# Dynamic investment model of the life cycle of a company under the influence of factors in a competitive environment

## TL;DR

This paper introduces a dynamic Markov model to analyze and optimize a company's life cycle under competitive and external influences, aiding strategic investment and advertising decisions.

## Contribution

It presents a novel Markov-based dynamic model incorporating external factors and action costs to predict company life cycles and guide strategic decisions.

## Key findings

- Model effectively predicts company life cycle transitions.
- Application to advertising policy shows increased equity.
- Highlights importance of external influences on company growth.

## Abstract

Modelling all possible life cycles of a company in a highly competitive economic environment gives a significant advantage to the owner in his business investment activities. This article proposes and analyses a dynamic model of a company's life cycle with known action costs and transition probabilities, that can be affected by an outside influence. For this task, the Markov model was utilized. The proposed model is illustrated on a task of determining an advertising policy for a car dealership, that would increase the stock equity of a company. The result demonstrates the usefulness of a model for use in determining future actions of a company. We also review multiple models of the influence of outside factors on a company's total capitalization.