A DEA-based approach for competitive environment analysis in global operations strategies

While competitive environment analysis is critical to a global retailing operations strategy, there exist research gaps from perspectives of operational performance, retailing industrial environment, and nondiscretionary factors. Therefore, our research objective is to propose a new approach to conduct competitive environment analysis for a global operations strategy in retailing, by examining relationships between discretionary inputs of the supply chain, nondiscretionary inputs of the environment, and performance of retailing. We develop a nondiscretionary data envelopment analysis model to assess performance in retailing and integrate it with econometric analysis. Using multisource data of 124 organizations in the global retailing industry, it is interesting to find: while nondiscretionary factors significantly influence the operational performance of global retailers, firms in an environment with a higher market concentration, larger consumer spending per capita, and smaller inhabitants’ population are more likely to achieve a higher operational efficiency in retailing. Another interesting finding with practical implication is: inputs relevant to outside environment (e.g., suppliers in upstream and outlets in downstream supply chain) can influence operational efficiency more than inputs in internal supply chain (e.g., warehouses).