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How to analyze the competitiveness of enterprises

Competition and competitiveness – what do these terms mean? By what indicators can one judge that one company is more competitive than the other? Answer these questions.
What is competition? Competitiveness? Perhaps this is one of the most popular and used words in the economic lexicon. It would seem a simple question, however … having scrolled through the books of F. Kotler or other not less famous luminaries from economics and marketing you will not find clear and intelligible definitions revealing the essence of this rather capacious topic. The topic, which in one way or another concerns practically all economic entities of both Russia and other countries.

If you arm yourself with dictionaries, you can find the following definitions of “competition”:

Competition is the competitiveness of economic entities when their independent actions effectively limit the ability of each of them to unilaterally influence the general conditions of circulation of goods in the relevant product market.

Competition – in the everyday sense – the rivalry of economic entities for the best conditions for the production, purchase and sale of goods.

Competition – in classical economic theory – an element of the market mechanism, which allows you to balance supply and demand.

Competition is also a way of managing, and such a form of existence of capital, in which one individual capital competes with another, being an attribute of the market.

I admit that these definitions have somewhat puzzled me. What is the “best production conditions”? Is it possible that only through competition can supply and demand balance? What kind of actions are such that “effectively limit the ability of each of them to unilaterally influence the general conditions of circulation of goods in the relevant product market”? Questions, questions, questions …

But perhaps the most accurate definition of the term “competition” can be found in the Dictionary of Foreign Words of the 1954 edition (State Publishing House of Foreign and National Dictionaries):

In a capitalist society, competition is a fierce, incessant struggle of the capitalists among themselves for a large share of profits, for markets, for sources of raw materials, etc.

In this definition, everything falls into place. From the first words it becomes clear: who is fighting, and, strictly speaking, for what, since the main function of a commercial enterprise is to make a profit.

But, in my opinion, in Russia, the very concept of competition is perceived somewhat differently. Casual and necessary … Why?

First, we start talking about competition only when people ask us (at the bank or partners), who are your direct competitors?

Secondly, when something in the sales cycle begins to “fail,” revenues and profits fall sharply, which does not invest in the “business functioning” framework outlined by our imagination. After all, everything should be … like “Coca-Cola”, but no … Something went wrong, and it does not fit the logical chain in the head of the owner …

Therefore, if we talk about competition among commercial enterprises in the Russian market, then these enterprises should, first of all, be an equal type of activity. Here we need tact, correctness and common sense. Obviously, it is impossible to compare the trade stall with a large supermarket or real estate firm with the existing manufacturing enterprise.

If we talk about the competition of “goods”, then of course, the investigated products should be with similar functionality. But since in this case we are talking about enterprises, let us dwell on them in more detail: in figures, facts and examples.

Suppose there is a certain roadway and intersection, as well as:
two gas stations;
two trade stalls;
two old grandmothers selling seeds,
those. six “business entities”, “working” in different markets. Let’s try to describe each of the business entities (situational analysis):

A brief situational analysis at the gas station leads to the following conclusions:

The term of commissioning of the Klyaks gas station is 2013, and the Kluk gas station was introduced in 2011, i.e. 2 years earlier. During this time, both the gas station “has accumulated” its regular customers. Is it a fact that it has worked out? It’s not a fact at all, it’s probably lost. What does it depend on? First of all, on the quality of fuel and level of customer service.

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