УДК: 339.138

DOI: https://doi.org/10.36887/2415-8453-2022-2-54

Nataliya Basiurkina
Doctor of Economic Sciences, Professor, Head of Department of Trade Entrepreneurship, Commodity Science and Business Management, Odesa National University of Technology
Iryna Sedikova
Doctor of Economic Sciences, Professor, Head of the Department of Management and Logistics, Odessa National University of Technology
Kamila Momot
Simon Kuznets Kharkiv National University of Economics

JEL classification: L20; L25

The article substantiates theoretical approaches to the concept of «diversification». It provides a meaningful definition, identifying signs and critical characteristics in the context of its development in conditions of economic instability. Based on a broad analysis of the definitions of diversification, the author’s theory is formulated, the essence of which is that «diversification» is a strategy aimed at improving the efficiency of the enterprise’s functioning in conditions of instability by changing the range of products, sales markets, distribution of risks, achieving economic benefits, preventing bankruptcy, and using available opportunities. The signs of diversification are defined, including target orientation, distribution of financial resources, penetration into new spheres and industries, expansion of geographical boundaries of activity, expansion of the range, development of new types of production and technologies, entry of enterprise into new sectors of the market, change of organizational structures. It is determined that the concepts of diversification of enterprise activity show its importance as a development strategy. The main characteristics of this strategy include structure, multidimensionality, dynamism, purposefulness, emergence, and feedback. It has been found that enterprises resort to diversification for various reasons, such as market stagnation, the desire to expand the range of activities, identifying new opportunities, and others. It is determined that the primary motive for using diversification is the desire to increase the efficiency of the enterprise not only at the current moment and shortly but also for the long term. A classification of motives for diversifying enterprise activities with their division into technical-technological, economic, financial, social, and strategic has been carried out. It is substantiated that the choice of a specific way of diversification depends on the financial condition of the enterprise, the capabilities of different industries, and the duration of such a strategy.

Keywords: management, diversification, market, strategy, motives.

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The article was received 06.04.2022