The market is a competitive environment in which independent sellers compete for the right to sell their goods to buyers. You can understand what it is based on its main elements, indicators of the competitiveness of a product and types of competition.
The main 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 of these is the commodity market. This is the sphere of circulation of goods that have no substitutes on the territory of Russia. It is determined on the basis of the economic ability of a potential buyer to purchase products in a certain territory and the absence of such an opportunity outside of it. In this case, interchangeable goods are an element of the commodity market.
The product boundaries of the market are the second element and are characterized by the consumer properties of the product. In addition, the formation of a product group plays an important role, 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 desired product. In this case, they have no way to buy it outside of this territory.
Competition is the fourth element of the market, which can be described as the adversarial nature of business 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 a product, thanks to which it is able to withstand competition with similar products. The main object of the market is products that have value and value, as well as have reliability and a decent technical level.
Competitiveness indicators
Six main indicators of the competitiveness of an enterprise allow maintaining its economic and social status at the proper level: technical and price indicators, quality of goods, terms of delivery and payments, features of the customs and tax system, as well as the degree of responsibility of sellers. As you can see, these factors make it possible to make the market conditions the most effective.
Types of competition
Since the market is a very wide area, competition should 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 a product.
Monopolistic competition is the second type. It consists of many buyers and sellers who trade in a wide price range. This opportunity exists due to the ability to offer customers different products.
Oligopolistic competition is a small number of price-sensitive sellers. Thus, the market as a competitive environment is a vast area that provides a decent standard of living.
