“Implementation of strategic analysis methods to choose a development strategy for the enterprise’s foreign economic activity” Galyna Azarenkova https://orcid.org/0000-0003-0101-2989 http://www.researcherid.com/rid/M-5272-2015 AUTHORS Olena Golovko https://orcid.org/0000-0001-6502-4562 Kateryna Oryekhova https://orcid.org/0000-0003-0214-2750 Sergii Yavorsky https://orcid.org/0000-0003-3561-0143 Galyna Azarenkova, Olena Golovko, Kateryna Oryekhova and Sergii Yavorsky ARTICLE INFO (2019). Implementation of strategic analysis methods to choose a development strategy for the enterprise’s foreign economic activity. Geopolitics under Globalization, 3(1), 1-11. doi:https://doi.org/10.21511/gg.03(1).2020.01 DOI https://doi.org/10.21511/gg.03(1).2020.01 RELEASED ON Tuesday, 14 January 2020 RECEIVED ON Saturday, 07 December 2019 ACCEPTED ON Friday, 10 January 2020 LICENSE This work is licensed under a Creative Commons Attribution 4.0 International License JOURNAL "Geopolitics under Globalization" ISSN PRINT 2543-5493 ISSN ONLINE 2543-9820 PUBLISHER LLC “Consulting Publishing Company “Business Perspectives” FOUNDER Sp. z o.o. Kozmenko Science Publishing NUMBER OF REFERENCES NUMBER OF FIGURES NUMBER OF TABLES 26 2 7 © The author(s) 2021. This publication is an open access article. businessperspectives.org Geopolitics under Globalization, Volume 3, Issue 1, 2019–2020 Galyna Azarenkova (Ukraine), Olena Golovko (Ukraine), Kateryna Oryekhova (Ukraine), Sergii Yavorsky (Ukraine) Implementation BUSINESS PERSPECTIVES of strategic analysis methods to choose a development strategy LLC “СPС “Business Perspectives” for the enterprise’s foreign Hryhorii Skovoroda lane, 10, Sumy, 40022, Ukraine economic activity www.businessperspectives.org Abstract The article considers stages and methods of strategic management of the enter- prise’s foreign economic activity. PEST analysis, SWOT analysis and SPACE analy- sis of foreign economic activity are used on the basis of a particular enterprise. PEST analysis has highlighted political and legal, economic, social and techno- logical factors influencing the foreign economic activity of the analyzed enterprise. SWOT analysis has allowed identifying strengths, weaknesses, opportunities and threats of the enterprise. SPACE analysis has revealed that in the absence of growth Received on: 7th of December, 2019 in the services market, the use of a strategy for the enterprise diversification is Accepted on: 10th of January, 2020 acceptable. This strategy involves the creation and development of new services. Therefore, it is necessary to constantly monitor the activity of the enterprise in the international economic environment. © Galyna Azarenkova, Olena Keywords foreign economic activity, types of strategies, stages Golovko, Kateryna Oryekhova, Sergii of strategy formation and implementation, strategic Yavorsky, 2020 analysis methods, PEST analysis, SWOT analysis, SPACE analysis, diversification strategy Galyna Azarenkova, Doctor of JEL Classification F41, M20 Economics, Professor, Kharkiv Educational and Scientific Institute of the Banking University, Ukraine. Olena Golovko, Ph.D. in Economics, INTRODUCTION Associate Professor, Kharkiv Educational and Scientific Institute of the Banking University, Ukraine. In the context of globalization, foreign economic activity (FEA) is a Kateryna Oryekhova, Ph.D. in major component of the transformational growth of enterprises. The Economics, Associate Professor, Kharkiv Educational and Scientific international market is extremely capacious. It doesn`t only put for- Institute of the Banking University, ward additional requirements for the FEA development, but also cre- Ukraine. ates significant prospects for enterprises. The strategy of the enter- Sergii Yavorsky, Postgraduate student, Kharkiv Educational and Scientific prises’ FEA requires a specific approach to its systematic development. Institute of the Banking University, It describes economic and financial aspects of the enterprise perfor- Ukraine. mance, provides economic and technical rationale for specific meas- ures to improve their operating results. Business practice shows that when starting foreign economic activity, companies rarely use strategic management methods that would pro- vide for effective business development. Many enterprises already op- This is an Open Access article, distributed under the terms of the erating in international markets are facing the challenge of expanding Creative Commons Attribution 4.0 International license, which permits their FEA or, on the contrary, reducing it. The solution depends on the unrestricted re-use, distribution, goals that the enterprises set for themselves at the stage of introducing and reproduction in any medium, provided the original work is properly products (goods, works, services) to international markets and what cited. strategy they define as the dominant one. https://doi.org/10.21511/gg.03(1).2020.01 1 Geopolitics under Globalization, Volume 3, Issue 1, 2019–2020 1. LITERATURE REVIEW fact that most of them are raw materials; Financial and economic literature reflected is- • unstable political environment, accompanied sues on managing foreign economic activity of by negative socio-economic phenomena; enterprises. • volatile exchange rate of the national currency; Thus, Alkema and Kachur (2017) note that the for- eign economic activity of the enterprise is an im- • most of the fixed assets are worn out, both portant area of its business activity. It is related to morally and physically. international production and scientific and tech- nical activities, establishment of foreign economic All these problems and obstacles to the develop- relations, export and import of products (goods, ment of international economic activity of enter- works, and services). prises must be addressed immediately. This should include innovative steps to activate it, which would According to Verbivska and Suduk (2017), the en- open up opportunities for qualitatively new rela- terprise’s performance efficiency in the foreign tions with foreign partners. market attests to the competitiveness of its prod- ucts (goods, works, services). The aggravation of competitive conditions in the internal market and 2. AIMS the intense struggle for the consumer are forcing companies to seek opportunities for international This study is aimed at summarizing approaches to economic activity to win new markets. determining the stages and methods for strategic management of enterprises’ foreign economic ac- Kolomitseva and Opalenko (2018) state that inte- tivity and implementing them to choose the devel- gration of countries, regions and individual en- opment strategy in the international environment. terprises into the world economy involves them to the process of globalization, which is becom- ing noticeable through various forms of interna- 3. METHODS tional activity. Globalization opens up additional opportunities for businesses to enter new markets, The paper used the following research methods: contributing to expanded access to capital flows, generalization and analysis, to determine the stag- technology, cheaper imports, and larger export es and methods of forming a strategy for the com- markets. pany’s FEA development; expert analysis, SPACE method, PEST method, and SWOT method, to However, today’s economic environment has vari- work out a development strategy for foreign eco- ous problems and obstacles in terms of foreign eco- nomic activity of Sigma Software development nomic activity of enterprises (Dubas, 2018; Kvitka company. & Kornieva, 2018; Kolomitseva & Opalenko, 2018; Perehonchuk, 2017; Poliakova & Baskovych, 2017; Financial statements and the official web resource Skrynkovskyi, Vizniak, Protseviat, & Koropetskyi, of Sigma Software made the information base of 2017; Uzhva & Chekina, 2018; Cherep & Mozhaiska, this research. 2017). The main ones include: • imperfect state regulation in the sphere of for- 4. RESULTS eign economic activity; The FEA development strategy is a direction of • unprofessional actions of the executive au- economic strategy, which considers all alternative thorities, corruption; development options in the sphere of FEA and jus- tifies them for making decisions, rules and meth- • low level of competitiveness of products ods of the enterprise behavior as an exporter and (goods, works, services), which results in the importer of products (goods, works, services) on 2 https://doi.org/10.21511/gg.03(1).2020.01 Geopolitics under Globalization, Volume 3, Issue 1, 2019–2020 The enterprise FEA development strategy Internationalization strategy – Segmentation strategy – deepening International market development developing new international the saturation of the offered strategy – increase in sales of existing markets through not only the products (goods, works, services) of products (good, works, services) in expansion of exports of products all consumer groups, choosing the new international markets or new (goods, works, services), but also the maximum depth of market demand, segments that currently exist export of capital and studying its small outflows Diversification strategy – mastering Deep penetration strategy is the Product (goods, works, services) the production of new products most effective in the unsaturated development strategy is best suited (goods, works, services), expanding international market. The company for an enterprise that already has its markets in the international reduces the cost of production of many successful brands. It means environment,