THE MASTER'S RESEARCH PAPER

FORMULATION OF THE ENTERPRISE DEVELOPMENT STRATEGY

(BASED ON “LVS” SPE, LLC)

Evheniy Korobeynikov

MO-09, part-time studiesScientific supervisor: Doctor of Economics, Full Professor,

Vladimir Evhenievich MomotLanguage consultant: Svitlana Anatoliivna Samoilenko

PRIVATE HIGHER EDUCATIONAL INSTITUTION«ALFRED NOBEL UNIVERCITY DNIPROPETROVSK»

INNOVATION MANAGEMENT AND INERNATIONAL LOGISTIC DEPARTMENT

Dnipropetrovsk2015

CONTENTSINTRODUCTION

CHAPTER 1 THE THEORETICAL FOUNDATIONS OF A CHOICE OF THE MARKETING STRATEGY

1.1. Methods of analysis of the competitive situation on the market

1.2. The concept of marketing strategy and strategic decision-making model

1.3. Types of marketing strategies, their classification

CHAPTER 2 ANALYSIS OF FURNITURE MARKET OF UKRAINE

INVIROMENT OF “LVS” SPE , LLC 2.1. Organizational management structure of “LVS” SPE , LLC 2.2. Analysis of technical and economic indicators “LVS” SPE , LLC in 2012-2013

2.3. The Ukrainian furniture market in whole

2.3. The structure of demand for home furniture

2.5. Market share for companies depending on their values

CHAPTER 3 ECONOMIC ANALYSIS OF “LVS” SPE , LLC

3.1. SWOT-analysis of “LVS” SPE , LLC

3.2. BCG matrix of “LVS” SPE , LLC

3.3. The positioning of upholstered furniture “LVS” SPE , LLC

3.4. Market competitive map (using data of Market Department of “LVS” SPE , LLC)

CONCLUSIONS

Slide 2.

Slide 3.INTRODUCTION

The Object of the research is “LVS” SPE (scientific production enterprise), LLC (Limited

Liability Company) and market environment where the company operates.

The Subject of the research is justification of the choosen strategy of the company in the process

of market planning of its activities and analysis of its competitive position.

The Purpose of the research paper is theoretical justification and development of methodical

recommendations regarding the choice of marketing strategy according to its competitive position.

  Objectives of Master's research paper are:

defining the place and role of strategy and competitive position of the company in process of

strategic market planning;

making the comparative analysis and the generalization of existing approaches for

justification of the choice of the enterprise strategy on the results of its competitive position analysis;

theoretical generalization of modern models of market strategies selection aiming to

determine system characteristics, causing assessment of the competitive position of the company;

generalization and making additions to the strategies and competitive position of the company

in the market;

elaboration of a plan of market activities in the context of chosen strategy of the factory and

making methodical and practical recommendations for its usage.

Slide 4.CHAPTER 1. THE THEORETICAL FOUNDATIONS OF A CHOICE OF THE MARKETING STRATEGY 1.1. Methods of analysis of the competitive situation on the market 1.2. The concept of marketing strategy and strategic decision-making model 1.3. Types of marketing strategies, their classification

Distinctive features of enterprise marketing strategy:  1. The process of strategy development is not completed some instant action. Normally it should end the general

definition of vectors which will promote and ensure they can increase and improve the position on the market.

2. The current strategy should be used in tandem with the search method, while in developing policies. The role will

consist in finding strategy is to first, help concentrate attention on specific areas and opportunities; and secondly,

neutralize all other features that serve as incompatible with our strategy.

3. The need for strategic planning fall how promising vector of output the company into a profitable level.

4. In the process of developing the strategy it is not possible to predict all the opportunities that emerged in the design of

management measures. That is why you should use generalized not quite complete information about possible

alternatives.

5. Once while searching new alternatives are specific, we see the accumulation of more accurate information. In this case,

it may question the need for strategic choice in the beginning. This creates the conditions for good communication

strategy without using the principles of recoverability.

6. For the selection of measures are used as benchmarks and strategies can being said that this is one and the same, and

that the various components. Guidepost acts as a goal to which the company intends to reach, and the strategy is the

means in achieving the goal. Guideposts, in is case, are the highest level of decision-making.

7. Guideposts and strategy are interchangeable, as in certain periods of time and at different levels of the enterprise.

Certain performance parameters (market niche) in one timeframe perform the role of the guidepost, and in other time

will become its market strategy.

Slide 5.

Director (CEO)

Deputy Director for technological

Affairs

Deputy Director for production

Chief book-keperDeputy Director for General Affairs

Chief engineer

Mechanical engineer

Engineer manufacturing

equipment

Repair and tool division

The Quality control

department

Designer

Technologist

Warehouse Department

Transportation(Logistic)

Department

Sales Department

Marketing Department

Accountancy

Planning-economic Department

Workshop production

CHAPTER 2 INTRODUSING THE EXAMPLE “LVS” SPE , LLCOrganizational management structure of “LVS” SPE , LLC

Slide 6.

Indicators 2011 2012Deviations 2012/2011

2013Deviations 2013/2011

ths. UAH % ths. UAH %

net effective income, ths. UAH13809 9297 -4512 -32,67 7073 -6736 -48,78

The average annual cost of

finished goods inventory, ths.

UAH

2212,8 2646 433,2 19,58 3382 1169,2 52,84

The speed of circulation of goods 6,24 3,51 -2,73 -43,75 2,09 -4,15 -66,51

The duration of one revolution,

days57,7 102,6 44,9 77,82 172,25 114,55 198,53

The average number of

employees, people987 1003 16 1,62 1003 16 1,62

Production personnel, people 691 710 19 2,75 710 19 2,75

Unit weight of PP, % 70 70,2 0,2 0,29 70,2 0,2 0,29

Productivity 1 employee, ths.

UAH19,98 13,09 -6,89 -34,48 9,96 -10,02 -50,15

The average annual value of

fixed assets, ths. UAH5278,6 4970 -308,6 -5,85 4718 -560,6 -10,62

Capital productivity 2,6 1,8 -0,8 -30,77 1,5 -1,1 -42,31

Depreciation of fixed assets, % 62 64 2 3,23 66 4 6,45

Analysis of technical and economic indicators “LVS” SPE , LLC in 2012-2013

Slide 7.

Special furniture

Office Furniture

Home

fur-ni-

ture

Ukrainian furniture market

10%

27%63%

0%5%

10%15%20%25%30%

30%

20% 20%

15%

10%

5%

The structure of demand for home furni-ture

5%

65%

30%

Market share for companies depend-ing on their values

Large (220 ths.c.o.)

Middle (35 ths.c.o.)

Small (less 25 ths.c.o.)

CHAPTER 3 ANALYSIS OF FURNITURE MARKET OF UKRAINE

Slide 8.

Strengths: Weaknesses:1. the availability of qualified personnel with extensive

experience;2. personnel policy is aimed at finding competent

professionals;3. a positive image of the company to its employees;4. favorable democratic climate within the company;5. the tendency of improving strategic planning;6. favorable terms of raw material supply;7. systematic development of new products;8. creative advertising campaign;9. consumer preferences orientation;10. a large number of well-controlled distribution channels;11. high quality of production.

1. high personnel turnover;2. imperfect communication channels within the system;3. inconsistency development strategy;4. outdated production equipment;5. irrational system of stock control;6. low profitability due to the high cost;7. inflexible pricing system;8. internal production problems;9. lack of resources for proper monitoring of the market;10. low-budget advertising;11. deficiencies in the system of economic planning. 

Opportunities: Threats:1. improving the quality of the product and as a result

strengthen market position;2. increase sales; 3. qualitative improvement of the production line due to new

product;4. the increase in profit;5. the increased interest in the product from the professionals

and potential customers;6. entering new markets (increase in the share of exports).

1. high competition;2. rising prices for raw materials, components, other

resources;3. too high costs;4. using /copying of new developments by competitors (new

models) and selling them at lower prices. 

CHAPTER 4 ECONOMIC ANALYSIS OF “LVS” SPE , LLCSWOT-analysis of “LVS” SPE , LLC

Slide 9.

Product name

№Strategic business

unit

Company Sales Volume, ths.units

Sales of the leading competitor, ths.units

Market Capacity (size), ths.units

Markets growth rate, %

Relative market share of Strategic

business unit

Market share of Strategic business unit, %

Interior accessories 1 1690 1182 7600 91,5 3 11,13

The Cabinet furniture 2 1127 1190 5100 104,1 0,87 22,98

Bedroom furniture 3 2500 1105 11500 109,3 2,4 23,04

Dining furniture 4 1503 625 7200 106,3 3,06 27,12Furniture for living room

5 2271 1102 8400 101,1 1,98 30,64

Soft furniture 6 3096 2720 10200 96,2 1,16 30,70

Data and calculations for BCG matrix plotting

BCG matrix of “LVS” SPE , LLC

Slide 10 .

 Furniture Quality Credibility of the company

Prown Dival Progress Livs Grand Prown Dival Progress Livs Grand

Score*4 4 3 2 4 4 3 3 3 4

Assessment of the quality of the product and the credibility of competitors*Score – the mark given on the basis of the analysis of the consumers reviews on the various trademarks.

The positioning of upholstered furniture “LVS” SPE , LLC

Slide 11.

The company:The market share of the enterprise at Soft

furniture market in 2013 (S) %

The rate of increase of market share at

Soft furniture market (Ts) %

«LVS» 31,8 98,6

«Livs» 23,1 103,4

«Prown» 11,9 102,3

«Progress» 33,2 99,2

Data for market competitor chart

Structure of the furniture purchasing by type

12%

43%

13%

29%

3% Furniture sales by type

Corner sofa

Sofa

Chair&Softchairs

Soft group furniture

Bed

Conclusions• the implementation of the strategy of marketing

mix modifications

• more effective advertising company

• offering customers perfected services

• using of methods of price competition

• searching for additional markets for new products and new customers

Thank you for your attention!