Risks of Entrepreneurial Activity in the Direction of Formation of Market Integration Portfolio of the Diversification Strategy
The article defines “entrepreneurial risk” as a critical component of effective entrepreneurial operations as well as a key component of management theory and practise. The causal-consequential relationship between the degree of effect of market threats on the output of the enterprise’s economic operation is expressed, as is the approach for estimating entrepreneurial activity losses. The concept of “diversification” as an economic mechanism has been demonstrated. Diversification is characterised as one of the strategic alternatives to a company’s growth, and it is emphasised as a means of gaining additional economic benefits in the face of a volatile market. The essence of the diversification mechanism, as well as the disadvantages of diversification strategy, are determined. Diversification strategy formation mechanisms are proven. The most important types used in the risk management process focused on the diversification approach are highlighted. The major synergistic impact of two or more companies is highlighted, which aids in resource conservation by lowering costs, combining complementary resources, increasing market weight as focus areas for investment, and conquering new markets. The experience of world leaders in adopting diversification strategies as the guiding force behind the world pharmaceutical industry’s unstoppable growth has been examined. Taking into account other countries’ experiences, it can be argued that the best outcome in partnership with foreign companies for Ukrainian businesses can be achieved if an effective diversification strategy and a particular cooperation model are properly chosen. The most important aspect of doing so is, first and foremost, making the best possible use of available resources, which are an essential part of modernising growth and increasing the attractiveness of the European Union to investors.
Implementing the proposed conceptual knowledge-resource-market integration portfolio of diversification strategy of business activity, which has the advantage of combining individual knowledge, resource potential, and entrepreneurial capability, will improve the effectiveness of cooperation with foreign partners as the main strategic reference point in the development of national entrepreneurship.
Author (s) Details
Educational and Scientific Institute of Management and Entrepreneurship, State University of Telecommunications, Solomianska Str. 7, 02000, Kyiv, Ukraine
Educational and Scientific Institute of Management and Entrepreneurship’ The Department of Entrepreneurship, Trade and Stock Exchange, State University of Telecommunications, 02000, Solomianska Str. 7, Kyiv, Ukraine
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