Diversification as a mechanism for ensuring enterprise development in conditions of market instability

Abstract

Increasing the financial stability of the organization is the most important problem of theory and practice in the modern economy. Even the most successful business cannot continuously develop and function unchanged for a long period of time. For organizations of any industry, the problem of effective diversification remains very relevant, as it will allow solving the following issues in the future: reducing costs, eliminating dependence on suppliers and subcontractors, forming working capital, and maximizing potential in general. The purpose of the study is to generalize the problems and consider the theoretical issues of diversification, necessary for the decision of the enterprise about the necessity or impracticality of diversification, to identify possible models of business management in the direction of diversification of the activities of industrial organizations. Implementation of research tasks was achieved on the basis of studying scientific sources of information in the field of methods and models of strategic and innovative management of organizations. The article examines the theoretical issues of diversification, identifies alternatives to this process, specifies the objectives for decision-making depending on the competitiveness and profitability of the enterprise, traces the benefits and main problems of diversification. The article defines that diversification should be used if it will ensure the economic growth and development of the organization, increase its competitiveness. At the same time, it is necessary to take into account that there is no single diversification strategy for organizations. Organizations related to even one industry are unique, therefore the definition of the diversification strategy should also be original, because it depends on the position of the organization on the market, its potential, the dynamics of development, the behavior of competitors, the characteristics of its products (services, performed works, the state of the economy and other factors).