THEORETICAL APPROACHES TO THE DIVERSIFICATION OF THE BUSINESS SUBJECT'S ACTIVITIES

Abstract

Introduction. The economic expediency of the diversification of production activities is determined by its impact on the economic and financial state of the enterprise, since the result of any diversification should be the reduction of risk and the emergence of synergistic effects, especially in the field of finance, thanks to the possibility of free intra-company transfer of funds to the areas of activity that develop the most dynamically. The effect of diversification largely depends on the choice of directions (vertical integration, diversification based on existing types of activities, creation of conglomerates). Methods. Modern general scientific and special methods of economic research were used during the research, in particular: systematic approach, comparative, dialectical, abstract and logical methods. The results. It has been proven that the diversification of production activity will be expedient in the following cases: narrowing the possibilities of development of the current business; strengthening the competitive advantages of the enterprise and its products due to diversification; the opportunity to use the existing potential for organizing activities in other fields; the ability to reduce production costs; availability of financial and organizational resources to implement diversification. Discussion. In the post-war period, there will be a change in the priorities of production and economic activity of business entities, which is caused by a change in the direction of the country's economic development. This circumstance will lead to the improvement of the theoretical foundations of the diversification of business entities. Keywords: activity, business entity, diversification, economic feasibility, directions of diversification.