Lessons 29–30 · 2 lessons · U. G‘afurov, Q. Sharipov. Basics of Entrepreneurship: textbook for Grade 11 of general secondary schools and for secondary specialised and vocational institutions. 1st edition. “O‘zbekiston” publishing house, Tashkent, 2018
30
Ensuring competitiveness
Textbook: pp. 137–140
GoalExplain competition, its functions, forms and methods, unfair competition and ways of raising a business’s competitiveness, and calculate market share.
New words
competition: the economic struggle between market participants for a better position and result · Raqobatmonopoly: a market where a single producer dominates and controls the price · Monopoliyanon-price competition: competing through quality, service and reputation rather than a lower price · Narxsiz raqobatmarket share: the part of total market sales that belongs to one business · Bozor ulushi
Explanation
Competition is the economic struggle of market participants for a better result and position. It places resources efficiently, encourages innovation, regulates prices and keeps producers in check. There are four forms of competition: free competition (very many businesses, no control over price), monopolistic competition (a few dozen businesses, products are differentiated), oligopoly (a few large businesses) and pure monopoly (a single producer). Competition is carried out through price (lowering the price) or without price (quality, service, reputation). Unfair competition means non-economic methods such as discrediting a rival with lies, coercion or physical force; these are against the law and unethical. To raise competitiveness, a business should introduce innovations, bring quality up to standards, raise staff skills, improve working conditions and carry out marketing research. Market share = the business’s sales / total market sales × 100 %.
Worked examples
In an imaginary town there are many bakeries, the bread is similar and each has a small share — this is close to free competition. If one bakery attracts customers with pleasant service and fresh hot bread, this is non-price competition.
Market share: in an imaginary neighbourhood market, 800 000 000 so‘m of dairy products are sold in total a month, of which one dairy’s sales are 120 000 000 so‘m. Its share = 120 000 000 / 800 000 000 × 100 = 15 %.
Class activity
Market analysis: a group picks three competitors for an imaginary neighbourhood, marks price, quality and service in a table, and writes 3 strengths of its imaginary product and 2 fair-competition measures.
Practice
1
Write the difference between price and non-price competition.
In price competition the price is lowered; in non-price competition quality, service and reputation are the main factors.
2
Give two examples of unfair competition and say why they are not acceptable.
Spreading lies about a rival and coercion; they are against the law, unethical and harm buyers too.
3
Total market sales are 500 000 000 so‘m and the business’s are 75 000 000 so‘m. What is its market share in per cent?
15
4
The price was 50 000 so‘m and was lowered by 10 %. What is the new price in so‘m?