MSME Adaptation Strategies in Facing Rising Production Costs: An Islamic Economic Perspective

Abstract

This study examines the adaptation strategies of a culinary micro-enterprise in responding to rising production costs from an Islamic economic perspective. The study focuses on Dapur Mamanau, a home-based culinary micro-enterprise in Tulungagung, East Java. This study employed a qualitative case study design. Data were collected through semi-structured written interviews conducted via WhatsApp with five informants, consisting of one business owner as the primary informant and four consumers as supporting informants. The data were analyzed thematically through an inductive coding process, while data credibility was strengthened through source triangulation and member checking. The findings indicate that rising raw material prices and difficulties in obtaining certain production inputs created pressure on the business's profit margins, while selling prices were not immediately increased. In response, Dapur Mamanau maintained product quality and variety, considered production and labor costs as well as the target market, developed product variants, adjusted production quantities according to market conditions, and utilized social media as a supporting marketing channel. The adjustment of production quantity was explicitly associated with declining purchasing power and the prevention of potential losses. From an Islamic economic perspective, these practices can be interpreted through 'adl in considering price and consumer affordability, shiddiq in communicating potential price changes, amanah in maintaining product quality, hygiene, and safety, maslahah in preventing unnecessary losses while maintaining business continuity, and tarāḍin through transparent communication with consumers. The study provides a contextual account of how a home-based culinary micro-enterprise combines economic and ethical considerations when adapting to rising production costs.