SUSTAINABLE COMPETITIVE ADVANTAGE OF RESTO BARS

IN CALBAYOG CITY

A Thesis Research

Presented to

The Faculty of College of Management

NORTWEST SAMAR STATE UNIVERSITY
Main Campus, Calbayog City

In partial fulfillment
of the requirements for the Degree
BACHELOR OF SCIENCE IN HOSPITALITY MANAGEMENT

By

MARCH 2021
SUSTAINABLE COMPETITIVE ADVANTAGE OF RESTO BARS
IN CALBAYOG CITY

NORTWEST SAMAR STATE UNIVERSITY

Main Campus, Calbayog City

MARCH 2021
 Table of Contents

CHAPTER PAGE

1 The Problem and Its Setting

Introduction
Theoretical Framework
Conceptual Framework
Statement of the Problem
Null Hypothesis
Scope and Limitations of the Study
Significance of the Study
Definition of Terms
2 Related Literature and Studies
Related Literature
Related Studies
3 Methodology
Research Design
Locale and Time of the Study
Respondents of the Study
Sampling Procedure
Instrument
Validation of the Instrument
Data Gathering Procedure
Statistical Treatment
References
Appendices
 CHAPTER 1

The Problem and its Setting

Introduction

Organizations are cast into a global environment with constant market

turbulence, such as potential competitors, currency devaluation, increases in interest

rates and currency fluctuations. Contemporary organizations seek to administer their

resources to achieve an advantageous position in relation to competitors and, thus,

remain competitive.

Competition in the business world is unavoidable, for that, every effort is required

to always know, understand what is happening in the market, what customer wants; and

understand the changes in the business environment so as to compete with others. For

that reason, an attempt to understand what and how to manage a variety of resources

owned to win the competition and create competitive advantage must always be

created.

The idea of a sustainable competitive advantage or SCA surfaced in 1984, when

Day suggested types of strategies that may help to "sustain the competitive advantage".

The actual term "SCA" emerged in 1985, when Porter discussed the basic types of

competitive strategies firms can possess (low-cost or differentiation) to achieve SCA.

Interestingly, no formal conceptual definition was presented by Porter in his discussion.

Barney (1991) has come the closest to a formal definition by offering the following: "A

firm is said to have a sustained competitive advantage when it is implementing a value

creating strategy not simultaneously being implemented by any current or potential

competitors and when these other firms are unable to duplicate the benefits of this
strategy (italics in original)". Based on both Barney’s work and the definitions of each

term provided in the dictionary, the following formal conceptual definition is offered: An

SCA is the prolonged benefit of implementing some unique value-creating strategy not

simultaneously being implemented by any current or potential competitors along with

the inability to duplicate the benefits of this strategy (Vinayan, et. Al., 2012).

Because of the importance of Sustainable Competitive Advantage (SCA) to the

long-term success of firms, the existing literature addresses its content as well as its

sources, and the different types of strategies that may help companies achieve SCA

(Kim et. al., 2012). Literature distinguishes competitive advantage with respect to

market-related strategies (external) and the internal capabilities of a company. Market

strategies relate directly to managerial decisions positioning the company in the

forefront of industry competitors, whereas the capacities are related to the resources

that the company has to face in the competition. Supporting the different

visions, and highlight that a competitive advantage can be derived not only from specific

resources but also from privileged market positions as well.

To satisfy customers organizations must focus on the voice of the customer

which is represented only in part by existing customers. Hence it is critical for an

organization to collect, analyze and effectively use customer information which is timely,

accurate and straight forward’. It may also be observed that the voice of the customer

in the foregoing analysis is a necessary adjunct to quality management, and an

inalienable aspect of competitive positioning. Whether or not customers will be satisfied

is a function of quality, as it is defined and provided by a competitive firm (Kruger et. al.,

2012).

According to the data reported by ReportLinker in 2013 gathered thru Data

Monitor, the global restaurant industry was able to generate revenue of almost US $1.6

trillion in 2010. In the same report, the expected value of the global food and beverage

service industry will reach US $992 billion in 2014 with a volume of 586 billion

transactions. Projected growth of the global restaurant industry is expected to slow

down yearly for five years, and in 2015, the expected revenue in the global restaurant

industry is seen at US $1.8 trillion.

The main challenge that sums up the basis for competitive advantage identified

by Smit et al. (2013) is the ability of an organization to identify current and future needs

of customers. This is critical for restaurant outlets under investigation in this study, given

the intense rivalry that existsin this industry. Understanding the customers’ needs and

incorporating such an understanding in the entire operational system of an organization

is a major challenge and a strategic imperative at the same time. voice of the customer

and seek to exceed customer expectations.

The performance indicators recommended by the Global Reporting Initiative

(GRI, 2013), a pioneer in the world of sustainability reporting information and, currently,

the most widely used sustainability report on the market, aim at describing the

economic, environmental and social impacts, such as Triple Bottom Line, as a way to

certify the sustainability of a company.

 In many countries, the hospitality industry is one of the major contributors to the

nation’s social and economic development. In the recent decade, the industry and the

broader service sector have witnessed significant disruptions from new entrants and

intensifying rivalry among incumbents, with corresponding shifts in consumer

preferences and expectations. Sharing economy start ups deploying technological and

business model innovations (BMI) backed by venture capitalists have radically

enhanced operation efficiency in the food delivery services to achieve exponential

growth in their market share. This has changed the competition landscape for the

hospitality industry, particularly in the food services sector. Similar trends have been

observed in the retail industry, where the rise of big data has enabled some retail

operators to drive BMI to provide their consumers with more personalized shopping

experiences through complementary online and offline channels (Cheah, et. al, 2017).

The success of bar and restaurant enterprises is very evident especially in the

Philippines where almost every town or city has one or more of this type of restaurant. A

bar and restaurant, or Resto‐bar, is a retail food service establishment that serves

alcoholic, non‐alcoholic, and mixed drinks for consumption on the premises. Food and

beverages can be served simultaneously or the drinks first before the food, or the other

way around (Rojo, 2011).

KFC’s Philippines sustainable competitive advantage and success factors are

grounded on four strategic pillars. They are 1. Service 2. Quality 3. Cleanliness 4. Value

(Bediako, 2012). These allow KFC to get more advantage over the competition. Despite

the fact that McDonald’s increased its stores to over 37000 globally, KFC’s overall
market share has increased drastically to due to proper implementation of these

strategic pillars.

The service quality assessment likewise revealed the factors that are in need of

attention in order to improve the product and service quality. These factors are coldness

of beverages, the food being palatable, waiting time, appropriateness of price in terms

of food and beverages offerings, promotional discounts, and correctly getting the orders.

Such findings imply that these are the factors which must be addressed not only by the

Resto‐bar but by restaurateurs pursuing re patronage (Inocencioa et. Al, 2016).

Theoretical Framework

Strategic management Theory is another promising theoretical perspective that

helps us understand the importance of menu and its associated managerial activities

with reference to competitiveness of restaurants. Indeed, creating and sustaining a

competitive advantage is the main focus of strategic management discipline. More

specifically, strategic management principally investigates the phenomenon of

sustainable competitive advantage as a source of performance differences among

business firms (Nerur et al., 2011). Following this argument, it is plausible to consider

the role of menu in creating sustainable competitive advantage for restaurants. In

particular, offering a unique meal experience and assuring customer satisfaction are the

main sources of competitive advantage for a restaurant. As one of the important

components of meal experience, menu deserves a special attention to understand how

a restaurant firm can achieve its strategic goals, can create a sustainable competitive

advantage, can satisfy its customers and can outperform the rivals. The following are
the variable and factors affecting the consumers point of view: Ambiance - Place,

Venue, restroom and etc.; Menu -Recent studies on menu planning examine variables

such as menu item selection process and criteria, menu changes and variety, and menu

item innovation. Those studies primarily assume that menu planning is a critical

managerial activity to the success of restaurant firms ;Operation - Operation is

essentially included in menu management issues; Pricing - Menu pricing is a quite

popular topic among menu researchers and it seems that a wide range of variables

such as price perceptions of customers, price sensitivity, price elasticity, pricing

methods and specifically the psychological pricing have attracted their attention.

Conceptual framework

Figure 1 shows the Conceptual paradigm of the study. As indicated in the

diagram, the study made use of the input - process - output (IPO) research model. The

input of the study consisted the profile of the Resto Bar Owners and Customers in

Calbayog City in terms of age, gender, employment and address.

The process included the factors can affect Sustainable Competitive Advantage

of Resto Bars In Calbayog City in terms of Ambiance, Menu, Operation and Pricing .

The output of the study would be to propose an enhancement program to promote

Sustainable Competitive Advantage in Resto Bars in Calbayog City based on the result

of the study.
Statement of the problem

This study aims to determine Sustainable Competitive Advantage of Resto Bars in

Calbayog City. The outcome of this research is to promote and provide guidelines to the

resto bars owners to improve their and better sustain their Competitive advantage.

Specifically, it sought answers to the following questions.

1.What is the profile of the respondent’s (customers) terms of;

1.1 Age

1.2 Sex

1.3 Employment

1.4 Address

2. Profile of the Resto Bars in Calbayog City as factors affective Sustainable

Competitive Advantage in terms of;

2.1 Ambiance

2.2 Menu

2.3 Operation

2.4 Price

3. Is there any significant differences between the thoughts of the respondents to the

Sustainable Competitive Advantage of Resto Bars in Calbayog City in terms of the

above-mentioned variables?

4.Is there any significant relationship between the profile and perception of the

respondents?

5. What are the problems encountered by the Sustainable Competitive Advantage of

Resto Bars in Calbayog City?

6. Based on the findings, what enhancement program can be proposed to promote the

Sustainable Competitive Advantage of Resto Bars in Calbayog City?

Null hypothesis

Ho: This study tested the following hypothesis: there are no significant

relationship between the profile of the respondents, profile of the Resto Bar

establishments and assessment on level of Sustainable Competitive Advantage of

Resto Bars in Calbayog City; and there are no significant differences among the

responses of the respondents regarding Sustainable Competitive Advantage level when

grouped according to Resto Bar service establishment which pertain to Ambiance,

Menu, Operation and Price.

Scope and Limitation of the study

The study aimed to determine and analyze the Sustainable Competitive

Advantage of Resto Bars in Calbayog City with the end view of analyzing and capturing

the expectations of customers. It measures the profile of the respondents in terms of

age, gender, employment and address. It also determined the factors that can affect the

Sustainable Competitive Advantage of Resto Bars in Calbayog City.

Moreover, the respondents involved in the study we're the business owners and

the customers of Rest Bars in Calbayog, City. Likewise, the research study was

conducted the whole duration of the research undertaking Covered the school year

2020-2021.
Significance of the study

This study was conducted to determine and analyze the Sustainable Competitive

Advantage of Resto Bars in Calbayog City with the end view of analyzing and capturing

the expectations the customers. The findings we're great importance to the following

beneficiaries:

Business Owners. The outcome of the study can be used by the business owners to

come up with the best Sustainable Competitive Advantage of Resto Bars in Calbayog

City.

Customers. The outcome of the study can be beneficial to the customers to help them

enjoy the Resto Bar Services with Sustainable Competitive Advantage of Resto Bars in

Calbayog City.

Researchers. The outcome of the study can be used as a reference and guide to the

other research about the Sustainable Competitive Advantage of Resto Bars in Calbayog

City. They can use the collected data for enhancement of other related research.
Definition of terms

The following terms were defined conceptually and operationally for clarity and easy

understanding within the scope and content of this study.

Business success: This refers to the continual sustainability and profitability of business

operations over a 5-year period (SBA, 2014).

Entrepreneurship: This refers to the practice of starting a new business that sells a

product or provides a service (Parilla, 2013).

Entrepreneur: This refers to a person who starts a business and takes on the

management responsibility and financial risks with the expectation of making a profit

(Lawrence, 2014).

Management: This refers to the act of managing people to accomplish a common

objective or goal (Perry, 2014). Marketing strategy: A marketing strategy is an action

plan used by business owners to achieve a greater market share (Mohammadzadeh,

Aarabi, &Salamzadeh, 2013).

 CHAPTER 2

Related Literature and Studies

This chapter presents the related literature and related studies which are relevant to

the present study. The several literature and studies, taken from various sources such

as books and journals, provide reference to the conceptualization of the present study.

Related Literature

Ambiance

Nowadays, people prefer to eat a lot more often. Customers are more aware of

the atmosphere and facilities that a Resto Bar can offer in which they are dining in than

they were before. This requires owners to put more effort into designing and providing

more comfortable surroundings for their customers. The atmosphere of a restaurant can

be as important as the food itself. The restaurant atmosphere is influenced by several

factors, such as the interior design, temperature, cleanliness, music, and table

arrangement (Banerjee, et. Al., 2018).

Menu

The number and complexity of menu items affects the production hours needed.

If you have a menu with many items requiring difficult production techniques, you will

require more preparation time per item. If your menu consists of a limited number of

items requiring minimal preparation, you will require less time (Kim, 2019) .
 Foods prepared on site require more preparation than similar menu items made

with convenience foods, such as pre-portioned meats or desserts. You can reduce your

labour costs by using convenience foods. However, you must consider two other

factors: convenience foods can increase your food costs and may affect the quality of

your product. The second factor – affecting the quality of the product – is not always

evident. Convenience foods made with high-quality ingredients and prepared exactly as

recommended by the manufacturer can provide uniform portions of very good quality

(Keith, et. Al., 2011).

Operation

A Resto Bar is featuring complex dishes with multiple components will require

more labour than a cafeteria-style operation or a fast-food restaurant. Also, a restaurant

that requires a higher level of skill to prepare complex dishes will require more

experienced staff, which in turn means higher wages (Namin, 2017).

Price

The price of a product or service can affect the level of satisfaction among

customers because it has an associated sense of fairness. A customer’s perceptions of

unfair pricing lead to negative outcomes, such as a lower level of revisit intention,

dissatisfaction, and negative word of mouth (Yan, et. Al., 2013).

The pricing of restaurant items also varies according to the type of restaurant. If

the price is high, customers are likely to expect high quality, otherwise, it can induce a

sense of being “ripped off.” Likewise, if the price is low, customers may question the

ability of the restaurant to deliver product and service quality (Namin, 2017).
Related Studies

Ambiance

Any part of a restaurant that influences the way guests experience dining will

contribute positively or negatively to the restaurant’s ambiance and atmosphere. This

includes the decor, furnishings, music and even the way in which servers dress and the

chef’s presentation of the food (Kruger, 2012).

The fact that the atmosphere of a food service establishment can be made up of

so many different factors is what makes it so difficult to control. Just one of these

aspects being out of line with the others can affect a restaurant’s success (Smit, 2013)

Food

Food quality is an important component and it has been constantly shown to be a

core value that a customer considers in deciding which fast food restaurant to eat at.

Many studies have investigated food quality characteristics, such as the freshness of

food, food presentation, food taste, a variety of menu options, and food temperature.

Food quality is considered to be a key foundation for customer satisfaction and

customers’ revisit intention (Daniel, 2011).

Operation

A good experience also generates word of mouth marketing on behalf of your

company. Word of mouth has proven to be one of the most powerful and trusted forms

of marketing that a company can have working in its favor. Though often unquantifiable,

word of mouth referrals undoubtedly have a positive long term impact on a restaurant’s

profitability. Alternatively, if you don’t provide the best atmosphere for your type of

restaurant, your results will suffer. You won’t retain customers nor get referrals. Both of
these results will assuredly prove difficult to overcome in the long term and should be

avoided at all costs (Dustin, 2014).

Providing a complete and memorable dining experience is what helps your

restaurant achieve a service enjoyed by customers. When you appeal to a diner’s

senses — sight, smell and hearing — they enjoy being at your restaurant. So if you’re

looking to create or improve your restaurant’s ambiance, look to these three categories

to help you achieve the perfect atmosphere that will be a critical factor in your attempt to

be profitable long term (Friedman, 2018)

Price

Due to the competitiveness of the restaurant industry, customers are able to

establish internal reference prices. When establishing prices for a restaurant, an internal

reference price is defined as a price in a buyer’s memory that serves as a basis for

judging or comparing actual prices (Bhutta, 2018).

 Chapter 3

Methodology

In this study, the researchers used the quantitative research because this type of

research eliminates the bias. This research also filters out the external factors and if

well designed it provide unbiased and the actual results.

This chapter describes the research methodology used in the conduct of the

study. It aims to determine the office administration students’ thoughts towards their

chosen program with the end view of proposing discoveries and expectations. It

Presents the procedures in the conduct of investigation such as the design study,

variables and measures, sources of data, instrumentation, and treatment of research

and data.

Research design

This study utilized descriptive method of research wherein the research design is

valuable in providing facts which could form basis of scientific judgments, since it may

provide essential knowledge about the sustainable competitive advantage of Resto bars

In Calbayog City. Descriptive-correlational research is not only concerned with the

description and gathering of the variables in the study but it will go further to test the

relationship between and among the variables.

Locale and Time of the study

The study was conducted within the different Resto Bars in Calbayog City. A map

on figure 2 was presented to further illustrate the geographical location of the school.

The study was undertaken from October 2020 to April 2021.

Figure 2. Geographical Location of Resto Bards in Calbayog City

Respondent of the study

The respondents of the business owners and customers. These respondents

were chosen based on their affiliation to the said Resto Bar. They were chosen as

respondents based on the program that they were taken.

Table 1

Distribution of the respondents of the Study

Respondents f %

Business Owners 10 10%

Customers 90 90%

TOTAL 10 100 %

The different business owners are the identified owners of the following: Doce,

Mango Lounge, Jungle, Frontrue, Ten 4’s, Kapitanes, Sophia Diane, Demetrius, Borbs

BBQ, and Kamalig. Nine customers each for the identified resto bars will be the

identified respondents for customer’s point of view.

Sampling procedure

The random sampling was utilized and use for the selection of the business

owners and customers as a respondent that included in the study.

At the end view of this study the researchers believe that the result would be

capable enough to come up with regards to the outcome of the study and to cope the

Sustainable Competitive Advantage of Resto Bars in Calbayog City

Instrumentation

There is one set of questionnaires utilized in this study. The questionnaire is

going to be answered by our respondents the business owners and the customers of

the different Resto bars in Calbayog City .

They used questionnaires based on the statement of the problem, the

questionnaire will contain questions that are all about Sustainable Competitive

Advantage of Resto Bars in Calbayog City. Since, the questions are very specific the

researcher will expect the respondents will answer the entire question in a given item.

The researchers used the online survey using the Google forms in conducting the

survey to ensure the validation of instruments was answered properly. The researchers

assisted the respondents wherever the needed clarification in the questionnaire.

Validation of the instrument

The research instrument was presented and submitted to the research adviser

for its content validation before it was fielded. After the approval, the researchers

proceed to the field. The data gathered from the survey questionnaire were then

evaluated and statistically treated.

The researcher used questionnaire as an instrument of this study. This served as

a tool for the survey that was conducted, collected, and analyzed which was given to

the respondents.

The data were interpreted using the statistical tools. Frequency distribution was

used to describe the profile of the respondents and the food service establishments;

weighted mean was used to determine Sustainable competitive advantage of Resto

bars In Calbayog City; eta was used to determine the significant relationship between

the profile of the business and Sustainable competitive advantage level of Resto Bars in

Calbayog City; and Analysis of Variance (ANOVA) to determine the significant

difference when grouped according to profile of the business. All data were also

supported using PASW version 18 to further analyze the results using 0.05 alpha levels.

Data gathering procedure

The researchers used the self-made questionnaire which was utilized in gathering the

needed information and data. The questionnaire has four parts. Part I contains the

profile of the respondents in terms of age, gender, employment and address. Part II

includes the profile of the establishments in terms of type of food service business,

trends of customer arrivals, marketing practices, and services offered. Part III concerns

on the level of Sustainable Competitive Advantage of Resto Bars in Calbayog City in

terms of Ambiance, Menu, Operation and Price which are renamed from Strategic

management Theory for easiest understanding of the respondents. Part IV includes the

problems encountered in the management of the business in terms of problems with

employees and problems in operations.

Statistical treatment

In the processing of data, the following statistical techniques were employed.

Frequency and percentage distribution were used in determining the respondents’

profile such as Age, sex, employment and address. Likewise, the mean standard

deviation was computed to determine the factors can affect the Sustainable Competitive
Advantage of Resto Bars in Calbayog City, as perceived by the respondents in terms of

Ambiance, Menu, Operation and Price.

The one-way analysis Variance (ANOVA) was used to determine the significant

difference between the thoughts of respondents towards Sustainable Competitive

Advantage of Resto Bars in Calbayog City, as perceived by the respondents in terms of

Ambiance, Menu, Operation and Price.

To present the problems encountered by the respondents the frequency counts

and ranking was employed. The pieces of information obtained are essential in

achieving the objective of the study.