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IMPROVING DECISION MAKING
Talipova N.T.
1
Makhmutkhodjaeva L.S.
2
1
Talipova Nigora Tulkunovna, Candidate of Economic Sciences, Associated professor of
the «International Economics» Department Plekhanov Russian University of
Economics, Tashkent Branch (Uzbekistan)
e-mail: nigoratal@gmail.com
2
Makhmutkhodjaeva Luiza Sayfullovna, Candidate of History Sciences, head of
department of the «Foreign languages and humanitarian disciplines» Department
Plekhanov Russian University of Economics, Tashkent Branch (Uzbekistan)
e-mail:
In the article, the authors analyze matrix models when strategic decisions making in the
economy. The main factors, opportunities and problems in applying matrix models are
considered and analyzed.
Keywords: matrix models, management, management strategy, factors, methods of
influence
Introduction
In industrial sphere problems of development of the proved strategy in relation
to paid products and services will be actualized. For the decision of this class of
problems - so-called models widely approved in foreign practice portfolio analysis
which it is especially successful, apply in conditions mass and a batch production.
Generally speaking, this class to become especially perspective, for the
enterprises which leave in Internet with the offer of production and services - cardinally
expands its market space and makes tempting a problem of a conclusion to the market
of such new products and services which would have the mass consumer.
This circumstance defines interest to possible appendices of models of classical
management and the marketing, successfully used by the western industrial firms, for
development of the proved strategic decisions both concerning information bodies as a
whole, and concerning separate information products or categories of consumers of
information services [1-4].
Now besides traditionally represented services of information search in a
databank multiplying, educational, it is possible to observe and services which were
unusual for the enterprises, such as intermediary, consulting, advertising,
telecommunication earlier, rent, polygraphic, expert, search, hire, trading, help,
intermediary, restoration, a photo, cinema, video of service etc.
However in many cases the set of the services making a so-called portfolio, is
formed in many cases spontaneously while the market economy directly touching the
enterprises, demands from them development of the proved market strategy with
reference to each of units of a portfolio of paid services.
Modeling in economics
The idea of classical models portfolio the analysis will consist in positioning each
of kinds in some coordinate space and the differentiated choice of strategy with
reference to each of kinds of production depending on its coordinates. For presentation
International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
111
of results matrix representation of coordinate spaces is used. Portfolio analysis is
directed on:
1) Reception of the maximal profit during the most long time;
2) Financial sustainability by avoiding sharp disruptions in production and
marketing policies;
3) Duly replacement of one product and services by others, more perfect and
viable;
4) Rational distribution of financial streams with precise understanding of what
products are donors, what investment receivers are, and what for reasons.
In the organizational plan portfolio analysis is based on the concept strategic
business - units, independently managing units [5,6].
This concept is for the implementation of a set of organizational measures related
to the transition from a linear-functional management scheme to divisional work using
appropriate devices. A dedicated business unit (BU) should work directly on the market,
and not serve other divisions, its customers and competitors, and management should
control the factors that ensure successful operation in the market.
One of the most common portfolio analysis models is the Boston Consulting
Group matrix, also called the growth-market share matrix. The parameters of the
relative market share and the growth rate of the sectorial market are taken as a
coordinate here (Fig. 1).
Figure 1. High Low
Positioning the full range of information products and services of companies on the
BCG matrix allows you to formulate the main strategy that the BU should hold out. Having
serious theoretical base method BCG is simple and evident.[7] From practical point of view
BCG allows to receive simple and evident representation about a place and comparative force
of every BU in coordinative portfolio, to analyses dynamics of development and to formulate
perspective strategy for every BU, also to make the proved decisions on the redistributed
financial streams between various BU with the purpose of realization the chosen strategy.
On fig. 1 area of circles reflects a share in total proceeds from realization of a product,
and allocated sectors - a share of the market in comparison with the nearest competitor.
The matrix the Poppy - Kinsey offered by company General Electric and firm
McKinney, called “ appeal a branch
-
position in a competition ”
has three graces 3
х
3 (fig. 2).
"Stars"
To invest with the purpose of increase in
a share of the market
« Difficult children »
To increase a share of the market or no-
invest
To invest only for maintenance of a share
of the market to put means in other
directions
«Investments »
To no-invest and liquidate business
"Refusal"
International Conference
“
Science of the 21st century: society and digitalization
”
Conference Proceedings. Scope Academic House, January 30, 2021, Sheffield, UK.
112
Figure 2.
Aggressive growth
To invest or hold positions
"Stars"
To invest, re-invest
profit
Selective growth
To invest, re-invest, leave.
“ question signs ”
Re-invest profit or to take the
maximal profit
Take maximum benefit
or leave
To remain or leave slowly
Low activity
To take the maximum benefit
or leave
“ double investments
”
Slowly leave
No-invest
leave quickly (slowly) or
remain
"Refusal"
Here long-term appeal of branch is considered as the integrated characteristic,
determined proceeding from an estimation of the certain set of factors. Thus in various
situations various factors can be involved, including:
•
The capacity of the market and its prospective growth;
•
Technological condition;
•
Availability of the market;
•
Profitableness of branch;
•
Degree of an acuteness{a witticism} of a competition;
•
Duration of life cycle (LC);
•
Seasonal and cyclic fluctuations;
•
Degree of dependence on a social and political situation, state regulation, etc.
•
The estimation of a concrete position also occurs from values of some set of
corresponding factors:
•
Relative share of the market in relation to the leader;
•
Relative level of expenses in comparison with the direct competitor;
•
Degree of development of technology;
•
Level of management and level of profitableness concerning competitors;
•
Opportunity to compete under the prices and quality;
•
Image, degree of popularity of production, etc.
Estimations of appeal and competitive position are made for each of kinds of
production then the matrix Poppy Kinsey is under construction. Model BCG and Poppy -
Kinsey are guided by short-term prospect. That it is better to identify the kinds of business
which are taking place on rise, and to take into account long-term prospect (forecast),
involve the models using the concept of life cycle (LC).
The model the Poppy - Kinsey, despite of the complexity, has received the big
distribution. The set of variations of the given model connected both with increase of
number of considered factors, and with expansion of set of strategic decisions is known.
The model "ADL/LC" (Arthur D., Little Life Cycle) is one of the most widespread
models using concept LC (life cycle) business - units (BU) or branches. Here it is supposed,
that any business consistently passes stages of a birth, development, a maturity and
recession in the existence.
The analysis of a position of concrete business is carried out in coordinate axes «a LC
stage of a product - relative position in the market (a competitive positio
n of business)».
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According to model, relative position of business in the market can be the leader,
strong, appreciable, strong, and weak. Procedure of a choice of strategic decisions on a
matrix (4
х
5) will consist of three steps.
On 1-st step strategy preliminary and in the general form is defined according to
what cell of a matrix is occupied with the given concrete business.
On 2-nd step positioning business inside the given cell of a matrix is taken into
account.
Depending on a position the choice of lines of the further movement of business and
a concrete definition of strategy though formulations of strategy here too have still the
general character here is carried out. For each of cells of a matrix there are possible
strategic routes by natural development and a line of selective development (fig. 3) and,
according to a choice, the set of the specified strategy.
Therefore on 3-rd step the choice of the specified strategy corresponding to the
chosen way of development of business is carried out.
Here for each of possible situations the concrete set of combinations from 24
specified strategies is offered, and the last are formed in terms of economic operations.
The strengths describing relative position of business in the market, can define also
variables, as: a degree of patent security; production efficiency; a degree of vertical
integration; the attitude of management to probable risks, etc.
The received integrated estimations basing use of weight factors and the expert data,
can be dictated by a concrete situation.
Within the framework of model carrying out not only the static analysis, and also
forecasting, both in short-term, and in long-term prospect is possible.
The advantages and the lacks are inherent in each of the considered models.
Therefore at a choice of strategy it is recommended to not be limited to one model, and to
try to construct all three matrixes, that the portfolio from various positions, on the one
hand, allows to consider, and with another - will help to reveal the errors admitted at
construction of models.
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