Proceedings of the Volgograd State University International Scientific Conference "Competitive, Sustainable and Safe Development of the Regional Economy" (CSSDRE 2019)

Impact of Design Company Financial Stability on Competitiveness on Regional Market

Authors
Vadim Yakovenko, Olga Oleynik, Irina Borisova
Corresponding Author
Vadim Yakovenko
Available Online June 2019.
DOI
https://doi.org/10.2991/cssdre-19.2019.20How to use a DOI?
Keywords
company competitiveness, methodology, R&D, engineering design, assessment, design activities, rating, financial stability
Abstract
Business entities, including design companies, see their operations increasingly complicated in today’s economic environment. Competitiveness of an enterprise is demonstrated by its higher opportunities for successful functioning as compared with other carrying out similar activities. Financial stability is a component of competitiveness assessment and the key to company’s financial and economic efficiency. Therefore, this article considers how the new approach to assessing financial stability of design companies can be implemented. The assessment method suggested here differs from existing methods in taking into account the specific activities of design companies, namely, the research & development, engineering design, field supervision, revamp and retrofitting of industrial facilities and infrastructures, upgrade of existing facilities. Relevance of the problem and absence of a comprehensive solution thereto encouraged us to study financial stability of design companies as the main factor affecting a business’ ability to successfully compete in the market of architectural and engineering design services for industrial and civil applications. The study is to develop a methodology for comprehensive assessment of design company financial stability taking into account the specifics of engineering design work, and to build a ranking system demonstrating a company’s ability to adapt to the varying challenges of external business environment while suffering minimum losses. The study uses the methods of economic & mathematical analysis, statistical analysis and process modeling. In the course of the study, the financial stability coefficients, both existing and newly proposed by the authors, have been analyzed, and their values optimized for design companies found. The optimized values have been obtained from the data of financial stability analysis of Volgograd region’s design companies and also from the review of applicable regulatory documents describing the financial stability indicators. Relying on the specifics of design company activities, we have completed the financial stability assessment with a new section, ‘Financial Efficiency of Design Company Processes’, covering three processes, namely design management, field supervision and subcontractor management. As a result of the study, we could use the financial stability indicators base we have generated to calculate the integrated financial stability indicator of a design company taking into account the quantitative and qualitative dynamics of operating economic entities. An effective way to monitor and evaluate the relative position in the intra-industry competition consists in rating design companies according to their degree of financial stability. This can affect the customer’s choice of engineering design contractor.
Open Access
This is an open access article distributed under the CC BY-NC license.

Download article (PDF)

Cite this article

TY  - CONF
AU  - Vadim Yakovenko
AU  - Olga Oleynik
AU  - Irina Borisova
PY  - 2019/06
DA  - 2019/06
TI  - Impact of Design Company Financial Stability on Competitiveness on Regional Market
BT  - Volgograd State University International Scientific Conference "Competitive, Sustainable and Safe Development of the Regional Economy" (CSSDRE 2019)
PB  - Atlantis Press
SP  - 99
EP  - 103
SN  - 2352-5428
UR  - https://doi.org/10.2991/cssdre-19.2019.20
DO  - https://doi.org/10.2991/cssdre-19.2019.20
ID  - Yakovenko2019/06
ER  -