Stages of choosing a project for the diversification of production and business

Abstract

Subject. The article considers the process of selecting a project for diversification of production and business at machine-building enterprises. Objectives. The purpose is to develop elements of a logical model of the diversification process, i.e. determination of the type of production, assessment of enterprise's readiness for diversification, assessment of resources of the diversified enterprise and expectations from the diversification project, formation of indicators to evaluate the diversified business. Methods. I employ a consistent comparative analysis of diversification projects at machine-building enterprises, which are the necessary basis for the study. The tools of the analysis rest on in-depth review of various theories of diversification and enable to visualize the results of the data obtained. Results. I compared different theories and classifications, determined the main metrics and sequence of their application when making a decision on diversification, defined objectives of diversification and ways to achieve cost-effectiveness of the project. The paper offers an approach to ensure the consistency of evaluation process and to analyze prospects for production diversification. It also formulates the necessary parameters of products selected by the enterprise for diversification, identifies and evaluates indicators for rapid assessment of diversification project, specifies the order of stages of selecting the diversification project. Conclusions. Enterprises with more than a quarter of the range of civilian products, qualified personnel, elaborated system of resource supply relying on flexible production, a high level of automation, and a technological platform have high chances to successfully implement a diversification project.