According to the theory of the American economist, professor at Harvard University Michael Porter, competition, including in the global market, is a dynamic, evolving process based on innovation and constant updating of technology. He identified five forces of competition that create a competitive climate and determine the level of profit in an industry. This:

• 1) penetration of new competitors;
• 2) the threat of the appearance on the market of substitute goods (substitute goods) produced using a different technology;
• 3) opportunities for buyers;
• 4) supplier capabilities;
• 5) rivalry between companies that have already established themselves in the market.

The threat of new competitors is expressed in a decrease in the overall profitability of the industry, because new enterprises enter the industry with additional production capacity, which causes an increase in supply and a decrease in prices. There are certain barriers to new competitors entering the market. But, nevertheless, the threat of penetration of new competitors is high. For example, suppliers of imported agricultural products seek to win market shares from domestic enterprises in the agricultural sector, which intensifies competition.

The emergence of substitute products limits the profitability of the industry by setting a ceiling on the prices that businesses can charge for their products. But thanks to the fact that alternatives to grain, like natural product no, we believe that the threat of substitute products can be ignored.

Large buyers or suppliers, in the process of trading, can impose unprofitable deals on enterprises in the industry, which causes a decrease in profits. In agriculture, buyers of products (mainly powerful processing enterprises, for example, elevators), as well as suppliers of equipment or fertilizers (large machine-building and chemical enterprises), are stronger than agricultural enterprises. This inequality of power leads to the fact that the prices of industrial products consumed in the agricultural sector rise faster than the prices of agricultural products, and this is again a reduction in profits.

A company can determine its own strengths and weaknesses by analyzing the forces that affect competition in a given industry and the reasons behind them. With increased competition, industry enterprises have to increase advertising and marketing costs, invest large sums in updating production capacities.

These elements of the competitive environment act together and change the level of intensity of competition. Among the factors that determine the intensity of competition of companies operating in the market, M. Porter, first of all, notes “a large number of competitors or an approximate equality of their forces.

GL Azoev, in assessing the interaction of factors of the competitive environment, also considers the nature of the distribution of market shares between competitors. The second factor is the growth rate of the market; and the third is market profitability.

So, to assess the intensity of competition in the target market, the following groups of indicators are used:

• 1) the nature of the distribution of market shares between firms competitors;
• 2) market growth rates (market dynamics);
• 3) market profitability.

Using the intensity of competition in the distribution of market shares (U d), the strength of the influence of competitors that have the same market share and a similar strategy is estimated. The intensity of competition in terms of market dynamics (U t) describes the tendencies of a certain firm associated with the redistribution of market shares, which affect the interests of competitors to varying degrees. The intensity of competition in terms of market profitability (U r) characterizes the ratio of supply and demand in the market; market development dynamics (T m), which characterizes the annual market growth rates and market volume (V m).

1. Calculate the indicator of competition intensity according to the distribution of market shares (Ud) using the formula .

where n is the number of enterprises in the market;

D i - company's share in the market;

D cf - the average market share occupied by one enterprise and is calculated by the formula:

The higher the value of the coefficient U d , the stronger the intensity of competition in the target market of the enterprise. The negative value of Ud indicates that the intensity of competition for the redistribution of market shares is weakly expressed.

2. The development of supply and demand over time can be expressed in terms of sales growth. When measuring the intensity of competition, this must be taken into account. "High rates, for example, in rapidly developing markets, ensured by the growing demand and supply of goods, push many problems, including competition, into the background. This is mainly due to the fact that the increase in market shares of enterprises does not occur for at the expense of competitors, but by increasing the number of consumers or volumes (multiplicity) of purchases to existing consumers. In this situation, the intensity of competition falls ". Based on business practice, the values ​​of the competition intensity indicator are distributed, taking into account the growth rates of sales in the market under consideration in the range from 70% to 140%.

To determine the intensity of competition in terms of market dynamics (U t), the indicator of market dynamics (T m) is calculated by market volumes at the end of the analyzed and base periods (V` m and V m) and the duration of the period (t)

where V` m - market volume at the end of the analyzed periods;

V m - market volume at the end of the base periods;

t - duration of the period.

As noted above, the maximum and minimum boundaries of the growth rate lie between 140 and 70% per year. Therefore, if Tm > 1.4, then the market is in a state of accelerated growth; when Tm changes from 1.4 to 0.7, the market goes through a state of positional growth, stagnation and collapse, if Tm< 0.7, то ожидается кризис рынка.

According to the market dynamics, indicators of the intensity of competition (Ut) are calculated. It can be assumed that if Tm > 1.4, then Ut = 0; at 0.7< Tm < 1.4, Ut = (1.4 - Tm)/ 0.7; если Tm = 0.7, то Ut = 1. Показатель интенсивности конкуренции в данном случае характеризует остроту конкуренции, так при Ut = 1 конкуренция максимальна.

3. Calculate the indicator of the intensity of competition in terms of market profitability (Ur) using the assessment of market profitability (Rm). Estimating the profitability of the market (Rm) is possible if there is data on the profits that competitors had or have in this market. It is not always possible to have such data, however, having retrospective reporting data of the company, as well as benchmarking information, it is possible to estimate the assets and profits of competitors' firms. In this case, profitability can be determined by the formula

where B pr - gross profit received by competitors in the market for a certain period;

В в - gross costs of competing enterprises included in this market for the same period.

t - duration of the period.

Having profitability data, determine the coefficients of intensity of competition for profitability (U r). If there is an inequality 0< R m < 1, то U r = 1 - R m ; а в случае R m < 0, U r стремится к 1.

The generalized characteristic of the intensity of competition (U c) is calculated according to the indicators U t , U r , U d , as the geometric mean of these indicators:

As U c tends to 1, competition intensifies. If U t or U r is not known, then U c is not considered.

Industry analysis is primarily supply analysis. It is based on the analysis of quantitative and qualitative factors of production. It is worth focusing on the role of competition and competitors in supply formation: these phenomena have a more significant impact on supply volumes, product quality, prices, production costs, etc.

Analysis of the industry and the competitive environment in it should be carried out in a certain sequence.

Stages of industry analysis

1) selection and calculation of the main economic indicators(parameters) that most fully characterize the industry;

2) determining the competitive forces operating in the industry and their impact on the situation, conducting a competitive analysis;

3) identification of factors, driving forces that cause changes in the structure of competitive forces in the industry;

4) identification of enterprises that have the strongest and weakest competitive positions in the industry;

5) forecasting the most likely strategic moves of competitors;

6) determination of the key success factors of the enterprise in the competition;

7) making a final decision regarding the profitability and attractiveness of the industry (final stage).

Let's consider these stages in more detail.

At the first stage, the industry parameters are calculated.

It is most fully characterized by the following of them:

The place of the industry in the national economy of the country;

Market size (annual production and sales);

Market dynamics (rate of change in %);

The stage of the life cycle in which the market is located (beginning, rise, rapid growth, maturity, saturation, stagnation and aging, decline);

The number of competitors and their specific gravity, the scale of competition;

The number of buyers (customers) and their purchasing power;

Technological and innovative level of the industry (for example: technology is homogeneous, changes slowly; changes in quality, etc.);

Availability of entry into and exit from the industry (difficulties: start-up capital, administrative obstacles, monopolistic prices, etc.);

The degree of differentiation of competitors' products;

Possibility to save on scale of production;

The degree of utilization of production capacities in the industry;

Markets for raw materials;

Industry investment level;

Level and pace of innovation;

The level of profitability of the industry (up to the average level for the country's economy).

Table 4.9 provides examples of strategic importance economic characteristics industries.

Table 4.9. EXAMPLES OF THE STRATEGIC SIGNIFICANCE OF THE ECONOMIC CHARACTERISTICS OF THE INDUSTRY

The second important step in the analysis of the industry is to determine the competitive forces and competitive position of the enterprise in the industry, or, as it is also called, competitive analysis.

Competitive analysis is performed in the following sequence: first, the main competitive forces in the industry are determined, and later, general main alternative competitive strategies are formed.

The generally recognized leader in the development of approaches to competitive analysis is M. Porter, professor at the Harvard Business School.

The forces of competition in the industry according to M. Porter are as follows (Fig. 4.4): competitors who have already firmly established themselves in the industry; potential (possible, new) competitors; threats from substitute goods (substitutes); suppliers (sellers); customers (buyers, consumers).

Rice. 4.4. in

The importance of each of these five factors varies from industry to industry and ultimately determines the profitability of industries and enterprises. In industries where these factors are favorable, numerous competitors can earn high returns on invested capital. In the same industries where at least one, and even more so several factors act unfavorably, not all enterprises manage to maintain high profits.

The five factors of competition determine the profitability of an industry because they influence the prices a business can charge, the costs it must incur, and the amount of capital investment required to compete in that industry. Therefore, by changing its strategy, the company can influence these forces in its favor.

Let us consider in more detail the influence of the five forces of competition on the activities of the enterprise.

The threat of new competitors reduces the overall profit potential because they bring new production capacity to the industry and seek to gain market share, thereby reducing profit potential. The competitive strength of this factor is highly dependent on the height of barriers to entry (the cost of entry into the industry). There are three main sources of such barriers:

Loyalty to the brand of buyers;

Absolute cost advantages;

Economies of scale in production.

All this creates significant difficulties for companies that start production.

Availability of substitute products limits the price that firms competing in the industry can charge, higher prices will encourage buyers to turn to a substitute, which will reduce the industry's output.

Supplier pressure lies in their threat to raise prices, forcing companies to reduce output, and hence profits. The most powerful is the pressure from suppliers in the following cases:

The product supplied has practically no substitutes and is important for the company;

Companies in the industry are of little importance to suppliers;

Suppliers exploit the threat of vertical integration. The ability of buyers to "bargain" poses a threat of pressure on prices due to the need for better quality or service. Consumers are most powerful in the following situations:

The industry that supplies goods is made up of many small companies and there are few buyers;

Buyers make purchases in large quantities;

The industry depends on buyers for most of its activities;

Buyers can choose between supplying industries based on the minimum price criterion, which increases price competition in the industry;

When, from an economic point of view, for buyers, acquisitions from different companies are considered as a whole.

Rivalry between existing companies in the industry also reduces profitability, so additional costs (advertising, marketing, research and development) have to be incurred to remain competitive, or profits "follow" to the buyer due to lower prices.

The value of each of the five factors of competition is determined by the structure of the industry, that is, its main economic and technical characteristics. Each branch of the economy is unique and has its own structure.

The structure of the industry is relatively stable, but still can change over time. Accounting for the structure of the industry is reflected in solving the problem of its competitiveness.

Intensity of competition in the industry are distinguished by the following types: attractively weak, moderate, intense, persistent. It is said that competition is intense if the actions of competitors reduce the average profit in the industry. Moderate competition is observed when the majority of enterprises make profits close to the industry average. Weak - when most enterprises can earn above average profits by investing only in production.

Factors affecting the intensity of competition in the industry

a) a large number of competing enterprises with approximately the same sales volumes, which increases the likelihood of strategic initiatives;

b) slow growth in demand (increases the intensity of competition);

c) business conditions in the industry (may encourage competitors to reduce prices or other methods of increasing sales volumes);

d) the costs of buyers in the transition from the production of one brand to another (low - facilitate the interception of consumers of competitors' products);

e) dissatisfaction of several market participants with their position in it (may induce them to aggressive actions);

f) increased competition in proportion to the growth of profits from successful strategic decisions, attracts the attention of all market participants to them;

is) competition becomes intense when the costs of exiting a given market are higher than staying in it and taking part in the competition;

g) competition intensifies when large companies buy a weak enterprise in the industry and take drastic measures to prevent bankruptcy.

An industry is attractive from the point of view of high profits if competitive forces do not significantly affect the situation in it. The ideal competitive environment for high profits is one in which suppliers and buyers are in a weak bargaining position, there are no quality substitutes, barriers to entry are high, and competition is moderate. However, if at least one of the competitive forces is strong, the industry will become attractive only to those enterprises whose strategy is sufficiently effective against the pressure of this competitive force and at the same time provides an opportunity to earn above average profits.

The third stage of the industry analysis.

At the third stage of the industry analysis determine the driving forces that will bring the greatest impact and nature of changes in the structure of competitive forces in the strategic period. Most often, these driving forces can be:

Drastic changes in the legislation and economic policy of the state;

A sharp change in aggregate demand;

The emergence of new products;

Significant technological changes;

Significant innovation, dissemination of know-how;

Significant changes in marketing;

The emergence of large enterprises in the industry or the exit from it;

Significant globalization of the industry;

Significant changes in cost structure or performance;

The transition of consumer preferences from standard products to differentiated ones or vice versa;

Significant changes in the social system, value orientations and other factors of the macro environment;

Changes in trends in the economic development of the industry;

Changes in the composition of consumers and ways of using the product;

Significant changes in the influence of uncertainty and risk factors.

Taking into account these driving forces, strategies are being developed that would mitigate their impact on the enterprise, even cause the reverse impact of the enterprise on competitive forces, and ensure its competitive advantage.

The fourth stage of the industry analysis.

At the fourth stage group all enterprises according to their competitive position in the industry, determine the strongest and weakest, that is, they make a map of strategic groups.

Experience shows that enterprises that operate in the same industry are not always in fact competitors, and the real competition is between enterprises that are part of the same strategic group.

Strategic group of competitors - a group of enterprises in the industry that occupy close positions in the market and compete with each other on the basis of the same competitive advantages, using similar methods.

One strategic group, for example, includes enterprises that have the same size, assortment, the same sales channels and customers with similar competitive advantages, have the same strategic guidelines, operate in the same geographical field, etc.

So, it is necessary to determine which strategic group the enterprise belongs to and identify enterprises in this group that have stronger competitive positions in order to develop an appropriate strategy. In addition, for the same purpose, they determine the level and type of competition between the strategic groups of enterprises in the industry, identifying which of them have strong competitive positions.

At the fifth stage of the industry analysis and the competitive environment in it predict the most probable behavior strategic competitors enterprises so as not to compete blindly. This is the most difficult, although the most important component of the analysis of the microenvironment.

To this end, attention is concentrated and data is collected to assess the potential for each competitor to perform better or worse than others. At the same time, attention is paid to the fact that radical strategic steps should be expected from aggressive competitors. Competitors, satisfied with their current position, will try to maintain it by making only minor changes to the current strategy. Weak enterprises will carry out either defensive steps or offensive, aggressive ones. Analysts should study whether a competitor is capable of taking decisive steps, whether he has the opportunity and desire for this, he is only able to adhere to the chosen strategy, only slightly adjusting it. The result of this analysis should be effective countermeasures.

At the sixth stage of the industry analysis and competition determine key factors success (KFU) of the enterprise.

In order to detect CFU, one can, in particular, use the G. Grant technique, according to which two questions must be asked and answered: 1. What do buyers want? 2. How to survive in competition?

Based on the answers to these two questions, industry-specific

The seventh final stage of the industry analysis and the competitive environment is to assess the situation as a whole and determine the attractiveness or not of the industry, both at present and in the strategic period, according to the following criteria:

Stability of demand;

Susceptibility to the influence of the driving forces of the industry;

Weakening (strengthening) of the influence of competitive forces;

The severity of the problems facing the industry as a whole;

Degree of uncertainty and risk;

Growth (decrease) in industry profitability.

Such a large-scale analysis of the industry and the competitive environment is carried out not only when developing a strategy, but also every 1-3 years. In between, refinement and monitoring are performed. Otherwise it is impossible. Stopping threatens the collapse of the strategy.

conclusions

Formation effective strategy requires a comprehensive study of the state of the enterprise environment, which is the goal strategic analysis, which is specified in its following tasks: identification and evaluation of the strategic potential; assessment of market attractiveness; determination of the strategic position of the enterprise.

First of all, it is necessary to identify internal variables that characterize those internal capabilities and the potential that an enterprise can count on in a competitive struggle in the process of achieving its goal.

Ensuring the correct definition of the strategy and overall policy of the enterprise requires identifying and clarifying the opportunities and threats that may arise for the enterprise in the future, which is the task of analyzing opportunities and threats. The following methods are used for its implementation: SWOT-analysis, SNW-analysis, STEP- and PEST-analysis, ETOM.

Each industry has its own competitive environment. That is why an enterprise must correctly assess its competitors and their interests, the industry (or industries) in which it operates in order to develop the most effective competitive strategies that would ensure its high competitiveness and competitiveness.

The purpose of industry analysis is to determine the attractiveness of the industry and its individual product markets. Such an analysis allows us to understand the structure and dynamics of the industry, its characteristic opportunities and existing threats, determine the key success factors and, on this basis, develop a strategy for the enterprise's behavior in the market.

Scheme of action of competitive forces.

In order to analyze the competitive environment, leaders should assess the capabilities of each of the five competing forces. As a rule, the stronger the forces of competition, the lower the profitability of competing firms.

The ideal competitive environment in terms of profit making is one in which both suppliers and buyers are in a weak position in trade negotiations where there are no good substitutes, entry barriers to entry are relatively high, and competition among existing sellers is fairly moderate. At the same time, if at least some of the five competitive forces are strong enough, the industry should be attractive from the point of view of competition only for those firms whose market position and market strategy provide good enough protection against competitive pressures to ensure themselves the opportunity to make a profit. above the average level.

In order to successfully enter the market without exposing the enterprise to the negative effects of competitive forces, managers must develop strategies that take into account a number of factors. The main factors are:

1) isolation of the enterprise as much as possible from the five forces of competition;

2) make an attempt to influence the laws of competition in the industry in a direction that is beneficial for the enterprise (to make the demand for the product of your company less elastic - to convince consumers that the they just need the goods);

3) to provide a strong reliable position that guarantees success in the competitive struggle.

Managers are unlikely to be able to cope with this task without realizing what the competition in the industry is and what the prospects for its development are.

The degree (intensity) of competition in the markets has a great influence on the firm.

The intensity of competition (the degree of concentration) characterizes the degree of uneven production (sales) of goods between market entities, as well as the degree of its monopolization. The degree of competition is quantified using a number of coefficients (concentration coefficient, Herfindahl coefficient, relative concentration coefficient, Gini coefficients, Lerner coefficients, etc.).

The most popular of these is the Herfindahl coefficient, which is defined as follows:

0£ a i£ 1 , where a i– share i-th competitor.

The interpretation of the quantitative values ​​of the Herfindahl index is as follows:

0 - There is no competition due to the lack of sellers in this market.

0 - 0.2 - Pure competition.

0.2 - 0.4 - Monopolistic competition.

0.4 - up to 1.0 - Oligopolistic competition.

1.0 - Pure monopoly.

The main parameters of possible types of markets:

0 – No competition due to the lack of sellers in this market.

0–0,2 – Pure competition when a large number of enterprises appear on the market offering mass products with homogeneous properties (grain, oil products, some types of raw materials, etc.), their rivalry takes the form of pure (simple) competition , where there is no clear competitive advantage. Firms compete on price points. Demand is very elastic. Non-price methods of competition, as a rule, are not practiced. There are no barriers to business organization.

0,2–0,4 – M onopolistic competition when many enterprises sell differentiated products. The range of price controls is narrow. There is an elastic demand, but non-price methods of competition are used mainly. The entry barrier to the industry is negligible. Manufacturers of goods compete with each other for more favorable conditions for the sale of products. As a rule, the tool of this type of competition is the quality of the goods and tactics marketing activities.

Priorities: creating conditions for realizing the effect of savings from increasing production volumes, eliminating unnecessary costs, eliminating missing links in the chain ʼʼʼproduction-saleʼʼ, specialization in a specific type of product and on individual orders of buyers.

0,4–1,0 – ABOUT oligopolistic competition is a special form of substantive competition, when there are several sellers who are sensitive to price changes. Manufactured products must be standardized (industrial products) or differentiated (consumer products). The range of prices depends on the coherence of the actions of enterprises that are interdependent. Mainly non-price methods of competition are used. There are significant barriers to doing business. Efficiency of work predetermines the utmost importance of matching the capacity of the enterprise to a significant market share. This requires a high concentration of production so that the total share of 4–8 enterprises is not less than 60% of the total market for this product. A large enterprise tries to behave like a monopoly.

In practice, an important role is played by the negotiation process in order to reach an agreement (cartel) and eliminate the possibility of a price war. Usually an agreement is reached on uniform prices and sales quotas. Competition manifests itself in the form of strengthening the brand of goods, differentiation of consumer properties of goods, organization of sales and delivery, service, etc.

As a result, oligopoly enterprises actually operate as a pure monopoly under specified quotas.

Priorities: aggressive reaction to price changes, organization of secret alliances, leadership in prices, active non-price competition.

1,0 – H pure monopoly when there is no commodity competition due to the presence of only one seller. This company produces unique products. There are no effective substitutes. The price controls are significant. Demand is inelastic. Entry into the industry for other enterprises is blocked (often resorted to patent blocking entry into the industry).

Priorities: boost entry barriers into the industry, competition with innovations in related industries, opposition to substitute goods, competition with imported products.

Features of the competitive environment depend on the type of competition in a particular market.

When evaluating the prospects and attractiveness of the market, it is extremely important to take into account the height of barriers to entry and exit from the market, as well as the capacity of the selected market.

To be successful in the market, enterprises must also determine the factors that affect the intensity of competition. Some of them can be distinguished:

1. Competition intensifies as the number of competing firms increases as their size and output levels out.

2. Competition is usually strong when demand for products grows slowly. In a fast-growing market, there is enough room for everyone.

3. Competition intensifies when business conditions in an industry push firms to cut prices or use other means to increase sales and output.

4. Competition intensifies when the cost to buyers of switching from consuming one brand to consuming another is low.

5. Competition intensifies when one or more enterprises are not satisfied with their market share and try to increase it at the expense of competitors' shares.

6. Competition intensifies in proportion to the growth of profits from successful strategic decisions. The higher the potential profit, the more likely it is that some enterprises will act in accordance with this strategy in order to receive this profit.

7. Competition becomes intense when the cost of leaving the market is higher than that of staying in it and taking part in the competition.

8. The dynamics of changes in competition is the less predictable, the more the priorities of firms, their strategy, resources, personal qualities of their leaders and the countries where they are registered differ.

9. Competition intensifies when large enterprises firms operating in other industries acquire a failing business in that industry and embark on a determined and well-funded effort to turn the acquired business into a market leader.

Determining the competitive pressure on the enterprise from rivals in the market, the strategist must determine the most effective competitive tools. (benefits, key success factors (KSF)) that can ensure the success of competitive confrontation.

Plan.

Introduction…………………………………………………………………

1.1. The concept and essence of competition ……………………………...

1.2. Characteristics of types of competition …………………………….

2.2. Competitive positions

2.3. Assessing the strengths and weaknesses of competitors

Conclusion

Glossary

List of used literature

The marketing environment of a firm is made up of a microenvironment and a macroenvironment. The microenvironment is represented by forces that are directly related to the firm itself and its ability to serve the clientele, i.e. suppliers, marketing intermediaries, customers, competitors and contact audiences. The macroenvironment is represented by forces of a broader social plan that influence the microenvironment (demographic, economic, natural, technical, political and cultural factors).

In this way, competitors are an important component of the marketing microenvironment of the company, without taking into account and studying which it is impossible to develop an acceptable strategy and tactics for the functioning of the company in the market.

There are many definitions of competitors, we will give the most common of them. As noted above, competitors are subjects marketing system, which by their actions influence the firm's choice of markets, suppliers, intermediaries, the formation of a range of goods and the entire range of marketing activities (which entails the need to study them). Considering competitors as subjects of the marketing system in more detail, we can give the following definition. Competing firms are firms that have a completely or partially coinciding fundamental niche. The fundamental market niche here is understood as

The presence of competing firms gives rise to such a phenomenon in the economy as competition. From an economic point of view, competition- the economic process of interaction, the relationship of the struggle of producers and suppliers in the sale of products, the rivalry between individual manufacturers or suppliers of goods and / or services for the most favorable production conditions. Thus, competition in a general sense can be defined as rivalry between individuals and economic units interested in achieving the same goal. If this goal is concretized from the point of view of the concept of marketing, then market competition is the struggle of firms for a limited amount of effective demand of consumers, conducted by firms in the market segments accessible to them.

From a marketing point of view, the following aspects are important in this definition:

First, we are talking about market competition, that is, the direct interaction of firms in the market. It refers only to the struggle that firms wage in promoting their products and/or services to the market.

Secondly, competition is conducted for a limited amount of effective demand. It is the limited demand that makes firms compete with each other. After all, if the demand is satisfied by the product and / or service of one company, then all the others automatically lose the opportunity to sell their products. And in those rare cases where demand is virtually unlimited, relationships between firms offering the same type of product are often more like collaboration than competition. Such a situation, for example, was observed at the very beginning of reforms in Russia, when a small number of goods that began to arrive from the West faced an almost insatiable domestic demand.

Thirdly, market competition develops only in accessible market segments. Therefore, one of the common techniques that firms resort to to ease the pressure on themselves from the competitive pressure is to move into market segments that are inaccessible to others.

Chapter 1: Fundamentals of the concept and types of competition

1.1. The concept and essence of competition

It is almost universally accepted, both among economists and in society at large, that if producers are constantly in danger of dying because of higher costs, or too low revenue, then society as a whole wins.

Since only those punishments are frightening which are applied from time to time, competition is effective only when it ruins and destroys those who lag behind. How often do those who lag behind die in a competitive economy? They often die. The composition of manufacturers of any product is updated quite significantly, and this applies not only to progressive industries, such as software companies. Banks are going bust and Insurance companies although the business is hundreds of years old. The scale of this phenomenon is even greater than it can be seen at first glance - many bankrupt firms that sold popular products (it happens) also sell the brand to others, so the consumer does not notice this. So, the owners of some Hollywood film companies are now Japanese.

Obviously, those who spend more than their products bring in revenue are the fastest to go bankrupt. If there are no reserves, and if such "scissors" are not a one-time occurrence, then everything ends soon. But it has always been so, even before our era, in any social system. But what happens if the company makes a profit, but the competitor is simply more profitable? Once upon a time, such a situation only led to the fact that someone got rich, and someone also got rich, but more slowly. As long as the enterprise brought in at least some income, its owner could live without much worry, although he had to cut his own consumption. If the enterprise was owned by a company of owners, then it was not easy for one of the partners, dissatisfied with low profits, to withdraw his part of the capital or even his share of the profits and invest in the enterprise of a more successful competitor. The difficulties were both legal and moral.

The situation changed when it became possible to move capital relatively freely and almost anonymously from enterprise to enterprise, from industry to industry, that is, when the stock exchange appeared. A more profitable enterprise has a greater investment attractiveness, and the owners of capitals try to take them away from the less profitable one in order to buy a share in a more profitable one. This is not too easy - the sale of a significant part of the company's shares reduces their price. However, an outflow of capital from a lagging company is inevitable, and none of the shareholders wants to be the last one on a sinking ship.

Therefore, the free movement of capital contributes to the strengthening of "natural selection" among competing enterprises, competing industries. This modern economy differs from the economy even of the last century. And the ease of movement of capital is becoming more and more wonderful - there are almost no national borders for capital, and modern means of communication in a matter of minutes transport billions of dollars of capital to a new place of their application. This is what is written in popular articles about the economy, but some important details are omitted. A shareholder, in order to save his money from a sinking enterprise, needs to find someone to whom he can sell his shares - this is not easy and involves monetary losses. You can't just "give" the shares back to the company that issued them. After all, the money has already been spent - a plant has been built on it, equipment and raw materials have been bought.

Therefore, the dream of any investor- find a way to invest money so that you can return it at any time, or even better, at a guaranteed percentage. And it's not easy.

That is, in fact, such a sharp disappearance of capital on one continent and its appearance on another does not happen, everything happens gradually. You can invest free capital quickly, but it is not so easy to "pull out" it.

Thus, a real investor must be very careful when investing money - it is physically impossible to cancel a deal if the money is invested in an uncompetitive enterprise. Naturally, when planning your investments, it is necessary to calculate the chances of a particular enterprise for survival. The most stupid method is to look at the shares of which company is in demand (the price of such shares is growing), and invest in it. But in this case, you won't win much - the "cream" is taken off by the one who first recognized the profitability of the enterprise - and you can make a mistake: fall for the bait of stock speculators. Yes, some "make" billions on speculation - but let's leave this topic aside. Real investors do not play games - we are talking about serious investments into real production, and not about speculation on the stock exchange.

Of course, intuition can help a lot - what kind of business can be profitable. You can invest in a successful enterprise if you know something important about it - for example, that there will be a large government order for some product, or that new technology ten times cheaper some popular product. But the emergence of revolutionary new industries or inventions is a rarity, an ordinary investor may never invest his money in an unknown product in his life.

The main tool in the valuation of the enterprise is the method of estimating production costs. This is routine, petty work, but free funds are usually invested on the basis of such an analysis. If we manage to estimate the level of costs in the production of a unit of product at a particular enterprise, then we can reliably assume what its fate will be.

This method is used to determine investment attractiveness businesses in a perfectly competitive economy. It is only necessary to correctly analyze the costs of production, not forgetting one little thing, and the picture will be clear. If one farm consumes two kilograms of feed per liter of milk, and the second - three kilograms, then to which farmer will you lend money to expand the farm?

But one should not think that competition acts like natural selection in a stable population of any animals, eliminating only "freaks" and losers. The world economy has not yet reached a steady state, so in some countries entire industries sometimes die out, temporarily or permanently.

The system of free movement of capital in a competitive environment not only promotes growth, but can create problems even in the most powerful and richest country in the world. And can this system bleed not just one industry, but the economy of the whole country? Maybe. It is this system of moving capital to more profitable industries that literally bled our economy. If an enterprise participates in a system of free movement of capital, then it can succeed dramatically, but it can also die, being not unprofitable, even, but simply less profitable than others. The owners of capital vigilantly monitor the profits of enterprises, paying attention to the difference in fractions of a percent.

Yes, competition is one of the most popular words in the economic lexicon. Many books have been written about her. I repeat: when it comes to competition between firms, the main, almost the only method of identifying the advantages of one firm over another is to compare the amount of costs per unit of finished product. The one who is lessshe spends - comes out the winner in the competition. Such a firm is more attractive for investment.

But here's the paradox - when it comes to comparing the economies of entire countries, the criteria are completely different. It is recommended to take into account some strange things - the level of civil liberties, the existence of freedom of the press, the development of legislation, etc. Based on these indicators, it is not clear how they are calculated, the investment attractiveness of countries is ranked.

From this it is concluded that it is enough to adopt the right laws, abolish the death penalty, finally free the press from any responsibility, cancel registration, develop civil liberties (for example, freedom of conscience) - and the investment attractiveness of our country will grow.

1.2. General characteristics of the types of competition

Depending on the ratio between the number of producers and the number of consumers, the following are distinguished: types of competitive structures:

1. A large number of independent producers of some homogeneous commodity and a mass of isolated consumers this product. The structure of relations is such that each consumer, in principle, can buy a product from any manufacturer, in accordance with his own assessment of the usefulness of the product, its price and its own possibilities for acquiring this product. Each producer can sell goods to any consumer, according to his own benefit. None of the consumers acquires any significant share of the total demand. This market structure is called polypoly and gives rise to the so-called perfect competition.

2. A huge number of isolated consumers and a small number of producers, each of which can satisfy a significant share of the total demand. Such a structure is called oligopoly, and gives rise to the so-called imperfect competition . The limiting case of this structure, when a mass of consumers is opposed by a single producer capable of satisfying the total demand of all consumers, is monopoly. In the case when the market is represented by a relatively large number of manufacturers offering heterogeneous (dissimilar) products, then one speaks of monopolistic competition.

3. The only consumer of the goods and many independent producers. At the same time, a single consumer acquires the entire supply of a product that is supplied by the entire set of producers. This structure generates a special type imperfect competition, called monopsony (monopoly of demand).

4. A relationship structure where a single consumer is opposed to a single producer ( bilateral monopoly ) is not competitive at all, but it is also not a market one.

According to Smith, the essence of the competitive behavior of producers was "fair" (without collusion) rivalry of producers through, as a rule, price pressure on competitors. Not rivalry in setting the price, but the lack of the ability to influence the price, is the key point in the modern interpretation of the concept of competition.

Let's take a closer look at the main ones listed above. market structures.

Polypoly (perfect competition)

A large number of sellers and buyers of the same product. Changes in the price of any seller cause a corresponding reaction only among buyers, but not among other sellers.

The market is open to everyone. Advertising companies are not so important and mandatory, since only homogeneous (homogeneous) products are offered for sale, the market is transparent and there are no preferences. In a market with such a structure, price is a given value. Based on the foregoing, the following options for the behavior of market participants can be deduced:

Price acceptor. Although the price is formed in the process of competition among all market participants, but at the same time, a single seller does not have any direct influence on the price. If the seller asks for a higher price, all buyers immediately go to his competitors, because in a perfectly competitive situation, each seller and buyer has complete and correct information about the price, quantities of the product, costs and demand in the market.

If the seller asks for a lower price, then he will not be able to satisfy all the demand that will be directed to him, due to his insignificant market share, while there is no direct influence on the price from this particular seller.

If buyers and sellers act in the same way, they influence the price.

Quantity regulator. If the seller is forced to accept prevailing market prices, he can adjust to the market by adjusting the volume of his sales. In this case, he determines the quantity he intends to sell at a given price. The buyer also has only to choose how much he wants to receive at a given price.

The conditions for perfect competition are determined by the following premises:

A large number of sellers and buyers, none of which has a noticeable influence on the market price and quantity of goods;

Each seller produces a homogeneous product which is in no way different from that of other sellers;

Barriers to entry into the market in the long term are either minimal or non-existent;

There are no artificial restrictions on demand, supply or price, and resources - variable factors of production - are mobile;

Each seller and buyer has complete and correct information about the price, product quantities, costs and market demand.

It is easy to see that none real market does not meet all of the above conditions. Therefore, the scheme of perfect competition is mainly of theoretical importance. However, it is the key to understanding more realistic market structures. And therein lies its value.

For market participants in conditions of perfect competition, the price is a given value. Therefore, the seller can only decide how much he wants to offer at a given price. This means that he is both a price acceptor and a quantity regulator.

Monopoly

One seller confronts many buyers, and this seller is the only producer of a product that does not have, moreover, close substitutes. This model has the following character traits:

a) the seller is the only manufacturer of this commodity (product);

b) the product being sold is unique in the sense that there are no substitutes for it;

c) the monopolist has market power, controls prices and supplies to the market. The monopolist is a price setter, that is, the monopolist sets the price and the buyer at a given monopoly price can decide how much of the product he can buy, but in most cases the monopolist cannot set an arbitrarily high price, since, as prices rise, demand decreases, and with falling prices - increases;

d) on the way to enter the market, the monopolist establishes insurmountable barriers for competitors - both natural and artificial origin, examples of natural monopolies can be public utilities - electric and gas companies, water supply companies, communication lines and transport companies. Artificial barriers include patents and licenses granted to some firms for the exclusive right to operate in a given market.

Monopolistic competition

A relatively large number of manufacturers offer similar but not identical products, i.e. There are heterogeneous products on the market. In conditions of perfect competition, firms produce standardized (homogeneous) products, in conditions of monopolistic competition, differentiated products are produced. Differentiation affects primarily the quality of a product or service, due to which the consumer develops price preferences. Products can also be differentiated by terms of after-sales service (for durable goods), proximity to customers, advertising intensity, etc.

Thus, firms in the market of monopolistic competition compete not only (and even not so much) through prices, but also through worldwide differentiation of products and services. Monopoly in such a model lies in the fact that each firm in terms of product differentiation has, to some extent, monopoly power over your product; it can raise and lower the price of it regardless of the actions of competitors, although this power is limited by the presence of manufacturers of similar goods. In addition, in monopolistic markets, along with small and medium-sized firms, there are quite large ones.

In this market model, firms tend to expand their area of ​​preference by individualizing their products. This happens, first of all, with the help of trademarks, names and advertising campaigns, which clearly highlight the differences in goods.

Monopolistic competition differs from perfect polypoly in the following ways:

On the perfect market not homogeneous, but heterogeneous goods are sold;

There is no full market transparency for market participants, and they do not always act in accordance with economic principles;

Enterprises seek to expand their area of ​​preference by individualizing their products;

Access to the market for new sellers under monopolistic competition is difficult due to the presence of preferences.

Oligopoly

A small number of participants in competition is understood as a relatively small (within a dozen) number of firms dominating the market of goods or services. Examples of classic oligopolies: the "big three" in the United States - General Motors, Ford, Chrysler.

Oligopolies can produce both homogeneous and differentiated goods. Homogeneity most often prevails in the markets of raw materials and semi-finished products: ores, oil, steel, cement, etc.; differentiation - in consumer goods markets.

The small number of firms contributes to their monopolistic agreements: to set prices, divide or allocate markets, or otherwise limit competition between them. It has been proved that competition in an oligopolistic market is the more intense, the lower the level of concentration of production (a greater number of firms), and vice versa.

An important role in the nature of competitive relations in such a market is played by the volume and structure of the information about competitors and about the conditions of demand that firms have: the less such information, the more competitive the firm's behavior will be. The main difference between an oligopolistic market and a perfectly competitive market is related to price dynamics. If in a perfect market they pulsate continuously and unsystematically depending on fluctuations in supply and demand, then in an oligopoly they tend to be stable and change less often. Typically, the so-called leadership in prices, when they are mainly dictated by one leading firm, while the rest of the oligopolists follow the leader. Market access for new sellers is difficult. When oligopolists agree on prices, competition shifts more and more in the direction of quality, advertising and individualization.

In the economic literature, it is accepted divide competition according to its methods into:

price (competition based on price);

non-price (competition based on the quality of use value).

Price competition dates back to the days of free market competition, when even homogeneous goods were offered on the market at a wide variety of prices.

Price reduction was the basis by which the manufacturer (merchant) distinguished his product, attracted attention and, ultimately, won the desired market share.

IN modern world price competition has lost such importance in favor of non-price methods of competition. This does not mean, of course, that modern market the “price war” is not used, it exists, but not always in an explicit form. The fact is that an open “price war” is possible only until the firm exhausts its reserves to reduce the cost of goods. In general, competition in an open form leads to a decrease in the rate of profit, a deterioration in financial condition firms and, as a result, to ruin. Therefore, firms avoid open price competition. It is currently used usually in the following cases:

F outsider firms in their fight against monopolies, for competition with which, in the field of non-price competition, outsiders have neither the strength nor the opportunity;

F to enter markets with new products;

F to strengthen positions in the event of a sudden aggravation of the sales problem.

With hidden price competition, firms introduce a new product with significantly improved consumer properties, but raise the price disproportionately little.

Non-price competition highlights the higher use value of the goods than competitors (firms produce goods of higher quality, reliable, provide a lower consumption price, more modern design). Non-price methods include all marketing methods of company management.

Illegal methods of non-price competition include:

ü industrial espionage;

ü enticement of specialists who own trade secrets;

ü release of counterfeit goods, outwardly no different from original products, but significantly worse in quality, and therefore usually 50% cheaper;

ü Purchase of samples for the purpose of their copying.

The following main areas of competitive activity of the company can be distinguished:

1. Competition in the raw materials markets for gaining positions in the resource markets in order to provide production with the necessary material resources, promising materials, highly qualified specialists, modern equipment and technology in order to ensure higher labor productivity than competitors. The company's competitors in the commodity markets are mainly manufacturers of analogue products that use similar material resources, technology, labor resources;

2. Competition in the sale of goods and/or services on the market;

3. Competition between buyers in sales markets.

Depending on the intensity of competition in this environment, the firm predicts prices for certain goods, organizes its marketing activities.

In a saturated market, buyer competition gives way to seller competition. In this regard, among these three areas of competitive activity of the company, the greatest interest, from the point of view of marketing, is the competition of sellers in the field of selling goods and / or services on the market. The two remaining areas are competition buyers.

Since competition in marketing is usually considered in relation to the consumer, different types of competition correspond to certain stages of consumer choice.

In accordance with the stages of the consumer's decision to purchase, we can distinguish the following types competition:

1) Desires-competitors. This type of competition is due to the fact that there are many alternative ways for the consumer to invest money;

2) Functional competition. This type of competition is due to the fact that the same need can be satisfied different ways(there are alternative ways to satisfy the need). This a basic level of studying competition in marketing.

3) Interfirm competition. This is a competition of alternatives to the dominant and most effective ways to satisfy a need.

4) Intercommodity competition. This is the competition between the firm's products. It is, in fact, not a competition, but is a special case of an assortment range, the purpose of which is to create an imitation of consumer choice.

Chapter 2. Assessment of the intensity of competition

2.1. Ways to compete

Competition, translated from Latin, means "to collide" and means the struggle between commodity producers for the most favorable conditions for the production and marketing of products. Competition plays the role of a regulator of the pace and volume of production, while encouraging the manufacturer to introduce scientific and technological achievements, increase labor productivity, improve technology, work organization, etc.

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

Competition can be conditionally divided into fair competition and unfair competition.

fair competition

Improving product quality

Development of pre- and after-sales service

Creation of new goods and services using the achievements of scientific and technological revolution, etc.

One of the traditional forms of competition, as already mentioned, is price manipulation, the so-called. “price war”, used mainly to push weaker competitors out of the market or penetrate an already developed market.

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

At present, various kinds of marketing research have received a lot of development, the purpose of which is to study the needs of the consumer, his attitude to certain goods, because. knowledge of this kind of information by the manufacturer allows him to more accurately represent future buyers of his products, more accurately represent and predict the situation on the market as a result of his actions, reduce the risk of failure, etc.

Big role plays pre- and after-sales customer service, as the constant presence of manufacturers in the consumer service sector is necessary. Pre-sales service includes meeting the requirements of consumers in terms of supply: reduction, regularity, rhythm of deliveries (for example, components and assemblies). After-sales service - the creation of various service centers for servicing purchased products, including the provision of spare parts, repairs, etc.

Due to the large impact on the public funds mass media, press advertising is the most important method conducting competition, tk. with the help of advertising, it is possible in a certain way to form the opinion of consumers about a particular product, both for the better and for the worse, the following example can be cited as evidence:

During the existence of the FRG, French beer was in great demand among West German consumers. West German producers did everything to keep French beer out of the domestic market Germany. Neither the advertising of German beer, nor the patriotic appeals "Germans, drink German beer", nor the manipulation of prices led to anything. Then the German press began to focus on the fact that French beer contains various unhealthy chemical substances, while German is supposedly an exceptionally pure product. Various actions in the press began, arbitration courts, medical expertise. As a result of all this, the demand for French beer still fell - just in case, the Germans stopped buying French beer.

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

Unfair competition, the main methods of which are:

Economic (industrial espionage)

Counterfeit products of competitors

Bribery and blackmail

Consumer fraud

Fraud with business reporting

Currency fraud

Hiding defects, etc.

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

The terms "industrial" and "economic" espionage are often used interchangeably. But there is a certain difference between them, because. in principle, industrial espionage is part of economic espionage. Economic espionage beyond industrial also covers areas characterized by such indicators as:

1) market value all final products and services produced in the company for the year;

2) the amount of income of enterprises, organizations and the population in material and non-material production and depreciation deductions), its distribution by sectors of the economy, interest rates, reserves of natural resources, possible changes in technical policy, projects for the creation of large state facilities - factories, landfills, highways and etc.

The answer to the question why economic espionage is interested in the above indicators of the state is that many countries provide generalized data from which it is difficult to establish the formation of income and expenses of a particular industry or the entire state. This especially applies to such areas as financing various kinds of research work in the field of nuclear physics and electronics, the space industry, etc. The same applies to the maintenance of various kinds of special services.

In principle, in our time, any government of a well-developed country has large in cash not controlled by Parliament. These amounts may be hidden in various government spending items or not included in the published state budget. In this way, hidden funding was created, for example, the atomic bomb in the United States. Its creation cost the government $2 billion.

The main targets of industrial espionage are patents, blueprints, trade secrets, technologies, cost structure; economic espionage, in addition to industrial secrets, also covers macroeconomic indicators and includes the exploration of natural resources, the identification of industrial reserves; In connection with the development of marketing, the collection of information about the tastes and incomes of various social groups society.

2.2. Competitive positions

After identifying and evaluating its main competitors, the company must develop competitive marketing strategies.

There is no universal strategy. Each company must determine which strategy is best for it, given its position in the industry, as well as its goals, capabilities, and resources. Even within the same company various kinds activities or products may require different strategies. For example, a company Johnson & Johnson uses for its leading trademarks in stable foreign markets one marketing strategy, and in its activities to create new high-tech products intended for the healthcare sector - another.

So, let's look at the main competitive strategies international marketing, which companies can use in their activities in foreign markets.

Competing companies always differ in their goals and resources. Some companies have large resources, while others lack funds. Some companies are old and stable, others are new and inexperienced. Some are fighting for rapid market share growth, while others are fighting for long-term profits. All these companies will occupy different competitive positions in the markets.

Here are three main competitive positioning strategies that companies can follow:

1. Absolute cost superiority . In this case, the company works hard to achieve the lowest cost of production and distribution in order to set a price lower than competitors and capture a significant market share.

2.Specialization . In this case, the company focuses its main efforts on creating a highly specialized product range and international marketing program, thus acting as the leader of the foreign market in this category of goods. Most consumers would prefer to own such a brand if its price is not too high.

3.Concentration . In this case, the company is focusing on quality service several market segments rather than serving the entire market.

Companies that follow a clear strategy (one of the ones above) are more likely to succeed. Companies that pursue this strategy the best way will receive the highest profits. But if companies do not adhere to any clear strategy, they try to stick to the golden mean, they can get lost in the global market among other companies in the industry.

Recently, two marketing consultants, Michelle Tracy and Fred Virzema, proposed a new classification of international competitive marketing strategies. Their starting point is that companies achieve market leadership by delivering the highest value to consumers. To deliver superior customer value, companies can follow any of three strategies called value disciplines. Here are those strategies.

1. Functional Superiority . The company delivers superior value by leading the industry in price and convenience. It works to reduce costs and create effective system providing customer value. It serves consumers who require reliable, good quality goods or services, but who want them cheaply and effortlessly.

2.Close relationship with the consumer . A company delivers superior value by accurately segmenting "its" external markets and then fine-tuning its products or services to meet the needs of its target customers. It specializes in meeting unique consumer needs by establishing close relationships with consumers and collecting detailed information about their personal preferences and habits. It caters to consumers who are willing to pay a high price to get exactly what they want.

3. Leading position by goods . The company delivers superior customer value by offering a continuous flow of latest products or services, leads to the rapid obsolescence of both its own former goods and services and those of competitors.

Some companies successfully follow more than one value discipline, applying them simultaneously. However, such companies are rare. Few companies can achieve excellence in more than one of these disciplines.

Leading companies focus on one of the value disciplines, achieving excellence in it, and try to adhere to the level of industry standards in the other two.

2.3. Assessing the strengths and weaknesses of competitors

As a first step, a company must collect data on each competitor's global business activity over the past few years. It must know everything about the goals, strategies and performance of the competitor. It's no secret that some of the above data will be difficult to obtain. For example, industrial goods companies have difficulty in determining the market share of competing companies because they do not have information services that serve a consortium of enterprises, similar to the services that consumer goods companies have access to. However, any information they can obtain will enable them to form a more accurate assessment of weaknesses and strengths their competitors.

The study of the strengths and weaknesses of the company's competitors is usually based on secondary data, personal experience and unverified rumors. In addition, companies can obtain additional information by conducting an initial marketing research consumers, suppliers and dealers. In recent years, a growing number of companies have been using baseline analysis. They compare their products and business processes with those of competitors or leading companies in other markets to find ways to improve quality and efficiency.

In the process of finding the weaknesses of competitors, the company should seek to reconsider all assumptions about its business and market that are not true. Some companies continue to believe that they produce the highest quality products in the industry, even though this is no longer the case. Many companies fall victim to slogans such as:

"Consumers prefer companies that produce the entire range of products in this group" or "Consumers care about the level of service, not price." If a competitor bases its activities on assumptions that are fundamentally wrong, the company can beat it.

Evaluation of the spectrum of possible reactions of competitors

Knowing the goals, strategies, strengths and weaknesses of competitors can not only explain much of their likely actions, but also anticipate their possible reactions to such company actions as lowering prices, increasing sales promotion or launching a new product on the world market. In addition, each competitor has its own views on entrepreneurial activity, has a certain internal culture and beliefs. International marketing executives need a deep understanding of the "mindset" of a given competitor if they are to anticipate its likely actions or reactions.

Each competitor reacts to the actions of another company in its own way. Some react slowly or weakly. They can feel the loyalty of their consumers; not immediately notice shifts in the competitor's way of doing things; lack resources to organize resistance. Other competitors react only to certain types of attacking actions, ignoring the rest. They can, for example, almost always take some action in response to a competitor's price cut to make him understand the futility of such a promotion. At the same time, they may not react in any way to increased advertising, considering it as a less significant threat. Some competitors react quickly and decisively to any offensive action. Most companies, knowing about such reactions, avoid direct competition with it and look for an easier way. And finally, there are competitors who show completely unpredictable reactions. There is no guarantee that they will react to this or that circumstance, just as it is impossible to predict their actions based on their economic situation, background or any other assumptions.

In some sectors of the world markets, competitors coexist in relative harmony, while in others they are in constant struggle. Knowing the possible reactions of major competitors gives a company the key to understanding how best to attack competitors or how to protect the company's existing position.

Choosing competitors to attack and avoid

Assume that the management of the company has largely already chosen its main competitors, taking a priori strategic decisions in relation to target consumers, distribution channels and international marketing complex. These decisions define the strategic group to which the company belongs. Now the management of the company must choose the competitors with whom it will compete most vigorously. A company can focus its offensive actions on one of several competitors.

Strong and weak competitors

Most companies prefer as targets weak competitors. It requires less resources and time. But this tactic may not bring significant results to the company. On the contrary, the company needs to compete with strong competitors in order to show its abilities. Moreover, even strong competitors have some weaknesses, and successfully going up against them often pays off. A useful tool for determining the strengths and weaknesses of competitors is customer value analysis. It allows you to identify those areas in which the company is most vulnerable to the actions of competitors.

Competitors near and far

Most companies will compete with competitors that are most similar to them. At the same time, a company's attempt to destroy a nearby competitor may lead to the fact that it will be forced to avoid it, because. in the case of a successful fight with the nearest rival, stronger competitors sometimes appear.

"Good-natured" competitors and competitors - "destroyers"

The company really needs competitors and even benefits from them. The existence of competitors results in some strategic advantages. Competitors can contribute to the growth of overall demand in world markets. They can bear the overall burden of the costs associated with market and product development and contribute to the emergence of new technologies. Competing companies may serve less attractive segments or promote greater product specialization. Ultimately, when united, they can come out from a much stronger position when concluding various kinds of agreements with trade unions or government bodies governing market activity.

However, a company cannot view all of its competitors as beneficial. There are often both "good" competitors and "destroyer" competitors in an industry. "Good-natured" competitors play by the rules defined by the industry. They prefer an industry that is stable and prosperous, set reasonable prices in line with costs, encourage others to cut costs or increase specialization, and are content with modest levels of external market share and profits. Competitors-"destroyers", on the contrary, break the rules.

They try to buy market share, not earn it, often take unnecessary risks, and generally shake the industry.

Conclusion

Companies can no longer afford to focus only on their home market, no matter how big it may be. Many industries are global industries, and those firms that operate globally manage to achieve lower costs and greater visibility.

Given the potential benefits and risks of international markets, companies feel the need for a systematic approach to making international marketing decisions. One of the main factors influencing the decision to enter a foreign market is the level of competition in this market and the competitiveness of one's own goods and/or services.

In developing an effective international marketing strategy, a company must take into account both its competitors and its existing and potential consumers. It must constantly engage in competitor analysis and develop international competition marketing strategies that provide it with effective positioning in relation to competitors and give the maximum possible competitive advantage.

Competitive analysis includes, firstly, the identification of the main competitors of the company based on the analysis of competition, both within the industry and in foreign markets. Second, it involves gathering information about the company's strategies, goals, strengths and weaknesses and the range of possible reactions of competitors. With this information, a company can determine which competitors to attack and which to avoid. Competitive information must be constantly collected, interpreted and distributed using appropriate information system support of decisions in the field of competition in foreign markets. The heads of international marketing departments and services of the company must receive comprehensive and reliable information about the actions and decisions of a competitor.

The preference for one or another international marketing strategy of competition is given depending on the position of the company in the foreign market and its goals, capabilities and resources. A competitive marketing strategy depends on what type of company the company is, whether it is a market leader, a challenger company, a follower company, or a company serving niche markets.

Competitor orientation is, of course, important aspect company's performance in today's global markets, but companies should not overdo it in this direction. Companies are more likely to be vulnerable to growing consumer needs and new competitors than to existing competitors in the industry.

Companies that pay equal attention to the actions of consumers and competitors - have chosen the right international marketing strategy, and are likely to succeed in both domestic and foreign markets.

Glossary

The firm's marketing environment - a set of active actors and forces operating outside the firm and affecting the ability of the management of the marketing service to establish and maintain target customers relationship of successful cooperation.

Competitor - an important component of the company's marketing microenvironment, without taking into account and studying which it is impossible to develop an acceptable strategy and tactics for the company's functioning in the market.

Competition - the economic process of interaction, the relationship between the struggle of producers and suppliers in the sale of products, the rivalry between individual manufacturers or suppliers of goods and / or services for the most favorable production conditions.

Fundamental market niche- the set of market segments for which the product and/or service produced by the firm is suitable.

Polypoly (perfect competition) - a large number of sellers and buyers of the same product.

Monopoly - one seller confronts many buyers, and this seller is the only producer of a product that, moreover, does not have close substitutes.

- a relatively large number of manufacturers offer similar but not identical products, i.e. There are heterogeneous products on the market.

Oligopoly(small number of participants in competition) - a relatively small (within a dozen) number of firms dominating the market of goods or services.

Price competition - free market rivalry, when even homogeneous goods are offered on the market at a wide variety of prices.

Non-price competition - higher than competitors use value goods, when firms produce goods of higher quality, reliable, provide a lower consumption price, more modern design.

List of used literature

1. Kotler F. Fundamentals of Marketing. - M.: Economics, 1990

2. Pakhomov S.B. International marketing: work experience of foreign firms. – M.: “Ankil”, 1993

3. Garkavenko S.S. Marketing. – K.: “Libra”, 2002

4. Didenko N.I., Samokhvalov V.V. Fundamentals of international marketing. - St. Petersburg: "Polytechnic", 2000

5. Moiseeva N.K., Aniskin Yu.P. Modern enterprise: competitiveness, marketing, renewal. - M: Vneshtorgizdat, 1993. - 304 p.

6. Orekhov N.A., Lavrukhina N.V. Assessment of the competitiveness of industrial products. - Kaluga: MSTU, 1997. - 38 p.

7. Feoktistova E. M., Krasyuk I. N. Marketing: theory and practice. - M: Higher School, 1993.

8. Lipsits I.V. A business plan is the basis for success. M: Mashinostroenie, 1993. - 80 p.

9. Meskon M. Kh., Albert M. Fundamentals of management. - M: Higher School, 1988.

10. Meskon M.Kh., Albert M., Hedouri F. Fundamentals of management: Per. from English. – M.: Delo, 1999. – 800 p.

Application No. 1

Comparison of consumer properties and competitiveness

Application No. 2

Characteristics of the main types of competition.

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The main stage of the analysis of competition in the market is assessment of the degree of market exposure to competition processes based on the analysis of the main factors that determine the intensity of competition.

Since the competitive environment is formed not only under the influence of the struggle of intra-industry competitors, the following groups of factors are taken into account to analyze competition in the market in accordance with the M. Porter model:

• rivalry among sellers competing in this market ("central ring") - situation in the industry;
• competition from products that are substitutes - the impact of substitute products;
• the threat of new competitors ;
• positions of suppliers, their economic opportunities - influence of suppliers;
• consumer positions, their economic opportunities - influence of buyers.

Each of the considered forces of competition can have a different impact on the situation in the industry, both in direction and in significance, and their total impact ultimately determines the characteristics of competition in the industry, the profitability of the industry, the company's place in the market and its success.

The main factors that determine the level of competition in the industry, combined into groups, as well as signs of their manifestation, are presented in Table 1.

Table 1. Factors of competition in the industry market.

Thus, it becomes possible to assess the significance of factors by the degree of manifestation of their characteristics in the market of the product under study and to draw a conclusion about the general level of competition in this market.

Let us analyze the nature of the influencing factors included in the group " situation in the industry".

The number and size of firms competing in the market determine the level of competition to the greatest extent. In principle, the intensity of competition is considered to be greatest when there are a significant number of competitors of approximately equal strength in the market, and it is not at all necessary that the competing firms be especially large. However, this rule is not universal and always true from the position of the firm conducting market research. So, for a large firm with powerful resources and numerous advantages, as a rule, only firms of a similar size with similar capabilities are in competition. On the contrary, for the average and, especially small firm the presence of even one major competitor can be a significant obstacle to successful marketing. It should be noted that the number of firms operating in the market, indicating a high degree of competition, can vary significantly depending on the industry, and even the field of activity.

Unification of services for goods in the industry reflects the ability of firms to expand the range of works and services in this field of activity. The presence on the market of a large number of competing firms with a high degree of diversification of services indicates the impossibility of leaving the "niche", that is, avoiding competition through specialization in some work or services. Thus, a high degree of unification of services for goods in the industry acts in the direction of reducing competition in the market under study.

Change in effective demand in the market strengthens or weakens the effect of the first two factors. Indeed, an increase in volume softens, and a decrease, on the contrary, intensifies competition in the market.

The degree of standardization of the product offered on the market, acts to increase competition. Indeed, when each manufacturer offers its own product model or its own set of services designed for one market segment, competition is reduced to a minimum. And, on the contrary, when all producers produce homogeneous products intended equally for all consumers, competition between them is high. Of course, these are extreme cases. In practice, products in any market are differentiated to one degree or another, which does not eliminate competition, but only slightly reduces the degree of competition.

The cost of switching a customer from one manufacturer to another, especially with a significant amount of after-sales service, can to some extent reduce the level of competition that threatens the supplier firm. Indeed, the predetermined features of the delivered product may make it unprofitable or simply impossible to invite a third-party company for after-sales service.

Market Exit Barriers work to increase competition in the market. If switching to another industry market or leaving this business area involves significant costs (liquidation of fixed assets, loss of the distribution network, etc.), then it is natural to expect greater persistence of the firms ousted from the market in the struggle for their positions.

Market entry barriers are closely related to the previous factor and act in the opposite direction, that is, an increase in barriers helps to reduce competition and vice versa. This is due to the need for significant investments, the need to acquire special knowledge and qualifications, etc. The barriers to penetration are higher, the greater the differentiation by technology types, features performance characteristics and other factors. In this case, existing firms have advantages over newly emerging competitors due to their focus on a specific customer, prestige and experience.

The situation in related commodity markets has a significant impact on competition in this market. A high level of competition in adjacent commodity markets, as a rule, leads to an aggravation of the struggle in this market.

Strategies of competing firms operating in the market are considered in order to identify the differences and commonality of the strategic attitudes of competitors. So, if most firms adhere to the same strategy, then the level of competition increases. On the contrary, if the majority of firms adhere to different strategies, the level of competition is relatively reduced.

Attractiveness of the market for this product significantly determines the level of competition. For example, a sharp expansion in demand causes a rapid influx of competitors.

Now consider how it affects the level of competition in the industry influence of potential competitors.

The severity of this threat depends on the size of the barriers, i.e. the difficulties and costs which the "newcomer" has to overcome in comparison with the "old-timers" of the industry.

Factors that reduce the pressure from new competitors are: the need for seed capital to enter the industry; efficient scale of production, temporarily unattainable for a newcomer; difficult access to distribution channels, etc.

Influence of suppliers appears as follows. Suppliers interact with firms, exerting a direct influence on them, which is enhanced in the following cases:

• suppliers' products are highly differentiated or unique, therefore, it is difficult for the buyer to change suppliers;
• firms in the industry are not important customers for the supplier;
• the cost of switching to another supplier.

Supply pressure can be reduced by creating alternative supply chains.

Buyers to a large extent can influence the strength of competition in the industry. This power increases in the following cases:

• products are standardized and not differentiated;
• purchased goods do not occupy an important place in the priorities of the buyer;
• the buyer has good information about all possible suppliers.

The influence of buyers weakens with the expansion of the boundaries of the industry market, product differentiation and specialization, coordination of efforts of industry producers, and the absence of substitute products.

Scientific and technological progress predetermines the emergence substitute goods- new goods and services that can successfully perform the functions of traditional goods. The pressure of enterprises producing substitute goods is that the prices and availability of substitutes create a price ceiling for basic goods in cases where the prices of basic goods are above this ceiling.

Competition from substitutes depends on whether it is easy or difficult for consumers to reorient themselves to it, what is the cost of reorientation. The lower the price of a substitute, less cost reorientation to a substitute and the higher the quality of the product, the stronger the pressure of competitive forces from substitutes.

Each of the factors characterizing competition in the market (see Table 1) is assessed by experts on a point scale. Managers and leading specialists of the enterprise can be involved as experts. For example, if the factor, according to the expert, does not appear on the market or there are no signs of its manifestation, then the strength of the manifestation of this factor is estimated at 1 point; if the factor is weakly manifested - 2 points; if the factor is clearly manifested - 3 points.

In addition, the factors considered have a different impact on competition in the market. To take into account the relative importance of various factors, the specific "weight" of each of them is determined directly during the analysis.

The assessment of the degree of influence of each of the five forces of competition in the market thus obtained is a weighted average score:

where b ij - score j -th expert of the degree of manifestation i -th factor;
n - number of experts;
k i - importance factor i -th factor,
m

Based on the obtained weighted average score, the following conclusions are drawn (Fig. 1):

Fig.1. Assessment of the degree of influence of the strength of competition in the market

the level of competition is very high

,

where b max - weighted average score corresponding to the case of a clear manifestation of competition factors in the market, b cf - weighted average score corresponding to the case of weak manifestation of competition factors in the market;

the level of competition is high if the resulting weighted score falls within the interval

;

moderate level of competition if the resulting weighted score falls within the interval

,

where b min - weighted average score corresponding to the case of non-manifestation of competition factors in the market;

reduced competition power if the resulting weighted score falls within the interval

.

In addition, at the stage of analysis of competition factors, a forecast of the development of competition in the market is carried out on the basis of predictive estimates of changes in the action of each of the factors. The predictive assessment of the change in the effect of the factor corresponds, for example, to the following scores: "+1" - if the effect of the factor will increase, "0" - will remain stable, "-1" - will weaken.

Based on the obtained expert assessments of the forecast for the development of each of the factors, a weighted average estimate of the forecast for the development of competition forces in the market is determined:

where with ij - score j -th development forecast expert i -th factor;
n - number of experts;
k i - importance factor i -th factor,
m - number of considered factors.

In the case when the weighted average estimate of the forecast falls within the interval (0.25; 1), it is concluded that increasing the level of competition power in the market, (-0.25; 0.25) - the level of competition strength will remain stable, (-1; -0,25) - go down(Fig. 2).

Fig.2. Evaluation of the forecast for the development of the level of competition strength in the market

An example of using the technique

We will illustrate the use of the considered methodology by the example of assessing the level and forecasting competition for the market of standardized structures as one of the markets for the products of ZAO Metall-Profil.

In the example under consideration, the exposure of the specified market to competition processes was assessed based on the analysis of the main factors that determine the intensity of competition. The forecast of the state of competition is given.

Information on this section was obtained through a survey of experts - managers and leading specialists of the enterprise.

The state and forecast of changes in competition factors in the market of standardized steel structures, obtained as a result of processing expert information, are shown in Table 2.

Table 2. Competitive factors in the market for standardized steel structures.