Экономические науки/6. Маркетинг и менеджмент

Assel K. Jumasseitova PhD

Karina Tsoy 1^st year Master student

Kazakh-British Technical University, Kazakhstan

Competitive state of the market services small business in Republic of Kazakhstan

It must be recognized that in the transformation of the economy of Kazakhstan in the period of "perestroika" reforms and small business has played a very important, to some extent system generator of a role in a new regional and local economies: in fact established territorial specialization of small business has allowed him to add a "big" and the economy form a relatively, complex structure of the economy of regions, cities and rural areas. Small businesses and generally small business occupied niche-oriented economic activities to regional and local needs. They feel the most confident in the production output of goods and services, which in Soviet times were in the shadow of the economic and social big industry. In the regions of Kazakhstan, a small business for more than 80% is focused on intra-market (and in the trade and construction of more than 90% - on the local, that is, the city and district), and even for intra-industry orientation is more than 70%. Most of the people think that only big corporations can do business effectively and profitably. The basic argument is that small companies cannot compete with well equipped big enterprises. Actually on practice, small business is able to be competitive with large business for several reasons. For example, to change the basic strategy large enterprises need approximately 6 years and 10 or more for making new one. For small firms to restart a strategy they need from 6 months up to 1 year. Going further, they said that technological innovations’ sphere is only for big enterprises, but statistics shows that 95% of the most radical innovations after the World War II are in the sphere of small business. Other sources say that small business sector has 24 times more innovations than large enterprises. Strengths of the small enterprises are obvious. They are dynamics, ability to change the types of goods, products and services, being more sensitive to innovations in technology and other spheres. Finally, in small firms relationships are less formal and there are no bureaucracy and heavy structures of relationships. Workers are able to take part in management and they can manage profits. The main specialty of small business is tending to collective work, mutual interest in getting profit of results. In large companies owners are must hire specialists and managers to organize the working process, and in most of the cases it causes mutual misunderstanding of both interests. Finally, it results in lack of effectiveness and management system as a whole. In small and medium size enterprises they can escape this problem because in most of the cases owner and a manager is the same person. The small businesses cannot be considered self-employed persons and legal entities engaged in: activities related to the trafficking of drugs, psychotropic substances and precursors, production and (or) the wholesale distribution of excisable products, activities for the storage of grain on grain-points, the lottery, activities in the field of gambling and entertainment, activities of mining, processing and sale of petroleum, petroleum products, gas, electricity and heat, activities related to the trafficking of radioactive materials, banking (or certain types of banking operations) and in the insurance market (excluding insurance agent), auditing activities, professional activities in the securities market, activities of credit bureaus, security activity. Average number of employees of small businesses is determined by considering all workers, including employees of branches, representative offices and other separate units of the entity and must not exceed 50 people. Individual business can be presented, in the form of a personal or joint venture, private enterprise is one individual alone on the basis of property belonging to him by right of ownership, but also because of a right, or similar use and (or) disposal of assets, and in the form of personal business individual, married, with no mention of the other spouse as an entrepreneur consent of the spouse on the course of business is required. In cases where private enterprise for individual use community property, the consent of the other spouse for such use, unless otherwise provided by law or the marriage contract or other agreement between the spouses. Joint enterprise is a group of individuals (entrepreneurs) on the basis of the property owned by them on the right of ownership, and also because of a right, allowing sharing and (or) disposal of assets. With joint ventures, all transactions related to private enterprise, committed, and the rights and obligations to acquire and exercise on behalf of all participants in the joint venture. Forms of joint ventures are: Business spouses, carried out on the basis of common ownership of the spouses; family business, carried out on the basis of common ownership of the peasant or farm or joint ownership of privatized housing; a partnership in which private enterprise is based on the common property.

Table1. Comparative analysis of large and small businesses

#	Criteria	Large Business	Small Business
1.	Industry and service	Industry, fuel and energy complex, energetics	Providing productions, trade, service
2.	Character of the production and goods	Mass production	Small-scale and individual production
3.	Sensibility and adoptiveness to innovations	Less adoptive to innovations	24 times more innovations than in large business
4.	Time to change a strategy	6-10 years	6 months-1 year
5.	Sphere of main business	Large cities and industrial complexes	Large cities and small towns
6.	Creating a competitive environment	Restriction of competition by capturing a significant market share	Strengthening of the competitive environment
7.	Registration and business making process	Significant financial costs and lengthy registration procedure	Minimal startup costs and registration requirements
8.	Ability to make new workplaces	Job creation rates are lower	Job creation rates are 3 times faster
9.	Maneuverability of labor	Not because of the specialization	There is due to high interchangeability of personnel
10.	Management structure	Cumbersome administrative structures	Flexibility in managing, minimal amount of executive office
11.	Interests in management system	Not because of contradiction between owners’ and managers’ interests	Managerial and owner’s functions are combined by one person, there is no contradiction between interests in executive office

This powerful fed cannot be neglected even by developed countries which understand that small business ultimately is the basis of any large business. That is because any large company starts with an idea of one or two people to start a business with small startup capital. Then this idea is being transformed in the company with a multi-million turnovers. Besides making new business in the Republic of Kazakhstan there are two more actual forms of making small enterprise – there are franchising and family business. Franchising company (franchiser) entitles franchisee to use the name of the company, trademark, production, technologies, etc. For the freshman in the small entrepreneurship it is a great chance to reduce risks of the opening and functioning of the new business. Franchise agreement gives an opportunity to new business of using a great experience of the present enterprise and its workers. That is why every 12^th entrepreneurship abroad is franchising. There are 3 types of franchising relationships:

- Franchiser - company manufacturing products or providing services, entitles the franchisee with the right to manufacture its products or provide its services;

- Franchiser – the main manufacturer of products, entitles the franchisee with the right to whole sale its products;

- Franchiser – the main manufacturer of products entitles the franchisee with the right to retail its products.

Before choosing the franchising firm company should analyze all the negative and positive aspects of franchising. One of the main advantages of franchising is ability to get an experience and to get training from the franchiser. The next advantage is that franchiser will support the company with finances, which will be indirected. Marketing advantage is that franchisee uses the trade mark and the name of brand (company) which is well-known in the world. Family businesses are very different by sizes and by the types of goods and services produced. They are: business, fully controlled and managed by the family; business, controlled by the family, but managed by the outside professional (manager); business, not controlled by the family.