Competition- this is a struggle between producers for the most favorable conditions for the production and sale of goods and services, between consumers for the goods of producers, as well as between producers and consumers for sources of income.

Competition comes in several forms.
From the standpoint of functional manifestation, competition is =

• industry (between manufacturers of the same industry)
• intersectoral (between manufacturers from different industries that compete for consumers' money).

If sellers influence demand through a change in price, then competition acts as price... It boils down to economic suppression of a rival (to his ruin) through price knocking down.
In non-price competition, sellers focus on distinctive features your product, its quality, promotion, packaging, delivery, service.

The type of competition is called pure (free), or perfect competition.

Free competition means unlimited "War of all against all".

Competition functions:
1. Competition helps to establish an equilibrium price. So, if the market price is set above the equilibrium price - the supply of goods exceeds their demand - a surplus of goods is formed. As a result, the confrontation among sellers who are trying to sell their goods at a higher price is escalating. In this struggle, the seller who sells his goods cheaper than others wins, i.e. it stimulates demand by driving down the price of a product. If the price falls below the equilibrium point - demand exceeds supply - there is a shortage of goods.
2. Competition maintains socially normal production conditions and product sales. Due to competition in any branch of production, at any given moment, a general (equal) price is established for homogeneous products that have the same quality.
3. Competition stimulates scientific and technological progress and increases in production efficiency. Only the manufacturer who spends fewer resources per unit of product and who has higher quality can receive more income.
4. Competition intensifies the socio-economic stratification of market agents. Commodity producers with unequal economic strength participate in competition. The rivalry between buyers and sellers significantly changes the entire structure of the market economy.

The rivalry in the market unfolds along three "fronts" -

• among sellers of goods,
• among buyers
• and between sellers and buyers.

Imperfect competition, unlike free, perfect, limited by the influence of monopolies and the state.
There are several models of imperfect competition:

• 1) pure monopoly
• 2) monopolistic competition
• 3) oligopoly.

In this article, you will learn:

• What is the difference between price and non-price competition
• What are the advantages and disadvantages of using non-price competition
• In what forms can non-price competition take place?
• What methods of non-price competition are used in a modern market economy

From an early age, each of us falls into the harsh circumstances of competition in different areas life. Competition in the economy can definitely be called one of the toughest types of struggle. Here, both wealth and luck are at stake. In entrepreneurship, there are two types of competition - price and non-price. More often than not, low cost actually wins. Yet non-price product competition helps to achieve greater success.

What is non-price competition

Competition- this is the struggle of individuals in various areas of the life process. First of all I mean economic sphere... Figuratively speaking, competitors are the owners of nearby shops, who strive to get as many visitors as possible. But it's not just the number of buyers that matters. It is also important to sell your goods and services on the most profitable terms. Scientists believe that it is competition that spurs modern world to develop at such a rapid speed. And at the same time it is the basis of the instability of the world economy.

Exists two paths of economic rivalry: price and non-price. The difference between price and non-price methods of competition is quite serious:

1. Price competition Is a type of struggle with rivals by reducing the cost of goods. Most often, this method is used where demand is greater than supply. Another option is when the competition between customers is strong enough. This option is also used when there are prerequisites for pure competition (many manufacturers offer a product of the same type). This way of competing with competitors cannot be called the most effective. After all, rivals can put prices at the same level, or even lower, at one moment. In this case, both the subject himself and his competitors lose their earnings. Despite all the disadvantages, this option is nevertheless widely used, especially in cases where products need to be introduced to a new market. Such measures should be taken very carefully. You need to know for sure that a decrease in value will really turn into an increase in profits, and not losses.
2. Non-price competition suggests more progressive and modern techniques. Among them - the isolation of their products among similar products from competitors, the introduction of special characteristics, expansion of the range, quality improvement, increased advertising costs and warranty service. The use of methods of non-price competition generates conditional monetary stability. Essential positive point it is also that competitors often fail to retaliate immediately, giving the opponent an edge. If the innovation turns out to be successful, all the spending on non-price competition options not only pays off, but also serves as a source of income.

To successfully apply the methods of non-price competition, companies and organizations must be aware of the latest developments in their market and continuously develop, which leads the country's economy along the path of progress.

Non-price competition is a form of competitive rivalry tactics. Various methods are used here, with the exception of reducing the cost of goods and services. Non-price competition implies the use of more advanced methods of competing for the buyer, such as creative advertising or improving the quality characteristics of a product. Quality improvement goes in two ways: by working on the technical parameters of the product or by increasing its flexibility according to the wishes of the customers.

Non-price competition allows you to focus on the path of progress and drive sales without price fluctuations. Non-price competition indicates a higher quality level of interaction in the market.

There are a number situations where non-price competition is applied:

• The cost cannot be reduced due to the limits set by the market controller.
• A punitive agreement has been signed that does not allow for a reduction in value. The meaning of such a document is to stabilize a specific level of profitability.
• The firm has invested so much money in the production of goods for the new market that cost reduction is economically meaningless.
• Distribution costs are high.
• In the market, demand exceeds supply, which means that the client will buy products at any price.
• The company relies on improving the quality characteristics of manufactured goods - by improving the technical properties of products (so-called product competition).

Non-price competition is typical for those industries where the quality of the product, its uniqueness, packaging, appearance, brand style, additional services, and off-market ways of influencing the buyer are of key importance. All these points are not directly related to cost, or even have nothing to do with it. Over the 80s and 90s, the first positions in the list of non-price criteria were:

• reduced energy consumption and low metal consumption;
• minimal harm to the environment (or lack thereof);
• the ability to hand over the product as a start-up fee for a new one;
• advertising;
• high level of warranty service (as well as post-warranty);
• indicators of related offers.

Example non-price competition . Sony at the start of global sales of its products in Russia faced difficulties in relation to non-price competition. The problem was that according to current regulations company, customers are only allowed to return broken products after five attempts to fix them. The law in our country, in turn, gives the client the right to return the goods immediately after identifying a problem. This condition is met by all firms in the Russian Federation. To boost sales, Sony has not only changed the warranty regulations to the local sample, but also significantly shortened the warranty period, similar to the more popular models. As a result, the firm strengthened its position in the non-price area of ​​competitive rivalry.

What are the disadvantages and advantages of non-price competition

Key benefits non-price competition are as follows:

• Price battles negatively affect all market participants. Bonuses are awarded only to the buyer. Price competition can lead to monopoly and economic decline. The more powerful the firm, the longer the period of time it can sell goods at a reduced cost. Small and medium-sized companies will lose out in competition with leading brands.
• Smart differentiation is a more productive way to compete than dumping. The client will pay the price set by the company for the desired product.
• With the right behavior, non-price competition is less costly than price competition. A good advertising clip can be made for little money, the main thing is to find a creative and tempting idea. The same applies to the properties of products: even a minimal improvement in design can attract the attention of buyers.
• With non-price competition, the company has a huge field for activity: it is possible to gain superiority with the help of any successful find.

However, there is also a number of disadvantages non-price competition:

• The firm loses that group of buyers for whom the cost is in the first place.
• Dependence on the professionalism of managers and ordinary employees, because they must develop competent tactics of competition and systematically monitor the compliance of the real state of affairs with the plans.
• Many firms use illegal methods of non-price competition (enticement of personnel, manufacture of counterfeit products, industrial espionage).
• We need cash infusions, often constant.
• High spending on trade marketing, advertising and PR.
• Specificity in positioning, thoughtfulness of actions, correctness of tactical moves are needed.

What types of non-price competition can be used and which are not worth it

There are different types of non-price competition:

• legal;
• semi-legal;
• deterring competitors using levers of government regulation and support.

Legal methods of competition suggest:

• product rivalry. In the course of work on the existing assortment, new product which has a new price;
• competition for the provision of services. It is especially relevant for the machinery and equipment market. The service package includes the supply of advertising materials, the transfer of technical papers (which simplify the use of the product), the training of the client's employees, and maintenance during the warranty period (and after it).

Semi-legal forms competitive rivalry means:

• economic espionage;
• bribes officials in the state apparatus and in rival companies;
• illegal transactions;
• activities to restrict competition. Here the firm has at hand an extensive arsenal of methods, the use of which can lead to the dictates of a monopoly company in the market. These include, for example, the activity of imposing intra-brand standards, the promotion of convenient conditions for the sale of rights to trademarks or patents.

The most common forms of non-price competition

The most common forms and methods of non-price competition are:

1. Product differentiation

The purpose of product differentiation is to offer the buyer products of various types, styles, brands. This, of course, gives the buyer serious bonuses, expanding the choice. However, pessimists warn that product differentiation is not an absolute good. The rapid growth in the number of items of goods often leads to the fact that the buyer cannot make the right choice, and the buying process takes a lot of time.

Differentiation of goods is a kind of reward for those negative phenomena that are inherent in monopolistic competition.

Types of differentiation:

• Product differentiation- production of goods of higher quality and more attractive outwardly than those of competitors. Regarding typed products (petroleum products, metal), there is almost no possibility of product differentiation. With regard to fairly differentiated goods (electronics, vehicles), this tactic is a matter of course.
• Service differentiation- consists in providing a service of a higher class compared to competitors. This can be installation and after-sales service, speed and safety of deliveries, training and advice for buyers.
• Differentiation of personnel- the desire to ensure that the employees of the company do their job more productively than the employees of the competing company. Team members must have such qualities as friendliness, professionalism, commitment.
• Image differentiation consists in working on the image, style of the company and (or) its products in order to highlight them best sides compared to competitors and / or their proposals.

2. Improvement of products and services offered

Another method of non-price competition is the improvement of the goods and services offered by competitors. Improving the quality or user parameters of products leads to increased sales. Competitors who don't care about improving their product step aside. This route of competition leads to favorable consequences, the main one of which is customer satisfaction. In addition, other firms are also beginning to take steps to offset the temporary success of a rival, which contributes to scientific and technological progress.

Competitive companies are looking for funds to improve the product or to create a new position. All these measures provide an opportunity to strengthen production and increase profits.

Some companies, instead of competing honestly, conduct imitation (imitative) activities. Most often, they stop at a minor modernization of the product. This is about external effect... Such firms pass off apparent changes in the product as real, and also introduce obsolescence into the improved product. This approach can lead to massive customer frustration.

3. Advertising

According to foreign researchers, goods go from manufacturer to buyer a path that can be illustrated by the formula:

commodity + distribution + scientific activity + resellers + transport + advertising = sale

• provides the customer with information about the products;
• increases the demand for products and forces them to increase the pace of their production. There are often cases when a manufacturer with a small income, through advertising in non-price competition, raises the level of sales several times, which leads to a large income;
• increases competition;
• enables the media to be independent, bringing them a certain profit.

Advertising reduces sales-related costs... First, advertising promotes faster turnover of goods. Secondly, it makes products different from similar ones. This makes it possible for buyers to track the cost of products in various stores and thereby restrain sellers' arbitrariness in setting a margin. Products that are smartly advertised will pass through distribution channels with minimal markups.

4. Other methods of non-price competition

The group of non-price methods includes: providing a wide range of services (including employee training), free service, handing over a used product as a start-up fee for a new one, and supplying equipment on a “finished product in hand” terms. Reduced metal consumption, no negative impact on the environment, reduced energy consumption and other similar parameters have become today the main in the list of advantages of goods or services.

At the moment, many firms are conducting marketing research... They make it possible to find out the wishes of the buyer, his opinion about various products. Knowing this knowledge helps the manufacturer to design the market environment and reduce the likelihood of misses.

Non-price competition methods: 3 main groups

Non-price competition techniques are divided into several groups.

First group Are techniques aimed at achieving competitive superiority through improvement various parameters products.

These include:

• launching new items of goods on sale;
• introduction of products with new consumer characteristics, for example, higher quality, improved appearance, more attractive packaging (this process is called the differentiation of consumer properties of goods).

Such techniques are used when:

• the company wants to improve the consumer characteristics of its products;
• the company wants to increase the market segment of the manufactured goods;
• the company wants to become known through a wide selection of manufactured products in a limited market sector;
• the company is working on the timely introduction of new service conditions (sale and after-sale) in order to interest new groups of customers, to make them purchase products more often and pay a lump sum for more positions (most often with the help of large discounts and promotions).

Second group- these are the methods of stimulating the buyer to buy. Most often these are short-term promotions, sales, etc. Incentive purposes in this case, there is an increase in the number of customers or an increase in the number of goods purchased by the same customer.

By means of stimulating sales for consumers are:

• draws and lotteries, discounts, coupons, promotions;
• trial samples (samplers, testers, as well as tasting);
• contests and games;
• sales;
• various "label events";
• consumer clubs.

The sales agent is the link between the manufacturer and the buyer. It is necessary to stimulate a sales agent in order to form a vivid image of the product, make it easily recognizable and widely known, and increase the number of positions in the trade network. It is equally important to "warm up" the agent's interest in high sales volumes of a certain brand.

Sales incentives various awards and presentations, all kinds of compensation for advertising expenses, trade fairs, prizes, sales brochures, souvenirs, etc. are presented to sales agents.

For the successful operation of the company, it is necessary to constantly look for alternative ways of selling products, as well as to index the amount of discounts in accordance with the current market situation.

Nevertheless, non-price competition works primarily by improving the quality characteristics of goods and production technology, modernization, patenting and branding, as well as competent "service" of sales. This type of competition is based on the desire to get a part of the industry market (or a significant segment of it) by producing new products or improving already known products.

Competition is rivalry, economic struggle, competition between sellers and producers for the right to obtain maximum profit and between buyers when buying goods for great profit.

Competition promotes the efficient use of limited resources. Resources are distributed among industries and types of production in such a way that the products obtained from these resources bring them a profit. It is the regulating force in the marketplace. Adam Smith called her "the invisible hand".

Competition fulfills 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 products only those that are needed by consumers. They are the ones who manage to sell. Others remain unclaimed, and their production is reduced. Competition is a specific mechanism by which the market economy solves the 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 activities of independent units. Through it, commodity producers, as it were, control each other. Their struggle for the consumer leads to a decrease in prices, a decrease in production costs, an improvement in product quality, and the development of scientific and technological progress.

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

With competition in the marketplace, manufacturers are constantly striving to lower their production costs in order to increase profits. The result is increased productivity, lower costs and the opportunity for the company to lower prices. Competition also encourages manufacturers to improve the quality of their products and constantly increase the variety of products and services they offer. Thus, manufacturers are forced to constantly compete with 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 a commodity producer on market conditions;

confrontation with all other producers in the struggle for consumer demand.

Competition - essential element market, playing 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 products and services are in demand. This is called the allocation function or allocation function.

The innovative function of competition is to stimulate the introduction of the achievements of science and technology, new technologies, the release of new types of products and services, improve the quality of products and services, etc.

The function of competition, which consists in creating conditions for obtaining income and profits 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 distributive.

Competition is a tool (means) that prevents the emergence and existence of stable monopoly power in the market. For example, a monopolist can set a price. At the same time, competition gives the buyer a choice 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 part of the total volume of production that an increase or decrease in its output will not have a tangible effect on the price of goods. The manufacturer, as well as the buyer, should always be guided by the market price. Thus, competition promotes a compromise between buyers and sellers. It can also be noted here that competition creates an identity of private and public interests. Firms and resource suppliers seeking to increase their own benefits and acting within the framework of an intensely 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 kind of tells commodity producers how much capital they should invest in the production of this or that product. Suppose one seller spent more money on the production of a commodity than another. In such a situation, when an equilibrium price is established on the market for given view goods, the last seller will have more profit, that is, the one who produced the goods at a lower cost. And with an excess of this type of commodity, as already noted, a sharp drop in prices will occur, and the seller, who has spent a lot of money on production, will incur losses. Thus, competition maintains the conditions of production that are normal for the whole society. McConnell notes that "in a purely competitive environment, profit-driven entrepreneurs will produce every good to the point where price and marginal cost are equal." It follows from this that in a competitive environment, resources are allocated efficiently.

Competition stimulates scientific and technological progress and increases in production efficiency. Since competition serves as the "equalizer" of prices, it can be concluded that in market competition, the one who has high quality goods and the lowest cost price will win. And for this it is necessary to constantly update the conditions of production, to spend large investments on improving technology. In on standing time 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, production efficiency increases every year.

With the confrontation between market entities, their socio-economic stratification increases. The competition involves many small owners who are just starting their business. Many of them, not having sufficient capital, modern means production and other resources, cannot withstand this rivalry and after a while suffer losses and go bankrupt. And only a few of them are increasing their economic power, expanding their enterprises and becoming full-fledged and fairly significant and respected market participants.

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 A Study on 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 increases prices (with a reduction in supply) and decreases them (with an excess of supply);
• the main principle of competition is defined - the principle of the "invisible hand", according to which the "hand" drives out firms engaged in the production of products that are unnecessary for the market;
• a flexible competition mechanism has been developed that instantly reacts to any changes in the situation in external environment;
• the main conditions for effective competition are determined: a large number of sellers, comprehensive information, the impossibility of each seller to have a significant impact on the change in the market price of the product.

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 was published in the 18th century, at the present time there is no established uniform definition the concept of "competition".

There are the following definitions of competition:

• competition- this is the process by which people receive and transmit knowledge (F. Hayek), (too narrow definition);
• competition- this is the desire to meet the criteria of 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 on the market of a large number of buyers and sellers, the possibility of free entry to and exit from the market (K.R. McConnell and S.L. Bru), (a broader definition, although it does not take into account the conditions for entering and entering the market) ;
• competition- a dynamic and evolving process resulting in new products, new marketing routes, new production processes and new market segments. (M. Poter), (a limited definition, since it does not explain what the process of competition is itself, but gives a characteristic only of its result);
• competition- this is a rivalry in any field between separate legal entities and individuals interested in achieving the same specific goal (G.L. Alozoev) (the definition does not contain the concept of a commodity);
• market competition- this is the struggle of firms for a limited volume of effective consumer demand, which is being waged by them in accessible market segments (A.Yu. Yudanov).
• competition 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 (RF Law “On Competition and Restriction of Monopolistic Activity in Commodity Markets);
• competition- This is an economic scruple to achieve the best results in the field of any activity, the struggle of commodity producers for more favorable conditions of management, obtaining the highest profit.

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, to the introduction of changes, to improve the structure of the enterprise.

Competition has the following defining characteristics:

1. is a system-forming component of market relations, determining the entire set of inherent elements (production costs, price formation, adaptability of enterprises and organizations to market requirements, meeting the need for goods and services, etc.);
2. serves as the foundation of market methods of economic management, the basis for the formation and manifestation of the competitiveness of products, an economic law that expresses the objectivity of categories of competition (competition) between market entities, affects the nature and forms of relationships between them;
3. 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 promotes scientific and technological progress, rational use of resources;
• helps manufacturers to be sensitive 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 what:

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

Competition in a market economy fulfills whole line functions. Competition functions:

• regulating- influences the offer 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 improve efficiency and achieve the optimum of the firm;
• motivating – ensures that firms receive positive and negative sanctions, that is, companies that offer better quality products or produce them at lower costs are rewarded in the form of profits, and companies that do not respond to the wishes of customers or violate the rules of competition suffer losses and are squeezed out of the market ;
• distribution, insofar as competition not only includes incentives for higher efficiency, but also allows income to be distributed among enterprises and households in accordance with their effective contribution, that is, with the principle of remuneration by results;
• controlling- contributes to the fact that no supplier and buyer can take a dominant position in the market.

3.1.2. Competition mechanism

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 actors, competition is a multifaceted process, which is refuted by rivalry for increasing production volumes, expanding sales markets, for sources of raw materials and materials.

Acting as a mechanism for regulating proportions, competition makes it possible to determine the size 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.

Competition mechanism for modern market deeply revealed by Harvard Business School professor Michael Porter.

Porter's expanded concept of rivalry assumes that an organization's ability to realize its competitive advantage in an underlying market depends not only on the direct competition it faces, but also on the role played by various competitive forces, so the essence of competition, in his opinion, expressed by five forces:

1. The threat of the emergence of new competitors.
2. The threat of the appearance of substitute goods, or the threat of substitution of products and services.
3. Supplier rivalry, or bargaining power of component suppliers.
4. Buyer rivalry, that is, buyers' ability to bargain.
5. The rivalry of existing competitors among themselves, that is, the struggle between existing competitors.

Together, these forces determine the intrinsic attractiveness of the long-term profit that can be obtained 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 required. 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 cross-sectoral competition.

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

Cross-industry competition- this is a struggle between producers in different industries for the most profitable areas for capital investment. As a result of cross-sectoral competition, funds from low-profit sectors are directed to highly profitable sectors of the economy.

Competition can be driven by both 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 great content iron in ore.

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

In addition, there is competition. objective, 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 cases where 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.

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

Anticipated competition begins already at the stage of development or mastering the production of new products that will be supplied already to the developed or new market.

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

It is also customary to highlight internal and external, regional and interregional, fair and unscrupulous, 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
• sphere of operation
• degree of openness
• market conditions
• nature of competition
• the number of participants;
• competitive situation.

;

TO price methodscompetitive struggle relate:

• lower prices 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 system of discounts (second degree) and consumer segmentation (third degree).

Competitive price methods 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 his reputation;
• incorrect comparison of own products with those of a competitor in advertising, misleading consumers regarding the quality of products and their properties.

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

TO methods of monopolistic competition relate:

• imposing a compulsory assortment of purchased goods and services on buyers (“load trade”);
• preliminary agreement between companies to raise or lower prices;
• preliminary agreement between manufacturers to reduce production;
• establishment of discriminatory conditions for business to clients and partners.

Unfortunately, the methods of monopolistic and unfair competition have been and are widely 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 country's economy is impossible.

3.1.4. Competition strategy and factors

The core element of a 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 new products already "approved" by the market. Logic leads to the conclusion that it is legitimate to consider an innovation strategy as a pivotal one for the whole range of problems solved by commodity producers. Competition is main factor the company's receptivity to product and technical innovations.

Competition in innovation has the following features:

• it encourages entrepreneurs to try to master higher quality products at market prices in order to retain consumers;
• stimulates the use of the most efficient production methods;
• forces the entrepreneur to constantly seek and find new types of products and services that are needed by consumers and can meet the needs of the market.

Analysis of the distant environment of commodity producers should be supplemented by the study of the immediate environment, that is, the competitors of the organization. Quantitative and qualitative data are used to analyze close competitors.

Quantitative data- This is information about which firms are competitors; what products they sell; how and in what markets; who are their main clients; how the promotion of goods to the market is carried out.

Qualitative characteristics are the fame of the enterprise, the qualifications of its personnel, the quality of goods, the loyalty of consumers to the brand of the enterprise, the management system, the strategy of market activity and other parameters that are not formalized, which are 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; mass media; catalogs, brochures, advertising materials; annual reports of firms, opinions of experts and buyers, up to industrial espionage. At the same time, other important factors are taken into account, presented in Fig. 1.

Rice. 1. Factors serving the actions of competitors

Assessment of the conditions of competition is the identification of factors influencing competition and their study. The organization oriented to the market, according to M. Porter's broader concept of rivalry, must take into account all the factors of competition operating in the market.

TO the most important factors of competition relate:

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

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

Competition encourages entrepreneurs to act effectively in the market, forcing them to offer more wide range of goods and services at lower prices and better quality, actively innovate, improve technology, rationally use limited resources, improve investment efficiency.

3.1.5. Types of firm competitive behavior

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 firm competitive behavior.

The first type is creative type of competitive behavior aimed at creating product, technological, organizational and management 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 in the long term through non-price methods of competition.

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

The most preferable for active business is the first type of competitive behavior, moreover, it is necessary for the successful implementation of the innovative strategy of the company.

3.1.6. Competitiveness and methods for assessing the competitive situation

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

In this regard, initially it is necessary to define the concept of competitiveness. Today there is no generally accepted concept of competitiveness.

According to the "Dictionary of the Russian language" S.I. Ozhegova " 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, 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 manufacturers. In the modern market, competitiveness is the ability to stay ahead of others, using one's advantages in achieving the set goals.

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

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

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

There are a fairly large number of definitions and methods of assessment competitiveness of products.

Usually, they mean everything that provides him with advantages in the market, promotes successful sales in a competitive environment.

Competitiveness of goods- This is a relative and generalized characteristic of a product that expresses its advantageous differences from a competitor's product in terms of the degree of satisfaction of needs and in terms of the cost of its production. According to the scientist I.M. Lifits, competitiveness of goods- the ability of a product to ensure commercial success in a competitive environment. However, such definitions do not clarify the content of this concept, noting the already obvious dependence of sales on competition.

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

Under competitiveness of goods a characteristic is understood that reflects its difference from a competitor's product both in the degree of compliance with a specific social need and in the cost of meeting it. Thus, under competitiveness of goods one should understand the 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 competitive advantage.

Competitive advantage can be associated with almost any aspect of the firm's activities: a special pricing policy, effective management of sales, profits, capital, costs, profitability, and others financial results, with the nature of innovation. Thus, competitive advantages- these are: low costs, high quality and a strong degree of differentiation.

In a market economy, an enterprise cannot hold 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 of its services and divisions, as well as its reaction to changes in external factors of influence. If we consider the concept of "competitiveness" in relation to an enterprise, then it can be defined as an opportunity for effective economic activity and its profitable practical implementation in a competitive market.

Enterprise competitiveness - the result of effective management focused on an innovative type of development. The competitiveness of an enterprise is the ability to use its strengths and concentrate their 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.

Competitiveness of the company, can be defined as the ability to provide a better offer of goods compared to a competing company.

The key concept of enterprise competitiveness is its competitive advantage.

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

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

In the interpretation strategic marketing, which is the basis of the modern concept of 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 advantages in the management system that create an advantage for the company over competitors.

The founder of the theory of competition M. Porter proposed a classification (hierarchy) competitive advantages in terms of their significance. Low Rank Benefits(available raw materials, cheap work force, production scale) give the firm insufficient competitiveness, since they are easily accessible to competitors and are widespread. To higher-order benefits include the reputation of the company, relationships with customers, as well as the investment attractiveness of the company. An important competitive advantage can be the goals and motivation of the owners, managers and staff of the firm. TO competitive advantages 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 in close dependence on the strategy he has chosen and the success of its implementation, therefore, more and more attention is paid to the enterprise strategy.

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

Rice. 2. National rhombus. Source: M. Porter International Competition - M. 1993. - P. 149.

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

The success of enterprises and their competitiveness in the innovation market depend on many factors. A list of indicators that reflect the key success factors in a specific market allows an enterprise to assess its competitiveness relative to its main competitors. Obviously, the main agents shaping the competitive climate can change from market to market. The interaction of these competitive forces is used to build a model of the industry's attractiveness and possible changes in it as a result of the action of objective economic factors.

Matrix methodassessment of the competitiveness of the enterprise, developed"Boston Consulting Group" describe the competitive situation using two main dimensions: the importance of retaining competitive advantage and the number of potential sources of differentiation that retain competitive advantage. The differentiation options are industry specific. In order to gain a competitive advantage, each firm must find its own way of differentiating products.

The Boston Consulting Group's Competitive Advantage Matrix identifies four types of business areas that differ in the number and magnitude of competitive advantages. V rectangular system coordinates, a matrix will be built: horizontally, the growth (reduction) rate of the number of sales is plotted on a linear scale, and vertically, the relative share of the product (service) on the market. The most competitive enterprises are those that occupy a significant share in the growing market (Fig. 3).

Rice. 3. Assessment of the competitiveness of enterprises (and the picture 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.

Matrix General Electric “Market attractiveness - business efficiency » collates named categories that, from a marketing point of view, are ideal for evaluating a business. 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 the hope of positive results. Defining these two categories requires analyzing the underlying factors, finding a way to measure them, and identifying key metrics.

Method based on effective competition theory, gives an idea of ​​the competitiveness of the enterprise, covering the most important aspects his economic activities. The method is based on the assessment of four group indicators of competitiveness: the efficiency of the production process management, the efficiency of the 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 department involves an assessment of the effectiveness of the use of these resources.

To assess the competitiveness of a company, a methodological toolkit called "benchmarking" is increasingly used. Benchmarking - comparative analysis key success factors (business parameters) of the enterprise and its main competitors . In the process of strategic analysis, it is necessary to first highlight the key success factors (KFU) of a given industry, and then develop measures to master the most important factors of success in competition, that is, to determine the ongoing innovation mission in order to achieve success in the creation and implementation of a new product. KFU can be based on different areas enterprise activities: R&D, marketing, production, finance, management, etc. In practice, KFUs can take various forms: it can be highly qualified personnel, low production costs, high market share, effective advertising, an enterprise image, a recognizable brand. 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. The factors by which the company lags behind the competitors are its weakness, and by which it is ahead is its strength.

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

Multi-Attribute Estimation Method identifies strong and weak sides, calculates their performance, numerically displays the value of the competitive advantage. Provides a good example for regularly tracking changes in competitiveness. The matrix is ​​divided into nine cells that make up three levels (Figure 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 a middle competitive position... The 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 specific 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 an enterprise - the competitiveness of a product.

As a disadvantage, it should be noted that it is not possible to judge the advantages and flaws in the work 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 an enterprise, including a new one, as the main approach to assessing the goods. The starting point of the method is that the higher the competitiveness of the manufacturer, the higher the competitiveness of his products. The criterion for assessing the competitiveness of a product (service) is the ratio of price and quality. As an indicator assessing the competitiveness of a new product, the ratio of two characteristics is used: price and quality. The most competitive product is optimal ratio these characteristics:

, (2.1)

CT- an indicator of the competitiveness of a product;

TO- an indicator of the quality of the goods;

C- indicator of the price of the goods.

The higher the difference between the consumer value of the product (the price of demand) for the buyer and the price he pays for it, the higher the competitiveness margin 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 affecting the competitiveness of an enterprise - the competitiveness of a 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; efficiency of product promotion, capabilities and efficiency of production, management.

Boole's method 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, catch-ups and followers.

The competitiveness indicator 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 investigated material;

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

or - relative indicator of material quality by i- th indicator;

Li- weight coefficient i- th indicator (determined by expert judgment);

n- number 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: - partial index of the costs of processing the analyzed material relative to the base sample:

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

- consumption price of the analyzed product;

WITHj- costs in value terms for the purchase and processing of the analyzed material;

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

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

conclusions

1. 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, to the introduction of changes, to improve the structure of the enterprise.

   There are both positive and negative features of competition.

   Competition in a market economy performs the following functions: regulatory, allocation; innovative; motivating ; distribution; controlling.

2. Competition is a form of interaction between market actors, 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 size of economic regulators, which are prices, the rate of profit, the rate of interest on capital, and a number of others. Porter's expanded concept of rivalry is based on the premise that an organization's ability to realize its competitive advantage in an underlying market depends not only on the direct competition it faces, but also on the role played by various competitive forces, so the essence of competition, in his opinion, expressed by five forces: Together, these forces determine the intrinsic attractiveness of the long-term profit that can be obtained in the commodity market. It is the interaction of these five forces that ultimately determines the profitability potential of the product (service) market.
3. For an in-depth study of the category of competition, its detailed detailed classification is required. 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 competition classification.

   Intra-sectoral and inter-sectoral competition can be distinguished. Competition can be driven by both natural factors and geographic. In addition, competition is subject, subjective, functional, specific, direct, expected. It is also accepted to distinguish internal and external, regional and interregional, fair and unfair, price and non-price, perfect and imperfect competition.

   Based on the different types of competition, there are various methods of competition. They are divided into: price ; non-price; unscrupulous; monopolistic.

4. The most important factors of competition include: the number of firms and their size; product specificity; the nature of demand and prospects for the development of the industry; costs associated with switching consumers from one supplier to another; the presence of barriers to exit from the industry; rivalry between competing companies; competition from substitute products; the threat of the emergence of new competitors; economic opportunities for suppliers and buyers, etc.
5. There are three main types of competitive behavior of the firm: creative, guaranteeing, opportunistic.
6. Methods for assessing the competitive situation include assessing competitiveness and assessing 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 the competitive market (markets) in the period under review while competing with other goods of a similar purpose and their manufacturers. In the modern market, competitiveness is the ability to stay ahead of others, using one's advantages in achieving the set goals.

When assessing the competitive environment in a specific 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 an enterprise, then it can be defined as an opportunity for effective economic activity and its profitable practical implementation in a competitive market.

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

The 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 diamond”.

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

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

Self-test questions

1. Define the concept of competition.
2. Formulate the main signs of competition.
3. Rate the positive and negative sides competition.
4. Describe the functions of competition.
5. Name the five competitive forces (according to M. Porter).
6. Describe all types of competition classification.
7. Describe the main methods of competition.
8. What are the main factors of competition?
9. Describe the types of competitive behavior.
10. Give a definition of the competitiveness of an enterprise and the competitiveness of products.
11. What are the competitive advantages of the product and the company?
12. Describe the methods for assessing the competitiveness of products and enterprises.

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Presentation title

• Competition, its main types, advantages and disadvantages. Healthy competition. Unfair competition. Free competition.

Competition - economic rivalry between producers of goods and services for more favorable conditions for production activities, sale of goods and services and thereby obtaining maximum profit. Competition drives search profitable solution economic tasks, especially the production of better quality products or services and their fastest implementation.

Competition advantages and disadvantages

• Competition stimulates the rational use of material, labor, financial and other resources, forces manufacturers to constantly renew their assortment, closely monitor scientific and technical innovations and actively introduce them into production.

The advantages of competition for the consumer and the economy:

• there is no unjustified rise in prices;

• improving the quality of goods;

• the engine of scientific and technological progress;

• improving competitiveness in world markets;

• economic efficiency growth.

Cons of competition:

• Someone may have a better product;

• more difficult to attract customers;

• the risk of being squeezed out of the market;

• based on self-interest, and this increases the motivation for committing fraud and crimes.

Types of competition

• functional competition - based on the fact that the same consumer need can be satisfied in different ways;

• specific competition is competition between similar goods, but different in design;

• objective competition is competition between similar goods, but different in product quality and brand attractiveness;

• price competition - a decrease in price increases sales, leads to an expansion of the market;

• hidden price competition: selling a personal product at a competitor's price, reducing the price of consuming a product

• illegal methods: anti-advertising of competitors' products, production of imitators (fake).

Healthy competition

The market economy is effective only under conditions healthy competition that cannot be achieved through self-regulation. In other other conditions, the market economy does not protect the interests of consumers, but drives them into a desperate situation when they have to choose the expensive from the expensive and the bad from the bad. Healthy competition is possible only when all market participants observe the rules of fair competition when the state's regulatory organizations are clearly in effect.

An example of healthy competition in Ukraine is market competition. retail... So, there are large players on the market - "Velyka Kishenya", "Silpo", "Furshet", "Megamarket", and smaller ones: "Fora", "Ekomarket", "Chumatsky shlyakh". Also in small cities there are very small sellers of goods, which does not prevent them from making a profit and competing with larger ones.

Unfair competition - violation of generally accepted rules and regulations of competition, while violating laws and unwritten rules.

Also, unfair competition can be:

• bribery of competitors' buyers, aimed at attracting them as customers and retaining their appreciation for the future;

• elucidation of industrial or commercial secrets of a competitor by espionage or bribery of its employees;

• unauthorized use or disclosure of a competitor's know-how;

• encouraging employees of a competitor to violate or terminate their contracts with an employer;

• threatening competitors with claims for infringement of patents or trademarks, if this is done in bad faith and with the aim of countering competition in the field of trade;

• boycotting the trade of another firm to oppose or prevent competition;

• dumping, i.e. selling their goods below value with the intention of opposing or suppressing competition;

• intentionally copying a competitor's goods, services, advertisements or other aspects of a competitor's business;

• encouraging breaches of contracts entered into by competitors;

• releasing advertisements that compare with competitors' products or services;

Free competition

• Free competition is a competition in which the activities of individual entrepreneurs, aimed at the production and sale of goods, are not limited by state regulation and the existence of monopolies.

The advantages of free competition:

• promotes more efficient use of resources in the production of goods necessary for society;

• causes the need to respond flexibly and quickly adapt to changing production conditions;

• creates conditions for the optimal use of scientific and technical achievements in the field of creating new types of goods, introducing new equipment and technologies, developing more advanced methods of organizing and managing production;

• ensures freedom of choice and action for consumers and producers;

• directs manufacturers to meet a variety of needs and to improve the quality of goods and services.

Disadvantages of free competition:

• does not contribute to the preservation of non-renewable resources (forests, wild animals, reserves of mineral resources, seas and oceans);

• negatively affects the protection of the environment;

• does not ensure the development of production of goods and services for collective use (dams, roads, public transport);

• does not create conditions for the development of fundamental science, the general education system, many elements of the urban economy;

• does not guarantee the right to work, to income for recreation;

• does not contain mechanisms that prevent the emergence of social injustice and the stratification of society into rich and poor.