An appraisal system for monitoring performance of convenience stores in Taiwan

 

 

W.Y. Wu^I; C. Bai^II; O.K. Gupta^III

^IDepartment of Business Administration, National Cheng Kung University, Taiwan wanyi@mail.ncku.edu.tw
^IIDepartment of Business Administration, National Cheng Kung University, Taiwan cj.bai@msa.hinet.net
^IIICollege of Business, University of Houston Downtown, USA guptao@uhd.edu

 

 

---

ABSTRACT

With service industries achieving almost 70% of GDP, Taiwan has witnessed a major shift in its economic structure, similar to the trends that have been observed elsewhere. The retail sector has shown enormous growth, and Taiwan has seen tremendous growth in convenience stores in recent years, as their density has peaked in many Asian countries. Operating efficiency has become a critical element of success and survival for convenience stores in a highly competitive environment. In this paper, we apply Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI) to investigate the productivity efficiency and monitor the performance of convenience stores, characterized by multiple inputs and outputs. The paper also offers a distribution service system model and management matrix to examine the competitiveness of the store chain as a whole. The findings indicate that DEA can provide useful diagnostic information, and suggest ways to improve efficiency.

---

OPSOMMING

Die bydrae tot die BBP van Taiwan beloop tans bykans 70% ten opsigte van dienstebedrywe. Die kleinhandelsektor toon ook 'n betekenisvolle oplewing. Doeltreffendheid is ook van opperste belang vir geriefswinkels.
Die navorsing ondersoek die gebruik van DataOmsluitingsAnalise (DOA) en die Malmquist Produktiwiteits-Indeks om die vertoning van geriefswinkels met veelvoude van insette en uitsette te monitor. Die mededingendheid van 'n kettingwinkel word ook bepaal. Toepassing van die bogenoemde DOA-metode lewer nuttige diagnostiese inligting wat gebruik kan word vir verbetering van bedryfsrendement.

---

 

 

“Full text available only in PDF format” 

 

 

REFERENCES

[1] Chen, W.Y. 2005. Trend Report of Taiwanese Merchandise Channel Industry in 2006 (in Chinese), Taipei: Taiwan Institute of Economic Research.         [ Links ]

[2] Wan, C.H. 2005. Trend Report of Taiwanese Convenience Chain Stores - Fourth Quarter, 2005 (in Chinese), Taipei: Taiwan Institute of Economic Research.         [ Links ]

[3] Donthu, N., Hershberger, E.H., and Osmonbekov, T. 2005. Benchmarking marketing productivity using data envelopment analysis, Journal of Business Research, 58(11), pp 1472-1482.         [ Links ]

[4] Camp, R.C. 1998. Global cases in benchmarking, Milwaukee (WI): ASQ Quality Press.         [ Links ]

[5] McGonagle, Jr., J. and Fleming, D. 1993. New options in benchmarking, Journal of Quality and Participation, 16(4), pp 60-71.         [ Links ]

[6] Donthu, N. and Yoo, B. 1998. Retail productivity assessment using data envelopment analysis, Journal of Retailing, 74 (1), pp 89-105.         [ Links ]

[7] Thomas, R.R., Barr, R.S., Cron, W.L., Slocum, J.W. Jr. 1998. A process for evaluating retail store efficiency: A restricted DEA approach, International Journal of Research in Marketing, 15(5), pp 487-503.         [ Links ]

[8] Barros, C.P. and Alves, C.A. 2003. Hypermarket retail store efficiency in Portugal, International Journal of Retail and Distribution Management, 31(11), pp 549-560.         [ Links ]

[9] Buckin, L.P. 1978. Productivity in marketing, Chicago: American Marketing Association.         [ Links ]

[10] Ratchford, B.T. and Brown, J.R. 1985. A study of productivity changes in food retailing, Marketing Science, 4 (Fall), pp 292-311.         [ Links ]

[11] Ratchford, B.T. and Stoop, G.T. 1988. A model and measurement approach for studying retail productivity, Journal of Retailing, 64 (Fall), pp 241-263.         [ Links ]

[12] Parsons, L. 1992. Productivity versus relatively efficiency in marketing: Past and future? In: Lilien, G., Laurent, G., Pras, B. (eds), Research traditions in marketing, Kluwer, Amsterdam, pp 169-196.         [ Links ]

[13] Thurik, R. 1992. Applied econometrics and productivity analysis in marketing, In: Lilien, G., Laurent, G., Pras, B. (eds), Research traditions in marketing, Kluwer, Amsterdam, pp 197-200.         [ Links ]

[14] Kamakura, W., Lenartowicz, T. and Ratchford, B. 1996. Productivity assessment of multiple retail outlets, Journal of Retailing, 72(4), pp 325-330.         [ Links ]

[15] Ingene, C.A. 1982. Labor productivity in retailing, Journal of Marketing, 46 (Fall), pp 75-90.         [ Links ]

[16] Ingene, C.A. 1984. Productivity and functional shifting in spatial retailing: Private and social perspectives, Journal of Retailing, 60 (Fall), pp 15-36.         [ Links ]

[17] Thurik, R. and van der Wijst, N. 1984. Part-time labor in retailing, Journal of Retailing, 60 (Fall), pp 62-80.         [ Links ]

[18] Bush, R.P., Bush, A.J., Ortinau, D.J., and Hair, J.F. Jr. 1990. Developing a behavior-based scale to assess retail salesperson performance, Journal of Retailing, 66 (Spring), pp, 119-136.         [ Links ]

[19] Stern, L.W. and El-Ansary, A.I. 1992. Marketing channels, 4^th edition, Englewood Cliffs, NJ: Prentice Hall.         [ Links ]

[20] Doutt, J.T. 1984. Comparative productivity performance in fast-food retail distribution, Journal of Retailing, 60 (Fall), pp 98-106.         [ Links ]

[21] Lusch, R.F. and Moon, S.Y. 1984. An exploratory analysis of the correlations of labor productivity in retailing, Journal of Retailing, 60 (Fall), pp 37-61.         [ Links ]

[22] Keh, H.T. 1997. The classification of distribution channel output: A review, International Review of Retail, Distribution and Consumer Research, 7(2), pp 145-156.         [ Links ]

[23] Achabal, D.D., Heineke, J.M. and McIntyre, S.H. 1984. Issues and perspective on retail productivity, Journal of Retailing, 60 (Fall), pp 107-127.         [ Links ]

[24] Keh, H.T. 2000. Measuring retailer performance: Towards an understanding of productivity, Journal of Targeting, Measurement and Analysis for Marketing, 9(2), pp 163-173.         [ Links ]

[25] Betancour R.R. and Gautschi, D.A. 1990. Demand complementarities, household production, and retail assortments, Marketing Science, 9, pp 146-161.         [ Links ]

[26] Betancour R.R. and Gautschi, D.A. 1993. The outputs of retail activities: Concepts, measurement and evidence from US census data, Review of Economics and Statistics, 75, pp 294-301.         [ Links ]

[27] Keh, H.T. and Chu, S. 2003. Retail productivity and scale economies at the firm level: A DEA approach, Omega, 31(2), pp 75-82.         [ Links ]

[28] Farrell, M.J. 1957. The measurement of productivity efficiency, Journal of the Royal Statistical Society Series A, 120(3), pp 253-281.         [ Links ]

[29] Charnes, A.W., Cooper, W.W. and Rhodes, E. 1978. Measuring the efficiency of decision-making units, European Journal of Operational Research, 2(6), pp 429-444.         [ Links ]

[30] Ho, C.T. and Zhu, D.S. 2004. Performance measurement of Taiwan's commercial banks, International Journal of Productivity and Performance Measurement, 53(5), pp 425-434.         [ Links ]

[31] Balakrishnan, P., Desai, A. and Storbeck, J. 1994. Efficiency evaluation of retail outlet networks, Environment and Planning, 21(4), pp 477-488.         [ Links ]

[32] Athanassopoulos, A. 1995. Performance improvement decision aid systems (pidas) in retailing organizations using data envelopment analysis, The Journal of Productivity Analysis, 6(2), pp 153-170.         [ Links ]

[33] Li, Y., Hu, J.L. and Chiu, Y.H. 2004. Ownership and production efficiency: Evidence from Taiwanese banks, The Service Industries Journal, 24(4), pp 129-148.         [ Links ]

[34] Keh, H.T., Chu, S. and Xu, J. 2006. Efficiency, effectiveness and productivity of marketing in services, European Journal of Operational Research, 170(1), pp 265-276.         [ Links ]

[35] Marianna, S., Jones, P., Lockwood, A. and Airey, D. 2005. Productivity in hotels: A stepwise data envelopment analysis of hotels' rooms division processes, The Service Industries Journal, 25(1), pp 61-81.         [ Links ]

[36] Wang, F.C., Hung, W.T. and Shang, J.K. 2006. Measuring pure managerial efficiency of international tourist hotels in Taiwan, The Service Industries Journal, 26(1), pp 59-71.         [ Links ]

[37] Rouse, P., Putterill, M. and Ryan, D. 2002. Integrated performance measurement design: Insights from an application in aircraft maintenance, Management Accounting Research, 13(2), pp 229-248.         [ Links ]

[38] Malmquist, S. 1953. Index numbers and indifference surfaces, Trabajos de Estadistica, 4, pp 209-242.         [ Links ]

[39] Caves, D.W., Christensen, L.R. and Diewert, W.E. 1982. The economic theory of index numbers and the measurement of input, output and productivity, Econometrica, 50, pp 1078-1092.         [ Links ]

[40] Fare, R., Grosskopf, S., Lindgren, B. and Ross, P. 1992. Productivity changes in Swedish pharmacies 1980-1989: A non-parametric Malmquist approach, The Journal of Productivity Analysis, 3(1), pp 85-101.         [ Links ]

[41] Flegg, A.T., Allen, D.O., Field, K. and Thurlow, T.W. 2004. Measuring the efficiency of British universities: A multi-period data envelopment analysis, Education Economics, 12(3), pp 231-249.         [ Links ]

[42] Odeck, J. 2006. Identifying traffic safety best practice: An application of DEA and Malmquist indices, Omega, 34(1), pp 28-40.         [ Links ]

[43] Chen, S.N. 2006. Productivity changes in Taiwanese hospitals and the national health insurance, The Service Industries Journal, 26(4), pp 459-477.         [ Links ]

[44] Şakar, B. 2006. A study of efficiency and productivity of Turkish banks in Istanbul stock exchange using Malmquist DEA, Journal of American Academy of Business, 8(2), pp 145-155.         [ Links ]

[45] Färe, R., Grosskopf, S., Lovell, C.A.K. 1985. The measurement of efficiency of production, Boston, MA: Kluwer/Nijhoff.         [ Links ]

[46] Kao, C., Huang, H.N. and Sueyoshi, T. 2003. Management performance evaluation data envelopment analysis (in Chinese), 1st edition, Taipei: Hwatai.         [ Links ]

[47] Andersen P. and Petersen, N.C. 1993. A procedure for ranking efficient units in data envelopment analysis, Management Science, 39(10), pp 1261-1264.         [ Links ]

[48] Lapré, M.A., Muhkerjee, A.S. and van Wassenhove, L.N. 1999. Behind the learning curve: Linking learning activities to waste reduction, Management Science, 46, pp 587-611.         [ Links ]

[49] Porter, M.E. 1996. What is strategy? Harvard Business Review, November-December, pp 61-78.         [ Links ]

[50] Walter, D. and Laffy, D. 1996. Managing retail productivity and profitability, London: Macmillan.         [ Links ]

 

 

1 Corresponding author