Surviving in the Red Ocean: measuring factors for business excellence among coffee franchises in Korea

Abstract

This study analyses the efficiency in the operation of coffee franchises in Korea with the aim to find out what the consumers think is important in the selection of coffee franchises and what factors meet their demands. Towards this goal, first, a data envelopment analysis (DEA) is performed to calculate the relative efficiency of top six coffee franchisors in Korea using input and output factors obtained from the financial statements of the coffee franchisors. Then, a survey was conducted among Korean coffee consumers and analysed using analytic hierarchy process (AHP) and importance–performance analysis (IPA), respectively. Finally, the IPA matrix was applied to map the attributes and suggest future strategies. The results found that the coffee franchise Ediya that enjoyed the largest growth in the past 5 years was also the most efficient franchise in terms of relative efficiency gained from DEA. With regard to service quality attributes, interior design gained the highest score for both importance and performance, whereas coffee price was considered most important but least satisfactory. In addition, customers felt that side menus are relatively less important, an insight for coffee franchises in Korea to put more focus on their original purpose and central product, coffee.

Keywords:

• service industry
• coffee franchise
• operational efficiency
• DEA
• AHP
• IPA

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Changhee Kim http://orcid.org/0000-0002-6087-3132