Revitalizing Strategies Analyzing For Declining and Bankrupt Small and Medium Manufacturing Companies with the Help of Interpretive Structural Modeling (Case Study: Food Industries of Ardabil Province)

Abstract

Introduction: Successfully reviving a bankrupt or declining company with poor performance requires considering a wide range of revival strategies that interact with each other. Neglecting this interaction complicates the revival of declining companies, especially small and medium-sized enterprises (SMEs). Therefore, the primary goal of this research is to present an interpretive structural model and analyze the interactions of revitalization strategies for SMEs. Metods: This research is practical in purpose and utilizes interpretive structural modeling to provide a hierarchical model of strategy interactions for reviving SMEs on the verge of decline and bankruptcy, making it descriptive-survey research. Given that many SMEs in the food industry in Ardabil province have declined or gone bankrupt in recent years and need revival, this sector was chosen as the case study. Initially, fuzzy screening was used to localize the decline factors of these companies. Subsequently, to determine the strategies related to each decline factor, interviews were conducted with a focus group of 10 academic and industrial experts. Structural interpretive modeling and the MICMAC method were employed to provide an interaction model and analyze the power and correlation of these strategies, using Excel and MATLAB for data analysis. Result and Discossion: Out of 22 decline factors identified in previous research, 19 were confirmed as decline factors for food industry companies in Ardabil province. Three factors— "monopoly situation in the market," "supply exceeding market demand," and "lack of a culture of cooperation between employees and managers"—were excluded due to their importance being less than 70% according to experts. For these decline factors, 32 strategies (localized and new) were identified. The revitalization strategies were categorized into six groups: financial and economic strategies; marketing and customer orientation; human resources; knowledge-based strategies; structural and interactions; and production and operation efficiency. The interpretive structural hierarchical model of revitalization strategies, shown in Figure 2, indicates that these strategies have a facilitating relationship. Implementing them should begin from the lowest level of the model. Another significant finding is that although the strategies are presented in six categories, the final model shows that implementing these strategies does not require attention to all strategies in one category simultaneously. Instead, the hierarchy of strategies clearly shows that the priority of implementation is from the bottom up and across different categories. Conclusions: Reviving bankrupt or declining SMEs in the food industry is not a one-dimensional process and lacks a single strategy. Instead, a combination of six strategies—financial and economic; marketing and customer orientation; human resources; knowledge-based; structural and interactions; and production and operation efficiency—must be considered. The revival process should be conducted in a systematic format as a continuous and gradual flow.

Keywords

• declining and bankrupt companies
• small and medium-sized companies
• food industry
• revitalization strategies
• interpretive structural modeling