PRESS OF UZBEKISTAN
April 19, 2017
DEVELOPMENT OF PRODUCTION STRATEGY IS THE ROAD TO SUCCESS
Today almost in all countries market form of economics is recognized as the prevailing one with which all benefits have the price – each article, each work or service is sold and bought at the certain price (cost). Even the labor has the cost in the form of the salary or the income. At the same time the market became the center, a peculiar ground where the manufacturer (seller) and the consumer (buyer), i.e. a demand and an offer or, on the contrary, an offer and a demand meet each other.
The elementary market is a trade from hand to hand, eye to eye, direct exchange under the principle "log rolling". Such market often was called a "bazar" and has preserved in this form till nowadays (the ware market, the market of vegetables and fruit, construction materials, etc.). In 18th-19th centuries the market was free. The enterprises made goods for the unknown and unregulated market, they competed among themselves generally by reducing prices of the production. By the beginning of the 20th century the market becomes more and more adjustable. Production and sale of bulk of goods is controlled by the monopolies which have divided the market into spheres of the influence. At the same time the monopolistic capital combats, mainly, by means of non- price competition, by means of dictatorship in relation to competitors. Today's market is the state regulated market. It is characterized by an active role of the state in development of the market relations, observance by all producers of rules of the fair, civilized competition, and antimonopoly policy. The regulated market doesn't exclude the competition which in present conditions isn't a competition for prize-winning places in comparison with planned economy, and rather is struggle of enterprises for acquisition of own "niche" in the corresponding market, marketing channels, receiving maximum benefit from the activity. As practice shows, one can achieve all this on the basis of the thought-over and purposeful production strategy. The word "strategy" was originally applied in military science and meant none other than science, art of conducting military operations. The commander who won or sought to win battle without big losses of manpower and the equipment i.e. keeping fighting capacity of the army was considered as the good strategist.
Strategy is applied also in economic practice. Unlike military strategy, economy strategy means long-term principles and intentions of the government on rational use of the productive forces and natural resources which are available in the country, ensuring macroeconomic stability, a gain of the national income, creation of wellbeing in society, etc. Evidence of that is the Decree of the President Shavkat Mirziyoev "On the strategy of actions for further development of the Republic of Uzbekistan" of February 7 of this year in which the priority directions of development of economy, increase in efficiency of reforms and improvement of a social and state system for the next five years are defined. The adopted document of development of strategy of actions not only raises it on qualitatively new level, but makes it important and obligatory at all levels, in all branches and links of economy. Development of strategy of actions is especially important for the enterprises which are, firstly, the main production link of economy, and secondly, manufacturers of production required for society. It has to include target setting and development of policy on their achievement. It should answers the following questions:
What products, how many, and of what quality the enterprise needs to produce?
How and what markets are to be entered to and production should be represented in?
What actions, how and why should be to carry out first of all?
What price policy should be followed?
What approx. period the developed strategy has to be intended for?
Answering these questions, one can define the current and perspective mission of the enterprise, i.e. how it looks today, or will look, approximately, in 5-10 years. The most important here is an objective assessment of activity of the enterprise in the past (for example, one year, 2-3 years ago) and in the present, and definition of the "strong" and "weak" sides both of own production, and production of competitors. For this purpose, first of all, deep economic analysis of activity of the enterprise and the record of consumer demand for the production or the rendered services is required. The latter, in practice, is carried out, as a rule, by questioning dedicated to studying of consumer demand. Activity of competitors – from production and sale of products to the innovations realized or planned to be realized - should always be kept under review of the enterprise.
If advantages over the competitor (s) are at the level of 30%, it means, according to modern calculations, that goods and services of this (your) enterprise are in a weak competitive position; rate within 30-50% is rather steady position in the market; rate of 50-70% is the successful competitive position in the market, and over 70% means control over the market of this production (services). The strategy of ensuring competitiveness should be built using only one of types of competitive advantages: attracting consumers (buyers) with rather low price of production in comparison with competitors, or satisfying demand of the most exacting buyers who demands exclusively quality production. These two types of competitive advantages should not be combined. The business plan should specify or show what strategy of production and ensuring the production competitiveness is chosen by the enterprise.
Production strategy has to have the advancing character. Such components as commodity and price policy, decrease in costs of production, fight against reject and against all types of losses and unproductive expenses need to feed coherently into it. Strategy can be considered effective if it promotes growth of production capacity of the enterprise, ensuring its economic stability and competitiveness. These provisions are considered as the first step of the production strategy realized by the enterprise. The second step – strategy has to be aimed at ensuring financial independence of the enterprise, its solvency and growth of profitability level of production. At last, the third strategic step is an orientation of the enterprise to modern waste-free technologies and "know-how", use of all advanced experience accumulated in domestic and foreign practice. In total development and realization of production strategy has to promote maintenance of high image of the enterprise in the corresponding market, expansion of a consumer ( i.e clients) range, and acceleration of turnover of the resources involved in production and return to enterprise with obligatory "plus". To do that the enterprise has not to produce that production it capable or able to produce, but production which is in demand in the consumer world, i.e. doesn't sit unsold in finished goods warehouses, which is fast selling goods. This requirement which is, in fact, the most important condition of survival of any enterprise in the conditions of today's market system and the developing competition, unfortunately, isn't fulfilled itself or automatically. To do that, as practice shows, the enterprise (s), firstly, has to work continuously to improve quality of manufactured products, which shouldn't concede to the foreign analogues, but rather should even exceed them. Secondly, not only director, but also all staff of the enterprise has to feel concern about quality and progress of production. Thirdly, the thought-over and effective advertizing activity has to be carried out, they shouldn't spare expenses, save funds for advertizing which has been main "engine" of trade. At last, fourthly, it is expedient to carry out flexible price policy, keeping in mind, at the same time, that the profit or the income of the enterprise (seller) in general, increases or can increase not only by advance of price of manufactured commodity products, but in many respects owing to growth of volume of sales.
Development and realization of production strategy by the enterprises are not an end in themselves, but order of the day and, at the same time, the requirement of the huge transformations occurring today in country life. Possessing the thought-over and purposeful strategy, the enterprises ensure, first of all, long life cycle and participation, both in internal, and in foreign market. It is the effective instrument of management, planning and forecasting of production, providing superiority over competitors and strengthening of the positions in market space. In other words, strategy is a program of achievement of goals of progressive development both by the enterprises and each enterprise separately. Managing such strategy is one of important tasks of the enterprises, irrespective of their branch affiliation, form of ownership, location and other signs.
(Source: «Business partner.uz» newspaper)