COMMERCIALIZATION AND PRIVATIZATION. Definition of commercialization and privatization :
Commercialization is a policy geared towards making state-owned enterprises to become more efficient and profit-oriented. The policy makes it possible for public enterprises to become more viable and effective.
The commercialization of businesses refers to the process of bringing a product, service, or idea to the market in order to generate revenue and profit.
It involves transforming a concept or innovation into a viable business model that can be sold to customers.
Here are some key aspects and steps involved in the commercialization process:
Market Research: Conduct thorough market research to identify target customers, understand their needs, and evaluate the potential demand for your product or service.
This helps in shaping your business strategy and positioning.
Product Development: Develop or refine your product or service based on the insights gained from market research. Ensure that it meets the identified customer needs and offers a competitive advantage over existing solutions.
Privatization = read more here= on the other hand is a policy designed to enable individuals and private or corporate organizations to take over the ownership and control of government businesses such as public companies and corporations.
Reasons for Commercialization and privatization
The reasons why the government of West African countries has found the policy of privatization attractive include the following.
Efficient management: Commercialization and privatization help to develop good and efficient management of enterprises
Participation of private individuals: They also assist individuals to participate in economic activities through ownership of enterprises
To generate more revenue: They assist the government to generate more revenue
Autonomy of enterprises: It helps to provide autonomy for the enterprises
Removal of unproductive enterprises: They also assist to remove or disinvest unproductive enterprises in the economy
To redirect resources: Privatization helps to redirect resources from businesses to other pressing areas of the economy
To attract foreign investment: Privatization helps to attract foreigners to invest in the economy because of the attractive profits expected
To minimize wastages and corruption: Privatization helps to reduce wastage and reduce corruption in the system
Attractive of foreign technology and expertise: Privatization assists in attracting foreign technology as well as expertise from developed economics
It fosters rapid economic development: It also aids the rapid economic development of a country as al productive activities are geared towards efficient production
Improvement of standard of living: Privatization also raises the general standard of living through the sale of shares to small investors
Generation of employment opportunities: Privatization helps to generate employment opportunities for several people in an economy
Advantages of commercialization and privatization
Reduction in public expenditure: commercialization and privatization help in reducing public expenditure on enterprises that are not viable
It promotes efficiency: Commercialization and privatization do help to promote efficiency in production
Generation of more revenue: Both policies equally help to boost the generation of revenue for the government
Emergence of innovations: The existence of competition in the industries assists in the emergence of innovations
Better choice by consumers: Both policies do assist the consumers to have a wide range of choice where there are abundant products== commercialization and privatization
Disadvantages of commercialization and privatization:
Poor standard of living: Commercialization and privatization lead to poor standard of living of the people due to a shift in interest from pure service delivery to profit maximization
High cost of products: These policies are aimed at profit maximization; hence they are usually associated with high cost of products of goods
Reduction employment: Many workers are usually laid off when industries are commercialized or privatized
Uneven distribution of income: Income is often unevenly distributed as few individuals are now in control of the industries
Loss of consumers’ welfare scheme: Under commercialization and privatization consumer’s welfare are not catered for.