Diversification Models of Sales Activity for Steady Development of an Enterprise

Nestor Shpak, Tamara Kyrylych and Jolita Greblikaitė
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Nestor Shpak: Department of Management and International Business Undertakings, Economics and Management Education Research Institute, National University “Lviv Polytechnic”, Metropolitan Andrey street 3, 79013 Lviv, Ukraine
Tamara Kyrylych: Department of Management and International Business Undertakings, Economics and Management Education Research Institute, National University “Lviv Polytechnic”, Metropolitan Andrey street 3, 79013 Lviv, Ukraine
Jolita Greblikaitė: Faculty of Economics and Management, Business and Rural Development Management Institute, Aleksandras Stulginskis University, Studentu str. 11, Akademija, 53361 Kaunas, Lithuania

Sustainability, 2016, vol. 8, issue 4, 1-19

Abstract: The paper substantiates the importance of the optimal directionality choice of sales activity as one of the main lines of enterprise activity, the functioning of which should be complete, synchronous and complementary. Diversification is one of the powerful instruments to ensure the steady development of the sales activity of an enterprise. Three models of sales activity diversification of an enterprise are developed. The first model is based on unveiling the potential of sales channels and allows us to show the peculiarities of their use. The second model of the optimal quantitative distribution of production between sales channels is based on profit maximization. This approach not only takes into account the evaluation of the prescribed parameters of sales channels, but also provides the high profitability of each assortment item and of the whole enterprise. The third model of the optimal distribution of production between sales channels accounts for the experience of collaboration between the enterprise and sales channels during the past period and ensures the minimal risk and appropriate profitability for each sales channel. The proposed models are tested and compared to actual data of the enterprise; the advantages and peculiarities of each model are discussed.

Keywords: sales activity; diversification; optimal production distribution; sales channels; profitability; business risk (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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