Kabir C. Sen

The use of franchising as a growth strategy by US restaurant franchisors

The paper summarizes predictions about the use of franchising as an expansion strategy and examines them through an empirical investigation of a sample of restaurant franchisors. The restaurant industry is an appropriate field for such an investigation as franchising is extensively used in this sector. The subject of growth is also important from the consumer’s perspective because of the increased desire for convenience and uniformity. The results suggest that franchising is an effective strategy for store expansion. However, larger chains have a lower need to use franchising as a growth strategy, apparently because they have their own resources. The paper also shows that the chain’s mix of company owned and franchised outlets is likely to be influenced by its past growth pattern. The results indicate that a significant increase in the proportion of franchised outlets is unlikely for chains that already have a relatively high percentage of franchised outlets. This is ostensibly because synergistic benefits are achieved through having both company owned and franchised stores.

Information Asymmetry and the Franchise Decision

Abstract A key explanation for the existence of franchising as a marketing channel has its underpinnings in the information asymmetry between the firm and individual outlets. Franchising is the preferred option for outlets where information asymmetry leads to prohibitive monitoring costs within a vertically integrated system. While modern information technology has the potential to reduce monitoring costs at geographically isolated locations, several factors are likely to limit its effectiveness. Thus, the incentive to franchise these outlets should continue to exist. The paper also discusses the possible implications of the increased use of information technology in the franchised channel.

A Model for Assessing Consumer Perceptions of Quality

Purpose – The purpose of this paper is to propose a model for linking the dimensions of quality and how customers create their perceptions of quality in the products and services that they purchase. This provides a holistic framework for a better understanding of the various dimensions of product and service quality and their impact on consumer perceptions.Design/methodology/approach – A holistic framework for the understanding of the various dimensions of product and service quality and their impact on the creation of consumer perceptions is presented. In addition research questions for future investigations are proposed.Findings – Consumer satisfaction is directly related to how well their expectations for a product or service are met. These expectations are developed from the customers perceptions about the product or service. If the firm wishes to develop new products and services that can create competitive advantage, they must understand how the various product characteristics, or service attributes, effect the creation of consumer perceptions.

A Comparison of Company Owned and Franchised Fast Food Outlet Performance: Insights from Health Inspection Scores

The paper compares the performance of franchised and company owned fast food outlets located within the same region in the USA. These outlets are inspected by the same team of health inspectors who use a standardized 44 item scale derived from Federal Drug Administration guidelines. Analysis of the health inspection scores received by the fast food outlets over approximately two and a half years shows that franchised stores receive significantly better ratings. The inspection scores of franchised outlets also have a lower standard deviation than that of company owned stores. The results support the view that the incentives provided in the franchise contract as well as the additional layer of supervision by the franchisee are likely to lead to better and more consistent outlet performance. At the same time, there are a few chains where company owned stores get higher scores than theirfranchised counterparts. This suggests that there are inter chain differences in the operational efficiencies of the two organizational formats.

Mapping statistics to success on the PGA Tour : Insights from the use of a single metric

Purpose – Although the PGA Tour provides a wide array of statistics, no single measure has successfully been able to predict a players success during the season, either in terms of earnings per tournament or weighted average scores. The purpose of this paper is to present a metric that attempts to predict annual player rankings based on these two criteria.Design/methodology/approach – The metric is computed from available statistics and attempts to encapsulate a players unique strengths and weaknesses in a single number.Findings – Deviations in rankings based on the metric are compared to those based on earnings per event and adjusted scoring averages. The results suggest that in addition to the average annual performance on the greens, the mix of tournaments played and the incidence of heroics or consistency have an important impact on the chances of success on the Tour.Research limitations/implications – The metrics predictions can be negatively affected if a golfer makes a large proportion of double...

The Value Proposition

As mentioned in the introduction, the purpose of any business is to generate money. The logic behind this objective is that without financial viability, the business cannot maintain or grow resources. The business will not be able to develop new products or services, hire, and pay employees or any other activity that society regards. The question is how does a business consistently generate money? The simple answer is through the creation of value for its customers, employees, investors, and the country. Furthermore, due to the interests of these three groups being inextricably linked, sustained value can only occur when value is created for all three groups simultaneously.

An empirical investigation of the variations in direct‐to‐consumer prescription drug advertising

Purpose – The present paper aims to understand the underpinnings of the variations in brand level direct‐to‐consumer (DTC) advertising through a two‐part study. First, it seeks to examine the various influences on advertising intensity (operationalized by advertising to sales ratios) in the context of DTC advertising. Second, it aims to analyze how changes in share of voice impact changes in market share.Design/methodology/approach – Data on brand level advertising as well as sales were collected from different government and industry sources. This is used to compute the ratio of DTC advertising to sales as well as changes in share of voice, market share and average drug prices. A log‐log model is used to find parameter estimates based on OLS regression.Findings – Market share has a negative influence on the ratio of advertising to sales. Drugs which have a greater degree of innovation (as judged by the FDA) appear to spend more on DTC advertising relative to sales. The paper also finds that an increase i...

Process Improvement Methods and Tools

The productivity of its transformational processes (i.e., production systems) has an enormous impact on the firm’s ability to deliver quality products and services to consumers. External customers rarely see a company’s production systems and in most cases are not interested in its details. However, being able to get the products and services, they desire in a timely fashion greatly affects consumer perceptions of those products and services. Even if the product or service is perceived as being of good quality, the inconvenience of not getting it in a timely fashion reduces the customer’s since of value and often causes dissatisfaction. With respect to internal customers, the higher the effectiveness and efficiency of the production systems, the greater their sense of value and perception of quality.

The Philosophy of Quality

The philosophy of quality has traditionally focused upon the development and implementation of a corporate wide culture that emphasizes a customer focus, continuous improvement, employee empowerment, and data-driven decision making. The drivers of this philosophy are rooted in the alignment of product and service systems design with customer expectations, along with focusing on quality during all phases of development, production, and delivery. The philosophy is process centric and emphasizes the reduction of variability as well as a continuous improvement in the functionality of the final product or service.

The Aspects of Quality

In the philosophy literature, it has been put forth that quality is a naturally occurring stimulus in our environment. Every time we see something new, such as the new Ford GT, 550 horsepower, mid-engine two-seater sports cars, or experience a joyful moment, such as a well-acted performance at a play, we are connecting with this stimulus at an emotional level. Our first response is usually, “Wow!” It is only later that we are able to describe the experience in a rational manner. Our initial impression of the quality of the item or the actual moment of interaction with the product or service is termed “perceived quality” (also called dynamic quality by some philosophers). This is essentially our instant judgment about a product or service’s overall excellence. Our later ability to describe the quality of the product or service in measurable terms is called “objective quality” (also called static quality by some philosophers). This aspect of quality refers to the technical excellence of the product or service.