What are the purposes and methods of market competition?

The essence of competition and the influencing factors of the market. The so-called competition is to compete with others for their own interests. Enterprise competition is an activity in which enterprises compete with other enterprises in the market to obtain ultimate benefits and development. There are many ways and means of competition, but the most important thing is to take the market as the center. Therefore, the essence of competition should be understood from the following aspects: First, competition is basically a consumer-centered activity. The so-called market competition is to compete for consumers, the size of market share, that is, the number of consumers; Every seller has a very conscious intention, the purpose of which is to provide products for consumers, and it is considered that the products he provides are more attractive or superior to those of competitors, so as to improve himself and enhance his position in the market. Secondly, the competitiveness is manifested in the strategies and counter-strategies aimed at winning more profits or greater market share by pursuing customers' purchases and fighting wits and wits aimed at defeating competitors. Thirdly, the competitive means and strategies adopted by enterprises, the competitive opportunities they can seek and the scope of competition they can participate in are restricted by their own imagination, consumers (buyers) and social norms (including special restrictions of the government and relevant laws). When one or more competitive enterprises are tempted, or take proactive strategic actions to increase sales, market share and profits, or take defensive actions to protect their existing position, new competitive pressures will arise. Five, with the continuous, long-term and development of the competition process, active competition will enable enterprises to create and cope with new market forces, market trends, customer interests and preferences. In this sense, it is also production that determines consumption. 6. Competitive behavior not only enjoys strategic success, but also bears strategic failure. If a certain competitive behavior guides, influences or "controls" the changing direction of the market, such a competitive strategy is considered to be successful. 7. The failure of competitive strategy means that the strategy is not enough to beat the competitors, or the market share or profit can't reach the expected effect because of poor design or poor implementation. Or lack of influential power, passively follow competitors to imitate or struggle. There are many factors that affect the market, but the most important ones are the characteristics of competitive products, the entry of new enterprises and consumers. First, the competitiveness of substitute products. Broadly speaking, all enterprises are competing with related products when putting any new products on the market. For example, engineering plastics and traditional furniture enterprises will inevitably compete in the use of products. The influence of a closely related substitute product on competitors is shown in the following aspects: First, it may completely replace the original commodity. For example, TV sets have almost completely replaced radios, and color TV sets have replaced black and white TV sets. Secondly, unless the products facing competition improve the quality or reduce the price, or add new functions. Otherwise, the sales volume and profit will be seriously affected, probably because substitutes enter the market. For example, this situation exists between automatic washing machines and ordinary washing machines. Finally, the competition intensity caused by substitute products shows the cross-demand elasticity between the unit sales volume of the original commodity and the sales price of substitute products. In other words, the lower the price, the higher the quality and performance of the substitute products, and the stronger the competitive pressure caused by them. This is the case between electronic watches and mechanical watches. Second, the potential for new enterprises to enter. New enterprises enter the market, form new production capacity, and at the same time have the requirement of occupying a certain share in the market, so they must compete with the original enterprises. Especially those powerful large enterprises, in order to implement their diversification strategy and diversify their operations, entering new markets will inevitably cause market oscillation. For example, Haier's entry into the air-conditioning and color TV markets is such a situation. The possibility of potential competitors entering the market is influenced by the following factors: (1) Economies of scale are inversely proportional to the possibility of potential competitors entering the market. Because it forces potential entrants to make large-scale investment, it may lead new entrants to bear risks such as excessive investment scale, high cost and market saturation. (B) the trust of commodity brands and customer preferences. General customers have different degrees of preference and trust in existing commodity brands. This means that new entrants must be prepared to pay higher costs in advertising and promotion in order to win the trust of customers and establish their own credibility. These jobs cost a lot of time and money. (3) The amount of capital invested. The greater the investment required to successfully enter the market, the greater the restrictions on potential entrants, and vice versa. (four) the economic and technical requirements of the product. For example, owning proprietary technology, obtaining a patent, exclusive use of unique raw materials that are difficult to share, and market advantages are all factors that affect new enterprises to enter the market. Third, the analysis of consumption factors. In the following cases, consumers have a great influence on enterprises: (1) There are few consumers, but the purchase scale is very large. In this case, the supplier of goods is very dependent on the buyer, and large customers often use the quantity they buy as leverage to obtain important price concessions or other favorable conditions. In either case, it will affect the profits of enterprises that provide goods, and even affect the competitiveness of production enterprises under certain conditions. (2) Consumers' purchases account for a large proportion of all sales in the sales industry, and the purchased products are standardized. Buyers can not only choose manufacturers, but also change product suppliers for free. This situation is often temporarily alleviated by increasing the cost of sales. (3) The industrial sector includes a large number of smaller producers, and it is more economical for buyers to buy goods from several or several suppliers at the same time, which will lead to price wars among producers. From the analysis of the influencing factors of competition intensity, we can see that the main influencing factors of the market are products, enterprises participating in the competition and consumers. Then, the factors that affect the intensity of market competition are also around these three aspects. Specifically, it is divided into the following factors: First, the competition intensity increases with the increase of the number of competitive enterprises, and also increases with the proximity of these enterprises in scale, output and competitiveness. The more enterprises participate in the competition, the less likely it is for an enterprise to manipulate the market and seek special interests alone; When competing enterprises are closer in scale and ability, it is possible and necessary for them to compete in a fair and equal position. So a competitive "equilibrium" is formed. A typical example is the motorcycle market in China: in the years around the early 1990s, Chongqing's motorcycles occupied half of the market, and the high market profits attracted a large number of competitors. At first, these new participants did not pose a threat to the original enterprises, but with the influx of new enterprises and the growth of entrants, the original enterprises began to have a sense of crisis. Second, when the demand for products is not strong or the demand growth is slow, the competition is generally more intense. In an environment of excessive demand or rapid market expansion, competition will be affected or even weakened, because each manufacturer has enough buyers and enough business to do. However, when the demand is not strong or the demand growth is slow, no matter those enterprises that expand the production scale or those that want to maintain enough sales to maintain the necessary profit level, they always try their best to compete fiercely for market share. This often leads to the elimination of weak, inefficient and poorly managed enterprises. Since 1990s, a large number of TV production enterprises, washing machine production enterprises, as well as air-conditioning and VCD production enterprises have been eliminated, all of which are victims of market depression. Thirdly, competitive enterprises try to use price reduction or other sales strategies to increase the number of sales units, and the competition becomes more intense. When the cost is not high and the marginal cost is low, the economic pressure of enterprises is great. Once, domestic color TV and microwave oven manufacturers dragged themselves into the sea of price wars. If the market demand becomes weak and the utilization rate of production capacity begins to decline, competitive enterprises may adopt price reduction, or special discounts, rebates and other strategies to increase sales, such as prize sales. If the economic life cycle of the product is short, or the product is seasonal, or the storage cost is high, this similar situation will be more intense. Almost all the calendar wars and moon cake wars in China spare no effort to play the price discount card. 4. If the difference of products or services of competing enterprises is not very prominent, and it costs little for buyers to change from one brand to another, then the competition will be fierce. Product brand and service itself is an important means of enterprise competition. However, if the service quality is comparable, the brand will become irrelevant, and the competition between enterprises will become more intense if they have to find another way. 5. Withdrawal of competitive enterprises. If enterprises quit their business, the cost is higher than staying to compete, then the market competition will be more intense. The higher the exit barrier, the greater the cost of giving up a market, and the greater the pressure and motivation for enterprises to stay and participate in the competition, because this is the best thing that enterprises can do and can only do. Even if the profits they can earn are very low, sometimes they even lose money. Those industries with highly specialized production, mechanical equipment and technicians have no other way out except the last stop once they are dragged into the fierce market competition. 6. The more complex and unpredictable the competitive situation becomes, the more diverse and eclectic the competitive enterprises become in strategy, behavior characteristics, business priorities, resources and marketing means. More enterprises will "go their own way" in the competition and adopt strategies that may cause greater market volatility and uncertainty. In such a competitive state, it is extremely difficult for any enterprise to accurately predict the behavior of competitors. At the same time, enterprises should always make their competitive strategies and counter-strategies suitable for their internal priorities, strengths, weaknesses and economic capabilities to some extent. The greater the difference between competitors, the more likely these factors are to be "correct" strategies for some enterprises and "wrong" strategies for another enterprise. Based on the above analysis, it can be seen that whether an enterprise can succeed in the competition involves the interaction between users, enterprises participating in the competition and their own competitive strategies. And the competitive strategy of enterprises must also be based on these three. First, user policy. The first and most important step of competitive strategy is to judge and analyze users. Analyze the influence of your own products on the competition of the whole industry, how much the products you provide account for the total input of users, and whether the products are highly dependent on technology. If the products you supply account for a large proportion of users' total investment, and have a vital impact on users' production and reproduction activities, or have a significant impact on users' product quality, then the heavier the bargaining weight between you and users, the greater the impact. At the same time, due to the special requirements of technology, it is more difficult or costly for users to change their strategies and suppliers. If enterprises have these two advantages, they should focus on optimizing product performance, improving product quality and reducing production costs in the competition, and provide them with prices that buyers think are more suitable; In addition, efforts should be made to stabilize the delivery date, stabilize and improve after-sales service, and contact users' feelings. Of course, the most important thing is to improve the performance of our products and upgrade our products, so as to improve the needs of users and upgrade their products. This inducement strategy not only strengthens users' dependence on themselves, but also prevents more competitors from joining the market to compete. A well-managed enterprise always develops its own unique ability, so that the method of distinguishing its own products is not easy to be used by others. The "other" here includes both competitors and users. Second, the strategy of competitors. At any time, two or more producers are competitors in the market, and they also have to face the problems of how to enter the market and how to formulate competitive strategies. These competitive strategies have their own characteristics, but there are still great differences. Some enterprises may adopt low-price strategy, some enterprises will pay attention to quality, some enterprises will choose vertical integration, some enterprises will strive to become "integrated production lines", and some enterprises will carefully limit themselves to a narrow production line; Some companies may focus their R&D expenditure on cost-saving production process innovation, while others will develop new products with better performance. If an enterprise's strategy is characterized by low price and the purpose is to penetrate the market quickly, this strategy itself is very risky: either its cost will be difficult to be compensated, or its profit will be affected, thus seriously affecting its development potential. Then it can be concluded that this competitive strategy of this enterprise will be difficult to last. In this strategic situation, as competitors, enterprises can respond or not. For example, it is hard to say how far its low-price strategy can go. "If you know who you are, you will win every battle." In competition, enterprises should not only know the competitive strategy of competitive enterprises, but also know other factors of competitive enterprises. These factors include: production capacity, equipment and technical conditions, the overall quality of employees and corporate culture. Only by fully understanding the family background of competitors can we know whether the strategies adopted by competitors are long-term strategies or short-term behaviors. Those "speculative" enterprises have neither product advantages nor long-term planning, trying to impress the audience by winning the "standard king" in one fell swoop, gaining unexpected benefits by maliciously "grabbing the trademark of a well-known brand, deceiving consumers by overwhelming advertisements, and seeking the" pie "in the sky through some fancy so-called" planning ". The life span of such enterprises is about 3 years at most. Therefore, for this so-called "competitive strategy", enterprises do not have to respond and take reasonable measures. Third, the market positioning of enterprises and related strategies. Enterprise positioning, first of all, is based on enterprise market share. According to China's actual situation and capital concentration, it can be divided into: the dominant position of the market-20% ~ 30% market share. If the enterprise is in a dominant position in the market, it should mainly focus on optimizing after-sales service, win more users through high-quality after-sales service and realize the steady development of the enterprise; Market challenger status-1 1% ~ 19% market share. Enterprises in the challenger position must make more efforts in advertising and marketing channels if the products they produce are standardized and stable in quality; Market follower status -5% ~ 10% market share. If such enterprises are not new entrants, they should probably make more efforts in improving product quality and establishing corporate social image; Addendum market position-market share is less than 5%. Enterprises in this position should base themselves on the local market, implement the localization strategy, do not blindly expand the market, but proceed from the local market and expand steadily. Secondly, closely related to market share, we should also consider the profit level and profitability of enterprises at this market share level: this is not only a sign of enterprise management level and comprehensive quality, but also a potential factor affecting enterprise competitiveness. In short, for an enterprise, no matter what kind of competitive strategy or method is adopted, its purpose is to put itself in such a position: (1) to be as defensive and isolated as possible from competitive forces; (2) Choose strategies that suit the time and suit local conditions to influence the direction of competition and develop in a direction that is beneficial to you.