The main factors influencing the activities of the organization. External factors that directly influence the occurrence of the disease in

Factors influencing the activities of an organization are divided into two types:

Direct impact;

Indirect impact.

Factors of direct impact:

Suppliers. This group has a direct impact on the activities of any organization. From the perspective systematic approach the organization provides a mechanism for transforming inputs into outputs. The main types of inputs of an organization are receipts of all types of resources to support its production (operational) activities. The organization's dependence on suppliers who provide the specified resources from external environment to ensure the activities of the organization, one of the most striking examples of the direct impact of the environment on the operational activities of the organization and the success of these activities.

Analysis of suppliers is aimed at identifying features in the activities of entities that supply the organization with various raw materials, energy and information resources, etc., on which the efficiency of the organization, the cost and quality of the product produced by the organization depend. Suppliers of materials and components, if they have great competitive power, can make the organization very dependent on themselves. Therefore, when choosing suppliers, it is important to deeply and comprehensively study their activities and their potential in order to build relationships with them that would provide the organization with maximum strength in interaction with suppliers. The competitive strength of a supplier depends on the level of specialization of the supplier, the cost for the supplier of switching to other clients, the degree of specialization of the buyer in acquiring certain resources, the concentration of the supplier on working with specific clients, and the importance of sales volume for the supplier.

Labor resources. In terms of labor resources high competition on the market in a number of industries forces us to look for ways to reduce the costs of attracting highly qualified labor in countries where it is cheaper. Examples include attracting specialists from the CIS countries to work in developed market countries in area information technologies and software product production. In general, in the field of human resources, two factors are rated higher than others: attracting highly qualified managers senior management management and training of capable leaders within the organization.

Laws and institutions government regulation. Labor legislation directly affects the activities of the organization and must be taken into account in management. Many laws and government agencies also influence organizations. Tax legislation and regulation have the greatest impact foreign trade(export, import), customs regulation. The state of legislation as a whole is characterized by its complexity, fluidity and, in some cases, uncertainty. This is especially the case in transition economies. Wherein government bodies ensure the enforcement of laws in the relevant areas of their competence (Ministry of Finance, Ministry of Foreign Affairs economic ties, Customs Committee, National Bank, etc.), and also accept their requirements that have the force of law (licenses, supervision of the quality of products and medicines, labor protection, ecology, etc.).

Consumers. The consumer's image can be formed by the following characteristics: geographical location; demographic characteristics(age, education, field of activity, etc.); socio-psychological characteristics (position in society, style of behavior, tastes, habits, etc.); the consumer’s attitude towards the product (why he buys this product, whether he himself is a user of the product, how he evaluates the product, etc.).

By studying the consumer, the company also understands for itself how strong his position is in relation to it in the bargaining process. If, for example, the consumer has limited opportunity When a seller chooses the product he needs, his bargaining power is significantly lower. Otherwise, the seller should seek to replace this consumer with another who would have less freedom in choosing the seller. The consumer's bargaining power also depends on how important the quality of the products he purchases is to him. There are a number of factors that determine the trading power of the consumer, which must be revealed and studied during the analysis process. These include: the ratio of the degree of dependence of the buyer on the seller with the degree of dependence of the seller on the consumer; volume of purchases made by the buyer; level of consumer awareness; availability of substitute products; consumer sensitivity to price, depending on the total cost of purchases made by him, on his orientation towards a particular brand, on the presence of certain requirements for the quality of the product, on the amount of his income.

And other factors that directly affect the operations of the organization and are directly affected by the operations of the organization.

Factors in a firm's microenvironment include: the firm's direct competitors for the goods it produces; all competitors of suppliers (“entry”); marketing intermediaries of the company for the “input” and “output” of the system; contact audiences (consumer society, regulatory authorities, trade unions, etc.).

It follows that the higher the competition for the “input” and “output” of the system, the higher the competitiveness of the goods produced by the company will be. A simplified diagram of the influence of direct factors on its functioning is presented

Consideration of competitors, those with whom the organization has to fight for the buyer and for the resources that it seeks to obtain from the external environment in order to ensure its existence, takes a special and very important place V strategic management. This is necessary in order to identify weak and strengths competitors and build your competitive strategy on the basis of this.

Subjects of the competitive environment are also those firms that can enter the market or that produce a substitute product. In addition to them, the organization's competitive environment is significantly influenced by buyers of its product and suppliers, who, having bargaining power, can significantly weaken the organization's position. It is important to take these features into account and create barriers in advance to the entry of potential competitors (in-depth specialization in product production, low costs due to economies of scale in production, control over distribution channels, use of local features that give an advantage in competition). Manufacturers of substitute products have very great competitive power. The peculiarity of market transformation in the case of the appearance of a replacement product is that if the old product is displaced, then it is very difficult to return it to the market. Therefore, in order to be able to adequately meet the challenge from firms producing a replacement product, the organization must have sufficient potential to move to the creation of a new type of product.

An organization's competitors are an external factor whose influence cannot be disputed. If you do not satisfy the needs of consumers as effectively as competitors do, it is impossible for a company to survive long in the market. In many cases, it is competitors who determine what kind of output can be sold and what price can be charged. They may also compete for labor resources, materials, capital (investment) and the right to use certain technical innovations. Competitors mean not only those companies that offer the same products but with a different brand, but also companies that produce substitutes.

The influence and growth of trade unions today forces large companies to negotiate with them, as well as to view the workforce as a complex variable organization. Domestic enterprises will also have to solve this problem, but perhaps a little later.

The next group of factors are direct impact factors, which are usually correlated with those components of the external environment that directly affect the company, helping to increase the profitability and efficiency of the organization in the process of functional activities.

The indirect impact environment is usually more complex than the direct impact environment. When predicting its impact on the organization, management, as a rule, does not have reliable information regarding the direction and absolute values ​​of environmental factors (dollar exchange rate, legally established minimum wage, lending interest rate, and much more), so often when making strategic decisions for the organization, it is forced rely only on your intuition. It should be taken into account that the organization cannot directly influence changes in environmental factors of indirect influence, since among them are technology (in a broad sense - as a state of scientific and technological progress), the state of the economy, socio-cultural and political factors, relations with local population, international environment.

The indirect impact environment influences the organization’s activities through the following group of factors:

Technology (level of technology taking into account the achievements of scientific and technological progress). Considering factor analysis technology, it can be noted that they are both a factor of an internal variable of the organization and an external environmental factor of indirect impact.

Technological innovations associated with the results of scientific and technical progress affect production efficiency and, accordingly, the price and quality competitiveness of manufactured products, the rate of obsolescence of products (including due to the reduction life cycle manufactured products).

The rate of technology change has accelerated in recent decades. This trend continues, as there are more scientists living on earth now than before. It is obvious that knowledge-intensive organizations must quickly respond to modern developments and propose innovations themselves. To remain competitive, all organizations must creatively rethink the emergence of new technologies that affect their effectiveness.

State of the economy. The state of the economy in the country is important factor for the activities of the organization. Including both negative and positive influences are possible economic factors for activities specific organizations. The organization's management must be able to anticipate how changes in the state of the economy will affect the organization's operations. The state of the global economy as a whole also affects the cost of all inputs and the ability of consumers to purchase certain goods and services. It should also be taken into account that the state of the country’s economy can seriously affect the ability to attract capital for the needs of the organization. It is important to consider that the same specific change in the economy can cause a positive impact on one and the same negative influences to other organizations. If the organization conducts economic activity V different countries, then fluctuations in exchange rates can seriously affect its financial position.

Sociocultural and political factors. Sociocultural factors also influence the products or services that result from a company's activities. The way an organization conducts its affairs also depends on social factors. Consumer perceptions of quality service influence the everyday practices of retail stores and restaurants.

Examples of socio-cultural influence on business practices:

in many countries there is still a stereotype that discriminates against women when hiring them; in promotions that suggest women are risk-averse and incompetent as leaders; in the production of clothing and footwear, many organizations take advantage of the ambition of certain segments of the population who are willing to pay more for the products of prestigious companies - they think that this contributes to an increase in their weight in society; The ideas of the majority of the population about “cultural services” affect the work of shops, cafes, and restaurants. To operate successfully, organizations must be able to anticipate changing societal expectations and serve their customers more effectively than their competitors.

Political factors - the mood of the administration, legislature and courts towards business. Sentiment influences government actions such as taxing corporate income, establishing tax breaks or preferential trade tariffs, mandatory certification, trends in price and wages, and much more.

Some aspects of the political environment pose challenges for organizations special meaning. Another element of the political environment that influences the activities of many firms is special interest groups or lobbyists. Examples of such groups: the military-industrial complex, big business, small business and much more.

Relations with local authorities. In managing the economy, administrative bodies are obliged to take into account the main factor of the inclinations of the population, their preferences for the location and development of certain industries. Achieving agreement on this issue brings to life additional (automatic) stimulants for the development of the productive forces of the territory and improvement of its controllability.

Thus, indirect impact factors manifest themselves on the basis of a “transition” from indirect to direct impact factors, or in the form of a “chain” of cause-and-effect relationships affecting efficiency economic activity the company in the form of profits, image formation and the number of adherents in the company’s goods and services (attraction functions).

The first shell, closest to the organization, is direct exposure environment, which includes factors that directly affect and are affected by an organization's operations: customers, suppliers, competitors, government agencies, and public opinion.

This shell is unique, it may not be exactly the same for different organizations: each airline has its own competitors, each university has its own students, each library has its own sources of supplies, etc.

The exceptional significance of each of the elements of this dimension of the external environment requires a more detailed consideration of them.

Consumers - those who are ready to purchase a product produced by an organization, on whom income or justification for existence depends (for non-profit structures). These can be either individuals or their various groups. The survival of an organization depends on its ability to find consumers for its products and satisfy their needs.

The organization needs to systematically obtain comprehensive information about consumers, including quantitative and qualitative parameters. This kind of information allows you to analyze the market from a demand perspective through assessment:

• absolute market size;
• market growth rates;
• degree of satisfaction of demand in a given industry (market saturation);
• buyer concentrations;
• stability of consumption;
• customer needs structures;
• client income level, purchasing power;
• volume of purchases;
• shopping motives;
• type of acquisition process;
• ways for the consumer to obtain information;
• changes in lifestyle and purchasing habits;
• price level and its changes;
• prices of other products (cost of living);
• demand for new products;
• emergence of new buyer groups.

Understanding their customers, present and future, allows managers to accurately predict changes in consumer demand patterns and make realistic plans for the future.

Suppliers provide the organization with what we called input, receipt necessary materials, which are then subject to transformation. Materials refer to a wide range of resources: equipment, tools, raw materials, energy, money, securities, information, work force different professions and qualifications. All organizations without exception depend on suppliers, but the balance of power may be different. If there is one large supplier in the region, organizations for which it is the main source of materials become dependent on it; and vice versa, the abundance of suppliers and the ease of changing them tip the scales in favor of the one who uses such supplies.

Analysis of this element of the external environment, along with an assessment of stability, reliability, long-term work for each partner, for their groups, for all supplies as a whole, involves tracking:

• prices, quality, delivery of raw materials;
• connections with capital providers (banks);
• labor market;
• distribution networks, wholesaler positions;
• changes in the role of sellers.

It is extremely rare to find market-oriented organizations that do not have competitors. In addition to monopolies generated by natural, economic or legal reasons, everyone else is forced to fight for market share with firms producing a similar product. Not only consumers are the object of competition, but also raw materials, financial, human and other resources. Prices for the product and basic resources depend on the competitive situation in the industry. Competitors often set each other the pace of change, the level of quality, and the degree of business innovation.

Researching competitors is an indispensable concern for the management of an organization. First of all, the circle of real and potential competitors is determined (companies that can enter the market and products that can replace existing ones). This requires tracking such critical parameters as:

• substitute products;
• new products introduced by competitors;
• the size and number of competitors;
• new (potential) competitors;
• changes in competitors' strategies;
• distribution (share) of the market between manufacturers;
• barriers to entry of new firms into the industry;
• average price level;
• changes in exports and imports.

The analysis does not end there, and the main competitors are examined in comparison with the company by function (production, marketing, R&D, personnel, finance, etc.). The organization requires not just detailed information about market competitors, but information comparable to internal indicators, reflecting the strengths and weak sides manufacturers.

Government bodies, as well as the public policies they must implement, have a significant impact on organizations. The need to comply with the laws established in a given state poses another task for the organization - taking into account the state of legislation and constant attention to changes in it. Key points to keep in mind:

• economic law;
• government income and price policies;
• subsidies and taxes;
• reduction in government spending;
• legal infrastructures;
• tariffs and foreign trade restrictions;
• labor law;
• areas of regulation (ecology, waste, energy, etc.).

In addition to government lawmaking local authorities Authorities, through their own regulatory decisions, influence the activities of organizations. Enterprises are subject to additional taxes and fees, they are required to purchase licenses for certain types of activities, restrictions are introduced on the import and export of products, on their price level. All these variables must be taken into account by the organization both in daily activities and when drawing up development plans for the future.

Public opinion in this context is understood as the opinion of the community in whose territory or near which the organization operates. The public is interested in enterprises providing permanent employment, a certain level of wages, participating in the formation of the local budget, in various cultural and charitable events, etc., without producing negative external effects. It is negative public opinion that can become a limiter on the expansion of the market, production, and access to rare resources. It must not only be studied, but also formed, working in the main areas:

• facilities mass media;
• industry organizations;
• financial unions;
• trade unions;
• party life;
• local sources of public opinion formation. The increasing importance of public opinion today is reflected in special public relations services created by many organizations.

The external environment is a set of active business entities, economic, social and natural conditions, national and interstate institutional structures and others external conditions and factors operating in the environment of the enterprise and influencing various areas of its activity

External environment of the company

The external environment is divided into:

• - microenvironment - an environment of direct influence on the enterprise, which is created by suppliers of material and technical resources, consumers of the enterprise's products (services), trade and marketing intermediaries, competitors, government agencies, financial institutions, insurance companies;
• - macroenvironment affecting the enterprise and its microenvironment. It includes the natural, demographic, scientific, technical, economic, environmental, political and international environment.

External microenvironment (direct impact environment)

The organization's direct external environment includes suppliers, labor, laws and government regulations, consumers, competitors, and other factors that directly affect and are directly affected by the organization's operations. The direct impact environment is also called the immediate business environment of the organization. This environment forms such environmental subjects that directly influence the activities of a particular organization:

• - suppliers (raw materials, supplies, finance) of resources, equipment, energy, capital and labor;
• - government bodies (the organization is obliged to comply with the requirements of government regulatory bodies, that is, the enforcement of laws in the areas of competence of these bodies);
• - consumers (according to Peter Drucker’s point of view, the goal of an organization is to create a consumer, since its existence and survival depends on the ability to find a consumer, the results of its activities and satisfy his request);
• - competitors - persons, groups of persons, firms, enterprises competing in achieving identical goals, the desire to possess the same resources, benefits, and occupy a position in the market;
• - labor resources - part of the country's population that has the totality of physical and spiritual abilities necessary to participate in the labor process. management centralism consumer competitor

Suppliers

From the point of view of the systems approach, an organization is a mechanism for transforming inputs into outputs. The main types of inputs are materials, equipment, energy, capital and labor. Suppliers provide the input of these resources. Obtaining resources from other countries may be advantageous in terms of price, quality or quantity, but at the same time dangerously increase environmental factors such as exchange rate fluctuations or political instability. All suppliers can be divided into several groups - suppliers of materials, capital, labor resources.

Laws and government bodies

Many laws and government agencies affect organizations. Each organization has a specific legal status, whether it is a sole proprietorship, a company, a corporation or a non-profit corporation, and this is what determines how the organization can conduct its business and what taxes it must pay. No matter how management feels about these laws, they must adhere to them or reap the consequences of failure to abide by the law in the form of fines or even a complete cessation of business.

As is known, the state in a market economy has an indirect influence on organizations, primarily through the tax system, state property both the budget and direct - through legislative acts. For example, high tax rates significantly limit the activity of firms, their investment opportunities and push them to hide income. On the contrary, lowering tax rates helps attract capital and leads to a revival entrepreneurial activity. And thus, with the help of taxes, the state can manage the development of the necessary areas in the economy.

Consumers

The famous management specialist Peter F. Drucker, speaking about the purpose of the organization, singled out, in his opinion, the only true purpose of business - creating a consumer. By this we mean the following: the very survival and justification of the existence of an organization depends on its ability to find a consumer of the results of its activities and satisfy their needs. The importance of consumers to business is obvious. All the variety of external factors is reflected in the consumer and through him influences the organization, its goals and strategy. The need to satisfy customer needs influences the organization's interactions with suppliers of materials and labor. Many organizations focus their structures on large groups of consumers on whom they are most dependent. They become important in modern conditions and various associations and associations of consumers that influence not only demand, but also the image of companies. It is necessary to take into account factors influencing consumer behavior and their demand.

Competitors

The influence of such a factor as competition on the organization cannot be disputed. The management of each enterprise clearly understands that if it does not satisfy the needs of consumers as effectively as competitors do, the enterprise will not stay afloat for long. In many cases, it is competitors, not consumers, who determine what kind of output can be sold and what price can be charged. Underestimation of competitors and overestimation of markets lead even the largest companies to significant losses and crises. It is important to understand that consumers are not the only object of competition among organizations. The latter may also compete for labor resources, materials, capital and the right to use certain technical innovations. The reaction to competition depends on internal factors such as working conditions, wages and the nature of relationships between managers and subordinates. At the same time, it should be noted that competition sometimes pushes firms to create agreements between them various types from market division to cooperation between competitors.

Labor resources

The level of education, qualifications and ethics, and personal qualities (independence, responsibility for the work performed) of the personnel have an impact on the organization. Highlight independent species professional specialist managers - personnel managers - main goal which is to increase the production, creative output and activity of personnel; focus on reducing the number of production and management employees; development and implementation of personnel selection and placement policies; development of rules for hiring and dismissing personnel; resolving issues related to training and advanced training.

External macro environment (indirect impact environment)

The external environment of the organization of indirect impact is political factors, factors of a demographic, natural, scientific and technical nature, sociocultural factors, the state of the economy, international events and other factors that may not have a direct immediate impact on operations, but, nevertheless, affect them.

Indirect environmental factors or the general external environment usually do not affect the organization as noticeably as direct environmental factors. However, management needs to take them into account. The indirect impact environment is usually more complex than the direct impact environment. Therefore, when studying it, they usually rely primarily on forecasts.

Let's look at some of them:

Technology

Technology is a set of means, processes, operations by which elements entering production are converted into output ones.

Technology is both an internal variable and an external factor of great importance. As an external factor, it reflects the level of scientific and technological development that affects the organization, for example, in the areas of automation, information technology, etc. Technological innovations affect the efficiency with which products can be manufactured and sold, the rate at which the product becomes obsolete, the way information can be collected, stored and distributed, as well as on what kind of services and new products consumers expect from the organization. To maintain competitiveness, every organization is forced to use the achievements of scientific and technological progress, at least those on which the effectiveness of its activities depends.

Technology is expressed by the acceleration of scientific and technological progress; increased allocations for research and development; technological development of the industry, etc.

State of the economy

The state of the economy affects the cost of all imported resources and the ability of all consumers to purchase certain goods and services. Management must be able to assess how the organization's operations will be affected. general changes state of the economy. The state of the global economy affects the cost of all inputs and the ability of consumers to purchase certain goods and services. If, for example, inflation is forecast, management may consider it desirable to increase the organization's supply of inputs and negotiate fixed wages with workers in order to contain the rise in costs in the near future. It may also decide to make a loan, since when payments become due, the money will be worth less and thereby partially compensate for losses from interest payments. If an economic downturn is forecast, the organization may choose to reduce inventories. finished products, since there may be difficulties in its sales, lay off some employees or postpone plans to expand production until better times.

It is important to understand that a particular change in the state of the economy can have positive impact on some and negative on other organizations. For example, while retail stores in general may be hit hard in an economic downturn, stores located in wealthy suburbs, for example, will not suffer at all. The economic situation is characterized by the state of general business activity (decline, stagnation, rise, stability); inflation, deflation; price policy; monetary policy, etc.

Sociocultural factors

Sociocultural factors - attitudes, life values and traditions influencing the organization.

Every organization operates in at least one cultural environment. Therefore, sociocultural factors, including prevailing attitudes, life values ​​and traditions, influence the organization.

Socio-cultural factors influence the formation of population demand for labor Relations, level wages and on working conditions. These factors also include the demographic state of society. The organization's relationship with the local population where it operates is also important. In this regard, independent media are also identified as a factor in the socio-cultural environment, which can shape the image of the company and its goods and services.

Sociocultural factors also influence the products or services resulting from a company's activities. The way organizations conduct their business also depends on sociocultural factors.

The following can be cited social factors: depth of stratification of society; income level; unemployment rate; social protection; purchasing power, etc., as well as demographic factors: population changes (aging society, declining birth rates); age composition of the population; population migration; occupation; education.

For almost all organizations, the prevailing attitude of the local community in which this or that organization operates is of paramount importance as an environmental factor of indirect influence. Almost every community has specific laws and regulations regarding business that determine where a particular enterprise can operate. Some cities, for example, have gone to great lengths to create incentives to attract industry to the city. Others, on the contrary, have been fighting for years to prevent industrial enterprise. In some communities, the political climate is favorable to business, which forms the basis for the influx of local budget funds from taxes. In other places, property owners choose to shoulder a larger share of municipal expenses, either to attract new businesses to the community or to help businesses prevent pollution and other problems that business and the new jobs it creates can cause. .

Political factors

Certain aspects of the political environment are of particular importance to organizational leaders. One of them is the attitude of the administration, legislative bodies and courts towards business. Closely linked to sociocultural trends, in a democratic society these sentiments influence government actions such as the taxation of corporate income, the imposition of tax breaks or preferential trade tariffs, requirements for hiring and promotion practices of minorities, consumer protection legislation, and price and wage controls. wages, the balance of power between workers and company managers.

Political stability is of great importance for companies with operations or markets in other countries.

The political situation is assessed from the point of view of stability or instability.

This also includes legislative factors the country in which the enterprise operates: taxes; legal protection of business activities (legislation: antimonopoly, false advertising, anti-dumping and others); consumer rights Protection; legislation on safety and quality of goods; occupational health and safety legislation; protection legislation environment etc.

The company does not have the ability to influence the external environment and, in order to operate effectively, must adapt to it, constantly monitor its changes, predict and respond in a timely manner.

From the above it is clear that the activities of the main areas of the company are intertwined and depend on each other and on the external environment. Thus, we can say that the management of a company is determined by two factors:

• - features of the production process;
• - the nature of the external environment.

The modern trend is the ever-increasing importance of the second factor, which is becoming decisive.

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Airway hyperresponsiveness is a condition in which there is

And HLA-B40 with the severity of the disease.

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Disease. There is evidence that the risk of developing an allergic disease in a child is one of

There is strong evidence that asthma is hereditary

Factors, even if very important (but not obligatory) for the development of the disease.

The prevalence of atopy and bronchial asthma, atopy should be considered only as one of

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Summer age, the risk of developing bronchial asthma is not much higher than in non-sensitized

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Those with hypersensitivity to aeroallergens manifested themselves in the first 3 years of life and subsequently become ill

Exposure to common environmental allergens. In population epidemiological

Bronchial asthma, which is defined as a predisposition to an IgE-mediated response to

Gender and race. The most important internal factor is atopy. Atopy is the most important phenotype

Genetic predisposition to the development of asthma or atopy, airway hyperresponsiveness,

Which determine a person’s predisposition to developing the disease. These include

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whose parents suffer from this disease is 50% and increases to 65% if both parents

increased reaction of the bronchi (bronchospasm) in response to exposure to specific (allergens) and

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people predisposed to this are: house allergens (these include house dust,

Trade events have many different effects, including price and quantity effects on trade, production, employment, and social effects. They manifest themselves both in the countries that apply them and in other countries that are directly or indirectly affected by such activities.

Activities that directly affect the price of imports.

A number of non-tariff measures (NTMs) that drive up prices act like tariffs by raising the supply price of an imported good to domestic consumers. These NTMs include anti-dumping duties and countervailing measures, which typically increase prices by a fixed percentage, as well as standards, marketing and labeling requirements; additional import fees; voluntary restrictions on import prices and the like, which may lead to both a percentage increase in price and an increase in the price per unit of production. Variable fees, minimum prices, reference prices act to increase the world price of goods, which is perceived as an attempt at previous fixation import prices. Even if free world prices decline, this level of fixed import prices is maintained. This means that the protective effects have increased, but this increase in protection is not immediately obvious to consumers because prices and consumption of goods remain at previous levels. The benefits of falling global prices simply do not trickle down to the consumer. On the other hand, if world prices rise above reference prices, then real world and domestic prices support trade and production.

The practice of public procurement from https://tender.uub.com.ua may differ in different countries, but, in general, when they are carried out when comparing price indicators (under other constant conditions), a conditional increase in the price of imported goods by a certain percentage is applied before a decision is made on which goods to give priority to - imported or domestic. If domestic production has a relatively high cost, this means that the government will pay a premium for domestically produced products and will purchase more of them than it would have otherwise. At the same time, the private sector will continue to buy similar goods at world prices. Consequently, in one country there are actually separate markets with price discrimination on them.