Competition. The concept of competitive strategy (the most important)

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Competition. The concept of competitive strategy (the most important)

Lecture notes, cheat sheets

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48. The concept of competitive strategy

Enterprise strategy - a set of actions in which individual combinations of enterprise behavior are subject to a premeditated plan that helps it achieve its goal.

Strategic behavior of the enterprise - choosing a variant of its activity, which takes into account the possible response actions of competitors.

Strategic behavior means that the company is able to influence the market, including the equilibrium price set in the market. The degree of such influence depends on the strategic strength of the enterprise: market share, the image of the enterprise, the availability of information about the market. In this sense, strategic behavior is characteristic only of an oligopoly market and, to a certain extent, of monopolistic competition: under conditions of free competition, the volume of production of an enterprise almost does not depend on and does not affect the output of other enterprises, since their number on the market is too large.

Strategic interaction of enterprises - such a situation on the market, when, due to their small number, enterprises begin to realize the interdependence of their own real and expected actions, as a result of which their functioning becomes more thoughtful, more purposeful.

This impact of enterprises on the market leads to specific structures of imperfect competition and specific types of market entry barriers, as well as to specific types of relationships between enterprises in the form of strategic groups.

Competitive actions of enterprises in a market economy are aimed at strengthening old and gaining new positions in the market and in some cases lead to a redistribution of the market power of individual enterprises, to a change in market structures.

The functioning (performance) of the industry depends on the behavior of the enterprise.

Industry performance - optimal distribution of industry resources, product profitability, technical process and price dynamics in the market. By influencing the structure of the market, the state can improve the parameters of the functioning of the industry. This approach underlies antimonopoly regulation.

Reverse influence - The government can regulate the number of enterprises in the industry, and enterprises can influence the government's policies to obtain higher profits.

Features of relations between enterprises and their combinations lead to varying degrees of concentration of sellers and buyers in the market, different degrees of differentiation of goods, different heights of barriers to entry and exit from the market, to varying degrees of influence of sellers and buyers on the price.

Author: Ilyina V.N.

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