As has been proven by many economists, competition is the driving force behind the development of society, the main tool for saving resources (for example, in Japan, resources are used as a whole three times more efficiently than in Russia), improving the quality of goods and living standards of the population. Therefore, competition is a very complex concept. It is especially important to study its mechanism in the conditions of the Belarusian economy, which is just beginning to master this mechanism. In developed countries, the effectiveness of the competition mechanism has existed for a long time, and its mechanism is well established.
At the present stage of world development, competition, as a driving force, forces manufacturers of goods to constantly look for new ways to improve their quality, reduce prices, improve the quality of service. Due to the scarcity of resources, a new problem arises – saving resources from consumers of goods by simplifying the design and improving the quality of goods, therefore, in the XXI century this task will be a priority.
Taking into account the analysis of the literature on competition, we propose the following definition: competition is the process of managing the subject’s competitive advantages in a particular market (territory) in order to win or achieve other goals in the fight against competitors for the satisfaction of objective and / or subjective needs within the framework of legislation or in natural conditions.
According to the degree of intensity, competition can be:
attractive, when in this segment the subject better satisfies his needs or receives profits more than in the previous segment; moderate, when the actions of the subject of competition support the competitive environment in this market segment; fierce competition for the object, when the subject absorbs, destroys or displaces the object from this segment; fierce for the subject of competition, when the object (competitor) absorbs, destroys or displaces the object from this segment [16 pp.153-154].
The concept of market competition is narrower than the concept of “competition”, but no less ambiguous. There are many types of market competition, which can be distinguished by the following main features [16 pp.153-154]:
1. According to the scope of action, the following are distinguished:
intra-industry; intersectoral competition; competition in local markets; competition on a national scale; domestic; international competition.
Each of these species can be divided into subspecies.
2. According to the subjects of competitive relations, the following are distinguished:
competition between buyers; competition between sellers; competition between sellers and buyers.
In turn, each of them may include special types of competition – competition between buyers of certain types of goods or certain types of resources, etc.
A separate and very important type of market competition is competition between producers, which includes many subspecies. For example, producer competition can be divided into competition between large enterprises, small enterprises, large and small enterprises.
3. According to the compliance with legal norms, competition can be divided into: fair (honest) and unfair (dishonest), as well as competition in the “black” or “shadow” market and competition in the legal market.
4. In accordance with the methods of competition, competition can be: price and non-price (the already mentioned types of fair and unfair competition can also be distinguished on this basis). A type of price competition is dumping. In modern conditions, such a kind of non-price competition as quality competition is emphasized. Its other subtypes are competition in terms of sale, after-sales service, competition through advertising, etc.
5. According to the manifestation, the following should be highlighted:
real competition; potential competition.
6. If possible, the impact on the market, competition is divided into two types: perfect and imperfect.
7. According to the influence of the state on the competitive mechanism, they talk about:
free competition; competition in a regulated market
[2 pp.9-10].
Forms of competition:
subject – competition between goods of the same assortment group, between similar objects that satisfy the same need; functional – competition between goods (objects) – substitutes.
Methods of competition:
based on the criterion for improving the quality of goods or services (non-price); based on the criterion for improving the quality of service of consumers of goods; on the basis of price reduction (price); on the basis of reducing operating costs for the consumer of goods and services; based on the use of dynamic factors that characterize the quality of management to a greater extent – time factors (duration, speed, acceleration), synergy, organization, adaptability, etc .; based on the use of several or all five of the previous methods of competition (integral).
Competition can occur at the following levels:
local (in a group, department, organization, etc.); regional (district, city, region, etc.); national (in the country); international (in several countries); global (on a global scale, without specifically defined countries).
Options for changing the strength of competition between firms are as follows:
competition is intensified by an increase in the number of competing firms; competition intensifies when large firms join another firm and take decisive steps to make it a leader; competition is strong when the demand for a product grows slowly; competition intensifies when the conditions of management in the industry push the firm to reduce the price or to use other means of increasing sales; competition intensifies when the costs of buyers in the transition from the consumption of one brand to others are small; competition intensifies when one or more firms are not satisfied with their market share; competition intensifies in proportion to the growth of profits from successful strategic decisions; competition intensifies when the costs of exiting the market are high, barriers are high; the course of competition is predictable when the strategies, resources, organizational features, missions of the firm differ to a large extent and are open to the majority.
Factors affecting competition:
market size – the larger, the stronger the competitors; market growth rate – rapid growth facilitates market penetration; capacities – excess capacity leads to a drop in prices; obstacles to entry or exit protect the position of the firm, their absence makes the markets vulnerable to penetration there, uncompetitive newcomers; price; the level of standardization of goods – buyers have an advantage, as it is easy for them to switch from one product to another; mobile technological modules; requirements for the size of the required capital investments – strict requirements increase the risk; create additional barriers to entry and exit; vertical integration increases capital requirements, leads to strong differences in competitiveness and production costs of integrated, partially integrated and non-integrated firms; Economies of scale – increases the market share needed to achieve product competitiveness quick updating of the range of products [16 p.153-155].