Benchmarking firm capabilities for sustained financial performance in the U.S. restaurant industry

Hua, Nan; Lee, Seoki

doi:10.1016/j.ijhm.2013.08.012

Cited by 20 publications

(16 citation statements)

References 72 publications

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“…In sum, these results should draw the attention of researchers and managers for the potential improvements in restaurants' performance, in terms of both effective utilisation of inputs and financial (revenue) performance. According to Hua and Lee (2014), this is one of the critical purposes of effective benchmarking -to gain a greater understanding of how one's operation compares with others, as well as to be able to achieve greater results. Identifying and learning from the best performers undoubtedly benefits the entire industry.…”

Section: Discussionmentioning

confidence: 99%

“…Such an indicator also allows operators to use the best-performing units as the basis for their benchmarking evaluation, as recommended decades ago by Farrell (1957). The notion of benchmarking by using performance-related indices that focus on the best performers in the field and integrate exogenously fixed variables is principally significant for restaurant managers (Hua & Lee, 2014).…”

Section: Efficiency Frontier Approachesmentioning

confidence: 99%

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Efficiency Analysis of Restaurants in a Small Economy after the Implementation of Fiscal Cash Registers: The Case of Slovenia

Kukanja

Planinc

2018

Organizacija

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Background and purpose: The aim is to analyse the efficiency of small and medium-sized (SMEs) restaurant enterprises in Slovenia after the government’s implementation of fiscal cash registers in January 2016. Strict financial supervision and the introduction of fiscal cash registers resulted in increased officially registered sales revenues, higher taxes, and more available and reliable financial data. No previous study has analysed restaurants’ efficiency in the country, as, due to fiscal malpractice, accounting data have not provided a reliable source for accurate efficiency evaluation.Design/Methodology/Approach: Efficiency was assessed using Data Envelopment Analysis (DEA), based on secondary-financial data provided by the national tax authorities. Data were gathered from 142 independently run restaurant SMEs in 2017.Results: The average efficiency score of Slovene restaurant SMEs is 85%, which indicates that, on average, restaurants have to increase their efficiency level by 15% in order to improve their efficiency according to the most efficient (best-performing) units under comparison. Our research results indicate a relatively successful and comparable level of efficiency performance in comparison to those found in previous international studies. The results also reveal that the patterns of conducting business operations in terms of efficient management are relatively similar across the restaurant sector. Surprisingly, in terms of determining the influence of different groups of operational variables on restaurants’ efficiency performance, the research results indicate that only operational financial variables (costs of goods sold, labour costs, and depreciation) influence efficiency performance, while managers’ demographic characteristics (gender, age, education, years of experience) and restaurants’ physical characteristics (size, number of competitors, location) have no statistically significant influence on restaurants’ efficiency in achieving net sales revenues.Conclusion: Secondary-financial data represent a valuable source of information for restaurant companies’ efficiency analysis. The use of selected variables enables an internationally comparable benchmarking process and facilitates the improvement of restaurants’ efficiency performance. It is suggested that future research include longitudinal data and focus on the systematic analysis of other variables (e.g., managers’ psychographic characteristics) that might influence restaurants’ efficiency performance.

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Section: Discussionmentioning

confidence: 99%

Section: Efficiency Frontier Approachesmentioning

confidence: 99%

Efficiency Analysis of Restaurants in a Small Economy after the Implementation of Fiscal Cash Registers: The Case of Slovenia

Kukanja

Planinc

2018

Organizacija

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“…The present time is highly challenging for the restaurant industry. Increased efficiency and appropriate management seem to be the prerequisites for longterm financial survival (Hua & Lee, 2014). The fact that the industry is made up largely of smes poses major challenges in relation to increasing the overall effi-ciency of the restaurant industry.…”

Section: Resultsmentioning

confidence: 99%

Classification and Efficiency Analysis of Slovenian Restaurant SMEs

Planinc¹,

Kukanja²,

Planinc³

2018

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Focusing on the characteristics of restaurant smes, the purpose of this paper is to use (1) a cluster analysis (ca), and (2) data envelopment analysis (dea) approach to classify restaurant smes into different groups based on their physical and managerial characteristics and attempts to determine whether differences exist in the efficiency performance of different groups. The study has conducted a two-step ca and dea analysis to identify the effects of restaurant characteristics on efficiency performance. This method takes into consideration the presence of heterogeneous subsets in efficiency assessment. Restaurants were preselected based on their operational characteristics. smes whose only source of income was their restaurant business were included in the study. Surveys were performed with restaurant managers, and the firms' financial reports were analysed. Two diverse groups were identified: smaller restaurants with younger and less experienced managers, and bigger restaurants with older and more experienced managers. The various physical (number of seats, years of business activity) and managerial (age, and professional experience) characteristics appeared to significantly affect restaurant types differently. Established restaurants with more seats, older and more experienced managers proved to be more efficient. This is the very first study to analyse Slovenian restaurant businesses efficiency with a combined ca-dea approach. Primary data was collected by surveying restaurant managers while secondary financial data was provided by national tax authorities after the implementation of fiscal cash registers.

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“…Forbes [5] further reported that the restaurant failure rate is 30% within the first year, and 30% of those that survive shutter in the following two operation years. As such, how to achieve sustained business performance becomes a critical issue for the restaurant industry [6]. Given that the development of restaurant industry could reduce unemployment rate and promote local economic growth, it is important to develop sustainable marketing strategies to drive restaurant performance.…”

Section: Introductionmentioning

confidence: 99%

Predicting the Helpfulness of Online Restaurant Reviews Using Different Machine Learning Algorithms: A Case Study of Yelp

Luo

2019

Sustainability

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Helpful online reviews could be utilized to create sustainable marketing strategies in the restaurant industry, which contributes to national sustainable economic development. This study, the main aspects (including food/taste, experience, location, and value) from 294,034 reviews on Yelp.com were extracted empirically using the Latent Dirichlet Allocation (LDA) and positive and negative sentiment were assigned to each extracted aspect. Positive sentiments were associated with food/taste, while negative sentiments were associated with value. This study further proves a robust classification algorithm based on Support Vector Machine (SVM) with a Fuzzy Domain Ontology (FDO) algorithm outperforms other traditional classification algorithms such as Naïve Bayes (MB) and SVM ontology in predicting the helpfulness of online reviews. This study enriches the literature on managerial aspects of sustainability by analyzing a large amount of plain text data that customers generated. The results of this study could be used as sustainable marketing strategy for review website developers to design sophisticated, intelligence review systems by enabling customers to sort and filter helpful reviews based on their preferences. The extracted aspects and their assigned sentiment could also help restaurateurs better understand how to meet diverse customers’ needs and maintain sustainable competitive advantages.

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Benchmarking firm capabilities for sustained financial performance in the U.S. restaurant industry

Cited by 20 publications

References 72 publications

Efficiency Analysis of Restaurants in a Small Economy after the Implementation of Fiscal Cash Registers: The Case of Slovenia

Efficiency Analysis of Restaurants in a Small Economy after the Implementation of Fiscal Cash Registers: The Case of Slovenia

Classification and Efficiency Analysis of Slovenian Restaurant SMEs

Predicting the Helpfulness of Online Restaurant Reviews Using Different Machine Learning Algorithms: A Case Study of Yelp

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