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Theoretical aspects of foming competitive strategies of enterprises in uncertain and risk-bearing conditions
The article presents the results of researching various scientific approaches to defining the competitive strategy of an enterprise. It is proposed to define a competitive strategy as planning and implementing a system of measures aimed at reaching a beneficial competitive position of an enterprise at the market.
The article examines the classifications of competitive strategies according to various criteria. Most of the time competititve strategies are classified according to the source of the competitive advantage (product differentiation, cost minimization, focusing), market share and actions of an enterprise on the market (market leader, challenger company, follower company, pioneer company), character (aggressiveness) of market actions (offensive, defensive, leftover, cooperative). The essence of main types of competitive strategies is explored. It is emphasized that an enterprise can use various strategies for different departments or types of products depending on objectives, market conditions and available resources.
Principles and stages of forming the competitive strategy of an enterprise are analyzed. An enterprise competitive strategy should be developed while considering such key principles: goal-oriented (aiming to reach defined goals), system approach (considering relations between separate strategies), complexity (considering all factors influencing the development and implementation of a competitive strategy), existence of an alternative option (possibility of choosing a competitive strategy among several options), flexibility (ability to react to changes in environment); realistic approach (defined goals should be possible to achieve), effectiveness (reaching the defined goals while using a defined scope of resources). Development and implementation of competitive strategy comprises the following stages: defining goal, setting objectives and tasks; environment analysis; analysis of the enterprise internal environment; assessment of the existing strategy; analysis of strategic alternatives and selecting a strategy; planning the implementation of a competitive strategy; implementing strategic decisions.
The article defines criteria that influence the choice of a competitive strategy. Criteria of a strategic choice are clearly defined and mostly objective parameters to which the adopted strategy should correspond. Among the key criteria are: alignment of the strategy with the interests of the owners, mission and goals of an enterprise, opportunities and threats of the environment, strengths and weaknesses of an enterprise; overall plausibility of the strategy implementation, coordination of the strategy in time, between operational directions that provides the synergy effect, and between types of strategy (corporate, competitive, functional, operational); acceptable level of risk.
A case is made for taking the size of an enterprise into account when choosing the competitive strategy among different options.
The main strategies of small enterprises include the copying; optimal size; participation in the product of a big enterprise; exploiting
the advantages of a big enterprise. Mid-sized enterprises commonly utilize such strategies as saving; going outside the niche; leading
the niche; looking for invader. Strategies for big enterprises are chosen based on the analysis of key factors, which describe their condition with regard to outcomes of portfolio analysis, as well as the nature and essence of implemented strategies.
Moreover, the choice of strategy is influenced by the current state of industry sector and the place of an enterprise in it. In most cases, strong enterprises use growth strategies: if industry sector is in decline, then it’s a strategy of differentiation; otherwise, either a concentrated
or integrated growth strategy is selected. Weak enterprises chose strategies, which should help strengthen their market standing. However,
if such strategies exceed enterprise’s abilities, retrenchment strategy is a viable option.
The article also reviews specific aspects of competitive strategy development under uncertainty and risks. Level of uncertainty is characterized by a partial or complete lack of information about processes, events, and/or impact of certain factors on the enterprise performance. According to the approach used by professionals from McKinsey, there are four levels of uncertainty: a clear enough future; alternative futures; a range of futures; true ambiguity. For the majority of Ukrainian enterprises, the second or third levels are applicable. Given the conditions, enterprises need to develop a number of possible scenarios, constantly monitor the market, and track early warning indicators to properly analyze changes and adapt their strategies accordingly.
Keywords: competitiveness, competitive advantage, competitive strategy, strategic options (alternative strategies), uncertainty.
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