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The essence and types of competition. Competition, forms and methods of competition

Competition comes in various forms and is carried out different ways. It can be intra-industry (between similar products) and inter-industry (between products from different industries).
It can be price and non-price, perfect and imperfect. Let's look at the last four types of competition in more detail.
Price competition involves selling goods and services at prices that are lower than those of a competitor. A price reduction is possible either by reducing costs, or by reducing profits, which only large firms can afford, or by price discrimination.
Price discrimination is the sale of certain types of goods or services produced at the same cost at different prices to different buyers. Differences in price are determined not so much by differences in the quality of the product or the cost of its production, but by the ability of the monopoly to arbitrarily set prices. For example, an airline reduces the cost of air tickets when purchasing round-trip tickets; the cinema offers discounts on tickets for children, pensioners or morning shows; the institute reduces tuition fees for students in need, etc.
Price discrimination is possible if three conditions are met:
the seller must be a monopolist or have some degree of monopoly power;
the seller must be able to distinguish buyers into groups that have different ability to pay for the product;
the original purchaser should not be able to resell the product or service.
Price competition is often used when providing services (doctor, lawyer) or when transporting perishable products from one market to another, etc.
Non-price competition is based on the sale of goods over High Quality and reliability achieved through technical excellence.
Improved product quality can be achieved:
a) either by differentiating the product itself;
b) either by differentiating the product by marketing methods;
c) or through competition between new brands.
Differentiation of the product itself means the variety of homogeneous products by changing their design and improving quality characteristics. These measures are aimed at winning the “loyalty” of customers, expressed in the latter’s belief that these products are “better” than competitors’ products.
Product differentiation by marketing methods includes: media advertising, test sales, sales promotion through sales agents and establishment of retail outlets.
The competition of new brands takes into account that, in the context of technological progress, existing products of companies begin to quickly become obsolete. To remain competitive, the company is forced to introduce new brands or remake old ones.
Depending on how participants in market relations compete with each other, they distinguish between perfect (free) and imperfect competition and the corresponding markets: free competition and imperfect competition.
The less influence of individual firms on the price of products, the more competitive the market is considered.
Perfect competition (free competition market) is an ideal image of competition in which:
Numerous sellers and buyers with equal opportunities and rights operate independently of each other on the market;
exchange is carried out by standardized and homogeneous products;
buyers and sellers have complete information about the products they are interested in;
there is a possibility of free entry and exit from the market, and its participants have no incentive to merge.
The main feature of perfect competition: none of the firms influences the retail price, since the share of each of them in the total output is insignificant.
An increase or decrease in the quantity produced by an individual firm has no appreciable effect on total supply and, therefore, on prices. Moreover, no seller will be able to raise the price above the established market price without losing his customers.
Perfect competition in its entirety is unattainable. You can only approach it. With a certain degree of convention, competition that existed until about the middle of the 19th century can be considered free.
Historically and logically, following the analysis of the perfect competition market, one should turn to the study of the imperfect competition market. Economists such as O. Cournot, E. Chamberlin, J. Robinson, J. Hicks and others made outstanding contributions to the analysis of the imperfect competition market. Perfect competition turns into imperfect competition when a monopolist appears on the market.
Therefore, it is useful to preface the consideration of imperfect competition with an analysis of the process of monopoly formation.
From the second half of the 19th century V. under the influence of scientific and technological progress there is a rapid process of concentration of production, which leads to the formation of large and super-large enterprises, i.e. monopolies.
Monopoly (Greek monos - one, poleo - sell) arises when an individual manufacturer occupies a dominant position and controls the market for a given product.
The purpose of a monopoly is to obtain the maximum possible income by controlling the price or volume of production in the market. The means to achieve the goal is a monopoly price, which ensures profits above normal.
Monopolies are formed by the merger of several companies and have the following organizational forms:
Cartel - an agreement on a quota (quantity) of products and division of sales markets.
Syndicate is an association for the purpose of organizing joint sales of products.
A trust is a monopoly in which ownership, production, and sales of products of its member firms are combined.
The concern is a monopoly with a single financial center for all its member firms in different industries, but with a common technology.
A conglomerate is an association based on the penetration of large corporations into industries that do not have production and technological connections with the field of activity of the parent company.
The emergence of monopolies makes competition imperfect, i.e. monopolistic (market of imperfect competition).
Imperfect competition is understood as a market in which at least one of the conditions of free competition is not met.
This condition is primarily the product differentiation that appears in an imperfect market.
Imperfect competition is divided into three types: monopolistic competition with product differentiation, oligopoly, and pure monopoly.
1. With monopolistic competition with product differentiation, a large number of sellers and buyers continue to remain in the market. But a new phenomenon is emerging - product differentiation, that is, the presence of properties in a product that distinguish it from similar competitors' products. These properties are: high quality product, beautiful packaging, good conditions sales, favorable store location, high level service, nice saleswoman, etc.
Having such advantages, the owner of a differentiated product becomes a monopolist to a certain extent and gains the ability to influence the price. But since the sales volume of each seller is relatively small, there are quite a lot of monopolistic firms and each of them has limited control over the market price - this is the distinctive feature of this type of competition. The term “product differentiation” was introduced into scientific circulation by E. Chamberlin. He associated monopoly power in the market primarily with the nature and characteristics of the goods sold and showed that market relations between seller and buyer depend to a large extent on the nature of the product.
2. Oligopolistic competition is represented by a market dominated by a few firms (Greek oligos - few, "poleo" - sell). It is characterized by the presence of either homogeneous or differentiated products, and the main feature is pricing based on the principle of leadership.
This principle assumes that most firms tend to charge approximately the same price as the firm that is strongest in that market.
The reverse phenomenon of oligopoly is oligopsony, when there are several buyers, not sellers, in the market.
3. A pure monopoly exists in the market if:
a) there is only one seller who has no competitors;
b) there are no substitute products, i.e. there are no close substitutes for the monopolist’s product;
c) entry is blocked, i.e. the barriers to entry are so significant that the entry of new firms into the market is impossible.
Unlike a perfect market, where entry is free, a pure monopoly does not allow the emergence of new producers. This means that a pure monopolist seller can change the price within very wide limits, and the highest possible price is limited only by effective demand. This means that the monopolist will receive excess profits both in the short and long periods.
However, power over the market price can be exercised not only by the seller, but also by the buyer. This phenomenon is called monopsony (“I buy one”). The problems of imperfect competition were studied by Cambridge University professor Joan Robinson.
The differences between market structures are presented in Table. 8.1.
IN reality There is no such thing as perfect or imperfect competition. As P. Samuelson noted, “the real world... appears as a unique combination of elements of competition with imperfections introduced by monopolies” (Samuelson P. Economics. M., 1964. P. 499).
Particular attention should be paid to natural monopolies.
A natural monopoly is a situation in which economies of scale (for example, a network railways or the country's energy economy) is so significant that minimum costs are achieved only when the entire output of the industry is concentrated in the hands of one producer. A natural monopoly exists when economies of scale allow one enterprise to satisfy all market demand before returns to scale begin to decline.

⚡ Competition ⚡- this is a struggle between enterprises for the most profitable terms production and sales in order to achieve the best results of their business activities.

In a market system, the main content of competition is the struggle for the consumer, the full satisfaction of his needs. This is a struggle for market share, the success of which depends on the cheapness and quality of goods.

Two main forms of competition

• intra-industry
• intersectoral

Intra-industry competition- competition between commodity producers of the same industry, when enterprises with higher than average labor productivity receive additional profits, and technically and organizationally backward enterprises, on the contrary, lose part of the individual value of the goods they produce and go bankrupt.

Inter-industry competition- competition between enterprises in different industries. It is expressed in the flow of capital from industries with a low rate of profit to industries with a high share of profit.

There are:

• perfect (free) competition
• imperfect competition

Main features of free competition

1. Unlimited number of participants competition, free access to and exit from the market: every person has the right to start a business or stop doing business. You can do this in different ways:
   • Start your own bissnes
   • taking direct part in the work
   • hire workers
   • buy shares
   • purchase government bonds
   • put money in the bank
   • invest them in real estate
2. Absolute mobility of material, labor, financial and other resources- a competitor invests his money for a reason, but to increase income.
3. Every participant is fully informed competition (about supply and demand, prices, profit margins, etc.) allows you to make the right best choice, for example, between buying a house and purchasing shares (in the latter case, the participant needs to know which shares will bring him the maximum income).
4. No participant in free competition is able to influence the decisions made by other participants.

Since their number is very large, the contribution of each producer-seller to the total volume of production and supply is insignificant, therefore the price for which he is going to sell his goods has almost no effect on the market. Thus, real price levels are set by some “invisible hand” (market mechanism).

⚡ Imperfect competition and its types ⚡:

• An imperfectly competitive market requires
• pure monopoly
• monopolistic competition

oligopoly Pure (absolute) monopoly.

This exists if one company is the only manufacturer of a product that also does not have close substitutes.

• This model has four characteristic features:
• the seller acts as the only one, and the industry is synonymous with the company, since there is only one company
• the product being sold is unique, i.e. there are no good or close substitutes for it (the situation is typical for some raw materials industries or for cases when a company supplies a fundamentally new product)
• a monopolist has market power, controls prices, supplies to the market

on the path of a monopolist's entry into the market, barriers of both a natural and artificial nature are insurmountable for the competitor

In the first case, we talk about natural monopolies. These are public utilities - electric and gas companies, water supply companies, communication lines and transport companies. Indeed, it is quite difficult to imagine that the metro will have a competitor. As a rule, in countries with a market economy, such natural monopolies are either owned by the state or operate under its strict control. Monopolistic competition

- a market situation in which a relatively large number of producers offer similar, but not identical products.

In this situation, the presence of thousands or even hundreds of firms on the market is not required, as with perfect competition; a few dozen are sufficient. Under conditions of pure competition, firms produce standardized or homogeneous products; under monopolistic conditions, they produce differentiated products.

Consequently, firms in the market of monopolistic competition enter into competition not only (and even not so much) through prices, but also through every possible differentiation of products and services.

What is monopolistic about this model? Each firm, under conditions of product differentiation, has some degree of monopoly power over its product; it can raise or lower its price regardless of the actions of competitors, although this power is limited both by the presence of producers of similar goods and by significant freedom of entry into the industry. In addition, in markets of monopolistic competition, along with small and medium-sized ones, very large firms can also operate.

Oligopoly. The main feature is the small number of competitors. When a relatively small number of firms (within a dozen) dominate a particular market for goods or services, the industry should be considered oligopolistic.

They can produce both homogeneous and differentiated products. Homogeneity prevails in the markets of raw materials and materials, semi-finished products (ore, oil, steel, cement, etc.), differentiation - in the markets of consumer goods.

The small number of firms facilitates their monopolistic agreements: to set prices, divide or distribute markets, or otherwise limit competition between them. As a result, oligopoly becomes closer to monopoly.

Table. Basic market models

Market characteristics	Free competition	Pure monopoly	Monopolistic competition	Oligopoly
Number of firms	Very big			Some
type of product	Standardized	Unique	Differentiated	Standardized or differentiated
Price control	Absent	Significant	Some within narrow limits	Limited or significant by collusion
Conditions for entering the industry	Very light	Blocked	Relatively light	Significant difficulties
Non-price competition	Absent	Absent	Characterized by special attention to quality, advertising, trademarks, etc.	Very typical, especially when differentiating a product

Price and non-price competition

In accordance with the methods of action, there are:

• price competition
• non-price competition

Price competition involves selling goods or offering services at lower prices than other competitors.

In a civilized market, price reduction occurs either by reducing production costs or by reducing profits. Small and medium-sized firms, in order to stay in this market, usually claim only a small share of the profit. Large monopolies sometimes refuse to make profits altogether in order to low prices for the corresponding product, completely oust competitors from the market, and subsequently increase prices and thereby compensate for losses incurred.

Non-price competition involves offering goods of higher quality, with better reliability and service life, with longer high performance, as well as a wider range.

Of particular importance are such product parameters as environmental friendliness, energy intensity, aesthetics, and safety.

In competition, the reliability and reputation of the manufacturer or supplier of goods, and prestige began to play an increasingly important role. IN last years non-price competition associated with competition to achieve the highest quality products has acquired a dominant role. An important tool Trademarks and trading companies become competitive in the market.

Unfair competition

In conditions of fierce competition between commodity producers, methods associated with violating the norms and rules of competition are often used, i.e. unfair competition. It is expressed in:

• dumping - selling goods at a price below cost
• establishing control over the activities of a competitor
• abuse of dominant market position
• setting discriminatory prices or commercial terms
• dependence of the supply of specific goods or provision of services on the adoption of restrictions on the production or distribution of competing goods
• introduction of restrictive conditions and agency agreements in the sale of products, determining when, to whom, in what quantities and on what conditions to make deliveries
• secret collusion at auctions
• false information and misleading competitors
• unfair copying of competitors' goods and products
• violation of standards and conditions for the supply of goods and services

The main element of the economic mechanism of a market type economy is competition.

The definition of competition given by the famous researcher M. Porter is widely accepted:

“Competitive strategy must be based on a comprehensive understanding of the structure of the industry and the process of its change. In any sector of the economy, no matter whether it operates on the domestic market or on the foreign market, the essence of competition is expressed by five forces:

• 1. The threat of the emergence of new competitors;
• 2. The threat of the emergence of substitute goods;
• 3. Bargaining ability of component suppliers;
• 4. The ability of buyers to bargain;
• 5. Rivalry between existing competitors.

The importance of each of the five forces varies from industry to industry and ultimately determines the profitability of industries.” Porter International competition. - M.: International relationships, 2008. - pp. 52-53.

In other studies, the concept of competition is defined from other positions. Thus, R. McConnell and L. Brew believe that the mandatory conditions for competition are: “the presence in the market of a large number of buyers and sellers of any particular product or resource,” as well as “freedom for buyers and sellers to enter or leave certain markets " McConnell Campbell R., Brew L. Stanley. Economics. - T. 1. - Tallinn, 2007. - P. 106

The second updated edition of the Explanatory Dictionary of Market Economics states: “Competition is rivalry, competition between enterprises operating on the market, with the goal of providing better opportunities for marketing their products, satisfying the diverse needs of customers.” Dictionary market economy. Ed. 2nd add. - M.: Gloria, 2008. - P. 101

Different definitions of competition, as a rule, do not contradict, but rather complement each other. Each of them, taken separately, cannot be considered sufficient. This is expressed in the fact that, while characterizing certain very important signs of competition, they ignore the general theoretical aspect of the problem - the essence of the economic relations inherent in it.

The results of the analysis allow us to draw conclusions that economic competition is characterized by the following defining features:

• – Manifests itself in the system of reproducing the technical and economic parameters of products at all stages of its design, manufacturing, pre-sale and after-sales service and consumption (operation);
• – It is a system-forming component of market relations, determining the totality of their inherent elements (production costs, price formation, adaptability of enterprises and organizations to market requirements, meeting the need for goods and services, etc.);
• – Serves as the foundation of market methods of economic management, the basis for the formation and manifestation of products, economic law, expressing the objectivity of the categories of competition (competition) between market entities, influences the nature and forms of relationships between them, and determines problems at the federal and regional levels.

“Competition is a stimulus for growth and development; competitor's enthusiasm for renewal; search, choice, and progress towards the goal; knowledge of rivals, ability to select partners, thirst for success.” Program of the discipline "Corporate Management". - M.:REA im. Plekhanov, 2008. - P. 106

Translated from Latin language competition means "to collide." In fact, competition is a struggle.

In order to better understand the essence of competition, let's consider some points of view on this concept.

A. Smith understood the essence of competition as a set of mutually independent attempts by various sellers to establish control in the market. Consequently, the emphasis was on the behavior of sellers and buyers, which was characterized by honest, non-collusion competition for more favorable terms for the sale or purchase of goods. At the same time, prices were considered the main object of competition.

Western scientists F. Edgeworth, A. Cournot, J. Robinson, E. Chamberlin proposed a structural understanding of the term “competition”. In their opinion, a market is called competitive when the number of firms selling a homogeneous product is so large and the share of a particular firm in the market is so small that no one firm alone can significantly influence the price of the product by changing sales volume. This understanding of competition obviously distinguishes between competition and rivalry.

Thus, it is obvious that the concept of competition does not have precise boundaries, since various concepts can be brought to its consideration, and also based on the above views of Western economists, one can say that there is inconsistency in the definition this concept. Despite this, it is important to note the very essence of competition, which lies in the fact that, on the one hand, it creates conditions for which the buyer in the market has a fairly large number of opportunities to purchase goods, and the seller - to sell them. On the other hand, two parties take part in the exchange, each of which puts its own interests above the interests of the partner. As a result, both the seller and the buyer, when concluding an agreement, must make a mutual compromise when determining the price, otherwise the agreement will not take place, and each of them will suffer losses.

It's also important to note required condition competition, which consists in the independence of the subjects of market relations from certain forces. This independence is manifested, firstly, in the ability to independently make decisions about the production or purchase of goods or services; secondly, in the freedom to choose market partners. In the process of competition, economic entities seem to mutually control each other. From this we can conclude that competition is a significant tool for regulating the proportions of social production in market conditions.

Competition (Latin “competition” - to collide) is rivalry between participants in a market economy for the best conditions for the production, purchase and sale of goods. Such a clash is inevitable and is generated by objective conditions: the complete economic isolation of each manufacturer, its complete dependence on market conditions, and confrontation with all other commodity owners in the struggle for consumer demand. The market struggle for survival and economic prosperity is the economic law of the commodity economy.

In the West, they distinguish between perfect competition (in which none of the competitors is able to influence the market price). A freely competitive market consists of a large number of sellers competing with each other. Each of them offers standard, uniform products to many customers. Production volumes and supply from individual producers constitute a small share of total output, so one firm cannot have a significant influence on the market price, but must agree with the price and accept it as a given parameter. Efimchuk I. Competition: pros and cons // “Finance”. - 2008. - No. 34. - With. 21-22

What keeps McDonald's, General Motors, or any other company from raising prices, selling inferior products, or providing inferior service? Competition. If McDonald's can't sell sandwiches at a reasonable price and with a smile, people will go to its competitors, such as Burger King or Wendy's. Recent experience shows that even such a huge company as General Motors can lose its customers to Ford, Honda, Toyota, Chrysler, Volkswagen, Mazda and other car manufacturers , unless she manages to stay on par with her rivals.

Competition provides a strong incentive for firms to create better products and adopt cheaper production methods. No one knows exactly what product consumers will want in the near future or what technology will help minimize unit costs. Competition helps answer this question. Is the entrepreneur's idea as brilliant as the idea of ​​​​creating a chain of fast food restaurants? Or is this just another fantasy that will soon turn out to be nothing? Entrepreneurs are free to choose new products or promising technologies; they only need the support of investors. In a market economy, approval from central planners, parliamentary majorities, or market competitors is not required. However, competition forces entrepreneurs and the investors who support them to be calculating: their ideas must withstand a “reality test.” If consumers value an innovative idea so highly that it covers the costs of producing a product or service, then the prosperity and success of the new business is guaranteed, but if not, collapse is inevitable. Consumers are the final judges of the success of innovation and the success of a business. Posherstnik E.B., Posherstnik N.V. Competition the Russian way. - M. - St. Petersburg, 2009. - p. 34-35

Manufacturers who want to survive in a competitive environment cannot afford to be complacent. A product that succeeds today may not survive the competition tomorrow. To succeed in a competitive market, firms must be able to anticipate, recognize, and quickly implement valuable ideas.

In other words, competition controls selfish self-interest and makes it work for the good of society. As Adam Smith noted in The Wealth of Nations, people are motivated by selfish motives: “It is not from the benevolence of the butcher, the brewer, or the baker that we look for our dinner, but from their consideration of their own interests. We appeal not to their humanity, but to their selfishness.” , and we tell them not at all about our needs, but about their benefits."

The competitive situation in Russia is complicated, first of all, by market instability. On the one hand, this is due to relatively recent serious changes in the way of life of society. The transition from a command economy to a market economy in the early 1990s led to a new division of society according to social sign. At the same time, there was a redistribution of income in favor of 1-2% of the population. The result of these processes was the absence of the middle class - the main buyer of consumer goods. For us, this meant, first of all, an increase in demand for bakery products and a decrease in demand for relatively expensive high-quality sweets. As an example of the reaction of producers to increased market sensitivity to price, one can cite the transition of many producers from using expensive varieties of nuts (hazelnuts, cashews) to peanuts. As the population's income increases, a reverse process is expected. In particular, we have resumed the production of creamy sausage with hazelnuts along with a similar variety produced with peanuts Margolin K. Competition is a search for ways of coexistence // Top Manager. - 2007. - No. 12..

On the other hand, the switch of consumers from traditional varieties was also due to the emergence of a significant number of foreign-made goods, often supported by powerful advertising. However, by the end of the 1990s, a reverse process began to emerge (for example, the demand for butter products and domestically produced sponge-cream cakes resumed).

From my point of view, competition is not so much a struggle with a competitor as a search for ways to coexist. In the baking industry, competition has retained a tinge of socialist competition. The fact is that most bakeries continue to be managed by the same people as in Soviet times. Therefore, corporate ties are very strong in our industry: permanent contacts between enterprises, exchange of information, discussion important issues. Despite this, working in market conditions leads to strong competition, primarily in the quality of goods (actually bread, loaves, pastries), quality of services (timely delivery, morning schedules) and prices. In recent years, there has been a tendency towards product differentiation by introducing new brands to the market (for example, Darnitsa, Khlebny Dom do this), while we are promoting the Pekar megabrand, using the strong position of our enterprise in the field of production confectionery Margolin K. Competition is the search for ways of coexistence // Top Manager. - 2007. - No. 12..

There is fierce competition in the confectionery market from both Russian and foreign manufacturers(many of which moved production to Russia after the 1998 crisis). Main trends: the emergence of new product groups (snacks, rolls, packaged muffins, chips - all this simply did not exist 15 years ago), the entry of new players into the market in the production segment traditional types sweets, product differentiation by creating brands and marks targeting specific market segments. In such a situation, the enterprise’s reaction to changing market conditions is very important. For example, over the past eight years, we have changed the packaging design of the “Surprise” and “Polar” waffle cakes three times, which made it possible to extend life cycle goods. At the same time, the design was oriented “vertically” (according to our observations, this is how waffle cakes are displayed in retail), creating a unified visual range, which attracts the attention of buyers and has a beneficial effect on the image of the company as a whole. In my opinion, the use of merchandising at the product creation stage gives very good results.

In general, choosing the right decision when launching a new or relaunching an existing product can be made subject to a reasonable combination of market research and expert assessment of the company's capabilities by employees. This process is so complex that it often causes internal competition between individual divisions of the enterprise. The main thing here is to competently organize the exchange of information and direct the process in a creative direction Margolin K. Competition is a search for ways of coexistence // Top Manager. - 2007. - No. 12..

Competition is the main distinguishing feature of market relations. Depending on the methods of its implementation, perfect and imperfect competition are distinguished. A market structure is determined by the conditions under which the firms that form it compete with each other. These conditions include: the number and size of firms, the nature of products, price control and other parameters (Table 1) The degree of influence of an individual seller (buyer) on the market price characterizes perfect or imperfect competition.

A market structure is characterized by perfect competition if none of the sellers (buyers) is able to significantly influence the price.

Competition is perfect if the following conditions exist:

1. A large number of firms producing homogeneous products

size compared to the total market volume is negligible

small - less than 1%;

insignificant influence on prices on the part of the company;

agreement between firms is excluded,

Homogeneity of products of different enterprises within a given sector. This simple condition is difficult to implement in practice, since exactly identical goods may be heterogeneous for the buyer due to the geographical location of sale, service conditions, advertising, packaging and other characteristics.

There are no entry barriers for a new manufacturer to enter the industry and the possibility of free exit from it.

Equal access to all types of information. This means that all buyers have complete information about the characteristics of the product and its prices, and manufacturers have information about production technology and prices for production factors.

Free flow of capital from industry to industry (mobility of production factors).

Rational behavior of all participants pursuing their own interests. Collusion in any form is excluded.

In a perfectly competitive market, buyers of standard products or services are indifferent to which company's products they choose. For example, the potato market is likely to be competitive. Many farmers sell potatoes every day. None of them have more than 1% of the market's daily sales volume. If the share of one of them, due to additionally sold potatoes, increases to 2%, this will not affect the market price in any way.

A firm selling its products in a competitive market is called a competitive firm, since these firms cannot influence the price, they act as price takers.

The demand for the products of an individual company under conditions of perfect competition is absolutely elastic, the demand curve is a horizontal line (Fig. 2).

This means that a competitive firm can sell any quantity of a product at a price P0 or below it.

A perfectly competitive firm takes the price of its products as given, independent of the volume of products it sells. But at any price exceeding P0 even by a small amount, the quantity demanded is zero. The company will lose its customers if it tries to raise the price higher P0. Therefore, when choosing the volume of output that ensures maximum profit, the firm will consider its output as a constant value.

Free entry and exit into an industry ensures that there is no agreement between producers operating in the industry to raise prices by reducing output. Any increase in prices can attract new firms into the industry, which will increase supply.

Purely competitive markets solve two problems:

firms involved in production produce a set of products that is most preferred and useful for consumers;

production is carried out at minimal costs to society.

A market is perfectly competitive if all sellers in an industry are perfect competitors and there are many buyers, each of whom has price information, acts independently, and has a relatively small quantity of demand.

Groups of buyers acting together can influence price, and the market changes from perfectly competitive to imperfectly competitive.

The limitations of perfect competition are overcome under conditions various types market structures. Imperfect competition is competition in which at least one of the characteristics of perfect competition is not observed. Markets in which buyers or sellers are able to influence the market price are called imperfectly competitive. Imperfect competition is divided into three types: pure monopoly, oligopoly, and monopolistic competition.

The main forms of competition are distinguished by methods of introduction and the nature of competition.

Forms of competition by method of introduction:

• - price
• - non-price

Price competition is a means of competition by reducing prices during the period of struggle for the market. The non-price form of competition puts competition in the first place in the quality of goods, product range, provision comprehensive services And. etc.

Based on the nature of competition, there are:

• - functional competition
• - species competition
• - intercompany competition

Functional competition is when goods that can satisfy a need act as competitors to each other.

Specific competition - when competitors are goods that serve the same need, but differ from each other in some significant characteristics.

Interfirm competition is competition involving firms competing on the basis of producing similar goods or providing similar services.

Typically, competition comes down to two main forms: price and non-price. One of the traditional forms of competition is price manipulation - the so-called “price war”. It is carried out in many ways: markdowns, local price changes, seasonal sales, providing a larger volume of services at the existing price, extending the terms of consumer loans, and the like. For the most part, price competition is used to push weaker competitors out of a market or to penetrate an established market.

Price competition is used mainly by outsider firms in the fight against monopolies, for which outsiders do not have the strength and ability to compete in the field of non-price competition. In addition, pricing methods are used to penetrate markets with new products (this is not neglected by monopolies where they have an absolute advantage), as well as to strengthen positions in the event of a sudden aggravation of the sales problem.

Non-price competition is carried out mainly through improving the quality of products and the conditions of their sale, “servicing” sales. Quality improvement can be carried out in two main directions: first, improvement technical characteristics goods; the second is improving the adaptability of the product to the needs of the consumer. Non-price competition through improving product quality is called product competition.

This type of competition is based on the desire to capture part of the industry market by releasing new products that are either fundamentally different from the old model or represent its modernized version.

The main goal of non-price competition is the constant improvement of products, the search for ways to improve their quality, technical reliability, improvement appearance, packaging. Thus, non-price competition, unlike price competition, is not destructive, but creative.

The range of methods that can be used by competing firms is quite wide. These methods can be divided into price and non-price methods. Prices include: the use of monopoly high or monopolistically low prices in order to oust a competitor and conquer the sales market; the use of price discrimination, especially in the provision of services (services of doctors, lawyers, hotel owners, transportation of perishable products), etc.

The main methods of competition in modern conditions are non-price, that is, competition is carried out by increasing the technical level of products, the quality of goods, improving the assortment while maintaining approximately the same price. These methods include advertising, after-sales services, credit sales, leasing, incentives for regular customers, and the use of trademarks and company names.

Unfortunately, sometimes forceful methods of competition are used (depriving a competitor of raw materials, sales markets, buying up patents, capturing labor markets), as well as methods prohibited by law (arson, murder of dangerous competitors, economic espionage, bribery and blackmail, dissemination of deliberately false information about competitors, counterfeiting of trademarks, etc.).

However, the use various methods competitive struggle will not bring success, will not make competition civilized and effective, unless the economic center of society, the state, takes measures to ensure normal conditions for functioning and protection from monopolism, the strengthening of which negatively affects the development of a market economy. The implementation of competition policy and regulation of the activities of monopolies by the state is manifested in the formation and improvement of antimonopoly regulation, including antimonopoly control over monopolized markets, an organizational mechanism (support for small businesses, simplification of the licensing mechanism, liberalization of markets, etc.) and antimonopoly legislation.

Forms of competition should be distinguished in genetic (from the point of view of the evolution of the economic system of capitalism) and structural (from the point of view of the sectoral and inter-sectoral structure of the national economy) aspects. In the first case, there is free competition, which reigned at the lowest stage of development of capitalism, monopolistic (imperfect) and oligopolistic competition, dominant at the highest stage of development of capitalism. In the second - intra-industry and inter-industry competition.

Free competition, which is characterized by a large number of competing producers and competing buyers, and free access of commodity producers to any type of activity, prevailed during the 16th-19th centuries. and was conducted primarily between the owners of small capitalist enterprises that produced goods for an unknown market. Therefore, such competition is also called “pure” or “perfect”. According to its terms, pricing is carried out as a result of the free (without any restrictions) and spontaneous interaction of demand, supply and price, which means self-regulation of the economic system. Manufacturers focus on meeting consumer needs. A type of free competition is pure competition between many sellers and buyers regarding the purchase and sale of homogeneous goods (for example, the flour market). Under capitalism at the lowest stage of development, free competition manifests itself in the competition between types and forms of private property, primarily between various forms private capital (industrial, commercial, banking, etc.) and within each of them. Such competition takes the form of intra-industry and inter-industry.

Intra-industry competition- this is a struggle between economically isolated commodity producers operating in one sector of the national economy to expand markets for their goods by reducing production costs and other methods.

Inter-industry competition- the struggle between economically isolated commodity producers of different sectors of the economy by transferring their capital to other sectors in order to increase the level of profitability and appropriation of greater profits.

Different levels of technology, organization of production, productivity and labor intensity of commodity producers lead to different individual work time for the production of a certain type of product, and therefore different individual production costs. Prices on the market tend to average costs, that is, to socially necessary prices, set at enterprises producing the bulk of products. Therefore, the result of intra-industry competition is the transformation of individual individual values ​​into a single market or social value.

Intra-industry competition helps reduce production costs, introduce achievements of science and technology, and stimulates the process of concentration of production and capital. In modern conditions, this competition is modified by competition in individual highly specialized markets for specific types of goods (for example, in the market of minicomputers, televisions, passenger cars and so on.).

The formation of market value means that supply and demand are balanced. However, the value of a product depends not only on the relationship between supply and demand. Market (social) value should be considered taking into account the labor time for the reproduction of goods. Since the reproductive aspect of the market value of goods is closely related to the competitive struggle of commodity producers, the difference between the concept of equilibrium price of A. Marshall and the theory of market value of K. Marx is largely leveled out. This provision was concretized in the category “production price,” which is formed as a result of inter-industry competition between commodity producers operating in various sectors of the national economy and competing not only by reducing market value, but also by pouring capital into other sectors.

Manufacturers in different areas with the same capital expenditures receive unequal profits. Therefore, those entrepreneurs who received lower profits try to invest their capital in industries with high profits. As a result, the supply of goods in industries with low incomes decreased (subsequently causing an increase in demand for them), while in industries with high incomes, supply increased and demand decreased. Market prices for goods produced in industries into which new capital flows decreased, and in others (from which capital outflows occur) they grew and became higher than market value. When the amount of income in different industries is equalized, the flow of capital stops, and a single average general rate of profit is formed in each industry for the same capital. This profit is an element of average market prices or production prices. So, as a result of inter-industry competition, the only market or social value turns into the price of production, around which prices fluctuate. market prices. On modern stage The main transfer of intersectoral capital occurs within diversified concerns and conglomerates.

With the emergence and development of monopolies, free competition turns into monopolistic, or imperfect.

Monopolistic competition occurs primarily between giant monopolistic associations, within them, as well as between enterprises in the non-monopolized sector of the economy and different types and forms of ownership for the appropriation of monopolistic excess profits. Industries dominated by purely monopolistic competition are manufacturing household appliances and electronics, outerwear and the like.

Oligopolistic competition prevails in the automotive and most other sectors of the national economy; its peculiarity is that the center of struggle is increasingly moving from the sphere of circulation to the sphere of production, from industry to inter-industry, from the national to the international level.

Monopolistic (including oligopolistic) competition means the struggle for the monopolization of sales markets, sources of raw materials, energy, for obtaining government contracts, loans, for the ownership of intellectual property (patents, licenses, etc.), its most important features are the establishment of monopoly high and monopoly low prices and assignment on this basis of monopolistically high profits. There are price and non-price types of imperfect competition.

Price competition- this is a struggle between commodity producers for the consumer due to a reduction in production costs, a reduction in prices for goods and services without a significant change in their quality and range. At the same time, entrepreneurs often manipulate prices (they set them low until the product conquers the market, and then raise it), resort to price concessions, seasonal sales, etc. Important feature price monopolistic competition is price discrimination in which the same product or service is sold different groups buyers at different prices.

Non-price competition- this is a struggle between large commodity producers for the consumer through the introduction of scientific and technological progress into production, which leads to an improvement in product quality and an increase in monopoly excess profits. Non-price competition is usually carried out by oligopolies. Specific methods of competition for non-price competition are the introduction of advanced equipment and technology (technical monopolism), the latest forms of organizing production and marketing activities (organizational monopolism), the concentration of highly qualified personnel (personnel monopolism), and the implementation of comprehensive research developments (scientific monopolism). ), price discrimination and capture of sales markets (sales monopoly), etc. Companies are also extending the deadline warranty service, provide loans to buyers, etc. In the process of competition, oligopolies enter into both open cartel-type agreements and secret, unspoken agreements.

Non-price competition is characterized by a certain stability of prices (since they are agreed upon by several powerful companies, pursuing their own benefit), the so-called “price leadership”. Such competition more fully reflects the interests of the consumer.

A type of imperfect competition is dishonest competition, conducted primarily by non-economic methods (bribery of officials, industrial espionage, conclusion of secret agreements on a common policy and even sabotage against a competitor, misinformation of consumers about the quality of goods and services, dissemination of distorted information about competitors’ products, use trademark leading firms and companies, etc.). Methods of competition also include improving the quality of goods and services, quick update product range, design, provision of guarantees and after-sales services, temporary reductions in prices, payment terms and the like.

Methods of competition (in the political economic aspect) at the highest stage of capitalism - a set of ways to expand the scope of monopoly property and narrow other forms of ownership by increasing the exploitation of monopoly enterprises, primarily of intellectual labor, obtaining a synergistic effect in the process of its interaction with the latest information technology and appropriation of other sources of monopoly high profits.

The mechanism of such competition is the establishment of monopoly prices in order to appropriate monopoly profits.

Method of competition under conditions of perfect and imperfect competition.

Introduction………………………………………………………………………………………. 3

1. The essence and functions of competition……………………………………….. 4

1. Perfect competition…………………………………………………………… 6

1. Imperfect competition…………………………………………… 7

1. Competitive strategy……………………………………………………. 7

4.1 Industry position …………………………………………………………. 8

4.2 Sources of Competitive Advantage ………………………………... 9

5. Methods of competition……………………………………... 9

5.1 Fair competition and unfair competition……… 10

6 Conclusion…………………………………………………………………………………... 13

1. Introduction

The modern market economy is a complex structure, consisting of a huge number of different production, commercial, financial and information substructures, interacting against the backdrop of an extensive system of legal business norms, and united by a single concept - the market.

By definition, a market is an organized structure in which there are producers and consumers, sellers and buyers, where, as a result of the interaction of consumer demand (demand is the quantity of a good that consumers can buy at a certain price) and the supply of producers (supply is the quantity of a good, which producers sell at a certain price), both product prices and sales volumes are set. When considering the structural organization of the market, the number of producers (sellers) and the number of consumers (buyers) participating in the process of exchanging the general equivalent of value (money) for any product is of decisive importance. This number of producers and consumers, the nature and structure of relations between them determine the interaction of supply and demand.

Key concept, expressing the essence of market relations, is the concept of competition (Latin concurrere - collide, compete).

Competition is the center of gravity of the entire market economy system, a type of relationship between producers regarding the setting of prices and volumes of supply of goods on the market. This is competition between manufacturers. Competition between consumers is similarly defined as relationships regarding the formation of prices and the volume of demand in the market. The incentive that motivates a person to compete is the desire to surpass others. Rivalry in markets is about deal making and stakes in the marketplace. Competition is a dynamic (accelerating) process. It serves to better supply the market with goods.

As a means of competition to improve their position in the market, companies use, for example, product quality, price, service, assortment, terms of delivery and payment, information through advertising.

The concept of competition is fundamental in the economic theory of market relations. Competition manifests itself at all levels of the capitalist economy - from the micro level (firm) to the global economic system. Even the creators of socialism, while condemning some forms of competition, tried to introduce it into the socialist economy, calling it “socialist competition.”

The economic success (and often survival) of a subject of a market economy primarily depends on how well he has studied the laws of competition, its manifestations and forms, and how ready he is for competition.

2. The essence and functions of competition

The term "competition" entered economic theory from spoken language from the Latin word “concurrentia”, meaning “collision”, “competition”. In economics, competition is defined as follows.

“Competition is a situation where there are several alternative uses of a rare good in which people are interested. various groups people fighting among themselves for the right to dispose of this good.”

Competition is rivalry between participants in a market economy for the best conditions for the production, purchase and sale of goods. Such a clash is inevitable and is generated by objective conditions: the complete economic isolation of each market entity, its complete dependence on the economic situation and confrontation with other contenders for the greatest income. The struggle for economic survival and prosperity is the law of the market. Competition (as well as its opposite - monopoly) can only exist under a certain market state. Different types competition (and monopoly) depend on certain indicators of market conditions. The main indicators are:

a) Number of firms (economic, industrial, trading enterprises with rights legal entity), supplying goods to the market;

b) Freedom for an enterprise to enter and exit the market;

c) Differentiation of goods (giving a certain type of product for the same purpose different individual characteristics - by brand, quality, color, etc.);

d) Participation of firms in controlling market prices.

Regulation function. In order to survive in the struggle, the entrepreneur must offer products that the consumer prefers (consumer sovereignty). Hence, factors of production, under the influence of price, are directed to those sectors where they are most needed.

Function of motivation. For an entrepreneur, competition means chance and risk at the same time:

Enterprises that offer better quality products or produce them at lower production costs are rewarded in the form of profits (positive sanctions). This stimulates technological progress;

Enterprises that do not respond to customer wishes or violations of competition rules by their rivals in the market are punished in the form of losses or are forced out of the market (negative sanctions).

Distribution function . Competition not only includes incentives for higher productivity, but also allows income to be distributed among businesses and households according to their effective contribution. This corresponds to the prevailing competitive principle of reward based on results.

Control function . Competition limits and controls the economic power of each enterprise. For example, a monopolist can set 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.

Competition policy is designed to ensure that competition can perform its functions. The guiding principle of “optimal intensity of competition” as competition policy objectives assumes that:

Technological advances in products and processes are rapidly adopted (innovation under competitive pressure);

Enterprises flexibly adapt to changing conditions (for example, consumer inclinations), (adaptation under competitive pressure).

The extent of competitive intensity is determined by how quickly profit advantages are lost as a result of successful reproduction of innovations to competitors. First of all, it depends on how quickly competitors react to the leap forward of the pioneer enterprise and how dynamic the demand is.

According to the guiding principle of optimal intensive competition favorable conditions For normal functioning rivalries arise when dealing with a “broad” oligopoly with “moderate” individualization of products. A “narrow” oligopoly with strong individualization of products, on the contrary, reduces the intensity of competition.

In every market economy, there is a danger that competitors will try to evade the regulations and risks associated with free competition by, for example, resorting to price fixing or imitation of trademarks. Therefore, the state must issue regulations that regulate the rules of competition and guarantee:

Quality of competition;

The very existence of competition;

Prices and quality of products should be the focus of competition;

The offered service must be commensurate in price and other contractual terms;

Trademarks and marks protected by legal norms help the buyer to distinguish goods by their origin and originality, as well as to judge some of their qualities;

- time-limited patent protection (20 years) and registered industrial designs, as well as industrial aesthetic designs.

2. Perfect competition

Perfect (free) competition is based on private property and economic isolation. It assumes that there are many independent firms on the market that independently decide what to create and in what quantities, as well as:

1. The volume of production of an individual company is insignificant and does not affect the price of the goods sold by this company;

2. The goods sold by each manufacturer are homogeneous;

3. Buyers are well informed about prices, and if someone increases the price of their products, they will lose customers;

4. Sellers act independently of each other;

5. Access to the market is not limited by anyone or anything.

The last condition presupposes the opportunity for every citizen to become a free entrepreneur and apply his labor and material resources in the sector of the economy that interests him. Buyers must be free from any discrimination and have the opportunity to buy goods and services in any market. Compliance with all conditions ensures free communication between producers and consumers. Perfect competition is also a condition for the formation of a market mechanism, price formation and self-adjustment of the economic system through the achievement of an equilibrium state, when the selfish motives of individuals to obtain their own economic benefit are turned to the benefit of the whole society. It is easy to see that no real market satisfies all of the above conditions. Therefore, the scheme of perfect competition has mainly theoretical significance. However, it is key to understanding more realistic market structures. And this is its value.

3. Imperfect competition

Imperfect competition has always existed, but it became especially acute at the end of the 19th and beginning of the 20th centuries. in connection with the formation of monopolies. During this period, capital concentration occurs, joint stock companies, control over natural, material and financial resources is being strengthened. Monopolization of the economy was a natural consequence of a large leap in the concentration of industrial production under the influence of scientific and technological progress. Professor P. Samuelson especially emphasizes this circumstance: “The economy of large-scale production may have certain factors inherent in it that lead to the monopolistic content of business organization. This is especially true in the rapidly changing field of technological development. It is clear that competition could not last long and be effective in the field of countless manufacturers."

4. Competitive strategy

Firms, not countries, compete in the international market. It is necessary to understand how a firm creates and maintains competitive advantage. At the present stage, the capabilities of firms are not limited by the borders of their home country. Particular attention should be paid to the role of global strategies in creating competitive advantage, because these strategies completely change the role of the home country.

To understand the nature of competition, the basic unit is industry(no matter whether it is processing or from the service sector), i.e. a group of competitors that produce goods or services and compete directly with each other. A strategically significant industry includes products with similar sources of competitive advantage. In addition, there may be related industries whose products have the same characteristics, production technology or distribution channels, but they have their own requirements for competitive advantage. In practice, the boundaries are always very vague.

By developing a specific strategy, firms strive to find and implement a way to compete profitably and lastingly in their industry. There is no universal competitive strategy; only a strategy matched to the conditions of a particular industry, the skills and capital possessed by a particular firm, can bring success.

A specific strategy must be based on a comprehensive understanding of the industry structure and the process of its change. In any sector of the economy - it doesn’t matter whether it operates only on the domestic market or on the foreign market too - the essence of competition expressed by five forces:

1. the threat of new competitors;

2. the threat of the emergence of substitute goods or services;

3. ability of component suppliers, etc. to bargain;

4. the ability of buyers to bargain;

5. rivalry between existing competitors.

4.1 Industry position

Firms must not only respond to changes in the structure of the industry and try to change it themselves in their favor, but also choose a position within the industry. Industry position is a firm's overall approach to competition, not just its products or who they target.

Competitive advantage determines your position in an industry.

Ultimately, firms outperform their rivals if they have a strong competitive advantage. Competitive advantage is divided into 2 main types: lower costs and product differentiation. Low costs reflect a firm's ability to develop, produce, and sell a comparable product at a lower cost than its competitors. By selling a product at the same (or approximately the same) price as its competitors, the company in this case makes a greater profit.

Differentiation is the ability to provide the buyer with unique and greater value in the form of a new quantity of product, special consumer properties or after-sales service. Differentiation allows the company to dictate high prices, which, with equal costs to competitors, again gives greater profits.

4.2 Sources of Competitive Advantage

A firm's chosen competitive strategy determines the way in which the firm carries out its individual activities. Firms gain competitive advantage by developing new ways of performing activities, introducing new technologies or input components of production. They go to market with them, and then it's - innovations.

Innovation leads to a change in competitive leadership if other competitors either have not yet recognized the new way of doing things or are unable or unwilling to change their approach.

Here are the most typical reasons for innovation that gives a competitive advantage:

1. New technologies. Changes in technology can create new opportunities for product development, new ways of marketing, manufacturing or delivery, and improvements in service or services. It is this that most often precedes strategically important innovations.

2. New or changed customer requests.

3. The emergence of a new segment in the industry.

4. Changes in the cost or availability of production components. Competitive advantage often changes hands due to changes in the absolute or relative costs of components such as labor, raw materials, energy, transportation, communications, media, or equipment. This indicates a change in conditions with suppliers or the possibility of using new or different components.

5. Changes in government regulations. Changes in government policy in areas such as standards, security environment, requirements for new industries and trade restrictions.

The above inputs can give firms a competitive advantage if firms understand their implications in time and take a decisive offensive. In many industries there are such “early birds” ( early moves ) have maintained leadership for decades. Early birds gain an advantage by being the first to benefit from economies of scale, reducing costs through intensive staff training, building a brand image and customer relationships at a time when there is no intense competition, having the ability to choose distribution channels or obtaining the most advantageous plant locations and the most profitable sources of raw materials and other factors of production.

5. Ways to compete

Competition translated from Latin means “to collide” and, as noted above, means the struggle between commodity producers for the most favorable conditions for the production and sale of products. Competition plays the role of a regulator of the pace and volume of production, while encouraging the manufacturer to introduce scientific and technical achievements, increase labor productivity, improve technology, labor organization, etc.

Competition is a determining factor in ordering prices and a stimulus for innovation processes (introduction of innovations into production: new ideas, inventions). It promotes the displacement of inefficient enterprises from production, the rational use of resources, and prevents the dictates of producers (monopolists) in relation to the consumer.

Competition can be divided into fair competition and unfair competition.

5.1 Fair competition and unfair competition

The main methods are:

- improving product quality

- price reduction ("price war")

- development of pre- and after-sales service

- creation of new goods and services using achievements

One of the traditional forms of competition is price manipulation, the so-called. "price war" It is carried out in many ways: lowering prices, local price changes, seasonal sales, providing a larger volume of services at current prices, extending the terms of consumer loans, etc. Basically, price competition is used to push weaker competitors out of the market or to penetrate an already developed market.

More efficient and more modern form competition is the struggle for the quality of the product offered to the market. The entry into the market of products of higher quality or new use value makes it difficult for a competitor to respond, because The “formation” of quality goes through a long cycle, starting with the accumulation of economic, scientific and technical information. As an example, we can cite the fact that the well-known Japanese company SONY was developing a video recorder simultaneously in 10 competing areas.

Nowadays there is a great development various kinds marketing research, the purpose of which is to study the consumer’s needs, his attitude towards certain goods, because The manufacturer's knowledge of this kind of information allows him to more accurately represent future buyers of his products, more accurately imagine and predict the situation on the market as a result of his actions, reduce the risk of failure, etc.

Pre- and after-sales customer service plays an important role, because a constant presence of manufacturers in the sphere of consumer services is necessary. Pre-sales service includes meeting consumer requirements for delivery conditions: reduction, regularity, rhythm of deliveries (for example, components and assemblies). After-sales service - creation of various service centers for servicing purchased products, including provision of spare parts, repairs, etc.

Due to the great influence of the media and the press on the public, advertising is the most important method of competition, because With the help of advertising, you can shape the opinion of consumers about a particular product in a certain way, both for the better and for the worse; the following example can be cited as evidence:

During the existence of the Federal Republic of Germany, French beer was in great demand among West German consumers. West German producers did everything to prevent French beer from entering the German domestic market. Neither advertising of German beer, nor patriotic calls “Germans, drink German beer,” nor price manipulation led to anything. Then the German press began to emphasize that French beer contained various chemicals harmful to health, while German beer was supposedly an exceptionally pure product. Various actions in the press, arbitration courts, and medical examinations began. As a result of all this, the demand for French beer nevertheless fell - just in case, the Germans stopped buying French beer.

But along with fair competition methods, there are other, less legal methods of competition:

The main methods are:

- economic (industrial espionage)

- counterfeiting competitors' products

- bribery and blackmail

- deception of consumers

- fraud with business reporting

- currency fraud

- hiding defects etc.

To this we can also add scientific and technical espionage, because... any scientific and technical development is only a source of profit when it finds application in practice, i.e. when scientific and technical ideas are implemented in production in the form of specific goods or new technologies.

Conclusion

One of the most prominent entrepreneurs of the last century is the Japanese Akio Morita, head of the famous company " SONY " His exceptional organizational skills and the technical genius of his partner Masaru Ibuki made it possible to transform a tiny radio conversion workshop, established in 1946 in war-torn Japan, into one of the largest companies in the world. Moreover, this company succeeded by engaging in the most difficult task - the creation and introduction to the market of fundamentally new products.

Exactly SONY » was the first to begin mass production of transistor receivers and created the world's first home video recorder. The now common player with headphones is also a brainchild.” SONY ”, as well as the last word in the field of sound recording - CDs for laser players. Now " SONY » began the introduction of high-definition television (HDTV), which makes it possible to obtain a television image that is not inferior in quality to the image on a movie screen. Akio Morita's authority in the world of economics is undeniable, and therefore it is interesting to listen to what he says about competition:

“Both the glory and the punishing sword of Japanese business, the fuel of the engine of our industry - It's good old competition. We have a free economic system in which anyone can start any company allowed by law, so if a product is successful, a lot of people will immediately jump on it and fight each other tooth and nail to produce that product.

Several years ago, Yamaha decided that the time had come to challenge Honda and increase its share of the Japanese motorcycle and scooter market. Honda had a clear advantage at the time, but it was investing heavily in a new car assembly plant in the United States, and then Yamaha released a series of new models and began an active advertising campaign.

Honda's management, despite the difficult financial situation, reacted immediately; it struck back by starting to release a new model every week for a whole year. "Yamaha could not keep up with her, and, in the end, some of the leaders of Yamaha resigned."

Akio Morita considers competition so important that he even... helps his competitors!

This is what he says.

“When we started making tape recorders in Japan, we had all the most important patents in our hands and we owned one hundred percent of the market. But if such a monopoly had been maintained, it could have ruined us.

We started selling licenses, and soon at We only had thirty percent of the market left, but it was already a significantly expanded market. We are not happy that no American industrialist makes VCRs... because with competition we could expand the market and speed up the development of new models. When there is no competition, there is less incentive to innovate.”

Bibliography

1. Borisov E. F. Economic theory. – M.: Yurait, 1999.

1. Lipsits I. V. Economics. – M.: Vita-Press, 2000.

1. R. Stroup, J. Gwartney. ABC of Economics 1993

1. Yudanov A.Yu. Competition: theory and practice. 2nd edition. M., 1998

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