Q.Explain how competition in the modern economy is a challenge before the co-operative sector.

In a liberalised, open economy co-operatives no longer operate in a protected environment.

In today's liberalised, open economy, co-operatives no longer work in a protected environment; they must compete directly with strong rivals, and this competition is a major external challenge.

The nature of the competition. Co-operatives now face well-financed, professionally managed private companies, multinational firms and public-sector organisations in fields such as banking, retail, dairy, sugar and marketing. These competitors typically offer:

• modern products and services,
• aggressive and skilful marketing,
• better technology and efficiency,
• and often better customer service.

Why it is hard for co-operatives. A co-operative that is burdened by weak capital, untrained management, political interference and inactive members finds it very difficult to match such competitors. It may be slower to modernise, less efficient, and unable to offer the same quality or price. As a result, it can steadily lose its members and business to stronger rivals. …