IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v9y2017i9p1629-d111824.html
   My bibliography  Save this article

Efficiency Analysis of Retail Chain Stores in Korea

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/9/9/1629/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/9/9/1629/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, July.
    2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    3. JinHyo Joseph Yun, 2017. "Dynamics of Open Innovation," Management for Professionals, in: Business Model Design Compass, chapter 7, pages 99-117, Springer.
    4. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 701-728.
    5. Keh, Hean Tat & Chu, Singfat, 2003. "Retail productivity and scale economies at the firm level: a DEA approach," Omega, Elsevier, vol. 31(2), pages 75-82, April.
    6. Perrigot, Rozenn & Barros, Carlos Pestana, 2008. "Technical efficiency of French retailers," Journal of Retailing and Consumer Services, Elsevier, vol. 15(4), pages 296-305.
    7. Susan M. Broniarczyk & Wayne D. Hoyer, 2010. "Retail Assortment: More ≠ Better," Springer Books, in: Manfred Krafft & Murali K. Mantrala (ed.), Retailing in the 21st Century, pages 271-284, Springer.
    8. Nickell, Stephen & Nicolitsas, Daphne & Dryden, Neil, 1997. "What makes firms perform well?," European Economic Review, Elsevier, vol. 41(3-5), pages 783-796, April.
    9. Assaf, A. George & Barros, Carlos & Sellers-Rubio, Ricardo, 2011. "Efficiency determinants in retail stores: a Bayesian framework," Omega, Elsevier, vol. 39(3), pages 283-292, June.
    10. Yu, Wantao & Ramanathan, Ramakrishnan, 2009. "An assessment of operational efficiency of retail firms in China," Journal of Retailing and Consumer Services, Elsevier, vol. 16(2), pages 109-122.
    11. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
    12. Dubelaar, Chris & Bhargava, Mukesh & Ferrarin, David, 2002. "Measuring retail productivity: what really matters?," Journal of Business Research, Elsevier, vol. 55(5), pages 417-426, May.
    13. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gupta, Anshu & Pachar, Nomita & Jain, Akansha & Govindan, Kannan & Jha, P.C., 2023. "Resource reallocation strategies for sustainable efficiency improvement of retail chains," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dimitris Balios & Nikolaos Eriotis & Alexandra Fragoudaki & Dimitrios Giokas, 2015. "Economic efficiency of Greek retail SMEs in a period of high fluctuations in economic activity: a DEA approach," Applied Economics, Taylor & Francis Journals, vol. 47(33), pages 3577-3593, July.
    2. Manuel Xavier, José & Ferreira Moutinho, Victor & Carrizo Moreira, António, 2015. "An empirical examination of performance in the clothing retailing industry: A case study," Journal of Retailing and Consumer Services, Elsevier, vol. 25(C), pages 96-105.
    3. Dimitrios Giokas & Nicolaos Eriotis & Ioannis Dokas, 2015. "Efficiency and productivity of the food and beverage listed firms in the pre-recession and recessionary periods in Greece," Applied Economics, Taylor & Francis Journals, vol. 47(19), pages 1927-1941, April.
    4. Neves Bezerra de Melo, Felipe Luiz & Sampaio, Raquel Menezes Bezerra & Sampaio, Luciano Menezes Bezerra, 2018. "Efficiency, productivity gains, and the size of Brazilian supermarkets," International Journal of Production Economics, Elsevier, vol. 197(C), pages 99-111.
    5. Francesco Daveri & Rémy Lecat & Maria Laura Parisi, 2016. "Service Deregulation, Competition, and the Performance of French and Italian Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(3), pages 278-302, July.
    6. Priit Vahter, 2009. "Productivity in Estonian Enterprises: the Role of Innovation and Competition," Chapters, in: David G. Mayes (ed.), Microfoundations of Economic Success, chapter 4, pages 131-167, Edward Elgar Publishing.
    7. Gaëtan Nicodème & Jacques-Bernard Sauner-Leroy, 2007. "Product Market Reforms and Productivity: A Review of the Theoretical and Empirical Literature on the Transmission Channels," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 53-72, March.
    8. Schiantarelli, Fabio, 2005. "Product Market Regulation and Macroeconomic Performance: A Review of Cross Country Evidence," IZA Discussion Papers 1791, Institute of Labor Economics (IZA).
    9. Elina Berghäll, 2016. "Innovation, competition and technical efficiency," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1199522-119, December.
    10. Cornett, Marcia Millon & Erhemjamts, Otgontsetseg & Tehranian, Hassan, 2019. "Competitive environment and innovation intensity," Global Finance Journal, Elsevier, vol. 41(C), pages 44-59.
    11. Renaud Bourlès & Gilbert Cette & Jimmy Lopez & Jacques Mairesse & Giuseppe Nicoletti, 2013. "Do Product Market Regulations In Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1750-1768, December.
    12. 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.
    13. Harris, Richard & Moffat, John, 2011. "Plant-level determinants of total factor productivity in Great Britain, 1997-2006," LSE Research Online Documents on Economics 33561, London School of Economics and Political Science, LSE Library.
    14. Valkonen, Laura, 2006. "Deregulation as a Means to Increase Competition and Productivity," Discussion Papers 1014, The Research Institute of the Finnish Economy.
    15. Elena Podrecca, 2013. "Riforme del mercato dei prodotti e crescita della produttivit?. Teoria ed evidenza empirica," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(2), pages 10-41.
    16. Hsin‐Pin Fu & Tien‐Hsiang Chang & Lon‐Fon Shieh & Arthur Lin & Shang‐Wen Lin, 2015. "Applying DEA–BPN to Enhance the Explanatory Power of Performance Measurement," Systems Research and Behavioral Science, Wiley Blackwell, vol. 32(6), pages 707-720, November.
    17. Yu, Wantao & Ramanathan, Ramakrishnan, 2009. "An assessment of operational efficiency of retail firms in China," Journal of Retailing and Consumer Services, Elsevier, vol. 16(2), pages 109-122.
    18. Pedro Carvalho, 2018. "Competition and Firm Productivity: Evidence from Portugal," GEE Papers 00108, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jul 2018.
    19. Philipp R. Steinbrunner, 2023. "May It Be a Little Bit More of Market Power? On Productivity Growth and Competition," Journal of Industry, Competition and Trade, Springer, vol. 23(3), pages 123-170, December.
    20. Pedro Carvalho, 2018. "Competition and Firm Productivity: Evidence from Portugal," GEE Papers 00108, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jul 2018.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:9:y:2017:i:9:p:1629-:d:111824. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.