Explaining an Investment Strategy Model in Alignment with the Business Cycle and Corporate Life Cycle Using a Mixed-Methods Approach

Abstract

Investments in productive assets intended for the modernization and expansion of production processes—and in response to market demand—are influenced by a range of internal and external organizational parameters, which together shape the investment strategy model. Considering the critical role that investment plays in profitability and the attainment of financial competitive advantage within businesses, this study aims to identify the factors influencing investment and to develop a model for investment strategy. The firms within the study’s scope are divided into two categories: chemical companies and food & beverage companies, with the results of the model implementation analyzed and compared across these two groups. In order to ensure compatibility of the model with environmental fluctuations and internal organizational changes, the variables of the business cycle and the corporate life cycle are incorporated into the model. The research methodology follows a mixed-methods approach comprising both qualitative and quantitative phases. The study's findings, covering the period from 2016 to 2023, reveal that the declining trend in the value of fixed assets indicates equipment obsolescence and a critical need for investment—particularly in the chemical sector, which relies heavily on imported advanced technologies. However, under current sanctions, such investment is unfeasible. Moreover, due to the presence of ownership entities and existing conflicts of interest in this profitable industry, excess investment is observed, which—based on the findings—is ineffective and lacks the necessary efficiency. In the food industry group, regulated pricing policies have led to reduced profitability and financial constraints, thereby preventing the sector from making the necessary levels of investment despite its strategic importance.