Diagnosing the Business Development during Strategizing

Abstract

Introduction. As a rule, strategic plans use the potential plant capacity to adapt the enterprise to adverse conditions, and these plans require constant adjustment. Strategic plans that rely on insufficient information about pant capacity may result in significant financial losses for the company. The research objective was to develop a principle for diagnosing sustainable growth based on potential capacity. Study objects and methods. The research featured three metallurgical enterprises, since metallurgy is of strategic importance for the domestic industrial development. The study involved such standard methods as system and situational analysis, expert assessments, correlation analysis, regression analysis, topological analysis, and statistical simulation. Results and discussion. The authors proposed an algorithm for calculating three types of potential capacity indicators: relative added value and revenue (y1), situational potential (y2) and performance (y3). The new methods made it possible to forecast the indicators of sustainable development and compare the mode of operation with standard value, i.e. the length of the estimated vector, which exceeded or equaled a certain fraction of its maximum possible value. If the vector length was less than this value, the stability started to decrease. The performance indicator demonstrated if the enterprise reached the maximal value of the indicator when it exceeded the boundary of the sustainability standard. Conclusion. The new approach provided a prompt assessment and forecast of the potential plan capacity. It could improve the forecast of potential instability, increase the flexibility of strategic plans, and prevent strategic shock.