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Economic essay
Sofya Shuster
This essay considers the value of strategic management in maintaining the
competitiveness of Russian enterprises on the domestic and world markets.
Initially strategic planning and all of the methods of strategic management were
aimed at the competitive recovery of enterprises working in the conditions of
intense competition inherent to market economies.
It is necessary to have a clear idea about the strengths and weaknesses of the
enterprise’s activity and its position on the market when developing the competitive
strategy. However, it is also necessary to understand the structure of the sphere in
which the enterprise works and that of the national and world economy as a whole.
In Russian business practice the tools of strategic management are in the formation
stage. However, domestic and international analysts consider that the Russian
market has entered a stage where the absence of a developed strategy significantly
hinders enterprises. Taking decisions on the spur of the moment, which brought
many companies success in the early 1990s, no longer works. Many companies
either go out of business or, having reached a certain stage, stop growing. Therefore
both the heads of companies and the directors of many state-owned enterprises have
come to understand the necessity of formulating a development strategy. This is
promoted by the identification of an enterprise as a complete isolated system, and by
the formation of new goals and interests of the enterprise and its employees.
Changes in the environment in which domestic enterprises operate also stimulate the
creation of new methods, systems and methods of management. If the environment
is relatively stable, there is no particular need to be engaged in strategic
management. However, the majority of the Russian enterprises work in fast
changing and difficult to predict environments, and therefore they require strategic
management.
The necessity for the formation of strategic management systems for domestic
practice is also caused by the integration processes, which are taking place.
Industrial groups that unite technologically connected enterprises are appearing in
Russian business. There is an active process of formation of financial and industrial
groups. Commercial companies, almost simultaneously with the creation of their
core business, are starting to organize financial-commercial groups. Even small
enterprises are uniting in order to successfully function as small corporations.
Business concerns and groups, behind many of which stand commercial banks, have
begun acquiring industrial enterprises, taking part in privatization and investment
tenders, and aggressively accumulating shares in attractive enterprises. Well known
examples include LogoVaz, Microdin, Alfa Group and industrial groups of banks
such as Menatep and Russian Credit. The central issue now lies in ensuring stable
and effective development of integration processes. However this is impossible
without resolving the issue of strategic management.
The next important precondition for the development of strategic management is the
process of globalization of business, which is also taking place in our country.
Global firms consider the world as a unified whole in which national distinctions
and preferences are erased. It entails standardization of consumption.
The goods of such global firms as Mars, Siemens, Sony, Procter and Gamble,
L'Oreal and many others are on sale worldwide and play an important role in
heightening competition on national markets. It is only possible to resist the impact
of the goods of global firms by operating with similar methods, i.e. by developing a
competitive strategy.
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