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Why Study Competitive Strategy and the Free Enterprise System?

Section by Roy Chapin on Competitive Advantage and Competitive Strategy for the final RAATP project book. To be Inserted after REC's introductory narrative and before the activities section.

Rationale: Competition, along with private ownership of the factors of production and prices being set in the market place, is one of the three basic tenets of the Free Enterprise System. Without competition there is little incentive to improve customer service, improve the quality of the good or service supplied and to reduce the cost of production by looking for ways to improve efficiency. This lack of competition impedes the re-allocation of a country's resources to their best possible use in response to customer demands and reduces the standard of living of the population. Competition is therefore good for a country and should be encouraged by government, business and the consumer.

Russia does not have adequate competition presently as its economy moves from being state owned and centrally planned to a market economy. Understanding the basic tenets of a free enterprise system, including competition, by government officials, business people and the Russian people is important to help Russia improve the standard of living of its citizenry. These concepts of a free enterprise system can be learned and should be taught.

It is helpful for an individual business to understand ways to improve its competitiveness and to serve customers better if it hopes to prosper on the world stage. Russia's infrastructure will be improved as competition becomes more prevalent.


  • Understand the dynamic nature of a market economy as compared to a static command economy and find out what drives a market economy
  • Learn how to analyze the competitiveness of an industry or a business in that industry so as to provide information to industry, start you own business or to teach the concepts
  • Identify competitive opportunities to differentiate, reduce costs, focus or provide "best value"
  • Understand the incentive provided by working for a profit objective and from having private ownership of the factors of production
  • Understand the fallacy of the state owning and controlling all the factors of production and how this reduces efficiency, customer service and the general standard of living.

Competencies: At the end of this session the participants should be able to:

  • Meet the objectives stated above including being able to:
  • Analyze a business and/or an industry and provide consulting advice on how to improve the competitiveness of the business by serving the customer better
  • Evaluate the daily news with a greater understanding of the part business competition plays and to use current business examples in your application and teaching
  • Promote the free enterprise system's adaptation by Russia and Russians
  • Apply competitive analysis and strategy to any production function such as dairying

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