Diversification of Foreign Economic Activities of Domestic Carpet Market Enterprises

: pp. 59 - 69
Lviv Politechnic National University
Lviv Politechnic National University

At the present stage of dynamic development of the world economy, active processes of interpenetration of technologies and capital, expansion of economic relations, economic entities are increasingly faced with various socio-economic challenges. In view of this, the role of foreign economic activity is increasing not only for economic entities, but also for the country as a whole, since all systemic transformations of the economy affect the characteristic features of the development of the specified sphere of activity. Activation of foreign economic relations is a driving force of economic transformation in Ukraine, which has a significant impact on the structure of social production, consumption and quality of life of citizens; determines the competitiveness of the national producer in the world market and determines the approximation of national standards of living to the European and world level as a whole. In a challenging market environment, more and more businesses are having to deal with numerous economic challenges. The uncertainty of the external environment, the increasing impact of crisis phenomena are driving economic agents to actively expand their activities and pursue strategic alternatives to development. External economic diversification enables the enterprise to support its activity in the period of economic downturn, gain competitive advantages and gain additional economic benefits. All of the above determines the relevance of the chosen topic and substantiates the need for research related to the choice of foreign economic guidelines and the implementation of the process of diversification of foreign economic activity of enterprises in the current conditions of foreign economic transformation, as well as assessing the effectiveness of economic diversification depending on the state of the industry act of management.

In this article there are analyzed the views of domestic and foreign researchers on the essence of the diversification process, described the main prerequisites for the use of diversification and presented the characteristics of the types of foreign economic diversification of enterprises. There are singled out the factors influencing the choice of directions of diversification as one of the most effective methods of ensuring the progressive development of the enterprise.

There is explored the current state of economic entities within the domestic carpet sector of light industry, the dynamics of export-import activity. There is developed the classification of motives of business entities for the diversification of foreign economic activity and a complex model of diversification of foreign economic activity.

  1. Brammer S. J., Pavelin S., & Porter L. A. (2006). Corporate social performance and geographical diversification. Journal of Business Research, 59 (9), 1025–1034.    https://doi.org/10.1016/j.jbusres.2006.04.001
  2. Michael Geringer J., Beamish P. W., & DaCosta R. C. (1989). Diversification strategy and internationalization: Implications for MNE performance. Strategic management journal, 10(2), 109–119. https://doi.org/10.1002/smj.4250100202
  3. Ansoff I. (1999). New corporate strategy. St. Petersburg, 416 (in Ukrainian)
  4. Semkina T. V, & Zgurskaya O. M (2019). Theoretical and methodological approach to the choice of enterprise diversification strategies. (in Ukrainian)     https://doi.org/10.31673/2415-8089.2019.032534
  5. Huth, S. Y., & Asanova, N. A. (2018). Diversification as the basis of an organization's development strategy in market conditions. Problems and prospects of development of the theory and practice of economic analysis, pp. 282–288. (in Russian)
  6. Zgurska O. M. (2018). Diversification as a method of increasing the economic efficiency of the enterprise. Investments: Practice and Experience, (13), 16–21. (in Ukrainian)
  7. Kotler F. (1998). Marketing and Management. Peter Com, 896 (Series: Theory and Practice in Management). (in Ukrainian) 
  8. Melnyk O. G., Petrishin N. E., & Chirkova Y. L. (2017). International diagnostic systems as instruments of business entities diagnostics in the conditions of European integration. Economy. Finances. Law, (11 (1)), 27–32.
  9. Melnyk O. G. (2017). Export potential of the enterprise: essence and methodological basis of analysis. Problems of Economy, (1), pp. 226–231 (in Ukrainian)
  10. Thomson A. A. Strickland A. J. (1998). Strategic Management. The art of strategy development and implementation. M .: Banks and Stock Exchanges, UNITI, 576. (in Russian)
  11. Stiglitz J. E. (2010). Risk and global economic architecture: Why full financial integration may be undesirable. American Economic Review, 100(2), 388–92. https://doi.org/10.1257/aer.100.2.388
  12. Battiston S., Gatti D. D., Gallegati M., Greenwald B., & Stiglitz J. E. (2012). Default cascades: When does risk diversification increase stability?. Journal of Financial Stability, 8(3), 138–149.    https://doi.org/10.1016/j.jfs.2012.01.002
  13. Zakharchenko V. I., Balakhonova O. V. & Velichko M. R. (2019). Optimization of investment risk using its diversification tool. Market Economics: Modern Management Theory and Practice, (18, Issue 1), 57. (in Ukrainian)  https://doi.org/10.18524/2413-9998.2019.1(41).173512
  14. Zakharin S. V. (2012). Economic diversification as an effective mechanism for ensuring enterprise development. Bulletin of the Kiev National University of Technology and Design.
  15. Morshchenko T. S., & Ostrick A. Y. (2016). Diversification of activity as a direction of development and strengthening of competitive advantages of a trading enterprise. Economy and society. Issue 7. (in Ukrainian)
  16. Sviderska A. V. (2016). Risk Management of Foreign Economic Activity of the Enterprise: (doctoral dissertation. Khmelnytskyi: KhNU, 290. (in Ukrainian)
  17. Berezyak I. (2013). Statistical study of risks in foreign economic activity and ways to minimize them. ACTUAL PROBLEMS OF UKRAINE'S ECONOMIC SYSTEM PERFORMANCE, 18. (in Ukrainian)
  18. Md. Harun-Or-Rashid. Diversification: An easy way to reduce risk. Retrieved from Access mode: http://m.theindependentbd.com/printversion/details/214436 (accessed: 03.02.2020).
  19. Official site of the Ukrainian Association of Light Industry Enterprises, [Electronic resource]. Retrieved from: https://ukrlegprom.org/ua/analytics/ (accessed: 02.02.2020). (in Ukrainian).
  20. Flooring – the basis of any interior, [Electronic resource]. Retrieved from: http://www.carpet-service.ru (accessed: 02.02.2020). (in Russian).
  21. Official site of the State Fiscal Service of Ukraine, [Electronic resource]. Retrieved from: http://sfs.gov.ua/ (accessed: 03.02.2020). (in Ukrainian). 
  22. Official site of the State Statistics Service, [Electronic resource]. Retrieved from: http://www.ukrstat.gov.ua/ (accessed: 03.02.2020). (in Ukrainian).