What is the market as a competitive environment?
Key elements of the competitive environment
The market is a competitive environment, which is based on the rivalry of manufacturers for the sale of their goods. There are five elements of the competitive environment. The first one is the commodity market. This is the sphere of circulation of goods, which has no substitutes on the territory of Russia. It is determined on the basis of the economic possibility of a potential buyer to purchase products in a certain territory and the absence of such an opportunity outside of its borders. In this interchangeable goods are an element of the commodity market.
Grocery borders of the market are the second element and are characterized by consumer properties of products. In addition, an important role is played by the formation of a commodity group, when its markets are considered one product category.
The third element is the geographical boundaries of the market, that is, the territory where buyers purchase the necessary goods.In this case, they have no opportunity to buy it outside this territory.
Competition is the fourth element of the market, which can be described as the competitiveness of economic entities when their own actions do not allow them to fully unilaterally influence the conditions of commodity circulation in the market.
The competitiveness of the product and the product itself are two more elements of the market. Competitiveness is the level of technical, economic and other parameters of products, thanks to which it is able to withstand rivalry with similar products. The main object of the market is products that have value and value, and also have reliability and decent technical level.
The six main indicators of enterprise competitiveness allow us to maintain its economic and social status at the proper level: technical and price indicators, product quality, terms of deliveries and payments, features of the customs and tax system, as well as the degree of seller responsibility. As you can see, these factors can make the market conditions more effective.
Types of competition
Since the market is a very broad field, competition must be divided into several types.One of them is pure competition, which is formed by many buyers and sellers of a similar product. At the same time there is no specific buyer or seller who can have a decisive influence on the price level of the goods.
Monopolistic competition is the second kind. It consists of many buyers and sellers who make deals in a wide price range. This opportunity exists due to the ability to offer customers different products.
Oligopolistic competition is a small number of sellers sensitive to pricing. Thus, the market as a competitive environment is a vast area that provides a decent standard of living.
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