must take into account all the factors of competition operating in the market.

TO the most important competitive factors relate:

number of firms and their sizes;
product specifics;
the nature of demand and prospects for the development of the industry;
costs associated with switching consumers from one supplier to another;
existence of barriers to exit from the industry;
rivalry between competing companies;
competition from substitute goods;
the threat of new competitors;
economic opportunities for suppliers and buyers, etc.

It is necessary to determine the rules of competition in the industry, evaluate intra-industry competition at the current time and in the future.

Competition encourages entrepreneurs to act effectively in the market, forcing them to offer a wider range of goods and services at a higher price. low prices And best quality, vigorously innovate, improve technology, make rational use of limited resources, improve investment efficiency.

3.1.5. Types of competitive behavior of the firm

The goal of any organization is to win the competition. Each firm chooses its own type of competitive behavior. There are three main types of competitive behavior of the firm.

The first type is creative type of competitive behavior, aimed at creating product, technological, organizational and managerial innovations that provide superiority over competitors.

The second type is guaranteeing. This is a type of competitive behavior based on the desire to maintain the previously achieved positions for the long term through non-price methods of competition.

The third type of competitive behavior is opportunistic. It is associated with a faster take into account changes in production and in the market situation and with the desire to get ahead of their competitors in adapting to new market conditions.

The first type of competitive behavior is the most preferable for an active business; moreover, it is necessary for successful implementation firm's innovation strategy.

3.1.6. Competitiveness and methods for assessing the competitive situation

Methods for assessing the competitive situation include assessment of competitiveness and assessment of competitive advantages .

In this regard, the concept of competitiveness should first be defined. To date, there is no generally accepted concept of competitiveness.

According to the "Dictionary of the Russian language" S.I. Ozhegov " Competitiveness is the ability to withstand competition, to resist competitors. Taking this definition as the concept of the Russian language as a basis, we can say that competitiveness is a complex multi-aspect concept that means the ability of a product and, accordingly, a commodity producer to take and maintain a position in a competitive market (markets) in the period under review when competing with other goods of a similar purpose. and their manufacturers. In the modern market, competitiveness is the ability to get ahead of others, using your advantages in achieving your goals.

In the economic literature, the concept of competitiveness has different interpretations, is analyzed in different ways, in particular, depending on which economic object it is applied to.

When assessing the competitive environment in a particular market, it is necessary to distinguish competitiveness of goods and enterprises. The competitiveness of products and the competitiveness of the enterprise are related to each other as a part and a whole.

The ability of a manufacturer to compete in a particular product market directly depends on the competitiveness of the product and the totality of the economic methods of the enterprise. The competitiveness of a product does not have a clear quantitative definition, all its factors are relative.

There are a large number of definitions and methods of evaluation product competitiveness.

Usually, they understand everything that provides it with advantages in the market, contributes to successful sales in a competitive environment.

Product competitiveness- this is a relative and generalized characteristic of the product, expressing its advantageous differences from the product-competitor in terms of the degree of satisfaction of the need and the cost of its manufacture. According to the scientist I.M Lifits, product competitiveness- the ability of the product to ensure commercial success in a competitive environment. However, such definitions do not clarify the content of this concept, stating the already obvious dependence of sales on competition.

Sometimes under product competitiveness only a complex of consumer properties, separated from value, is understood. Thus, the term "competitiveness" is identified with the concept of product quality, in broad sense words. And although non-price competition, or quality competition, has now become the basis of competition, this does not mean that it is possible not to take into account the price of a product when assessing its competitiveness. In this regard, Russian scientists E.A., Utkin, N.I. Morozov and G.I. Morozov under product competitiveness is understood a set of its quality and cost characteristics, which ensures the satisfaction of the specific needs of buyers and favorably for the buyer differs from competing products.

Under product competitiveness is understood as a characteristic that reflects its difference from a competitor product both in terms of the degree of compliance with a specific social need, and in terms of the costs of satisfying it. Thus, under product competitiveness should be understood as a complex of consumer, price and quality characteristics goods that determine its success both in the domestic and foreign markets.

When assessing the competitiveness of a product, the main factor is the sources competitive advantage.

Competitive advantage can be associated with almost any aspect of the company's activities: a special pricing policy, effective management of sales, profits, capital, costs, profitability of production and other financial results, with the character innovation activities. In this way, competitive advantages are: low costs, high quality and a strong degree of differentiation.

In a market economy, an enterprise cannot occupy a stable position for a long time if its strategy is aimed only at the competitiveness of the product. When entering a new market, when deciding to expand and curtail production, when making investments, it is required assessment of the competitiveness of the enterprise itself.

Enterprise competitiveness indicator is a mirror that reflects the results of the work of almost all its services and divisions, as well as its reaction to changes external factors impact. If we consider the concept of "competitiveness" in relation to the enterprise, then it can be defined as the possibility of effective economic activity and its profitable practical implementation in a competitive market.

Enterprise competitiveness - result effective management, focused on innovative type of development. The competitiveness of an enterprise is the ability to use its strengths and concentrate its efforts in the area of production of goods or services where it can take a leading position in the domestic and foreign markets. At the same time, competitiveness is assessed only within a group of enterprises belonging to the same industry, or firms producing substitute goods.

The competitiveness of the firm can be defined as the ability to provide the best offer of goods, compared with a competing company.

The key concept of the competitiveness of an enterprise is its competitive advantage.

English economists M. Meskon, A. Albert and F. Hedouri consider competitive advantages as a high competence of the organization in any area, which gives it best opportunities attracting and retaining clientele.

Professor R.A. Fatkhutdinov believes that competitive advantage of the organization - these are any exclusive values (tangible, intangible, monetary, social, etc.) that an organization possesses and which give it superiority over competitors. According to Fatkhutdinov, the implementation of competitive advantage is based on the essence of value, which was the source of obtaining the advantage.

In the interpretation strategic marketing underlying modern concept strategic management, the French scientist J. Lambin defines competitive advantages as those characteristics, properties of the product (brand) or other factors that create a certain superiority for the company over its direct competitors. These characteristics can be very different and can relate both to the product itself (basic service), and to additional services accompanying the basic one, to the forms of production.

Competitive advantages, according to the English scientist Richard Koch, these are the characteristics of the properties of a product or brand, as well as the advantages in the management system that create superiority for the company over competitors.

The founder of the theory of competition M. Porter proposed a classification (hierarchy) competitive advantage in terms of their importance. Low Rank Benefits(available raw materials, cheap labor, scale of production) give the company insufficient competitiveness, since they are easily accessible to competitors and widely distributed. To higher order benefits include the firm's reputation, customer relationships, and the firm's investment attractiveness. An important competitive advantage can be the goals and motivation of the owners, managers and staff of the firm. TO competitive advantage of the highest order M. Porter refers to the technical level of products, patented production technology and high professionalism of the staff.

Consequently, among the internal factors of the competitiveness of an innovative firm, the leading role belongs to the technological factor, and the most important source of creating and maintaining a competitive advantage is the constant renewal and innovative development of production.

The competitive advantages of a commodity producer are closely dependent on the strategy chosen by him and the success of its implementation, therefore, more and more attention is paid to the strategy of the enterprise.

The methodology for assessing the conditions of competition has been developed M. Porter and is based on the "national rhombus"(Fig. 2).

Rice. 2. National rhombus. Source: Porter M. International competition - M. 1993. - S. 149.

When assessing the conditions of competition, both the parameters of factors and the parameters of demand should be taken into account. The strategy of organizations, their structure and competition directly depends on these parameters. but, in turn, has a strong influence on them.

The success of enterprises, their competitiveness in the innovative market depend on many factors. A list of indicators reflecting the key success factors in a particular market allows an enterprise to assess its competitiveness relative to its main competitors. It is clear that the main forces that shape the competitive climate can change from market to market. On the interaction of these competitive forces, a model of the attractiveness of the industry and possible changes in it as a result of the action of objective economic factors is built.

Matrix methodassessment of the competitiveness of an enterprise, developed"Boston Consulting Group" describe the competitive situation using two main dimensions: the importance of maintaining competitive advantage and the number of potential sources of differentiation that maintain competitive advantage. Differentiation opportunities depend on each specific industry. In order to gain a competitive advantage, each firm must find its own ways to differentiate products.

The Boston Consulting Group Competitive Advantage Matrix distinguishes four types of areas of activity that differ in the number and magnitude of competitive advantages. A matrix is built in a rectangular coordinate system: horizontally, the growth (decrease) in the number of sales is plotted on a linear scale, vertically, the relative share of goods (services) in the market. The most competitive are enterprises that occupy a significant share in a growing market (Fig. 3).

Rice. 3. Assessment of the competitiveness of enterprises (as pictured in the dock)

In the presence of reliable information on the volume of sales, the method allows for a high representativeness of the assessment. However, the application of this method does not include an analysis of the causes of what is happening, which complicates the development of management decisions.

The matrix General electric “Market attractiveness – business efficiency » compares named categories, which, from a marketing point of view, are ideal for business evaluation. A successful firm operates in attractive markets, and its business is efficient enough to be successful. If at least one of these factors is missing, you can say goodbye to hope for positive results. To define these two categories, it is necessary to analyze the underlying factors, find a way to evaluate them, and determine the main indicators.

The method based on theory of effective competition, gives an idea of the competitiveness of the enterprise, covering the most important aspects of its economic activity. The method is based on the evaluation of four group indicators competitiveness: the efficiency of production process management, the efficiency of working capital management, the competitiveness of the product - the quality of the product and its price. According to this method, the most competitive will be those enterprises where the work of all departments and services is best organized. The effectiveness of their activities is influenced by many factors - the resources of the enterprise. Evaluation of the performance of each unit involves assessing the effectiveness of the use of these resources.

To assess the competitiveness of a company, methodological tools called "benchmarking" are increasingly used. Benchmarking - comparative analysis of key success factors (business parameters) of the enterprise and its main competitors . In the process of strategic analysis, it is necessary to first identify the key success factors (KSF) of this industry, and then develop measures to master the most important success factors in competition, that is, determine the ongoing innovative mission in order to succeed in the creation and sale of a new product. CFU can be based on different areas enterprise activities: R & D, marketing, production, finance, management, etc. In practice, KFU can take a variety of forms: it can be highly qualified personnel, low production costs, high market share, effective advertising, company image, recognizable brand. The key success factors vary across the stages of the industry life cycle. All these indicators can be assessed by experts, but it is more preferable to use market monitoring data. Those factors by which the company lags behind competitors are its weakness, and by which it is ahead - strength.

The ratings given take into account the opinions of management services specialists. According to the table, you can find out who is the main competitor.

Method of multi-attribute assessments identifies strengths and weaknesses, calculates their performance, numerically displays the magnitude of the competitive advantage. Is an good example to regularly monitor changes in competitiveness. The matrix is divided into nine cells, which make up three levels (Fig. 4).

Rice. 4. Market attractiveness and competitive position (in the dock)

The three cells in the upper left corner are occupied by firms with strong competitive positions. The cells going from the lower left corner to the upper right corner belong to firms with an average competitive position. Three cells in the lower right corner are occupied by non-competitive firms. The area of the circle is proportional to the size of the market share, and the results are represented by arrows of a certain length and direction.

The advantage of this method, in comparison with others, is that it takes into account the most important factor affecting the competitiveness of the enterprise - the competitiveness of the goods.

As a disadvantage, it should be noted that there is no way to judge the advantages and disadvantages of the enterprise, since the competitiveness of the enterprise takes the form of the competitiveness of the product and does not affect other aspects of the enterprise.

Among the methods for assessing the competitiveness of a product deserves attention method "Price - quality". A method that uses as the main approach to assessing the goods of an enterprise, including a new one. The starting position of the method is that the competitiveness of the manufacturer is the higher, the higher the competitiveness of its products. The criterion for assessing the competitiveness of a product (service) is the ratio of price and quality. As an indicator that evaluates the competitiveness of a new product, the ratio of two characteristics is used: price and quality. The most competitive product has the optimal ratio of these characteristics:

, (2.1)

CT- indicator of product competitiveness;

TO- an indicator of the quality of the goods;

C- an indicator of the price of goods.

The higher the difference between the consumer value of the product (demand price) for the buyer and the price he pays for it, the higher the margin of competitiveness of the product, the share of the consumer (Fig. 5).

Rice. 5. Assessment of the competitiveness of the goods (in the dock)

The advantage of the method: it takes into account the most important criterion that affects the competitiveness of the enterprise - the competitiveness of the product.

Disadvantages of the method: allows you to get a very limited idea of the advantages and disadvantages of the enterprise, since the competitiveness of the enterprise takes the form of the competitiveness of the product and does not affect other aspects: market share, product quality, brand reputation; the effectiveness of product promotion, the possibilities and efficiency of production, the administrative apparatus.

Boole method is based on the calculation of universal coefficients, initially based on the "price-quality" ratio. Used to identify priority competitors and determine the strength of their positions. It classifies enterprises depending on the calculated indicators into groups of leaders, catching up and followers.

The indicator of competitiveness K is determined by the formula:

, (1)

T is an indicator of competitiveness in terms of technical parameters;

E is an indicator of competitiveness in terms of economic parameters.

(a), or (b) (2)

Ri- absolute value i- th technical parameter of the test material;

- absolute value i-th technical parameter, taken as the basic one (that is, for the comparison sample);

or - relative indicator of material quality according to i- mu indicator;

Li- weight factor i- th indicator (determined by experts);

n- the number of technical parameters of interest to the consumer.

From formulas (2.a) and (2.b), choose the one according to which an increase in the relative indicator corresponds to an improvement in product quality.

(3)

where: - private index of costs for processing the analyzed material relative to the base sample:

- cost share j-th type of costs in the price of consumption of the base sample (otherwise, the weighting coefficient of the j-th indicator);

- consumption price of the analyzed product;

FROMj- costs in value terms for the acquisition and processing of the analyzed material;

- costs in value terms for the acquisition and processing of the basic sample according to j-th type of costs. The material is competitive if TOi 1.

Assessment of the competitiveness of an enterprise covers all the most important assessments of the economic activity of an enterprise, eliminates duplication of individual indicators, and allows you to quickly and objectively get a picture of the position of an enterprise in the industry market. The use of comparisons of indicators for different periods of time during the assessment makes it possible to apply this method as an option operational control individual services.

conclusions

Despite the fact that there is no single concept of “competition” in the world, all economists agree that competition is the driving force behind the development of society, the main tool for saving resources, improving the quality of goods and the standard of living of the population, as well as the main incentive for adapting to changes, that is, the introduction of changes, the improvement of the structure of the enterprise.

There are both positive and negative traits competition.

Competition in a market economy performs the following functions: regulatory, allocative; innovative; motivating ; distribution; controlling.
Competition is a form of interaction between market entities, a mechanism for regulating market proportions, a set of methods, an economic process. Acting as a mechanism for regulating proportions, competition makes it possible to determine the magnitude of economic regulators, which are prices, the rate of profit, the rate of interest on capital, and a number of others. The extended concept of rivalry introduced by Porter proceeds from the fact that the ability of an organization to realize its competitive advantage in the underlying market depends not only on the direct competition that it faces, but also on the role played by various competitive forces, therefore, the essence of competition, in his opinion, expressed by five forces: Together, these forces determine the inherent attractiveness of the long-term profit that can be made in the commodity market. It is the interaction of these five forces that ultimately determines the profitability potential of the product (service) market.
For an in-depth study of the category of competition, its detailed detailed classification is necessary. The classification of competition is necessary in order to identify its specific features and take adequate measures to participate in the competition and win it.

There are several types of classification of competition.

It is possible to distinguish between intra-industry and inter-industry competition. Competition can be due to both natural and geographic factors. In addition, competition can be objective, subjective, functional, specific, direct, expected. It is also customary to single out internal and external, regional and interregional, fair and unfair, price and non-price, perfect and imperfect competition.

Based on different types of competition, there are various methods of competition. They are divided into: price ; non-price; dishonest; monopolistic.
The most important factors of competition include: the number of firms and their sizes; product specifics; the nature of demand and prospects for the development of the industry; costs associated with switching consumers from one supplier to another; existence of barriers to exit from the industry; rivalry between competing companies; competition from substitute goods; the threat of new competitors; economic opportunities for suppliers and buyers, etc.
There are three main types of competitive behavior of the firm: creative, guaranteeing, opportunistic.
Methods for assessing the competitive situation include the assessment of competitiveness and the assessment of competitive advantages.

Competitiveness- this is a complex multi-aspect concept, meaning the ability of a product and, accordingly, a commodity producer to take and maintain a position in a competitive market (markets) in the period under review when competing with other goods of a similar purpose and their producers. In the modern market, competitiveness is the ability to get ahead of others, using your advantages in achieving your goals.

When assessing the competitive environment in a particular market, it is necessary to distinguish between the competitiveness of goods and enterprises.

The competitiveness of a product should be understood as a complex of consumer, price and quality characteristics of a product that determine its success both in the domestic and foreign markets.

When assessing the competitiveness of a product, the main factor is the sources of competitive advantage. Competitive advantages are: low costs, high quality and a strong degree of differentiation.

If we consider the concept of "competitiveness" in relation to the enterprise, then it can be defined as the possibility of effective economic activity and its profitable practical implementation in a competitive market.

The key concept of the competitiveness of an enterprise is its competitive advantage.

An analysis of the competitiveness of an enterprise and its product should begin with a study of the conditions of competition in the market.

The methodology for assessing the conditions of competition was developed by M. Porter and is based on the "national rhombus".

There are many methods for assessing the competitiveness of products and enterprises. The most important of them are the following:

matrix method for assessing the competitiveness of an enterprise, developed by the Boston Consulting Group;
General Electric matrix "market attractiveness - business efficiency";
a method based on the theory of effective competition;
benchmarking;
method of multi-attribute assessments;
method "price - quality";
Boole method.

Questions for self-examination

Define the concept of competition.
Formulate the main signs of competition.
Assess the positive and negative sides competition.
Describe the functions of competition.
Name five competitive forces (according to M. Porter).
Describe all types of classification of competition.
Describe the main methods of competition.
Name the main factors of competition.
Describe the types of competitive behavior.
Define the competitiveness of an enterprise and the competitiveness of products.
Name the competitive advantages of the product and the enterprise.
Describe methods for assessing the competitiveness of products and enterprises.

Bibliography

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Title of the presentation

Competition is rivalry, economic struggle, rivalry between sellers - manufacturers for the right to obtain maximum profit and between buyers when buying goods for a greater benefit.

Competition contributes to the efficient use of limited resources. Resources are distributed by industries and types of production in such a way that the products obtained from these resources bring them profit. It is the regulating force in the market conditions. Adam Smith called it "the invisible hand".

Competition performs the most important function in a market economy - it forces producers to take into account the interests of the consumer, and hence the interests of society as a whole. In the course of competition, the market selects from a variety of goods only those that are needed by consumers. They are the ones that sell. Others remain unclaimed, and their production is reduced. Competition is a specific mechanism by which the market economy solves fundamental questions: what, how and for whom to produce?

Competition plays an important role in market relations. It stimulates the development of the economy and the workers themselves, the activity of independent units. Through it, commodity producers, as it were, control each other. Their struggle for the consumer leads to lower prices, lower production costs, improved product quality, and the development of scientific and technological progress.

Competition is the rivalry of business entities to achieve the highest results in their own interests. As an economic law, competition expresses a causal relationship between the interests of business entities and the results in the development of the economy.

In the presence of competition in the market, manufacturers are constantly striving to reduce their production costs in order to increase profits. As a result, productivity is increased, costs are reduced, and the company is able to reduce prices. Competition also encourages manufacturers to improve the quality of goods and constantly increase the variety of goods and services offered. Thus, manufacturers are forced to constantly fight competitors for buyers in the sales market by expanding and improving the range of high-quality goods and services offered at lower prices. The consumer benefits from this.

The main conditions for the emergence of competition:

complete economic (economic) isolation of each commodity producer;

complete dependence of the commodity producer on market conditions;

opposition to all other commodity producers in the struggle for consumer demand.

Competition is the most important element of the market, which plays a role in improving the quality of products, works and services, reducing production costs, in the development of technical innovations and discoveries.

Competition directs limited resources to those industries and activities for which there is a demand for products and services. This is called the allocation function or allocation function.

The innovative function of competition is to stimulate the introduction of scientific and technological achievements, new technologies, the release of new types of products and services, improving the quality of products and services, etc.

The function of competition, which consists in creating conditions for the receipt of income and profit by the most successful enterprises and leading to the bankruptcy of an enterprise whose products and services are not in demand by the consumer, is called distribution.

Competition is a tool (means) that prevents the emergence and existence of stable monopoly power in the market. For example, a monopolist may charge a price. At the same time, competition provides the buyer with the opportunity to choose among several sellers. The more perfect the competition, the fairer the price. That is, competition has a controlling function.

Competition contributes to the establishment of an equilibrium price, the equation of supply and demand. In a purely competitive market, individual firms exercise little control over the price of products, have such a small share of the total volume of production that an increase or decrease in its output will not have a tangible effect on the price of the goods. The manufacturer, as well as the buyer, must always be guided by the market price. Thus, competition contributes to reaching a compromise between sellers and buyers. Here it can be noted that competition creates the identity of private and public interests. Firms and resource providers seeking to increase their own benefit and operating within the framework of a fiercely competitive struggle, at the same time as if directed by an “invisible hand” - contribute to ensuring state or public interests

Competition maintains socially normal conditions for the production and sale of goods and services. It seems to suggest to commodity producers how much capital they should invest in the production of this or that commodity. Let us suppose that one seller spent more money on the production of some commodity than another. In such a situation, when the equilibrium price is established in the market for this species goods, the last seller, that is, the one who produced the goods at a lower cost, will have more profit. And with an excess of this type of product, as already noted, a sharp drop in prices will occur, and the seller, who has spent a lot of money on production, will suffer losses. Thus, competition maintains normal conditions of production for the whole society. McConnell notes that "under pure competition, profit-driven entrepreneurs will produce every good up to the point where price and marginal cost equalize." It follows from this that under conditions of competition, resources are distributed efficiently.

Competition stimulates scientific and technological progress and increased production efficiency. Since competition serves as an "equalizer" of prices, it can be concluded that in market competition the one who has high-quality goods and the lowest possible cost will win. And for this it is necessary to constantly update the conditions of production, to spend large investments on improving technology. Nowadays, there are many resourceful entrepreneurs who are willing to take risks in the production of goods using new technology. Consequently, with the development of competition, the efficiency of production increases every year.

With the confrontation of market entities, their socio-economic stratification intensifies. The competition involves many small owners who are just starting to run their own business. economic activity. Many of them, not having sufficient capital, modern means of production and other resources, cannot withstand this rivalry and after a while suffer losses and go bankrupt. And only a few of them increase their economic power, expand their enterprises and become full-fledged and quite significant and respected market participants.

You will learn what competition is, what types of economic rivalry are, the levels and conditions of competition, how to compete effectively in business

We welcome regular readers of the HeatherBober online magazine! With you are the permanent authors of the resource Alexander and Vitaly. In this issue, we will talk about one of the key concepts in business - competition.

Without healthy and reasonable competition, economic development is impossible, and competitiveness is an indicator of the success of a company, product or commercial service.

So, let's begin!

1. What is competition - definition, history of occurrence, levels and conditions of competition

Competition is understood as rivalry between persons interested in achieving specific purpose. If we talk about a market economy, then the definition of this concept will be as follows:

Competition- this is competition in the market with other players (companies), aimed at obtaining commercial benefits by obtaining more sales at higher prices.

Modern competition is very important element market. Thanks to it, manufacturers and service providers are trying to stand out from other firms in order to expand their existing customer base.

The main conditions of competition are as follows:

economic isolation of the manufacturer;
dependence of producers of goods on market conditions;
confrontation with other market participants;
the presence of a large number of equal subjects.

When selling existing products, sellers strive to sell it on the most favorable terms - as expensive as possible. However, in order to stimulate consumer demand, they are forced to lower prices so as not to completely lose customers.

This point is a plus for buyers, because in this case they will not overpay unreasonably.

The whole essence of competition is determined by several functions:

Regulatory. In conditions of rivalry, goods with the greatest demand are determined. This is necessary to increase the scale of production of demanded products.
Motivating. It is competition that motivates the manufacturer to act actively in the most severe conditions - to vary the levels of price indicators, increase the scale of production, and look for new cooperation. This is the only way to increase the competitiveness of the company.
Distribution. The distribution of income of enterprises is carried out taking into account the contribution to economic activity.
Control. Competition controls bargaining power and provides a potential buyer with the opportunity to buy a product or refuse to purchase it in favor of cooperation with another manufacturer. If enough is created on the market high level competition, prices will be as objective as possible.

What it looks like in practice
Businessman Petya sold oranges at an unreasonably high price, so he had a minimum number of sales every day. This was due to the fact that his direct competitors were selling oranges ten rubles cheaper.
In order to somehow increase sales, Petya decided to lower the initial price and compete with his opponents. After such a move, sales of oranges doubled.

2. Importance of competition in the modern economy

Competition in a market economy plays a very importance. In the competitive struggle, leaders, applicants, followers and newcomers are distinguished.

From an economic point of view, competition in business guarantees the creation of more comfortable conditions for the buying side. The intensity of competition for a particular group of products is determined by the number of competitors and the strategies chosen.

Of the positive aspects of competition that affect the economy, we can distinguish:

Activation of the development of STP (scientific and technological progress).
Stimulating the response of producers of goods to changes in consumer demand.
Averaging wages and profit rates.
Satisfaction of consumer demand.

Economic competition forces manufacturers to use innovative technologies in the production of products. This approach is a guarantee of improving the final quality of the product.

Responding to changes in consumer demand ensures cheaper production costs and guarantees a stop in the growth of price indicators.

However, despite all the positive aspects, competition in the economy can also have a negative impact, such as:

the option of creating business instability is possible;
creating conditions for inflation and unemployment;
there is a possibility of illegal actions of competing companies;
industrial espionage;
struggle for qualified specialists;
underutilization of production capacities during recessions.

Example
An employee of the company "K", on behalf of the management, got a job in the staff of a competing company. During the two months that he worked in the new company, the employee studied all the mechanisms of work.
After being fired of his own free will, the industrial spy returned to his former place of work and described to his supervisors the features of the functioning of competitive production. As a result of such a raid, the company "K" managed to increase the volume of production and, accordingly, profits.

At the moment, companies are struggling with such phenomena by concluding a trade secret agreement with their employees.

3. Types of competition - perfect, imperfect, monopolistic, pure and other types of competition

Classification of competition is carried out according to various criteria. Here, the scale of development of such a phenomenon is taken into account, the fulfillment of the conditions for the competitive equilibrium of the market is taken into account, and the ratio of demand to supply is analyzed.

The types of competition are described in more detail in the table below:

№	Classification sign	Types of competition
1	By scale of development	local branch intersectoral national global individual
2	According to the nature of development	price non-price
3	Depending on the fulfillment of the conditions of competitive equilibrium of the market	perfect imperfect
4	Depending on the ratio of supply and demand	clean oligopolistic monopoly
5	Depending on the ratio of the number of business entities	intra-industry intersectoral
6	Depending on the needs, the basis of the product	horizontal vertical

Despite such a large number of variations of this phenomenon, competition can be implemented in two different forms - intra-industry and inter-industry. The latter arises between different enterprises and is expressed in the redistribution of the capital of industries.

The market of imperfect competition implies pure monopoly, as well as oligopoly and monopolistic competition.

Among the main features of an absolute monopoly, the following features should be noted:

the uniqueness of the goods sold;
one seller;
price control by the monopolist;
market power of one company.

Competition and monopoly are opposite concepts. However, under certain circumstances, there may be a possibility of the emergence of so-called monopolistic competition. Here, manufacturers can offer similar sales models that are not identical.

What it looks like in practice
Each firm, which is a monopolist in a certain direction, has monopoly power over its own product - it can change price indicators, regardless of the actions of competitors.

We conducted a survey among 12 businessmen we know and found out how they identify their competitors and what they do to beat them.

The competition of goods has a very positive effect on the quality of products.

To stand out from the general flow of manufacturers and increase the existing customer base, modern companies should be able to exist in conditions of created competition.

You can increase the level of competition in various ways.

Council number 1. Study consumer demand in the long term

The dynamics of long-term demand is a fundamental factor in making decisions regarding investment in order to increase production capacity.

An increase in this indicator may indicate the feasibility of searching for new distribution channels and updating the product line. The decline in consumer demand in the long term indicates the need to revise the chosen development strategy of the company.

Council number 2. Apply technological innovation

Outdated production technologies negatively affect the volume of production and the quality of goods. To increase competitiveness, it is necessary to resort to the implementation technological innovations which are aimed at producing high quality goods while minimizing costs.

The innovative factor allows minimizing costs at the macro level and contributes to the optimization of the production process.

Council number 3. Use marketing and pricing technologies wisely

Marketing innovation refers to the sale of existing products using new methods of marketing. We have already told, in a separate article.

A detailed analysis of the most effective marketing technologies entails an increase in consumer interest and provides a reduction in costs per unit of product. Particular attention should also be paid to the study of the pricing process.

Council number 4. Upgrade the skills of your employees

At the heart of maintaining the competitiveness of any company is the professional development of full-time employees of the company. Staff training can be massive or carried out individually.

In the latter case, we can talk about achieving the desired effect in the shortest possible time. Increasing the qualifications of employees in the future has a very positive effect on the quality of the company's services. Thanks to this procedure, employees will be able to solve the tasks of any level of complexity.

Council number 5. Analyze competitors, study their strengths and weaknesses

The experience of competitive companies can be used when choosing a development strategy for your own enterprise. After a thorough analysis, maximum attention should be paid to studying their sides. This effective tool is called benchmarking.

A systematic and detailed study of the experience of competitors and representatives of related industries will help to avoid possible errors which were admitted by other market participants. Effective techniques that give the desired result can also be used to your advantage.

Council number 6. Increase productivity and quality

It should be noted here that an independent increase in production volumes cannot bring the desired result. To achieve a positive final result when using this method, it is necessary to take into account the costs of the enterprise and the level of final profit.

When organizing the production process and planning the volumes of manufactured products, it is very important to ensure the break-even of production activities.

With an increase in the volume of production of goods, one should not forget about quality standards. Providing services or products of high quality will be the key to entering the foreign market and raise the company's image among buyers.

Entering a new level of sales allows you to generate an additional amount of demand. Thus, it is much easier for companies to influence the consumer and encourage him to purchase the product.

Expansion of the existing sales market for manufactured products can be achieved in various ways.:

Attracting new customers. This method involves notifying about a product or service to a category of potential buyers who have not yet heard about the company's assortment. It is also possible to attract new customers by expanding the geography of enterprises.
Finding new ways to use the company's products. Even one new application of the manufactured products can increase sales. Regularly looking for ways to use a product can increase profits.
Intensification of the use of manufactured products. The main task of the manufacturer when using this strategy is to convince the buyer of a more intensive use of the products.

For example
The corn flakes manufacturer has convinced its customers that they will enjoy eating a whole pack of flakes, not half. Thanks to this move, the level of sales has increased significantly.

5. How to deal with competitors and who can help in this?

The development of competition pushes manufacturers to improve the quality of their own products. Only in this way can companies expect to expand their customer base and increase profits.

However, in order not to get lost against the background of direct competitors, it is necessary to be ahead of them in everything. Below are the most common ways to deal with other manufacturers or service providers.

Tips and ways to deal with competitors:

Chat with competitors. For direct communication with representatives of competitive firms, the help of relatives or close friends may be needed. The latter can play the role of potential buyers. It will not be possible to fully disclose all the plans of competitors, but you will have a general idea of \u200b\u200btheir actions in the near future.
Interview clients of competitive companies. Sending questionnaires or surveys to people in the immediate vicinity of the store can indicate the actions of competitors, which customers evaluate positively.
Study the specialized press. Notes in newspapers about the achievements of competing companies allow you to follow the development and success of other firms.
Attend industry shows. As part of such events, all companies openly present new developments, demonstrate product line updates, and share other useful information with visitors.
Analyze competitor ads. If competitors' advertising works, then you can project such techniques on your business. Particular attention should be paid to those advertising mechanisms that ensure the expansion of the client base. In particular, it applies to such a tool.
Check competitor websites daily. Every day you need to visit competitive sites and follow literally everything that is new - updating the news block, implementing promotional offers, updating the product line.
Try competitors' products. The opportunity to try competitive products must be taken from personal experience. Only in this way it will be possible to understand why customers prefer this particular company, and not yours.
Collect printing products and competitors' discs. All technical manuals, advertising leaflets, catalogs and even price lists can be useful in achieving the final goal.

These actions will help you see the full picture of competitive activity and then take countermeasures to improve your business.

If independent study of competitors is a problematic task for you, then it is possible to use the services of specialized companies that are engaged in commercial, marketing and economic intelligence.

One of these firms is the community of detectives "Tornado", which collects information and explores the environment of competitive organizations. Such business intelligence provides input for further strategic planning and is its basis.

6. Conclusion

Dear readers, let's sum up!

In this article, we introduced you to the basic concepts of competition and analyzed different kinds this phenomenon.

Competition is the basis of the mechanism of commodity production and the market economy. The rivalry of goods and enterprises provides an opportunity for a potential buyer or consumer of services to make a choice in favor of the most acceptable conditions for purchases and other types of cooperation.

We wish you success!

If you want to know something else on this topic, you can leave your questions in the comments and do not forget to rate the article!