A feature of a market economy is the complete freedom of the manufacturer to choose any product for manufacture. In this case, the freedom of the consumer lies in the acquisition of any product, and the employee - in free employment for work, with the appropriate qualifications. But free choice does not provide automatic luck in production. In addition to the main factors for a successful choice of strategy, the influence of competition on the development of production is also important.
The essence of competition
Competition (translated from Latin - to collide or collide) is a struggle between business entities of a market economy for the best conditions for the manufacture, production and sale of goods and services. The whole history of mankind and society as a whole is a competition. With the development of human society, the form of this struggle also changed - from the struggle for existence and survival to economic and industrial competition. The importance of competition for a market economy and the formation of a market for the production of goods and services as a whole is of great importance and cannot exist without taking these factors into account. And also this value sometimes takes on cruel forms, and since the branching of entrepreneurial activity it has not diminished, but on the contrary, has acquired a conflict-competitive interaction between producers of certain goods.
In order to understand how an entrepreneur can survive and not go broke under the brutal influence of the rules of a modern market economy, it is worthwhile to study in more detail the essence and influence of competition on the development of production.
It often happens that during the competition the strongest wins when infringing on other uncompetitive entrepreneurs. In other words, the role of competition in the development of enterprises is carried out according to the principle: the main thing is victory, not participation. A generalization of the role can also be expressed as the desire of manufacturers to satisfy consumer demands, while realizing their own economic sovereignty, entering into competition with other manufacturers. 
There are three examples of the impact of competition on production development:
1) The desire of the manufacturer to make better products.
2) The desire of the manufacturer to produce more products.
3) The manufacturer closes the production.
Types of competition
Competition is divided into many species according to various evaluation criteria. Next, we consider them in more detail.
Competition in scale
The impact of competition on the development of production by the scale of development is divided into the following types:
- individual - one manufacturer seeks to choose the best conditions for the sale of their services and goods;
- local - found among manufacturers in a certain territory;
- industry - the struggle in a particular industry for maximizing income;
- intersectoral - competition among manufacturers of various industries for attracting a buyer in order to maximize income;
- national - competition within a particular country;
- global - struggle at the global market level.
Competition by nature of development
The influence of competition on the development of production is reflected in the nature of development and is divided into regulated competition and free, non-price competition and price. It is worth delving into the concept of price and non-price struggle between producers.
Price competition is formed when artificially reducing the cost of a particular product or service. Price discrimination also occurs when a product is sold at completely different prices, but this difference is not justified by the difference in costs.
Non-price competition is formed when improving the quality of a particular product or service. In this case, methods are applied to influence a potential buyer through the quality of service, merchandising and advertising. Thus, these species have a significant impact of competition on the development of production. The description of these processes is supplemented by the stages of making purchase decisions.
Types of competition at the stages of purchasing decisions
Here you can list a certain list:
- competitor wishes;
- functional competition;
- intercompany competition;
- competition between goods.
Dependence on the prerequisites of competitive market equilibria
Perfect competition - the struggle between manufacturers, which is based on the following equilibria:
- the presence of independent entrepreneurs and consumers;
- free trade driven by factors of production;
- independent management of production entities;
- comparability and uniformity of manufactured products;
- the availability of all market information.
Imperfect competition - the struggle between producers - which is based on the violation of the determining factors of equilibrium. In imperfect competition, one can distinguish the following characteristics:
- the complete dominance of some firms or organizations in the market section;
- business autonomy is limited.
Types of competition depending on supply and demand
These types are distinguished:
- pure competition;
- oligopolistic competition;
- monopolistic competition.
These examples of the influence of competition on the development of production follow from the varieties of the prerequisites for competitive equilibrium of the market.
Pure competition can be called the case when most buyers and manufacturers are not able to influence pricing and the market is filled with many similar products that can replace the main one.
A market with pure competition is favorably formed only with a low degree of monopolization of production.
Oligopolistic competition is an imperfect kind. This type of competition can be characterized as follows:
- creating a strong relationship with a small number of competing manufacturers;
- goods are similar to each other and are limited in substitution.
This type is characteristic of such industries as the chemical industry, mechanical engineering, and the metal industry.
Monopolistic competition is an imperfect kind and is characterized as follows:
- numerous competitors have relatively balanced production forces;
- buyers and consumers may note that the goods have different quality, for example, the taste of the product, technical specifications, originality of production, range and quality of services provided.
The formation of a monopoly type of market is most often characteristic of infrastructure industries, such as transport, energy or communications.
Monopolization may occur due to the following conditions:
1) With certain technological features and fixed costs that are very high, the emergence of a large number of competitors is impossible, as a result of which large manufacturers are formed.
2) At high sunk costs, when the assets are very specific and there is no way to reorient them to other products or market types.
3) With excess production capacity.
The term "monopoly" itself can be applied to business entities, market conditions, or the type of economic-industrial relations.
Types of Monopolies
We can distinguish a stable, innovative and artificial monopoly.
Sustainable (natural) monopoly - owners and business entities have at their disposal very rare and non-reproducible resources.
An innovative monopoly - the manufacturer has a unique product and this is opposed to a huge number of customers. Such a monopoly is limited in time, since the technology of the first (unique) manufacturer can be distributed to other industries.
Artificial monopoly - the manufacturer focuses in its hands the objects of economic relations.
Monopolistic competition and its role in the development of production always satisfies only the interests of a large and strong producer, but there are both negative and positive effects of the monopoly on production.
Positive impact - unit costs are reduced due to cost savings on a large scale production; Due to the high degree of resource content, technological progress is taking place.
Negative impact - there is a violation of the rights of the end consumer, since the goods are sold at high prices with artificially reduced supply; structural imbalances arise in market development.
Types of competition depending on the equality of the number of production entities
Intra-industry competition - competition for a favorable condition for the production and sale of products.
Intersectoral competition - competition between manufacturers for a profitable capital investment based on redistribution of profits. Such competition is based on various production conditions, which leads to different profits.
Summing up, we can conclude that an analysis of the impact of competition on the development of any production can help an entrepreneur avoid bankruptcy and rash decisions.