concept of "competition" is one of the basic parameters of the market mechanism by which regulated supply, demand and cost of production of the goods.This competition determines the competitiveness of enterprises and goods.The competition is a specific form of relations business entities.This economic rivalry independent manufacturers of commercial products for a certain segment of the market and, ultimately, is the basis of competitiveness of the goods themselves.
competition primarily serves the approval of consumer sovereignty.In this regard, it requires constant adaptation of production to the characteristics of the market situation, encourages producers to active business activities.With the economic position of the competition is the competition of commercial entities for the acquisition of the most favorable conditions for production and sale of goods, obtaining the most profitable orders in order to strengthen positions in the market and maximize profits.
implementing incentive function to achieve entrepreneurial success, competition spontaneously generates the need to improve the economic organization of production, which will change the structure of production costs in the direction of increasing the share of competitive properties of the product.If not, then the producer of commodities from crowding just as ejected when immersed in water item with lower specific gravity than it.The competition gives the intensive reproduction of important features such as innovation and investment activity, the pursuit of product differentiation and diversification of production under the influence of the dynamics of demand and constant analysis of what is now the company has developed the actual production cost of output.
Along with the assertion of the sovereignty of consumers, adapting production and its stimulation, an important function of competition is to ensure economic independence, self-regulation and differentiation of producers.Competition mobilizes hidden reserves of growth of the company, promotes the optimal combination and efficient use of factors of production, management of its resources and the redistribution of income contributes to the cost of production at the plant is constantly decreasing.Acting as distribution, competition creates the conditions under which the distribution of income and productive activities is dependent on the efficiency of the factors of production.This distribution is the basis for promoting economic dynamism of production and thus provides the necessary volume of supply in the market and its receipt of the corresponding income.
production cost and terms of delivery of products, the parameters of social and economic responsibility of business for its production is also largely determined by competition.Feature competition manifested in the fact that it is constantly "learning" the businessman, although its results are unpredictable.Because the competition is fraught with risk, it makes calculate alternative business.
as an incentive to speed up STP and release competitive products competition can analyze both price and non-price aspects.
Price competition usually involves a policy of dumping - selling products at lower prices than competitors.This policy virtually defines such an important parameter as the cost of production and is effective only for a limited time.
price competition, on the contrary, is mainly based on the development, manufacture and supply products of higher quality.And though it requires additional investments in modernization of production, ultimately this policy is more effective for the company in terms of its competitiveness.
