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Measuring the Meta Efficiency and Its Determinants on Efficiency in the Korean Coffee Shop Franchise

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  • Doo-Young Park

    (Department of Business, Hansung University, Seoul 02876, Korea)

  • Kanghwa Choi

    (Department of Business, Hansung University, Seoul 02876, Korea)

  • Dae-Han Kang

    (Department of Business, Hansung University, Seoul 02876, Korea)

Abstract

Previous applications of DEA (data envelopment analysis) models in the field of franchising have been scarce. In particular, measurement and analysis of the operational efficiency of coffee shop franchisors in the explosively growing coffee market in Korea is required. In this study, we categorize 29 Korean coffee shop franchisors into three groups according to their number of franchisees and employ the metafrontier analysis to measure the efficiency of coffee shop franchisors from 2015 to 2018. Based on the results of metafrontier DEA, this study identifies sources of inefficiency within individual coffee shop franchisors to provide insights for coffee franchise operators and investigates efficiency differences between small-chain and medium-chain coffee shop franchisors. Furthermore, the results of bootstrapped truncated regression provide that the external environmental factors affecting the efficiency of each individual group are totally different patterns depending on the franchise group. Based on the analysis results, this study suggests strategic initiatives tailored to individual coffee shop groups to enhance their operating efficiency and identifies the principal operational drivers of the environmental variables to achieve sustainable growth.

Suggested Citation

  • Doo-Young Park & Kanghwa Choi & Dae-Han Kang, 2020. "Measuring the Meta Efficiency and Its Determinants on Efficiency in the Korean Coffee Shop Franchise," Sustainability, MDPI, vol. 12(6), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:6:p:2398-:d:334293
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    References listed on IDEAS

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    Cited by:

    1. Eunkyung Lee & Ji-Hern Kim & Chang Seop Rhee, 2021. "Effects of Marketing Decisions on Brand Equity and Franchise Performance," Sustainability, MDPI, vol. 13(6), pages 1-15, March.
    2. Gowangwoo Park & Seok-Kee Lee & Kanghwa Choi, 2021. "Evaluating the Service Operating Efficiency and Its Determinants in Global Consulting Firms: A Metafrontier Analysis," Sustainability, MDPI, vol. 13(18), pages 1-18, September.

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