What is competition in history definition. What is competition? Types of competition. Who are the competitors and how to deal with them? Fair Competition Practices

DEFINITION

Competition represents economic process relationships and interactions between market organizations to ensure best opportunities sales of their products, as well as meeting the various requirements of consumers.

There are several functions of competition, with its help, the market value of products is revealed and established, the transfer of funds between industries and industries is regulated. Competition is able to equalize individual costs and distribute profits in accordance with the different costs of labor.

Types of competition

If we consider competition according to its characteristics, we can distinguish several types of competition. In accordance with the scale of development, competition is classified into individual, local, sectoral, intersectoral, zonal and global competition.

Individual competition occurs when one market participant seeks to take its place in the market and choose the best conditions for the sale of services or products. Local competition arises among the owners of goods in a certain territory. Industry competition may arise in one of the sectors of the market, where there is a struggle for more income. Intersectoral competition is manifested in the rivalry of different market sectors for attracting consumers to their side in order to extract more income.

National competition is competition among domestic business owners in a territory. given state. global competition manifests itself in the struggle of enterprises, economic entities and states in the world market.

The ratio of supply and demand

Depending on the ratio of supply and demand, there are several types of competition:

1. clean,
2. oligopolistic
3. monopoly.

Pure competition is the limiting case of competition, which refers to price competition. The main key characteristics are that there are a large number of consumers and sellers in the market who do not have sufficient power to influence prices. In such markets, undifferentiated and completely replaceable goods are produced, sold at prices that are determined by the relationship of supply and demand.

Oligopolistic competition is an imperfect form of competition. The main characteristic of such a market lies in the small number of competitors that create a strong relationship. It has great market power, which is measured by the elasticity of the company's response to the actions of competitors. Goods produced under oligopolistic competition are similar and their quantity and standard sizes are limited.

Monopolistic competition is imperfect competition. In such markets, there are a large number of competitors, while their level of strength is balanced. The product is produced differentiated, with distinctive qualities. Differentiation takes many forms, including the quality and range of services, special technical characteristics, brand strength, etc.

Other types of competition

In accordance with the ratio of the number of business entities regarding the investment of capital in the field of marketing or production, one can distinguish between intra-industry and inter-industry competition.

Intra-industry competition is the competition of industry entities for more favorable conditions for the sale and production of products, as well as profit. Competition within an industry is the starting point in the entire mechanism of competition. With the help of it, scientific and technological progress is stimulated, weak enterprises and enterprises are identified, and the economic power of the leader is limited.

Interindustry competition is competition between firms in different industries for more profitable proposition capital. Intersectoral competition arises and is based on unequal conditions for the release of goods, which lead to different standards arrived. With the help of intersectoral competition, intensification is intensified, production efficiency is growing, sectoral proportions are being optimized, and the restructuring of the economy is taking place.

Competition can be vertical or horizontal. Horizontal competition is competition between producers of the same type of product. Vertical competition is characterized by competition between manufacturers of different products that are able to satisfy the same consumer need.

National Open Institute of Russia

St. Petersburg

Department of Economics

Discipline "Economic theory"

COURSE WORK

Students of the M83s2v group

Nechaeva Elena Alekseevna

"Competition, its role in market economy»

Checked ____________________

The date________________________

Excellent rating

St. Petersburg

Introduction______________________________________________________________3

Chapter 1. Competition. Types of competition____________________________6

1.1. The concept and conditions for the emergence of competition ____________________6

1.2. Functions of competition _________________________________________ 7

1.3. Types of competition _______________________________________ ____10

Chapter 2 perfect competition ____12

2.1. Perfect (pure) competition _____________________________12

2.2. Monopolistic competition______________________________14

2.3. Oligopoly _________________________________________________15

2.4. Pure monopoly ___________________________________________16

Chapter 3. Competition in the Russian economy. Antimonopoly legislation and state regulation of the economy __________20

Conclusion ____________________________________________________________26

List of references _________________________________28

Introduction

COMPETITION is a competition between producers (sellers) of goods, and in the general case - between any economic, market entities; struggle for markets for goods in order to obtain higher incomes, profits, and other benefits (from lat. concurrentia - to collide).

The purpose of this work is to analyze the evolution of the concept of "competition" with the development economic theories, to show what role the state plays in the development and maintenance of competitive relations in a market environment.

In the system of market relations, buyers freely exchange goods in many competitive markets. Competition is the mechanism that decides everything economic problems society.

Market character economic relations means freedom of choice for the buyer and the seller. The mechanism of the market operates through the ratio of supply and demand, which implies the necessary mobility of prices, competition of goods and, therefore, commodity producers. Competition is an integral part of the market environment, necessary condition business development.

Competition arose simultaneously with commodity production, but only under capitalism did it become the main lever of market regulation of social production.

Competition has both positive and negative sides.

The positive impact of competition on the economy is as follows:

1. It contributes to the development of scientific and technological progress, constantly forcing the commodity producer to apply the best technologies, rationally use resources. Thanks to competition, economically inefficient production, obsolete equipment, and low-quality goods are washed out;

2. it is sensitive to changes in demand, leads to cheaper production costs, slows down the rise in prices, and in some cases leads to their reduction;

3. to a certain extent equalizes the rate of return on capital and the level wages in all industries national economy.

The negative aspects include:

1. gives business a certain instability, creates conditions for unemployment, inflation and bankruptcy;

2. leads to income differentiation and creates conditions for their unfair distribution;

3. Its consequence may be overproduction of goods and underutilization of capacities during periods of production downturns.

During the years of the planned economy in our country, competition did not play the role that is assigned to it under market methods of management. From the point of view of organizing a planned economy, the concentration of production in monopolies was considered the most effective way of managing, and competition was considered a source of chaos and crises of overproduction. Thanks to this, the Russian economy has turned not only into a system of highly monopolized industries, but literally into the sum of gigantic industrial subsistence farms, independently providing themselves with everything necessary: ​​from auxiliary production before social sphere. Ultimately, all this has led to low production efficiency, excessively high levels of costs, and, in some industries, to a deep technological lag behind advanced scientific and technical developments.

With the transition of Russia to market methods of management, the role of competition in economic life society has grown significantly.

The fiercer the competition in the domestic market, the better prepared national firms are to compete for markets abroad, and the more advantageous are consumers in the domestic market both in terms of prices and product quality. After all, competitive products should have such consumer properties that would favorably distinguish them from similar products of other competitors.

Maintaining a competitive environment in the Russian Federation, as in all developed countries at the present time, has become an important task state regulation economy. This means that the study of competition, its role in the development of market relations is currently the most important task of economic research in our country.

Chapter 1. Competition. Types of competition.

1.1. The concept and conditions for the emergence of competition.

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

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

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

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

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

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

The main conditions for the emergence of competition:

1. complete economic (economic) isolation of each commodity producer;

2. complete dependence of the commodity producer on market conditions;

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

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

1.2. Competition features.

Competition guides limited resources in those industries and activities for whose products and services there is a demand. This is called the allocation function or allocation function.

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

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

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

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

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

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

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

So, let's begin!

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

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

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

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

The main conditions of competition are as follows:

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

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

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

The whole essence of competition is determined by several functions:

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

The term "competition" comes from the Latin word "concurrentia", which means clash, rivalry. At the same time, it is legitimate to note that this concept is the same root as the Latin “concurus” - competition, competition. Therefore, it is quite fair to define competition as rivalry or competition, and vice versa. The above definitions carry the same content: in the context of a clash of interests of the parties, the participants in the “conflict” take actions to defend their own interests. The differences between these categories are reduced to minor nuances that do not fundamentally change the essence and content of the phenomenon under consideration.

Economists of various schools and directions have a genuine interest in the study of the content of competition. In the works of scientists, the reasons for the emergence of competition are revealed, various interpretations, mechanisms of action, socio-economic consequences and other characteristics of the phenomenon under consideration are given. However, in economics there is no single generally accepted understanding of the category "competition", which would be shared by all economists.

First of all, this is due to the fact that with the development economic system the forms and methods of competitive relations themselves evolve, they are not static and are subject to development as the competitive environment and other factors that can influence them change. In a specific historical period, competition acquires certain specific features, which causes researchers to interpret this phenomenon in different ways. In addition, the plurality of definitions of competition, among other things, is caused by the use of three approaches by the authors to identify this economic category: behavioral, functional and structural.

From the point of view of the behavioral approach, competition is understood as the competitive interaction of market entities for obtaining the desired (necessary or best) conditions for reproductive activity.

Based on the behavioral approach, competition is structured according to the following criteria: by subjects, by scale, by methods, by the legality of competition (Fig. 1).

Figure 1. Main types of competition

According to the subjects of competition, there are:

individual - competition is between separate independent (independent) economic entities;

group - competition between various forms of associations of enterprises (cluster, transnational companies, companies of the "co-competition" model, etc.).

In terms of the scale of actions, competition is:

intra-industry competition, which involves the rivalry of enterprises in the same industry for obtaining the desired (necessary or best) conditions for reproductive activity (profit making, gaining (share) of the market, providing the necessary resources);

intersectoral competition is a struggle between enterprises located in different industries;

regional competition aims not only to compete with enterprises in other regions, but also to fight for various preferential regimes from the federal authorities;

national competition is the rivalry of domestic enterprises within a given country;

global competition is conducted by enterprises, business associations and states different countries on the world market.

Price forms of competition (Fig. 2) are based on the desire to conquer the market and (or) achieve the best economic conditions by reducing prices and, as a rule, while reducing production costs. Reducing prices by reducing the share of profits can lead to an increase in sales, ousting competitors from the market. Price competition can take the form of open form(dumping, "price war"), and in the hidden.

Figure 2. Forms and methods of price and non-price competition

An example of open price competition is such a process as "dumping" (from the English. dumping - dumping) - the sale of goods at prices below cost in order to undermine the position of a competitor, his bankruptcy or ousting from the market. This process is carried out with the expectation of compensating in the future for current losses, when, thanks to low prices, a stable position in the market is achieved and the price of the product rises. It is worth noting that firms quite often resort to dumping as a one-time process, fast way obtaining the necessary Money. Dumping is recognized as a form of unfair competition that violates the freedom of entrepreneurial activity through unlawful trading practices. Many states, including Russia, have legislation aimed at preventing the sale of goods at bargain prices.

On the one hand, dumping is beneficial for buyers, due to the fact that they can purchase goods at a price lower than that of a competitor. On the other hand, entrepreneurs earn less profit while maintaining the same production costs. In addition, when using dumping, an entrepreneur will not be able to form a stable client base, due to the fact that customers attracted only through price dumping, when another company appears on the market, offering even more low prices, as a rule, "leave".

Another example of open price competition is a “price war”, which consists in price cuts by one company and, as a rule, even greater price cuts by a competing company in return. The "price war" between enterprises continues until all possibilities for reducing the cost of goods or their retail value are exhausted.

It should be noted that "price wars" are good in case of deterioration in sales for certain assortment groups in order to correct the situation. Moreover, the price reduction should take place in stages in accordance with the current market situation for these commodity items. At the same time, the enterprise forms an “unsustainable” customer base and minimizes its profit while maintaining costs.

Thus, the main tool of open price competition methods is such a technique as price reduction in the process of competition for the consumer and market conquest. At the same time, it is assumed that by lowering the price of their goods, the entrepreneur will be able to eliminate the rival. Having taken a leading position in the market, the entrepreneur seeks to make up for the current loss in profits by subsequent price increases.

Hidden price competition occurs when companies issue new product with significantly improved characteristics, and the price is raised insignificantly.

Another example of covert price competition is the provision of discounts to customers. This method is often used by retailers as a tool to build customer loyalty. Thus, the company increases turnover due to loyal regular customers. However, while maintaining the cost of operating the enterprise, there is a reduction in profits. Costs may increase, for example, in connection with maintenance discount cards or other discount programs.

Direct price competition is the rivalry of an economic entity with a wide announcement of a price reduction, including with the involvement of the media in order to win a client. Indirect price competition has a more individual, personal approach to customers with the help of price reduction notifications via sms, e-mail, individual informing the client on social networks on the Internet, mailing lists, leaflets.

It should be noted that price competition is not possible in all industries and is not effective in all. commodity markets. Price, as a competitive factor, is of particular importance, since the consumer is very sensitive to its changes. This type competition is typical for markets with monotonous products.

The monotony of products is typical for the agricultural industry, petrochemical production, ferrous and non-ferrous metallurgy. However, the possibilities of competition between industries in these conditions differ. If the only way for an agricultural producer to ensure the sale of food products is to sell them at a low price (sometimes lower than the cost), then producers of petroleum products and semi-finished metals have the opportunity to solve the problem of sale by entering into an unspoken collusion. Often they try to maintain their position in the market through parallel pricing and other opportunities offered by an oligopolistic, highly concentrated market. They resort to price competition as a last resort.

In addition, the practice of price competition is limited in time: as soon as new ways of organizing production and reducing costs become generally available and competitors begin to use them, the prices of goods level off. In this regard, the most effective way of competition is the use of non-price methods based not on manipulating the price, but on modifying the product, giving it such properties that would favorably distinguish it from the competitor's product. Similar products are intended to satisfy the same needs, while the ways in which these needs are met are varied. Therefore, there are practically no restrictions in the process of improving the quality characteristics of the product. Non-price methods of competition include all marketing methods of management. A significant role in non-price competition is played by: design, packaging, subsequent Maintenance, advertising, product adaptability, etc.

In industries where there are wide opportunities for product differentiation, firms do without price competition (manufacture of medical, electronic, household appliances, the pharmaceutical industry, etc.). Differentiation allows you to make products in the eyes of consumers much more attractive than those of other firms, to create your own unique product. There are many industries where differentiation is the only way to stand out in a highly competitive industry market. Such, for example, are some segments of the market for products light industry, perfumery and cosmetic industry, book market, etc.

Another criterion for classifying competition is the principle of legality and compliance by economic entities with antimonopoly (competitive) legislation. In this regard, competition is divided into fair (observing the principles of legality) and unfair (associated with violation of the law).

Fair competition is characterized by obtaining a scarce resource by creating the best products, providing quality services, reducing costs and using generally accepted norms and rules of conduct in the market.

Unfair competition includes the actions of economic entities aimed at discrediting a rival. The most common forms of unfair competition are:

dissemination of inaccurate, distorted, false information (using the media, via the Internet, at exhibitions, presentations, in the course of promotions, etc.) that can cause damage to an opponent or damage his business reputation;

misleading consumers about the nature, place and method of manufacture, consumer properties, quantity and quality of the goods of manufacturers. This form of unfair competition is typical for Chinese manufacturers, who often pass off their goods as goods of world brands and manufacturers from other countries - Italy, Germany, France, etc.;

incorrect comparison of the manufacturer of goods with other goods. As a rule, when comparing, complete objective information about the competitor's product is not given, but several indicators are used that reflect its individual properties;

introduction into circulation (sale, exchange, etc.) of goods with illegal use of the results of intellectual activity of another business entity. Products of intellectual activity (trademarks, trademarks, registered trade names, licenses, patents, etc.) are goods, the use of which without the consent of the right holder or owner is unacceptable. In tough competitive conditions, there is a desire to borrow someone else's property in order to achieve quick commercial success, to get the maximum benefit at the lowest cost, for example, to use a well-established or “promoted” trademark;

use and disclosure of information that is a commercial secret (information about buyers and suppliers of products, information about the conditions of sale and prices, recipe for manufacturing products, etc.).

An incomplete list of these methods characterizes unfair competition, the purpose of which is to influence a competitor in prohibited ways, or almost prohibited ones, since it is impossible to mention all unfair methods in competition laws. The subjects of unfair competition seek to achieve an advantage not at the expense of their own achievements, but at the expense of the illegal use of the results of the opponent's activities. Economic methods remain aside - improving quality, reducing costs and, accordingly, the price of goods.

Thus, based on the behavioral approach, competition can be independent and group; intra-industry, inter-industry, regional, national and global; price and non-price; conscientious and dishonest.

From the perspective of a functional approach, competition is seen as an integral element market system. The essence of competition is manifested through the functions it implements. Competition is studied as a mechanism that ensures the balance of prices through the interaction of supply and demand; as an accelerator of scientific and technological progress; as a tool for regulating the proportions of social production, which contributes to the flow of capital from industry to industry.

From the point of view of the functional approach, the subject of competition research is the effects received by the economy or a specific market from the competition of economic entities. In this case, the effects can be both positive and negative.

The positive role of competition in a market economy is manifested in a number of functions that it performs. Let's highlight the main ones.

Firstly, world experience convinces us that competition covers all major areas of economic life - production, distribution, exchange, consumption, and is an effective mechanism for placing factors of production in places where their use will provide the greatest return.

Secondly, competition through the mechanism of supply and demand affects the formation of the market price, ensuring a balanced relationship between social production and social needs. Competition minimizes the risk of producing products that are unnecessary or too expensive for the consumer.

Thirdly, competition encourages producers to reduce individual production costs, which stimulates entrepreneurs to save raw materials, materials, working hours and other resources.

Fourth, competition acts as an accelerator of scientific and technological progress. In the conditions of market relations and competition, no one and nothing can force to improve production, improve the quality of goods in the way that the threat of bankruptcy of the company as a result of its defeat in the competitive struggle can do. It is on the basis of improving their activities and introducing innovations that entrepreneurs improve their competitive positions. Thus, competition stimulates the introduction of innovations and contributes to the acceleration of scientific and technological progress.

Fifth, competition prevents "stagnation" in the economy and is aimed at macroeconomic growth.

Performing these functions, competition affects the efficiency of production, increasing its technical level, improving quality and expanding the range of products, which, as a result, is reflected in the economic growth of the country.

It is worth noting that the world economy knows examples of the negative consequences of competition. Let's highlight the main ones:

competition creates conditions for the bankruptcy of individual economic entities, small producers, which can lead to mass unemployment and increase property stratification and inequality;

competition leads to increased income differentiation;

contributes to the emergence of economic crises;

in a highly competitive environment, entrepreneurs often forget about the protection environment saving on environmentally sound disposal of waste from production activities, which can lead to an environmental disaster;

competition between economic entities is carried out, among other things, with the aim of ensuring a monopoly status in the market. In other words, competition can be a factor in the monopolization of the market. A monopoly, as is well known, has its own negative consequences for the economy: holding back scientific and technological progress, overpricing products, and so on.

Thus, competition in the economy can have both positive and negative effects, and, based on the functional approach, competition can be divided into positive and negative. Positive signs of competition are: the country's economic growth, "cleansing" the economy of inefficient economic entities, production efficiency in the industry, implementation and innovation, cost reduction and product quality improvement, efficient resource allocation, balanced price-quality ratio, provision of scientific and technical progress that prevents stagnation in the economy, etc. The negative consequences of competition include: the bankruptcy of individual enterprises and unemployment, economic crises and environmental disasters, the likelihood of market monopolization.

Separately, it is worth highlighting competition with zero effect (the concept was introduced by the author of this article), identified in the analysis of competition in Russian economy. Zero effect competition is a situation in the market when, despite the increase in the number of enterprises (potential competitors) in the industry, the price and quality characteristics of the product deteriorate in terms of consumer demands, or remain at the same level. The consumer cannot experience the positive effects of competition, expressed in price reduction and improvement in the quality characteristics of goods and services, in view of the fact that the competition mechanism does not work. Such a situation in the Russian economy is typical for the market of cargo transportation by rail, the market for electricity transmission, the banking sector, construction, and the market for private medical services. Economists, identifying competition from the standpoint of a structural approach, focus their attention on the model of perfect competition - an idealized state of the market, characterized by the presence of many equal sellers and buyers who are not able to significantly affect the change in the price of goods, the absence of barriers to entry or exit from the market, equal to and full access all market participants to information. The basic principles of this model were formulated as early as the 18th century. classics political economy Adam Smith and David Ricardo, and for a long time it was considered a kind of standard, the deviation from which was regarded negatively and needed state regulation.

From the standpoint of the structural approach, competition (the model of perfect competition) acts as a certain criterion for determining the degree of monopolization of markets and, based on this, they distinguish the market of perfect (pure) competition, the market of monopolistic competition, oligopoly and monopoly (Table 1).

Table 1. Types of markets depending on the degree of competition

Thus, the study of the essence and types of competition allows us to draw the following conclusions:

• 1) competition should be considered from the standpoint of three approaches: behavioral, functional and structural. Based on the behavioral approach, competition, first of all, is a process based on the competitive interaction of market entities for the possession of the desired (necessary or best) conditions for reproductive activity. From the point of view of the functional approach, competition is studied as an integral element of the market system, the essence of which is revealed in its functions: an effective mechanism for allocating resources, a pricing tool, an accelerator of scientific and technological progress, a factor economic growth and others. The structural approach characterizes competition as a market model in which many sellers and buyers interact, unable to influence the price;
• 2) in the modern economy there are various types, forms and methods of competition. Competition can be conducted independently or in alliance with other economic entities in the intra-industry, inter-industry, regional, national and global markets. Economic entities can use both price and non-price methods of competition. The first is price manipulation in order to attract consumers and conquer the market. The most effective are non-price methods, the essence of which is to improve the quality characteristics of the goods, to improve the conditions of sale, expand the range, etc. fierce competitive fight forces some economic entities to resort to methods of unfair competition, the purpose of which is to discredit the activities of a rival, using false information, someone else's intellectual property, etc. Competition can have both positive and Negative consequences for the economy. Depending on the degree of monopolization of markets, perfect (pure) competition is distinguished, monopolistic competition, oligopoly and monopoly.

Competition (lat. concurrere - to compete) - rivalry between participants in the market economy for the best conditions for the production, purchase and sale of goods. Such an inevitable clash 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 highest income.

The struggle of private commodity owners for economic survival and prosperity is the law of the market.

The essence of competition is also manifested in the fact that it. on the one hand, it creates such conditions for which the buyer in the market has a great many 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 interest above the interest of the partner. As a result, both the seller and the buyer, when concluding an agreement, must make a mutual compromise in determining the price, otherwise the agreement will not take place, and each of them will incur losses.

An indispensable condition for competition is the independence of the subjects of market relations from certain "higher" and external "forces. This independence is manifested, firstly, in the ability to independently make a decision on the production or purchase of goods or services; secondly, in the freedom to choose market partners. In In the process of competition, economic entities seem to mutually control each other.Competition is also an important tool for regulating the proportions of social production in market conditions.

There are the following functions of competition:

identifying or establishing market value goods;

equalization of individual values ​​and distribution of profits depending on the various costs of labor;

regulation of the flow of funds between industries and industries.

There are several types of competition. Consider the classification of types of market competition on a number of grounds.

Types of competition by scale of development

According to the scale of development, the following types are distinguished:

individual (one market participant seeks to take his place under the sun - choose best conditions purchase and sale of goods and services);

local (among the commodity owners of some territory);

sectoral (in one of the market sectors there is a struggle for the greatest income);

intersectoral (rivalry between representatives of different market sectors for attracting buyers to their side in order to extract more income);

national (competition of domestic commodity owners within a given country);

global (the struggle of enterprises, economic associations and states of different countries in the world market).

According to the nature of development, competition is divided into free and regulated. Also, competition is divided into price and non-price.

Price competition arises, as a rule, by artificially knocking down prices for these products.

Non-price competition is carried out mainly through the improvement of product quality, production technology, innovation and nanotechnology, patenting and branding and the conditions for its sale, "serving" sales.

Types of competition depending on the fulfillment of the prerequisites for competitive market equilibrium

There are perfect and imperfect competition.

Perfect competition is competition based on the fulfillment of the prerequisites for competitive equilibrium, which include the following: the presence of many independent producers and consumers: the possibility of free trade in factors of production; independence of business entities; homogeneity, comparability of products; Availability of market information.

Imperfect competition is competition based on the violation of the prerequisites for competitive equilibrium. Imperfect competition has the following characteristics: division of the market between several large firms or complete domination: limited independence of enterprises; product differentiation and market segment control.

Types of competition depending on the ratio of supply and demand (goods, services)

Can be distinguished the following types competition (varieties of perfect and imperfect competition):

• oligopolistic:

  monopoly.

Pure competition is an extreme case of competition and belongs to the type of perfect competition. The key characteristics of a market of pure competition are: a large number of buyers and sellers who do not have sufficient power to influence prices; undifferentiated.

Oligopolistic competition is imperfect competition. The key characteristics of the market of oligopolistic competition are: a small number of competitors that create a strong relationship; greater market power: the strength of a reactive position, measured by the elasticity of the firm's responses to the actions of competitors; the similarity of goods and the limited number of their standard sizes.

Monopolistic competition is competition of an imperfect kind. The main characteristics of the market of monopolistic competition: the multiplicity of competitors and the balance of their forces; product differentiation

Types of competition depending on the ratio of the number of business entities regarding the investment of capital in the field of production or marketing

There are intra-industry and inter-industry types of competition.

Intra-industry competition is competition between the subjects of the industry for more favorable conditions for the production and marketing of products, obtaining excess profits. Intra-industry competition is the starting point in the mechanism of competition. The main functions of intra-industry competition:

the possibility of establishing the social, market value of the goods and the market equilibrium price;

stimulation of scientific and technological progress;

economic coercion to improve production efficiency;

identification of weak, less organized producers;

limiting the economic power of leaders.

Intersectoral competition is competition between entrepreneurs in various industries for a more profitable investment of capital based on the redistribution of profits. The emergence of intersectoral competition is based on unequal conditions of production (different structure of capital and the rate of its turnover, fluctuations in market prices), leading to different rates of profit.

Main functions of intersectoral competition:

the possibility of modernizing industries, as new enterprises are created on a progressive scientific and technical basis:

strengthening of intensification, growth of production efficiency;

optimization of sectoral proportions, restructuring of the economy.

Types of competition in accordance with the need underlying the product

There are horizontal and vertical types of competition.

Horizontal competition is competition between producers of the same product. It is a kind of intra-industry competition, i.e. competition for the best production of functional properties and product parameters.

Vertical competition is competition between manufacturers of different products that can satisfy the same customer need. For example, with the help of a TV, you can satisfy the need for information, leisure, education, etc.

Types of competition depending on the ratio of supply and demand for a particular product

There are the following types of competition, which are varieties of intra-industry competition: the competition of sellers of goods and the competition of buyers of goods.

The higher the degree of seller competition, the lower the degree of buyer competition and vice versa. The vectors of action of these two tendencies are opposite, and their impact on society is the same, so there is a certain balance between them. When the supply and demand curves interact, a period of relative equilibrium arises, which has three phases: short-term. medium and long. In a short-term equilibrium, price is determined by demand. As the time period lengthens, the price is already determined by the value, i.e. costs.