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Efficiency Analysis of Retail Chain Stores in Korea

Author

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  • Kyungwan Ko

    (School of Business, Hanyang University, Seoul 04763, Korea)

  • Meehyang Chang

    (College of Hospitality and Tourism, Sejong University, Seoul 05006, Korea)

  • Eun-Song Bae

    (Graduate School of Hanyang University, Seoul 04763, Korea)

  • Daecheol Kim

    (School of Business, Hanyang University, Seoul 04763, Korea)

Abstract

In today’s low-growth business environment, efficiency management is becoming more important to improve corporate sustainability. In a chain store, the efficiency of individual stores must be well managed to improve the efficiency of the entire enterprise. To do this, it is important to measure the efficiency of individual stores and to find factors that affect efficiency. The main purpose of this study is to find out the factors affecting the efficiency of chain stores and to analyze the results to find out the implications that contribute to an improvement in efficiency. We measured the relative efficiency of individual stores using data envelopment analysis (DEA) and analyzed the factors that affect efficiency with the Tobit regression model. As a result, we found that the number of items per employee and a competitive environment influence the efficiency of stores. An excessive number of items may cause efficiency to be lowered. Therefore, it is necessary to manage the life cycle of the product, considering the trade-off between assortment and efficiency. Competition helps to improve efficiency to some extent, but too much competition can reduce efficiency.

Suggested Citation

  • Kyungwan Ko & Meehyang Chang & Eun-Song Bae & Daecheol Kim, 2017. "Efficiency Analysis of Retail Chain Stores in Korea," Sustainability, MDPI, vol. 9(9), pages 1-14, September.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:9:p:1629-:d:111824
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    References listed on IDEAS

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    2. Ömer Faruk Görçün & Sarfaraz Hashemkhani Zolfani & Mustafa Çanakçıoğlu, 2022. "Analysis of efficiency and performance of global retail supply chains using integrated fuzzy SWARA and fuzzy EATWOS methods," Operations Management Research, Springer, vol. 15(3), pages 1445-1469, December.
    3. JinHyo Joseph Yun & Kwangho Jung & Tan Yigitcanlar, 2018. "Open Innovation of James Watt and Steve Jobs: Insights for Sustainability of Economic Growth," Sustainability, MDPI, vol. 10(5), pages 1-16, May.
    4. Yun-Gi Hwang & Soohyun Park & Daecheol Kim, 2018. "Efficiency Analysis of Official Development Assistance Provided by Korea," Sustainability, MDPI, vol. 10(8), pages 1-13, August.
    5. Nomita Pachar & Jyoti Dhingra Darbari & Kannan Govindan & P. C. Jha, 2022. "Sustainable performance measurement of Indian retail chain using two-stage network DEA," Annals of Operations Research, Springer, vol. 315(2), pages 1477-1515, August.
    6. Joong Hoon Ko & Daecheol Kim, 2019. "The Effects of Maturity of Project Portfolio Management and Business Alignment on PMO Efficiency," Sustainability, MDPI, vol. 11(1), pages 1-16, January.
    7. Ján Dobrovič & Veronika Čabinová & Peter Gallo & Petra Partlová & Jan Váchal & Beáta Balogová & Jozef Orgonáš, 2021. "Application of the DEA Model in Tourism SMEs: An Empirical Study from Slovakia in the Context of Business Sustainability," Sustainability, MDPI, vol. 13(13), pages 1-19, July.
    8. Maimouna Diouf & Choonjong Kwak, 2018. "Fuzzy AHP, DEA, and Managerial Analysis for Supplier Selection and Development; From the Perspective of Open Innovation," Sustainability, MDPI, vol. 10(10), pages 1-17, October.
    9. Zheng, Run & Li, Zhuyuan & Na, Sanggyun, 2022. "How customer engagement in the live-streaming affects purchase intention and customer acquisition, E-tailer's perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).

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