COMPETITION AMONG NON-MANUFACTURING SECTOR ENTERPRISES - Научное сообщество
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COMPETITION AMONG NON-MANUFACTURING SECTOR ENTERPRISES

26.04.2023 22:07

[1. Экономические науки]

Автор: Daria Halias, Student, Management of non-productive sphere, Mariupol State University; Anastasiia Sorokina, Student, Municipal Management, Mariupol State University; Olena Viktorivna Kravchenko, Doctor of philosophy, Associate Professor of the Department General management and finance, Mariupol State University


In the context of intensifying competition, the task of preserving and increasing one's own competitiveness comes to the forefront for each enterprise. More and more companies are focused on achieving victory in competition and achieving their goals through the constant efforts of management to implement an effective competitive development strategy.

In the context of global crisis phenomena, the problem of forming sustainable competitiveness has become particularly relevant due to the increased variability of the external environment and the insufficient scientific and methodological development of many aspects of forming and implementing the competitive advantages of enterprises. The problem of managing the competitiveness of enterprises is relevant and practical due to the far from complete mastery of modern methods of assessing competitiveness and mechanisms for developing competitive strategies by enterprise management.

A.Yu. Yudanov notes that "competition is a very subtle (selective) and flexible mechanism. Firstly, with a decrease in demand for a product or service, firms suffer equally. The greatest difficulties are experienced by inefficient enterprises, producers of low-quality products, etc. On the contrary, the strongest companies can even prosper in difficult times, as market segments that were previously controlled by competitors that went bankrupt shift to them. The flexibility of the competition mechanism is manifested in its instantaneous reaction to any changes in the situation."

The Ukrainian Law "On Restricting Monopolies and Preventing Unfair Competition in Entrepreneurial Activity" defines competition as "...the competition among entrepreneurs, when their independent actions limit the opportunities of each of them to influence the general conditions of product realization in the market and stimulate the production of those products that consumers need."

This means that competition is associated with dynamic development: it stimulates enterprises to innovate, brings efficient companies to the market, and promotes the exit of those who are less efficient. Both subjective indicators based on perception and regulatory indicators indicate that most countries can improve their institutional framework and legal system to create a high-quality competitive environment.

In reality, competition has a more complex basis. Each type of economic entity has its own characteristics: in leading powerful monopolies, it is strength, in small firms, it is flexibility, in specialized companies, it is adaptability to specific market segments and niches, in innovative firms, it is the advantages of being a first mover, and so on. In specific market situations, one quality or another becomes the decisive advantage.

For market participants, competition has an objectively coercive character, forcing them to systematically apply new technologies, increase labor productivity, and reduce or restrain prices for produced goods. In other words, competition systematically forces the reduction of individual production costs, saves resources, and seeks the most rational combination of production factors

The pandemic has intensified concerns about the limited level of competition and its possible consequences for the region's economic recovery. In particular, if small businesses find it harder to implement new technologies or business models, and if they have less chance of receiving government support, the likelihood of them exiting the market will be higher, leading to an increase in the concentration of large businesses in the market. This will further limit competition at a time when it is most needed to accelerate economic recovery.

Unfortunately, competition between organizations is not always fair. All organizations strive to achieve the highest results in their activities to ensure their interests. Some do this not quite honestly. Unscrupulous methods of competitive struggle, elimination of competing organizations from the market, and obstruction of the creation and development of new enterprises lead to a slowdown in the country's economic development as well as the organization itself.

The non-production sector's activities aimed at providing social conditions for the population's livelihoods and the production sector's functioning are a significant part of the world economic space, where most of the working population is employed and allows the enterprise to position itself in the hierarchy of non-production enterprises at all levels.

We have identified factors that have a direct or indirect impact on the competitiveness of non-production sector enterprises. These include:

• internal factors (management style; enterprise personnel; corporate culture; features of service promotion; service level; enterprise goals; enterprise resources);

• external factors (micro-environment factors: suppliers; customers; competitors; contact audiences; macro-environment factors: political factors; demographic factors; economic factors; cultural factors; natural environment factors).

Despite the importance of the non-production sector in the economy, little analysis has been conducted on whether the behavior of such a sector differs from that of the production sector. A duopoly competition model was investigated for this purpose. The results suggest that competition between non-production and production organizations can be harmful to non-production organizations, depending on the nature of the competition. However, this always improves the welfare of consumers and society as a whole by increasing equilibrium production and reducing equilibrium prices. Additionally, the results also suggest that any possible tax exemptions provided to a non-profit organization do not generate unfair competition.

Literature

1. Mochny S.V., Ustenko O.A., Chobotar S.I. Fundamentals of Entrepreneurship: Manual.- K.: VTS "Academy", 2013. - 280 p.

2. Small and medium-sized businesses (Ed. V.Ye. Sakharov.- K .: National Academy of Management, 2013.- 368 p.

3. Dmitriev I.A., Kirchata I.M., Shershenuk O.M. Enterprise Competitiveness: Textbook. - Kharkiv, 2020. - 204 p.

4. Sizonenko V.O. Modern Entrepreneurship. - K .: Vikar .:, 2009. - 438 p.

5. Adamik V.A. Evaluation of Enterprise Competitiveness / V.A. Adamik // Bulletin of Ternopil National Economic University. - 2012. - 68 p.

6. Putsenteylo P. Competition as an Economic Category / P. Putsenteylo // Economics of the Agro-Industrial Complex. - 2013. - 126 p.



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