In spite of the growth of the franchise industry, there are some kinds of problems in the food service franchise industry, e.g. brief historical record of a franchise, insolvent operation, lack of distribution system, low level of information processi...
In spite of the growth of the franchise industry, there are some kinds of problems in the food service franchise industry, e.g. brief historical record of a franchise, insolvent operation, lack of distribution system, low level of information processing and insufficiency of confidence. Specifically the variation of the foodservice industry requires franchise system to be fully equipped with various business strategies which is indispensable to run franchise system.
In the high level of environment dynamism, many companies keep trying to launch new product and to secure the differentiation. In order to achieve this purpose, it is needed that company have to have customer oriented intelligence, and competitor oriented intelligence. Also, the business strategy for brand differentiation which hold a key post in the franchise operation, is required. These market oriented intelligence and brand orientation are able to affect franchisors' new product development and securing differentiation. Futhermore, it is thought that they can have effects on franchisees' trust and performance
In this dissertation, author propose a theoretical model which is empirically tested. For the purpose of verify the model, a total of 304 questionnaires are collected from Oct. 4th 2007 to Oct. 26th. During the selecting data, author sets limits to specific franchises which have launched new product for the last year, and are above the average by the report of the Ministry of Commerce, Industry and Energy .
The empirical results of the Structure equitation model are as followed.
Customer oriented intelligence influence directly on new product development, differentiation, and trust; in addition, indirectly on differentiation, trust and performance; competitor oriented intelligence have positive influences on trust; new product development which is influenced by customer oriented intelligence has positive effects on differentiation, franchisees' trust, and performance; franchisees' trust is influenced by exogenous variables and new product development which directly affects on franchisees' performance.
Major suggestions and significances of this study can be outlined as follows :
First, franchisor should grow conscious of the importance customer oriented intelligence and analyze the customer continuously. The reason why many companies fail to catch hold of customers' requests is that they are bent on following wrong market trend and believe blindly a result of market survey. Currently, many franchise have launched new product without analyzing customers' demand in proper order. Therefore, franchise systems in the foodservice industry are not satisfied with the intelligence generation about customers which obtained by simple market survey.
Second, the product in the foodservice industry is not only easy to copy by competitors, but also hard to place their own products under the protection of the existing laws. In this situation, franchisor should propagate its own brand and make icon brand for customer to differentiate with other competitors' brands. When customers regard franchisor's products as valuable and different, its franchise system could have competitive advantage. Therefore, franchisor has to reinforce brand orientation activities so that customers can distinguish its franchises system from others.
Third, franchisees' trust is caused by franchisor's various management supports. Franchisees are able to believe their franchisor when franchisor launches profitable new product by generating market intelligence and analyze competitors and customers. Also, brand orientation is used as a tool for achieving franchisees' trust which is helpful for franchisor to run a business.