Innovative business model for food industry enterprises operating in conditions of global destructive processes in the economy

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High school of the social and economic

Innovative business model for food industry enterprises operating in conditions of global destructive processes in the economy

Grazyna Kacicka,

candidate of political sciences (PhD), scientific and pedagogical worker

Przeworsk

Abstract

This research presents the development of strategic management foundations and crisis management mechanisms within the entrepreneurial structures of the food industry, including methods for overcoming crisis phenomena and ways of adapting to changing market conditions. This involves examining the impact of economic crises on entrepreneurial activity and developing effective anti-crisis management strategies that contribute to the preservation and development of economic stability under new conditions, taking into account innovative approaches in the economy. The study aims to identify key elements that should be integrated into business models to enhance their resilience to external shocks and market environment changes. Special attention is given to analyzing the role of innovation, digital transformation, and social responsibility in forming sustainable and adaptive business strategies capable of withstanding the challenges of global economic instability. An important aspect is the examination of enterprise behavior in response to potential types of threats to its economic activity, the risk of which increases during economic crisis periods. The process of implementing effective crisis management methods for food industry enterprises, facilitating early detection and neutralization of potential risks, is considered as a key factor in maintaining operational flexibility and strategic adaptability. This provides enterprises with the necessary foundation for making timely decisions, preventing losses, and seizing new market opportunities, which in turn contributes to strengthening their competitive positions in the long-term perspective. The implementation of these methods forms the basis for constructing an innovative business model for the operation of food industry enterprises in conditions of global destructive processes in the economy, taking into account the identification of key elements that should be integrated into the business model to enhance the resilience of the economic activity of the aforementioned entities under these conditions.

Keywords: innovation, risk, economic crisis, crisis business model.

Main part

management entrepreneurial crisis market

Problem statement. Economic crises are complex and multifaceted phenomena affecting all levels of entrepreneurial activity, including the food industry. Understanding the mechanisms of crisis processes and developing methods to overcome them require detailed study and adaptation of classical and contemporary theories of crisis management. An important aspect is the integration of innovations to enhance the resilience of enterprises to external and internal shocks.

The relevance of this work is determined by the need for a comprehensive analysis and development of strategic approaches to managing the sustainability of entrepreneurial structures in the food industry, especially in the context of creating and implementing adaptive corporate strategies, as well as reviewing and adapting business models to ensure sustainable operation of enterprises in a changing external environment. These strategies should consider not only the current market situation but also potential crisis changes, requiring in-depth theoretical and methodological elaboration.

The study of innovative business models aimed at overcoming destructive processes in the economy becomes critically important for maintaining competitiveness and achieving sustainable development of food industry enterprises. This research is aimed at identifying and analyzing innovative approaches that can contribute to the adaptation and sustainable development of enterprises in the face of economic shocks.

Analysis of recent research and publications allows identifying significant contributions to the understanding of innovative business models in the food industry, particularly in the context of adaptation to changing economic conditions and external challenges. Based on the above, we can highlight the main structural elements that form the system of modern basic knowledge, emphasizing the role of innovations, digital transformation, and social responsibility in creating sustainable and adaptive business strategies to overcome global economic instability:

The contribution of innovative business models to the development of new food chains. Nosratabadi et al. (2020) explored the impact of innovative business models on the development of "new food chains," which may include innovations such as digital platforms for direct sales from farmers to consumers, product origin tracking systems, automated inventory management systems, and other technological solutions improving efficiency and transparency in the food industry. They found that innovations in value creation, processes, and delivery are successful strategies in the food industry. The study highlights the role of digitization and e-commerce in changing food distribution models [1].

Management of the innovative development of the food industry. The work by Naumova et al. (2019) discusses the management of innovative development in the food industry in the context of global environmental and economic challenges. The study emphasizes the importance of a strategic approach and the introduction of innovative technologies to ensure economic stability and competitiveness of enterprises [2].

Transformation of sustainable development mechanisms in the food industry. The research by Efimenko et al. (2023) focuses on the specifics of the food industry's development based on innovations, creating new conditions and opportunities for entering new market segments. The authors highlight the importance of developing business models capable of ensuring higher profitability and business security [3].

Models of open innovation adoption in the food industry. The study by Bigliardi and Galati (2013) analyzes the application of open innovation models in the food industry. The authors emphasize how different firms overcome innovation barriers and how important it is to carefully coordinate innovative actions considering the large number of participants. The work examines three main models of open innovations applied in the food industry [4].

The impact of the global financial crisis on innovation activity in the agri-food sector - the basic raw material producer for the food industry and the finished product market. The work by Zouaghi and Sanchez (2016) investigates how the global financial crisis affected innovation activity in the agri-food sector compared to the rest of the economy. The authors found that the economic crisis significantly and negatively impacted firms' innovation indicators and efforts regarding research and development [5]. The work by Misati and Ngoka (2024) emphasizes that changes in business models, caused by global economic downturns, require food industry enterprises to review their strategies and introduce new approaches to export and competitiveness [6].

Sustainability and competitiveness of business model development. The research by Bivona and Cruz (2021) shows how various business model innovations help small and medium enterprises in the food industry overcome turbulent and uncertain conditions, such as the economic crisis caused by COVID-19. The authors propose a new framework describing three processes helping SMEs implement innovations into their business models for effective crisis response. Furthermore, the research by Kawane et al. (2024) on overcoming the COVID-19 crisis in the Japanese food industry shows how important it is for small and medium-sized enterprises to develop adaptive business models that can help reduce losses and overcome new risks [8].

Innovations in the agri-food sector. The study by Tell et al. (2016) deeply analyzes innovations in the agri-food sector and suggests that agricultural entrepreneurs consider shifting from a production model to an entrepreneurial one, with a focus on business model innovations, underscoring the need for further research and strengthening theoretical foundations [9].

This analysis provides a broad overview of research concerning the development of innovative business models in the food industry, as well as adaptation to global economic and social challenges. These works represent just a small part of a wide range of research dedicated to innovative business models in the food industry and their adaptation to the challenges of global economic changes. They highlight the diversity of approaches and perspectives available in this field and can serve as a basis for further analysis and strategy development. However, despite significant progress in researching innovative business models in the food industry, there remains a wide field for further exploration and the development of new concepts and tools that can contribute to the adaptation and growth of enterprises under conditions of uncertainty and global challenges.

The purpose of the article is to develop an innovative business model for entrepreneurial structures in the food industry, strengthening their strategic management and crisis resilience by identifying possible types of threats to the economic activities of enterprises, the risk of which is exacerbated during crisis periods of economic development.

Summary of the main research material. The modern entrepreneurial landscape faces numerous challenges caused by both external and internal environments. Increased competition, changes in consumer preferences, and sudden economic shocks are constant elements accompanying the economic activities of enterprises in a market economy.

Considering the current economic situation, the importance of implementing crisis management systems in the entrepreneurial sector to mitigate the effects of economic shocks and maintain business stability becomes evident. A key element of such a system is the management substructure, aimed at ensuring sustainability and growth amid market fluctuations. The modern economic dynamics demonstrate that reducing the negative impact of crisis situations is achievable through the integration of innovations, digital technologies, and the enhancement of social responsibility in management decisions to increase the resilience of enterprises to external and internal shocks, as well as a reasoned system of applying risk management methods and tools. The absence of such measures can lead to deep economic and social crises, undermining the foundations of society as a result of the emergence of potential threats to food security and technological independence, both for specific enterprises and for the corresponding sectors of the economy (areas of the national economy) of the country.

We have previously considered the role of implementing effective crisis management methods for food industry enterprises, facilitating early detection and neutralization of potential risks [10]. It is noted that the implementation of the aforementioned methods is a key factor in maintaining operational flexibility and strategic adaptability and provides enterprises with the necessary foundation for making timely decisions, preventing losses, and leveraging new market opportunities, which in turn contributes to strengthening their competitive positions in the long-term perspective.

In the context of striving for operational flexibility and strategic adaptability, special attention should be paid to the detailed analysis and selection of risk management methods and tools. These methods and tools can be divided into several key categories, focusing on specific approaches and innovations that may be particularly relevant for enterprises in the food industry within the framework of crisis management:

1. Quantitative Methods: include financial analysis, statistical methods, and risk modeling. These methods help assess the likelihood of risks occurring and their potential impact on the financial results of the enterprise.

2. Qualitative Methods: focus on the identification, analysis, and assessment of risks based on expert knowledge and experience. These include SWOT analysis, scenario analysis, and the Delphi method.

3. Combined Methods: combine quantitative and qualitative approaches for a more comprehensive analysis of risks. An example is risk mastering, which integrates various data and expert assessments to form a comprehensive picture of risks.

4. Risk Assessment Tools: an important part of risk management is the assessment of potential threats. Tools such as sensitivity analysis, SWOT analysis, and risk-impact analysis allow enterprises to understand which factors can most significantly affect their operational and financial activities.

5. Risk Mitigation Strategies: after identifying and assessing risks, a key aspect is the development of strategies for their mitigation. This can include diverse approaches, from insurance and hedging to diversification of operations and creating contingency plans.

6. Continuous Monitoring and Strategy Revision: risk management is not a one-time process but an ongoing activity. It is important to regularly review and adapt risk management strategies in accordance with changing market conditions and the internal environment of the enterprise.

7. Scenario Planning and Modeling: one of the key tools in risk management is the creation of various scenarios that can help enterprises prepare for a variety of future situations. Scenario planning involves analyzing potential future events and developing action plans for each possible scenario. This helps enterprises quickly adapt to changing conditions and effectively respond to unforeseen situations.

8. Crisis Management: An important aspect of crisis management is the development of clear procedures for managing crisis situations. This includes creating a crisis management team, developing crisis response plans, and regularly conducting drills and exercises to test readiness for unexpected events.

9. Training and Staff Development: effective risk management requires not only the right tools but also skilled staff. Upskilling employees and continuous training in risk management are key to success in crisis management.

10. Application of Big Data and Artificial Intelligence Technologies: recent years have seen a significant focus on using big data and artificial intelligence in risk management. Research in this area shows how data and machine learning can be used to forecast market trends and identify potential risks.

11. Supply Chain Risk Management: modern research emphasizes the management of supply chain risks: the importance of developing flexible and resilient supply chains capable of adapting to sudden changes and crisis situations.

12. Ethical and Sustainable Risk Management Approach (integration of sustainable development and social responsibility): the importance of a sustainable and ethical approach to risk management requires companies to strive not only for financial stability but also to consider the social and environmental aspects of their operations.

13. The Role of Corporate Culture in Risk Management: Corporate culture plays a key role in effective risk management. A culture that encourages openness, innovation, and adaptability fosters more effective risk management.

Using these methods and tools within crisis management allows not only for the identification and assessment of risks but also for the development of effective strategies to minimize them. An important aspect is their flexible application, considering the industry specifics and individual characteristics of each enterprise. Thus, the comprehensive application of various risk management methods and tools allows food industry enterprises not only to effectively respond to current crisis situations but also to forecast potential threats, developing appropriate strategies for their prevention and reduction. This deeper analysis offers a broader view of risk management methods, including the latest trends and research. It provides a better understanding of how a comprehensive approach to risk management can contribute to effective crisis management, especially in food industry enterprises.

Continuing, let us consider the possibility of adapting the risk management methods and tools we propose for developing a corresponding mechanism. In our opinion, this can ensure the process of organizing cyclical action on a constant basis for this mechanism and its effective implementation in the overall risk management system.

Considering the comprehensive approach outlined for the development of an innovative business model aimed at enhancing resilience in the face of global economic challenges, we recognize the critical importance of structured and detailed risk management. The methods and strategies discussed provide a foundational framework for addressing the multifaceted nature of risks encountered by food industry enterprises. Building on this foundation, it is essential to delve deeper into the formulation of a precise risk management mechanism that can mitigate the impact of crisis phenomena characteristic of the food industry. This transition allows us to shift our focus from the theoretical underpinnings to practical applications, ensuring that the identified innovative strategies and tools are effectively implemented within the operational framework of these enterprises. Therefore, based on the material discussed, let's proceed to construct and delineate a comprehensive risk management mechanism aimed at diminishing the effects of economic crises, specific to food industry enterprises, as depicted in Figure 1. This mechanism will detail each component, breaking down its structural elements and their subsets, providing a thorough description of the entire architecture of each component, thereby composing a cohesive overall risk management system.

Using this scheme, let's examine in detail the organizational mechanism for risk management in food industry enterprises under conditions of economic crisis phenomena:

1. Risk Identification

Structural Elements:

- External Factors: market risks, political risks, environmental changes, shifts in consumer demand, and trends in the food industry. Recognizing that external risks, such as changes in the economic environment or consumer preferences, can significantly impact enterprise operations. Analyzing these factors helps to anticipate and prepare for potential threats.

- Internal Factors: operational risks, financial risks, personnel management risks, technological risks, and other internal threats. Understanding internal risks, including managerial, operational, and financial aspects, allows enterprises to minimize internal vulnerabilities and strengthen control.

2. Risk Analysis and Assessment

Structural Elements:

- Quantitative Methods: financial analysis, statistical methods, and risk modeling. The use of these methods provides a comprehensive assessment of risks, allowing enterprises to prioritize and allocate resources efficiently.

- Qualitative Methods:

- SWOT analysis: the opportunity to identify internal strengths and weaknesses of the enterprise, as well as external opportunities and threats. Applying SWOT analysis helps enterprises understand their market position, identify key areas for improvement, and develop strategies to exploit opportunities and minimize threats.

- Scenario Analysis: the development and examination of various hypothetical future scenarios, helping enterprises plan and prepare for possible changes in the business environment. Scenario analysis ensures flexibility in planning and aids in adapting to changing conditions.

Expert Evaluations: including opinions and analysis from industry experts and experienced professionals provides additional depth to risk analysis. Expert evaluations can uncover non- obvious threats and opportunities, as well as suggest alternative risk management strategies.

Scheme of the Organizational Mechanism for Risk Management in Food Industry Enterprises in the Context of Economic Crisis Phenomena

- Integrated Approaches: combining quantitative and qualitative methods for a comprehensive risk assessment. The application of these qualitative methods in conjunction with quantitative approaches creates a multi-level system for risk evaluation and management, facilitating more effective decision-making and strengthening the resilience of food industry enterprises.

3. Development of Risk Management Strategies

Structural Elements:

- Risk Prevention Strategies: actions aimed at minimizing the possibility of risks occurring. Creating targeted strategies helps prevent the emergence of risks or minimize their impact, thereby ensuring business stability.

- Risk Minimization Strategies: plans developed to reduce the impact of risks if they materialize. An important aspect of these strategies is the development of procedures and actions that will enable an organization to respond quickly and effectively to negative events.

- Risk Transfer Strategies: using insurance, contractual obligations, and other mechanisms to transfer risk to third parties. Transferring risks through insurance or contracts helps relieve the enterprise from some threats, allowing it to focus on key aspects of its operations.

4. Implementation of Risk Management Strategies

Structural Elements:

- Organizational Changes: implementing new processes and structures within the company for risk management. Implementing organizational changes aimed at improving risk management involves modifying existing processes and structures of the enterprise. This may include introducing new procedures, revising organizational hierarchy, and optimizing workflows. Such changes are aimed at enhancing the flexibility and responsiveness of the organization, improving its ability to adapt to changing conditions and effectively manage risks.

- Training and Personnel Development: increasing awareness and competencies of employees in risk management. Training staff in risk management enhances overall competence in this area and fosters a culture oriented towards risk management.

- Technological Innovations: implementing technologies for improved monitoring and risk analysis (use of big data, which allows for collecting, analyzing, and interpreting vast amounts of information from various sources to provide more accurate and comprehensive risk analysis; application of artificial intelligence and machine learning, which facilitates the automation of risk analysis processes and decision-making; development and implementation of forecasting and monitoring systems that provide continuous real-time data analysis, enabling enterprises to respond promptly to changes in the external environment and effectively manage risks). Technological innovations in risk management not only increase the accuracy and efficiency of processes but also promote faster and more flexible responses to changes, thereby improving the resilience of food industry enterprises to economic fluctuations in crisis situations.

5. Monitoring and Review of Strategies

Structural Elements:

- Regular Audit and Monitoring: continuous tracking and assessment of the effectiveness of implemented strategies. It allows for timely detection of changes in the risk profile and the effectiveness of adopted measures, providing the opportunity for prompt response.

- Feedback and Adaptation: adjusting risk management strategies according to the obtained data and changes in the external environment.

- Iterative Improvement Process: continuous refinement of strategies and approaches to risk management based on the analysis of results and new data.

6. Communication and Reporting

Structural Elements:

- Internal Communication: regularly informing employees about the current status of risks, their management strategies, and changes in company policy. This fosters a culture where risks are seen as an integral part of business processes.

- External Communication: communicating with stakeholders, including investors, regulators, and partners, regarding risk management and measures to reduce their impact, which enhances transparency of business processes and trust in business relationships with these external parties, and also supports maintaining the reputation and trust in the brand.

- Reporting: regular preparation of reports on risks and the effectiveness of their management for management and other stakeholders.

7. Evaluation and Improvement of the Risk Management System

Structural Elements:

- Constant Evaluation of System Effectiveness: analyzing the effectiveness of implemented strategies and risk management measures. Critical for understanding how effectively the enterprise manages its risks. It helps to identify areas needing improvement or adaptation.

- Updating and Improving Processes: implementing improvements in the risk management system based on the data and feedback received. Continuous improvement of risk management processes ensures that the system remains relevant and effective in changing conditions.

- Implementation of Innovations: applying innovative approaches and technologies for the enhancement of risk management not only increases its effectiveness but also provides the enterprise with a competitive advantage.

The development and implementation of such a risk management system require a comprehensive approach and a deep understanding of the specifics of the activities of food industry enterprises. This includes continuous market analysis, attention to changes in legislation, consumer demand trends, and technological innovations. Thus, enterprises can not only effectively manage current risks but also adapt to future challenges, maintaining sustainable development and competitiveness in the market.

Transitioning from the discussion on "organizational mechanism for risk management in food industry enterprises under conditions of economic crisis phenomena," we now move towards a broader perspective. We will explore "The structured format for the Innovative Business Model for Food Industry Enterprises Operating in Conditions of Global Destructive Processes in the Economy". This shift allows us to extend our understanding from focusing solely on risk management to embracing a comprehensive business strategy that is designed to thrive even amidst global challenges.

Below is the structured format for the Innovative Business Model, represented in a hierarchical Table 1.

This table provides a hierarchical overview of each main element of the Innovative Business Model, detailing the structural components and their descriptions, tailored for food industry enterprises facing global challenges.

Below, we delve into the components of the business model to ensure a clear understanding of the functions and purposes of its individual structural elements.

1. Strategic Analysis and Framework Integration:

- Market Insight and Consumer Engagement: A comprehensive understanding of consumer behaviors, trends, and preferences, combined with a systematic approach to identifying potential market and operational risks.

- Sustainable and Agile Production: Practices that ensure the company's operations are flexible, environmentally sustainable, and capable of adapting to market changes and internal challenges.

2. Innovation-Driven Risk Management:

- Innovation and Product Development: A continuous cycle of product and service innovation that addresses current market demands and anticipates future trends, while also serving as a mechanism for risk mitigation.

- Digital Transformation and E-commerce: Utilization of advanced digital technologies to enhance business processes, customer engagement, and sales channels, aligned with a strategy to mitigate external market and operational risks.

The structured format for the Innovative Business Model for Food Industry Enterprises Operating in Conditions of Global Destructive Processes in the Economy

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3. Efimenko, A., Pivovarov, V., & Yerafeyenka, D. (2023). Transformation of mechanisms of sustainable development of food industry enterprises: preconditions for winning the competition by upgrading the business model of the food factory. Agrarian Economics, 1(11), 57-70. DOI: 10.29235/1818-9806-202311-57-70

4. Bigliardi, B., & Galati, F. (2013). Models of adoption of open innovation within the food industry. Trends in Food Science and Technology, 30, 16-26. DOI: 10.1016/J.TIFS.2012.11.001

5. Zouaghi, F., & Sanchez, M. (2016). Has the global financial crisis had different effects on innovation performance in the agri-food sector by comparison to the rest of the economy?. Trends in Food Science and Technology, 50, 230-242. DOI: 10.1016/J.TIFS.2016.01.014

6. Misati, R., & Ngoka, K. (2024). Drivers of manufacturing export performance and competitiveness. In Tanzania's Economic Development: A Firm-Level Perspective (pp. 1-256). Oxford: Oxford University Press. Available at: https://books.google.bg/books?hl=en&lr=&id=tCx2EAAAQBAJ&redir_esc=y

7. Bivona, E., & Cruz, M. (2021). Can business model innovation help SMEs in the food and beverage industry to respond to crises? Findings from a Swiss brewery during COVID-19. British Food Journal, 123(11), 3638-3660. DOI: 10.1108/BFJ-07-2020-0643

8. Kawane, T., Adu-Gyamfi, B., Cao, Y., & Zhang, Y. (2024). An Adaptation and Resilience Measure for MSMEs amid the COVID-19 Pandemic in Japan: Lessons from the Food Service Industry for Collaborative Future. Sustainability, 16(4), 1550. DOI 10.3390/su16041550

9. Tell, J., Hoveskog, M., Ulvenblad, P., Ulvenblad, P., Barth, H., & Stahl, J. (2016). Business Model Innovation in the Agri-food Sector. International Journal of Social Ecology and Sustainable Development (IJSESD), 7(2), 1-13. DOI: 10.4018/IJSESD.201604010

10. Kacicka, G. (2023). Adaptive risk management in food industry enterprises: integration of strategies and innovations in an environment of economic instability. International Interdisciplinary Scientific Journal "Expert", 1(1), 73-88. DOI: 10.62034/2815-5300/2023-v1-i1-006

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