A model for structuring the mechanical engineering market

Current trends and circumstances of Russia’s economic development emphasize the necessity to find internal sources of growth, and increase the competitiveness of industrial enterprises and the manufacturing sector. However, every industry has its structural and behavioural specifics determining basic competitive advantages, as well as competences in building business models for development of enterprises. Studying these specifics, typifying them is a highly relevant task when designing new industrial policies and strategies at the micro level. The paper centres on the empirical development and justification of market structures classification, wherein individual industrial markets of mechanical engineering are analysed. Methodologically the research is based on the paradigm “structure-behaviour-results’, complemented by the theory of market structures, the theory of the firm and new empirical approach. Having examined the domestic and foreign practices of structuring industrial markets the author identifies general principles confirming the classical paradigm. The researcher also suggests criteria for classification of an industrial market that reflect its structure, behavioural specifics in the market core: the Lind index and indicators characterising the basis of oligopoly structure, namely the Lerner index of monopoly power and the cost advantage indicator. As a result of combining the selected indicators, four types of industrial markets are specified. The author tests the suggested approach on cases of seven industrial markets of mechanical engineering. The findings led to a number of conclusions with respect to the competition level, lines for searching new competitive advantages and models of company behaviour in industrial markets of mechanical engineering.