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Basics of entrepreneurship in the motor transport industry. Study guide

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5) growth in capacity for the development of motor car transport services;
6) high exit barriers for all evaluation indicators of motor car transport
services.
Theoretical studies perform a predictive function. Its essence lies in the fact that, by revealing the internal content of competition in motor car transport services, it makes it possible to foresee their further development path, turning them into strategic directions. Yes, there is no universal competitive strategy, but by recognizing the conditions of motor car transport activities, its infrastructure, features, skills, and capital, which economic entities of motor car transport possess, it is possible to formulate strategies that bring success. A specific strategy of economic entities of motor car transport consists in the desire to find and implement a way of the most profitable and long-term competition in the market of motor car transport services. The most relevant competitive strategies are:
providing, unlike their competitors, diverse in their technology and versatility motor car services, using the latest achievements of navigation satellite and computer technologies;
maintaining the rolling stock of motor car transport in accordance with the tastes and needs of consumers of motor car transport services;
regular development and improvement of the service system (organization of branded routes, provision of wedding services, etc.);
– integration of the most attractive motor car transport services for consumers (accepting orders for passenger taxis and trucks for the arrival and departure of trains, airliners, sea vessels, when purchasing goods in a retail network, etc.);
stimulation of new types of motor car transport services;
conducting monitoring activities to study the needs of the population for
the provision of motor car transport services by new models of motor vehicles, as well as the use of existing and obsolete types of rolling stock.
Using theoretical systematization, expansion, and deepening of scientific knowledge of competition, we will consider the types of competition in motor car transport services and clarify their essence and functional aspect.
Of greatest interest is the expected competition, which begins already at the stage of development or mastering new types of motor car transport services. Direct competition arises in the case of competitive relations without intermediaries. Functional competition is characterized by the fact that services for the transportation of goods and passengers are provided by economic entities that are functional competitors. Species competition is a consequence of the fact that services for the transportation of goods and passengers differ in certain technical parameters. Price competition involves the provision of motor car transport services at lower prices than competitors. Non-price competition does not involve price, but the quality of motor car transport services, transport and forwarding services, the provision of a large volume of services to the consumer, etc. Unfair competition is accompanied by violations of the norms and rules of
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competition in the motor car transport services market from misinformation of consumers to false information.
Unfair competition is often prohibited by certain legislative and legal acts. In addition, special types and varieties of competition are distinguished depending on the nature of competitive relations. At the industry level, there are: inter-industry competition and intra-industry competition, which are characterized by the struggle between economic entities of different types of transport in the first case and the same types in the second, for a limited volume of solvent demand. Inter-economic competition is characterized by the struggle between economic entities of one or different industries for a limited volume of solvent demand. Intra-economic competition is typical for various types of services of its economic entity. Let us conclude that the competition of motor car transport services is a rivalry between economic entities of motor car transport, determined by the current stage of its life cycle and prognostic analysis, outlining the paths of its further development. The concept and idea of competitiveness of motor car transport services is the difference of certain properties of the services provided by one economic entity of road transport compared to another.
Competitiveness is considered as a relative assessment of the advantage of motor car transport services, which allows to satisfy the needs of consumers with greater efficiency. Competitiveness reveals the advantages of the quality level of motor car transport services over similar competitors. Competitiveness characterizes the ability to withstand other services of the same purpose in a certain segment of the motor car transport services market.
Thus, it can be concluded that competition in the motor car transport services market contributes to the provision of the most competitive services. It is determined by the quality and cost values of the provided motor car transport services, which are comprehensively «assessed» by consumers in terms of importance, satisfaction, and costs. We consider the competitiveness of motor car transport services according to the concept on which the activities of an economic entity in the motor car transport sector are based. The conceptual and categorical apparatus in the study of the competitiveness of motor car transport services as an economic science is very extensive and diverse. Cognition of objective phenomena and their comprehension are impossible without categories.
In the system of competitive relations, the competitiveness of motor car transport services is a key function that should be determined by several categories:
individual category (competitiveness of an individual entrepreneur);
microcategory (competitiveness of a motor car transport enterprise);
mesocategory (competitiveness of the transport industry);
macrocategory (inter-industry, national competitiveness).
The competitiveness of individual entrepreneurs in the sphere of motor car transport services is the most significant in our country and it should be
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attributed to the micro category. In order to deepen the theoretical cognition of the individual category, it is necessary to determine the essence of the competitiveness of other categories and identify their interrelations. All the named categories identify competitiveness, i.e. the attractiveness of the consumer of motor car transport services, but with different rating assessments. Each category is an integral part for the others. Given the lack of a unified approach to determining the competitiveness of motor car transport services as a key function in the system of competitive relations in the motor car transport services market, the existing terminological uncertainty requires regulation of the content of the categories. We define the competitiveness of a motor car transport enterprise as the potential ability of the enterprise to develop, improve, and provide motor car transport services on the market, ahead of competitors and ensuring the economic efficiency of motor car transport activities. Achieving the competitiveness of a motor car transport enterprise is carried out through a competitive advantage, which is the main element of the system of competitive relations. Competitive advantages are those additional characteristics that create a clear superiority for a motor car transport enterprise over its direct competitors. A distinction is made between external competitive advantages, which are based on the distinctive parameters of motor car transport services for the consumer, and internal competitive advantages, that is, superiority in terms of production costs, allowing for a lower cost of motor car transport services, the possibility of reducing the price of services imposed by the market and competition.
Mesocompetitiveness is understood as the ability of the transport industry to compete in the domestic and foreign markets. Competitiveness of the industry is the probabilistic ability of the transport industry, in comparison with another transport industry, to identify and productively use the potential of competitive advantages reflected through a system of adequate indicators due to economic, social, organizational, and other factors. As a basis for comparison, we take different types of the transport industry in one territorial entity and the same transport industries in comparison with another territorial entity. Macrocompetitiveness is considered as competition between economic entities of different industries, which is manifested in the competition of goods and services provided by one industry with goods and services of another industry.
Inter-industry competition is a competition between economic entities of different industries for obtaining the highest rate of profit. It is expressed in the flow of capital from industries with a low rate of profit to industries with a high rate of profit. As a result of inter-industry competition, a certain dynamic balance is created, ensuring the receipt of equal profit on equal capital, regardless of where it is invested. Research of the categories of competitiveness of motor car transport services allows us to recognize its specificity: heterogeneity and hierarchy of the competitive environment. It should be noted that the level of competitiveness of motor car transport services at any given time is determined by the joint impact of a number of factors. Studying and
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analyzing factors allows us to determine to what extent they contribute to or hinder the achievement of the level of competitiveness of motor car transport services. Factors are nothing more than a driving force, a cause of events or processes; it is the factors of competitiveness of motor car transport services that determine its characteristic features. These factors are not the same in nature, character, and degree of impact. They are expressed by the compliance of the consumers interests, their solvency, convenience, and trust in the provided motor car transport services.
Let us identify the main factors of competitiveness of motor car transport services and classify them. From the point of view of the system approach, the classification of factors (levels of competitiveness of motor car transport services) deserves the greatest attention depending on the motivation of the needs of the consumer of motor car transport services.
The first level of competitiveness characterizes consumers of services that satisfy minimum needs at minimum costs.
The second level is the consumer's orientation to the price character and quality characteristics of motor car transport services.
The third level is the consumer's orientation to a comprehensive assessment of all factors that satisfy their needs, giving preference to motor car transport services with the best ratio of non-price and price characteristics.
The fourth level is the consumer's orientation to the uniqueness of the services provided, at a high price.
The fifth level is the incentive factor (branded provision of motor car transport services).
Thus, the level of competitiveness of motor car transport services is determined by the following factors: superiority in quality, consumption price, service level, innovative activity, and development potential of the provided motor transport services. Let us conclude that an influential factor in the competitiveness of motor car transport services is the high quality of services at a fairly low price. The competitiveness of motor car transport services is fully determined by internal and external factors of motor transport economic entities. Internal factors determine both the possibility and the effectiveness of the adaptation process to the challenges and threats of the external environment. The following should be attributed to the factors of the internal environment: the availability of production and financial resources of motor car transport economic entities, development strategy, pricing policy, personnel qualifications, motivation and incentives for employees, and the use of information resources. Internal factors are the capabilities of a motor car transport economic entity to ensure its own competitiveness.
The factors of the external environment reflect the totality of those conditions to which the economic entity of motor car transport adapts. The external environment is a necessary condition for its existence. It is in the external environment that the main characteristics of the market of motor car transport services are formed, i.e. its type, capacity, presence and capabilities of
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competitors, and security, composition and structure of labor resources. All factors of the external environment are heterogeneous in their nature, the nature of the impact on the competitiveness of motor car transport services.
The factors of the external environment influencing the competitiveness of motor car transport services include: state-economic, scientific-technical, legal factors, factors of the natural environment, competitors' strategy, development of the infrastructure of the motor car transport services market. The factors considered represent a system that ensures the competitiveness of motor car transport services. The significance of each individual factor varies depending on the market of motor car transport services, the nature of competition, the stage of the life cycle of services, and other aspects.
It should be noted that there is a certain synergistic effect of the mutual influence of the factors of competitiveness of motor car transport services under consideration. The author's approach to identifying and classifying the factors that determine the competitiveness of motor car transport services is based on the assumptions that, by analyzing the factors, we can identify the strengths and weaknesses in the activities of motor car transport economic entities and in the work of competitors. This allows, on the one hand, to avoid the most acute forms of competition, and, on the other hand, to use your own advantages and the weaknesses of your competitor. This approach contributes to the development of measures and means by which a motor car transport economic entity could increase the competitiveness of the services provided and ensure its success, change its share in the provision of motor car transport services in the relevant market, and also satisfy the needs of consumers of motor car transport services. In general, theoretical knowledge of the competitiveness of motor car transport services is carried out in accordance with the assumed requirements of socio-economic development, environmental safety, ergonomics, aesthetics, as well as the specific role of road transport activities. The presence of an interconnected and complementary infrastructure exacerbates the problems and relevance of the competitiveness of road transport services. A specific feature of road transport activities is characterized by the fact that it depends entirely on the degree of compliance of roads with consumer properties of road transport. M. Porter attributed the road system to general factors that provide competitive advantages of a limited nature. General factors have Government funding as creating a basis for factors of a higher order. In our opinion, the competitiveness of road transport services is ensured by the creation, improvement, development, and effective use of roads, which are related to general factors. General factors depend on the nature of demand and the capacity of the road transport services market.
One of the most important and basic factors in ensuring the competitiveness of road transport services is the competitive environment, which is identified with its marketing environment, including the totality of all infrastructure entities of the road transport services market, influencing the relationship between the producer of road transport services and the consumer of
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these services. At the same time, the competitive environment in the conditions of various models of competition of road transport services is formed as a result of the impact on the road transport services market of many heterogeneous factors, characterized by a certain sphere of action, time period, and intensity of their action. Most of the factors that form the competitive environment are discussed above.
However, the specific features of the road transport infrastructure require additional research into the competitive environment, which are outlined in the following paragraph. For a road transport economic entity, the prospective development of the competitiveness of road transport services is becoming increasingly important. This orientation is due to the fact that the prospect of competitiveness opens up opportunities for a road transport economic entity to improve the quality characteristics of the road transport services provided, implement advanced technologies, and develop the range and nomenclature of services.
Taking into account the conducted theoretical studies, the prospective development of the competitiveness of road transport services should have advanced trends of increased requirements for parameters, quality characteristics, and satisfaction of the growing needs of demand for services. Trends in the development of the road transport services market and the nature of competition suggest the definition of the time period of the prospect of competitiveness. The time period of the prospective development of the competitiveness of road transport services will be defined as the period of time from the emergence of a need until the appearance on the market of road transport services capable of satisfying these needs. Economic entities of road transport, using the boundaries of the time period of the prospective development of competitiveness, have the opportunity to dominate the road transport services market. The prospective development of the competitiveness of road transport services is based on the following principles proposed in [60]. The adequacy principle assumes the consistency of the strategy and tactics of economic entities in the road transport sector with the real parameters of the external and internal marketing environment. Modern conditions of the road transport services market assume the functioning of road transport economic entities in situations of uncertainty, unreliability, and risk, under the influence of many different and complex interrelated factors.
In such a situation, the implementation of the adequacy principle assumes:
– taking into account the probabilistic nature of real processes and existing trends;
– using various options for forecasts, assessments, and decisions on a multifactorial basis;
increasing the number of factors taken into account;
increasing the accuracy of development prospects.
The principle of optimality determines the upper limit of the competitiveness of road transport services and shows the upper limit of the
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values of competitiveness indicators, the excess of which will not lead to a further increase in competitiveness. A significant excess of the objective level of competitiveness does not always ensure its long-term nature, since market priorities may change over time, and the costs of increasing the level of competitiveness may be unjustified.
The principle of sufficiency regulates the lower level of competitiveness of road transport services and determines that the components of competitiveness must be sufficient to ensure the appropriate level of competitiveness.
These components must be strictly ranked and have different specific weights in percentage terms, making up 100 % of competitiveness in total. The ranking is consistent with the external and internal factors of economic entities of road transport, influencing the process of ensuring the competitiveness of road transport services. The principle of purpose determines the compliance of road transport services with their purpose and fully corresponds to the need that it must satisfy. The closer the road transport service corresponds to its purpose and the better it meets the need, the higher its competitiveness, determining the effectiveness of satisfying the need. The principle of functional efficiency denotes the purpose of road transport services to perform certain functions. On the one hand, this principle determines the degree of completeness of satisfaction of the need by the services provided, complementing the principle of purpose, on the other hand, it determines the necessary costs for the performance of these functions, which determines the price of satisfying the need, i.e. the efficiency of the function both in terms of purpose and in terms of the costs of their implementation. The higher the functional efficiency of services that satisfy the intensity of need, the higher their competitiveness.
The principle of economy is that ensuring the competitiveness of road transport services cannot be an end in itself and should be commensurate with the resources aimed at ensuring it. The principle of economy determines the efficiency of costs to ensure competitiveness commensurating costs with the results of achieving a given level of competitiveness of road transport services. This principle underlies the choice of strategy for an economic entity in road transport, as well as diversification of the process of ensuring the competitiveness of road transport services associated with the competitiveness of an economic entity in road transport. The developed conceptual approach to the long-term development of the competitiveness of road transport services based on the formulated principles involves not only planning, but also following certain rules of competition in order to increase the competitiveness of road transport services. This approach determines sustainable and comprehensive long-term development of competitiveness, in which consumers of road transport services can satisfy their changing needs to the maximum, and the economic entity of road transport can receive maximum profit and increase its competitiveness. As a result of a theoretical study of the supposed specific activities of economic entities in the road transport sector and a study of the
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system of scientific values of competitiveness an original scientifically based concept of the competitiveness of road transport services has been developed.
The formation of a competitive environment in the road transport services market in a modern market economy takes place in complex specific conditions. The disunity of subjects and objects of transport infrastructure, the low quality of road transport services provided, the absence of real mechanisms for state regulation of road transport activities, and the chaotic nature of many processes that ensure the functioning of the industry have led to a significant decrease in the competitiveness of road transport services.
The formation of a competitive market for road transport services can become a solution to the problem of increasing the competitiveness of road transport services. Road transport economic entities, the interaction of which causes rivalry, as well as the relations between them, form a competitive environment in the road transport services market. However, the competitive environment is formed not only by intra-industry economic entities providing similar road transport services and selling them in the same market. Subjects of the competitive environment are also infrastructure entities, as well as economic entities that can enter the market, and those that provide consumers with substitute road transport services. In addition to them, consumers of road transport services have a noticeable impact on the competitive environment. The combination of factors that determine the ability of business entities in the road transport market to make a profit characterizes the state of the competitive environment. Administrative barriers and infrastructure restrictions have a negative impact on the state of the competitive environment in the road transport market.
One of the main restrictions is the low rate and quality of development of the road transport infrastructure. The condition of roads, network density, capacity, regularity of communications, speed of delivery of goods and passengers, cost of transportation, and level of motor car service are of key importance for the development of a competitive environment in the road transport services market. As we have noted, road transport economic entities operate in the road transport services market in constant competition with competitors. The state of the competitive environment and the actions of competitors influence the decisions made by road transport economic entities, their plans and policies.
Information on the competitive environment is usually collected in order to obtain initial data to answer the following questions:
1. Which economic entities operate in the road transport services market
and are competitors?
2. What market share does each competitor occupy?
3. What marketing programs do competitors use and how effective are
they?
4. How do competitors react to the marketing actions of road transport
economic entities?
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5. At what stage of the life cycle are competitors' road transport services?
6. What is the financial status of competitors and their organizational
structure?
7. What is the strategy of competitors and what methods do they use in the
fight for the road transport services market?
Most answers to these questions can be obtained by conducting research into the competitive structure of the market. The theory of the competitive market includes the classification of the market by types of competition and the analysis of the mechanisms of operation inherent in each of these types. Analysis of the external environment involves, first of all, the study of models of modern markets. Let us highlight the main features characterizing each of the four market models, as applied to the industry component – road transport: pure competition, monopolistic competition, oligopoly, pu re monopoly, and give a brief description o f them. The study of the road transport services market should be conducted across the entire spectrum of features – the number of economic entities in the road transport market, the type of services, price control, conditions for entry into the industry, and factors of non-price competition.
In the road transport industry, conditions have been created for the development of monopolistic competition markets, since cargo and passenger transportation services and freight forwarding services are performed by many economic entities of road transport and, due to the relatively easy «entry into the industry», there are opportunities for further expansion of participants providing road transport services. In particular, economic entities of road transport can have small-sized road transport enterprises that do not require significant initial capital to purchase or lease several motor vehicles.
Such a situation, as a rule, occurs in large cities with a large number of road transport economic entities of various specializations and numerous consumers of road transport services, requiring transportation of a variety of nomenclature and significant volumes of cargo and passengers. With a relatively small number of road transport economic entities, each of them controls a relatively small share of the road transport services market and cannot influence the pricing policy in a specific market segment.
In addition, with a large number of road transport economic entities, the possibility of their concerted actions aimed at limiting the volume of services provided and artificially increasing prices is excluded. For the oligopoly market model, the most typical transportation in medium-sized and small towns is carried out by several road transport economic entities under conditions of a limited number of clients and average volumes of transportation of passengers and cargo of a certain nomenclature. Road transport economic entities have some opportunities to control tariffs and significant opportunities in a secret conspiracy. This means that state control over the establishment of tariffs is necessary, primarily for socially
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significant types of road transport services. In some situations, road transport economic entities represent a pure monopoly.
A monopoly position in a region may be held by an economic entity located at a sufficient distance from its other competitors that do not affect its work, these are mainly rural areas. Even in a large city, where dozens of economic entities of road transport are located, a monopolist may be, for example, a specialized road transport economic entity for the transportation of large-sized, heavy, and dangerous goods in the absence of other carriers claiming to work in this market segment. The definition of a market model by an economic entity of road transport provides mainly a conceptual approach to the problems of competition and pricing. In practice, it is difficult to identify markets that strictly correspond to monopolistic or oligopolistic competition. Even in a purely monopolistic market, there will be some competition. When assessing its competitiveness, an economic entity of road transport, first of all, identifies its main competitors, their strengths and weaknesses, geographic location, market share in the total volume of road transport services in the region, the volume and range of services provided, additional services, pricing and sales policies, etc. Here it is appropriate to highlight some other existing market structures, in particular a duopoly, where there are only two economic entities engaged in road transport; a monopoly that practices discrimination, when different prices and tariffs are applied to different consumers of road transport services; a bilateral monopoly, when one consumer is opposed by one carrier; a monopsony, when there is only one economic entity of road transport in the road transport services market. Thus, we come to the conclusion that competition in the market of road transport services and works is recognized as the most important factor in the development of the road transport services market [60].
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