CC BY
0THE DEVELOPMENT STRATEGY OF INTERNATIONAL COMPANIES IN
MODERN CONDITIONS
Yunusov Djurabay Tadjibayevich
Special subject teacher of Tovoqsoy multidisciplinary technical school under Chirchik Pedagogical University
Abstract. This article develops strategies for the development of international companies in modern conditions; the basic concepts of the development strategy of international companies in modern conditions are revealed; analyzed the activities of the association "Uztekstilprom"; practical proposals have been developed to improve the development strategy of the association "Uztekstilprom"
Key words. Operational strategy, corporate strategy, enterprise resources, market share, intensive demand growth, offensive strategy.
Introduction. In the context of globalization, the role of domestic businesses as participants in the global market is significantly increasing. Many domestic companies now have the growth and economic potential to become major players on the global stage. However, these companies face a challenging environment marked by increased uncertainty, rapidly changing international markets, heightened competition, stricter regulations, and significant shifts in the global economy.
For domestic companies, formulating a strategy to expand their business abroad is not only a way to increase shareholder value, but also to establish themselves as full participants in the international market. To do so, they need to thoroughly explore strategic alternatives in the face of intense competition from foreign counterparts.
Given the limitations of time and resources, the multitude of strategic choices necessitates the development of an effective international strategy for these companies. This underscores the relevance and importance of studying the international strategy of domestic companies operating in the global economy.
In summary, the growing prominence of domestic businesses on the global stage, coupled with the complex, uncertain, and highly competitive environment they face, highlights the need for these companies to develop and implement well-crafted international strategies to succeed and thrive in the global marketplace.
Methods. In preparing the article, such research methods as the method of horizontal and vertical analysis, the formal-logical method, the method of scientific abstraction, and econometric analysis were used.
Results. The development of Uzbekistan's textile industry is one of the country's most important strategic priorities. Uzbekistan is well-positioned to cost-effectively process and manufacture high value-added textile end products from its abundant raw cotton resources. However, the industry is still less technologically advanced and attractive to foreign investment compared to other textile-producing countries.
There is a strong link between foreign investment and economic growth. For Uzbekistan to achieve sustainable high growth rates, it needs to attract capital inflows. As factories relocate from China due to the US-China trade tensions, mainly to Southeast Asian countries, Uzbekistan has a rare opportunity to attract hundreds of textile factories with its textile clusters, large cotton production, low electricity and labor costs. This could lead to billions in foreign direct investment and create hundreds of thousands of jobs for Uzbek citizens.
Uzbekistan's textile industry has expanded significantly since independence, with a variety of consumer goods now produced, including fabrics, yarns, knitwear, cotton wool, and finished products. The industry is now organized under the Uztekstilprom Association, which oversees exports under a single "Uztextile" label. The previous state monopoly on raw cotton sales to local producers has also been abolished.
The government has supported the creation of the Uztekstilprom Association and liquidated the previous regulatory body Uzbekengilsanoat, as the existing management system was not aligned with modern textile industry trends. International experience has shown that textile industry clusters, integrating the entire production cycle from cotton cultivation to high value-added final products, are an effective model.
The government has also provided the Uztekstilprom Association members with various benefits and preferences, such as customs duty exemptions on imported raw materials. Starting next year, textile companies will be able to directly purchase raw cotton from farmers on an experimental basis, allowing them to control the entire cotton value chain.
In summary, Uzbekistan sees great potential in developing its textile industry through strategic initiatives, regulatory reforms, and incentives to attract investment and modernize the sector to become more globally competitive.
Analyses. The Association "Uztekstilprom" is a joint-stock company, with the general meeting of shareholders as the supreme governing body, exercising its powers in accordance with Uzbekistan's laws on joint-stock companies and shareholder rights protection.
Uzbek textile products are exported to more than 55 countries worldwide. The main export markets are the CIS countries, primarily Russia, as well as countries in Latin America, the EU, South Korea, China, Singapore, Iran, Israel, and the USA. In 2016, new export markets were developed, including Pakistan, Georgia, Croatia, and Nigeria.
Russia and other CIS countries are the largest importers of Uzbek textile products, accounting for over 51% of all exports. South Asia accounts for 21% of exports, Europe for over 12%, and the Middle East and Africa for 8%.
The export value of Uzbekistan's textile, clothing, and knitwear products reached $1.3 billion in 2017.
In summary, Uztekstilprom is a joint-stock company governing the export-oriented Uzbek textile industry, which has diversified its global markets, with
Russia and the CIS as the dominant export destinations, followed by South Asia, Europe, and other regions, with the total export value reaching $1.3 billion in 2017.
Table 1
Forecast volumes of production of marketable products for 2018-2021
(billion sum)
№ Enterprises 2017 2018 2019 2020 2021 Pace growth, %
1 Industrial production 10 87 12 41 4 269 16 553 19 201 116,0
products at comparable prices,
1.1 total by association 2 879,4 4 38,4 4 862,2 5 639,8 6 542,2 116,0
1.2. including on: 7 688 8 202,4 9 668,0 10 913,0 12 658,7 116,0
large enterprises
Small businesses 23 30,2 34,3 35,6 37,2 104,5
including by: 688,5 1562,8 2 150,4 2 581,4 2 608,2 100,0
From tab. 1. It can be seen that in the last three years alone, 92 industrial enterprises were put into operation with a total value of 575.3 million dollars and with an export potential of 215.8 million dollars. At the same time, more than 11.6 thousand jobs were created. In particular, this was achieved through the creation of the Indorama Kokand Textile joint venture on the basis of the Kokand Textile Plant with a production capacity of29,000 tons of yarn per year. In addition, in the Khorezm region, the Uzteks Group enterprise, together with the Swiss company Swiss Capital, organized the production of 12,000 tons of cotton yarn per year.
At present, the industry's production capacity is 450 thousand tons of yarn, 296 million square meters of fabrics, 90 thousand tons of knitted fabric and 270.2 million pieces of garments and knitwear per year. Modern design, along with high technical characteristics, makes the products of light industry enterprises the most attractive and allows them to occupy their own niche in the international market, compete at the highest level with world brands. According to the Uztekstilprom Association, by 2020 Uzbekistan plans to implement more than 80 light industry projects worth over $1 billion. For this, the Program for the Development of the Textile and Light Industry for 2015-2020 has been developed. Its implementation will increase the export potential of the country's textile industry by more than 1.8 times.
The results of the first half of this year also speak of how the industry is gradually and dynamically developing today in line with the adopted state programs. In particular, as a result of the implementation of measures to expand the range of manufactured consumer goods in the textile industry, in the first six months of 2019, the production of 38 new types and 174 new models of finished garments and knitwear was mastered.
The measures taken to stimulate and support enterprises of the real sector in the implementation of modernization and strengthening of the material and technical base contributed to the dynamic development of the textile industry, whose enterprises
produced goods worth 4,399.8 billion soums in January-June this year, including cotton - for 1,185 .9 billion soums and knitwear - by 400.5 billion soums, clothing industry -by 1,113.1 billion soums and so on.
In addition, compared to the corresponding period last year, large light industry enterprises increased the production of cotton twisted yarn not packaged for retail sale by 1.3 times, pile and terry knitted fabrics by 3.2 percent, and sewing and knitwear in total. - 1.2 times, including outer knitted and knitted clothes - 2.1 times, overalls - 1.6 times. However, according to experts, despite all this, the light industry of Uzbekistan still has a significant unrealized investment potential, all the conditions for further accelerated growth. The main target for further work is to increase the production of goods for the domestic market in order to meet the growing needs of the population. To do this, it is necessary to attract investments in projects for the production of ready-made cotton fabrics, blended and silk fabrics, garments and knitwear, which provide for the creation of mobile production facilities with the mandatory formation of structures responsible for design, marketing, and rapid changeover of production, taking into account fashion and demand.
In order to ensure the accelerated development of the textile industry of the republic, expand the production of high-quality and competitive finished products, further its promotion to large foreign markets, as well as the consistent implementation of the tasks identified by the Action Strategy in five priority areas for the development of the Republic of Uzbekistan in 2017-2021:
1. Consider the most important areas for further reform of the textile industry of the Republic of Uzbekistan:
- first, increasing the share of the textile industry in the economy, increasing the volume and quality of textile products produced in the country, primarily through reorientation to high-tech production of competitive textile products with high added value;
- second, a fundamental revision of the textile industry management system with the introduction of advanced management technologies, effective forms of comprehensive assistance and support for industry enterprises, including in solving problems that hinder their development;
- third, further improvement of the standardization and certification system in the textile industry through its harmonization with international requirements and standards, as well as modernization and accreditation of product testing laboratories;
- fourth, the widespread introduction of advanced information and communication technologies into the industry, which makes it possible to obtain reliable and timely information on the state and development trends of the domestic and foreign markets for textile products, to conduct its systematic and comprehensive analysis in order to determine priority areas for the development of the industry;
- fifth, the implementation of a cluster development model that provides for the integration of production, starting from the stage of growing raw cotton, its primary processing, further processing of products at ginneries and the production of final textile products with high added value;
- sixth, ensuring a balanced distribution of raw materials and deployment of emerging enterprises in the industry in conjunction with the development of logistics and engineering infrastructure, including through the construction of multifunctional transport and logistics hubs, the selection of optimal routes and corridors for the delivery of goods, as well as the optimization of tariffs for transportation;
- seventh, the widespread introduction of advanced innovative technologies, know-how, design developments into the production process, the localization of the production of modern fittings and accessories in order to expand the production and export of finished high-quality textile products, promote national brands in world markets;
- eighth, cardinal improvement of the system of training, retraining and advanced training of personnel for the textile industry with the expansion of areas in the most popular specialties, the revision of the curricula of educational institutions, taking into account current trends in the development of the industry, the intensification of research activities, as well as international cooperation in this area.
2. Approved "Roadmap" for the accelerated development of the textile and clothing and knitwear industry in the Republic of Uzbekistan (hereinafter - the "Roadmap").
The heads of ministries, departments and other organizations are personally responsible for the timely, complete and high-quality implementation of the measures provided for by the Roadmap.
Due to serious systemic problems in the industry, including the lack of effective management and the associated technological chain for the manufacture of finished products, the share of the textile sector in the structure of GDP is only 4.6% (data for the first half of this year). High monopolization and lack of due competition also hinder development and are the reason for the low profitability of raw cotton production, its processing and production of finished products.
Association Uztekstilprom works with marketing services at enterprises and its main function is to support domestic producers and create favorable conditions for the sale and export of finished products.
The main priorities in the work of the marketing department of the Uztekstilprom Association are:
1. Conducting an analysis of the economic activities of exporters in the interests of the Republic of Uzbekistan, development of road maps
2. Development of a production strategy at enterprises
3. Stimulation of production volumes using market levers
4. Import of textile products without overpricing.
5. Analysis of the information received from trading advisors in
embassies, consulates.
6. Cooperation with ministries and departments, such as the Ministry of Foreign Trade, the Ministry of Economy of the Republic of Uzbekistan, the Ministry of Finance, the State Tax Committee.
7. Working with the industry - opening new and promising markets for the sale of finished products, supporting domestic producers.
8. Analysis for the delivery of goods and the formation of a favorable environment for production.
9. Study and implementation of Western production technologies.
10. Reducing the tax burden for domestic producers.
Table 2
№ Country № Country
1 Bangladesh 11 Russia
2 Iran 12 Turkmenistan
3 India 13 Bulgaria
4 Egypt 14 Vietnam
5 Pakistan 15 China
6 Uzbekistan 16 Ethiopia
7 USA 17 England
8 Germany 18 Poland
9 Belgium 19 Indonesia
10 Italy 20 Sudan
In 2015, the total export value of the Turkish textile machinery industry was 1.6 billion USD, and in 2019 it was 8.6 billion USD, an increase of almost 7 times during this period.
Discussion. Based on the analysis, the best strategy for the main activities of the Uztekstilprom association is a low-cost strategy, focusing on fuller utilization of its fixed assets. The management should also establish contacts with new suppliers of raw materials and inputs on more favorable terms for the enterprise.
According to the Porter model, a differentiation strategy can be proposed, where the firm targets a large market by offering both standard products and new, stand-out products.
Offering a wide range of new materials would be beneficial for Uztekstilprom. Since most of its building products are in the maturity stage, the firm should try to maintain its distinctive advantages, such as high quality and a thoughtful discount system, for as long as possible.
The current pricing strategy has been calculated correctly, leading to high profits. The path of product transformation and modification to renew demand after market saturation has also been chosen correctly. The company should introduce new product modifications to the market to continue receiving high revenue and profits.
In the short term, the company is recommended to pursue a strategy focused on identifying deeper customer needs and expanding its product coverage, for example, by producing new types of building structures.
In summary, the key recommendations are to pursue a low-cost strategy, differentiate with new products, maintain quality and pricing advantages, and expand the product range to meet evolving customer needs
Reference
1. DJURABAEV O. Formation of model beekeeping facilities and modernized interindustrial communications in human bearing management //Архив научных исследований. - 2020. - №. 11.
2. Djurabaev O. Methods of the process approach in management and determination of the criterion of technological efficiency of beekeeping farms: methods of the process approach in management and determination of the criterion of technological efficiency of beekeeping farms // Archive of scientific research. - 2021. - T. 1. - No. 1.
3. Saidov M. Increasing Management Efficiency in The Electricity Sector of Uzbekistan //The 5th International Conference on Future Networks & Distributed Systems. - 2021. - С. 343-347.
4. Saidov M. S. Analysis of the economic activities of natural monopoly organizations //Инвестиции, градостроительство, недвижимость как драйверы социально-экономического развития территории и повышения качества жизни населения. - 2022. - С. 74-79.
5. Munira A. Analysis methods of the factors influencing on consumer market //Бюллетень науки и практики. - 2018. - Т. 4. - №. 2. - С. 276-282.
6. Shanazarova G. Features of innovative management strategy of the automotive industry of Uzbekistan //Архив научных исследований. - 2019.\
7. Yaxyayeva I. Енгил саноат корхоналарида махсулот ракобатбардошлигини ошириш йуналишлари //Архив научных исследований. - 2019.
