Diagnosis of Diversification Processes at an Enterprise

Abstract

The aim of the article is formation and development of theoretical and methodological basis for diagnosing diversification processes at an enterprise in the context and on the basis of theory and practice of economics and enterprise management. It is found that: 1) one of the most common ways of development of an enterprise is diversification, which contributes to effective implementation of its development strategy and formation of its prospects; 2) diagnosis of diversification processes at an enterprise is a targeted evaluation of its state, trends and development prospects associated with identification of new spheres (branches) of activities and penetration into them, development of new production technologies and markets, expansion of the range of products (goods), which is most conducive to effective realization of competitive advantages of an enterprise with the purpose of maximization of its incomes received from all directions of its activity and minimization of expected risks. It is determined that the key business indicators of the diagnostic system are indicators that reflect the level of diversification of an enterprise’s activities: the absolute level of diversification; the transformed concentration index; the Berry index / the Herfindahl-Hirschman index; the concentration ratio of the sphere of activity (branch) according to the descending (or increasing) principle; the entropy index; the Atton index; the index of diversification; the level of risk. The prospect for further scientific and practical research in this area is development of a multi-criteria system for diagnosing the activities of enterprises, taking into account diagnosis of diversification processes at an enterprise as a partial diagnostic purpose of the system of partial diagnostic purposes of the multi-criteria system of economic diagnosis of an enterprise.

Keywords

• enterprise
• diversification
• production
• products
• diagnosis
• business indicators