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Modern trends of the corporative integration in the agribusiness
The competitiveness of the agriculture sector companies become dependent on their ability to choose the best options for integrating corporative structures (ICS). Under modern conditions the formation of ICS is a way to reduce the uncertainty of the environment. Firms gradually concentrated in certain business sectors, increasing production capacity and closing production cycles.
The basic premise of ICS is creating a desire to combine all kinds of resources participants (tangible, intangible and financial assets) in order to increase the efficiency of production and economic activity, create optimal technological and cooperative relations, increase export potential, accelerate research and development, attract investments, improve the quality management system. So, all that should improve the competitiveness of all participants ICS.
Categories that describe the content of corporate organizational structures include mergers, acquisitions, integration. Management of ICS created by the way of mergers and acquisitions, based on the centralization of administrative functions, strengthening management control and coordination mechanisms for building production. The purpose of the acquisition of a new element through the processes of mergers and acquisitions is to create a strategic advantage by combining and integrating new elements of ICS, which should be more efficient than their internal development within the existing ICS. Integration - the appropriate combining of economic subjects, deepening their cooperation, the development of relations between them in order to achieve their overall strategic goal, increasing of the activity competitiveness and efficiency. Integrating enterprise is undertaken to achieve specific goals by gaining additional benefits.
Modern trends of competitive strategies of agribusiness in Ukraine are characterized by activation of mergers and acquisitions. Small businesses are beginning to realize that they can not compete successfully in the market. This is due to factors such as high entry barriers of access to capital markets and crisis phenomena.
Today, the corporate integration is also characterized by a new quality of cooperation - forming business alliances. Rapid changes in markets, technologies, products, and the nature of competition caused considerable uncertainty in many sectors, which increased risks. Alliances allow companies to be flexible and continually leverage emerging opportunities of the environment.
Agricultural industry has the following types of vertical integration as "backward integration" when the company is expanding its business through the stage of raw materials and "forward integration" with the next stage of production and marketing.
The essence of the mechanism or the philosophy of corporative integration depends on the goal, which involves determining the effective development by analyzing the economic basis of their functioning.
The positive effects of integration reforms in the agricultural sector can be attributed synergy effect, increasing of the financial stability and ensuring solvency; modernization of agribusiness and the introduction of innovative technologies, entering on the new local markets and expand of the existing market share. The negative effects include monopolization of the market, the impact on the environment, unequal economic relations between parent and subsidiary business entities, reducing manpower requirements.
Formation ICS enables integrated agribusiness enterprises more efficiently, compared to a market mechanism, to coordinate internal resources with the purpose to adapt integrated companies to the conditions of the external business environment with a high degree of uncertainty.
Key words: integrating corporative structures, mergers, acquisitions, alliances, collaboration, competition, competitiveness, strategy, business management, key competences, backward integration, forward integration.
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