INTEGRATED BUSINESS STRUCTURES DEVELOPMENT ON BRANDIG-BASED PRINCIPLES

Abstract

The paper seeks to verify that to create favourable environment to enhance branding-based integrated business structures development, it is critical to ensure management effectiveness of consolidation processes and to increase the owners’ profits. To attain this objective, a range of methodological approaches, tools and methods for consolidation efficiency forecasting and evaluation have been suggested. The author's approach to managing consolidation processes refers to the systems theory and profit management. The bulk of the proposed solution is to examine the effects of consolidation processes on owners’ profits subject to the group operation as a system of brand development. As a principal tool to achieve this goal, the study proposes a pre-project analysis method which consists of separate procedures to assess the effects on: strategic location – through the developed graphical mathematical model; production and economic efficiency – through the assessment of changes in integrated structures of business (ISB) cash flows subject to synergistic effect calculated using a cognitive map; the risk exposure – through business simulation. The core of the analysis is modelling of financial and operation activities of the group of companies before and after the consolidation, based on the adjusted input-output model of consolidated financial statement specifics in industrial companies. The final procedure in pre-project consolidation analysis is to assess the consolidation projects by means of multi-criteria decision-making analysis method. The study also suggests a broader approach to the consolidation process – from a project portfolio perspective that maximizes the utility under budget constraints.