The constraints and opportunities of commercial entities functioning under the conditions of a distorted market economy

Abstract

Understanding market concentration and its ramifications is one of the most important components of analyzing and evaluating competition challenges, and this is garnering greater attention in the sustainability research of businesses. This study's objective is to analyze the viability of evaluating the HHI in the implementation of company strategy in order to prevent market distortions. In this work, a literature review and analysis are used to assess the importance of market definition in establishing the concentration of a market economy, respectively Game theory, tested to find the optimal bargaining positions of market participants under the influence of the forces of a distorted market economy. The contribution of this study is the compilation of the HHI evaluation system, which aims to determine the market conditions of corporate entities and facilitate the achievement of long-term market competitiveness. A comparison of probability theories demonstrates that the market's HHI-based performance can be measured. It is more adaptive to the organization's actual method of decision-making. The operation of firms in markets with the least amount of distortion can be crucial for boosting competitiveness not only at the national level, but also at the global level, especially through enhancing reputation, decreasing costs, responding to market demands, and adapting to market expectations. The findings will be useful for policymakers entrusted with controlling market inefficiencies and encouraging sustainable economic projects.