Figure 2. Classification of factors of production diversification
Table 1 Matrix of Financial Strategies
Opportunities
Favorable
Unfavorable
Exist
Sales and income growth, enhancing competitive
positions.
Expansion (or preserving) of operation scale.
Stable and relatively independent functioning.
Growth of sales accompanied by
decline in income.
Decrease in supplying for the
market, decline in income.
Artificial support of income level.
Do not exist
Stable functioning, maintenance of the market share Reduction of sales and income
The best situation is when a company has enough internal resources for
production diversification and no need for external financing. Otherwise, it has to
substantiate the strategy for paying back borrowed money. Therefore, it is necessary to
foresee income generated by production diversification sufficient for paying interest
considering potential fluctuations of foreign currency exchange rates. Synergy is a
result of production diversification, sometimes called synergetic diversification [2].
Thus, synergistics (from Greek synergetikos – joint, collaborative, coherent,
acting) is the scientific sphere analyzing connections between elements of structures
(subsystems), created in open systems (biological, physical and chemical, economic
etc.) due to intensive exchange of substance and energy with the external environment
in non-equilibrium conditions [8]. We can observe cooperative behavior of subsystems
in such systems causing the growth in level of order, namely decline in entropy (self-
organization). The fundamentals of synergistics is the thermodynamics of non-
Factors of Production Diversification
Probable Factors
Effectiveness Factors
Diversification fund
quantity and quality
Connection with traditional
production
Volume of demand
Labor force quantity and
quality
Rates of return
Scale of production and activity
Competitiveness
Organizational and legal
Innovation
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