Development of a competitive strategy of an organic production enterprise based on discriminant analysis

Abstract

This study offers an additional toolkit that will allow substantiating the formation of a strategy for future development considering the potential growth or reduction of activity, which is relevant for producers of organic products, since considering the potential trajectory of development will provide an opportunity to protect the enterprise from unfounded decisions in the event of a reduction in activity and will help activate existing reserves in case of future growth, which is relevant and quite in demand. The purpose of this study was to prove or refute the hypothesis about the influence of several factors on the development of organic products, as well as to determine the further strategy of the enterprise. For this, data from 75 Ukrainian enterprises that grew organic products were analysed. The division of enterprises into groups depending on the volume and growth rate and identification of factors affecting the future development of organic producers was carried out using cluster and discriminant analysis. The factors that substantially affect the future development and allowed dividing the enterprises under study into groups were the diversification of production, the replacement of crops, changes in the volume of organic production, and changes in production efficiency. Whereas the factors “percentage of new (or withdrawn from production or not certified) crops in the new year to the total volume of production last year” and “change in the area of organic soil” did not show sufficient influence on the distributive capacity of the model, and were excluded from further analysis. It is proposed to develop a strategy for enterprises producing organic products based on a differentiated approach for three different groups of enterprises, namely: those that potentially have high potential, speed of development and expansion of activities; those that are potentially expected to reduce and decrease the production of organic products; those that develop at moderate rates. The obtained equations can be used in practical activities for additional justification of the development strategy of organic producers