Development strategies of modern enterprises: a study on Russian metallurgical industry

¹ Russian Presidential Academy of National Economy and Public Administration, North-West Institute of Management, 199178 Saint Petersburg, Russia
² Baltic State Technical University “VOENMEH” named after D.F. Ustinov, Philosophy Department, 190015 Saint Petersburg, Russia
³ Baltic State Technical University “VOENMEH” named after D.F. Ustinov, Organization Management Department, 190015 Saint Petersburg, Russia

^* Corresponding author: lkshamina@rambler.ru

Abstract

The development of the metal processing industry requires paying attention both to the environmental safety of technologies of metal processing and to the energy costs. We will look at the economic impact of reducing production costs by saving resources and using environmental engineering tools. Minimizing the cost of protecting the air and water, soils and perennial plantings, recycling and disposal of waste and protecting natural landscapes are an important aspect of the company’s development strategy. The article discusses the implementation of elements of strategies announced by the largest steel companies—Novolipetsk and Magnitogorsk Metallurgical Plants, and Severstal PJSC. The definition of strategy has been given. The strategy, on the one hand, is presented as an element of the enterprise’s interaction with the external environment. On the other hand, it is seen from the point of view of the company’s activity on three levels: corporate–business–functional, each of which, in its turn, consists of certain elements. We highlight the main elements of company’s strategies, which are (generalized) as a combination of operational efficiency and cost reduction (functional strategies)—for all the companies, as well as market leadership (corporate strategy)—only for NLMP. The SWOT-analysis of the activities of all companies highlighted common characteristics of their traits: low growth of the world and domestic economy, low level of use of metallurgical capacity worldwide; the policy of protectionism that replaced globalization, the introduction of duties to enter the markets, the fact that domestic companies have their own resource base, the full production cycle, and other factors.As a general conclusion, despite the complexity of the external environment, companies try to adhere to the stated strategy and maintain high performance of operating efficiency and dividends. Companies can be considered to be confirming to their strategies and a system of planned indicators.