Applying advanced scenario-based dynamic SPACE analysis: A case study of ukrainian energy company

Abstract

We offer methodology for forming a strategy for energy company based on the use of dynamic SPACE analysis which provides an opportunity to formulate strategic recommendations for possible scenarios (optimistic, most probable and pessimistic) and calculated on the basis of β-distribution of the expected future. We have identified nine stages of the formation process of strategic recommendations for strategic business units of our case company. The methodical toolkit is developed by considering the dynamic approach taking into account possible scenarios (optimistic, most probable and pessimistic) of the future development, obtaining predicted integral estimates based on β-distribution. The matrix of strategic recommendations is formed depending on the basic trajectories and values of the model parameters, which enables to identify “basic” strategic decisions and recommendations for each strategic business unit of the enterprise taking into account predicted trajectories as superposition of single basic vectors. The methodology of forming a strategy for a power company is a flexible and effective tool for strategic diagnostics for making managerial decisions about choosing a development strategy not only for a power company, but also for other enterprises by adapting evaluation criteria in accordance with their relational space. The presentation of the predictable trajectories of business units in the form of S-vectors by means of the superposition of the basic unit vectors for each of the possible development scenarios, as well as for the expected β-distribution of expected future, enables managers to increase the validity of the proposed strategic recommendations and increase the effectiveness of their implementation.