Multi-sectoral analysis of strategic groups in franchisingA study in Italy

  1. José M. Ramírez-Hurtado 1
  2. Bernardino Quattrociocchi 2
  1. 1 Universidad Pablo de Olavide
    info

    Universidad Pablo de Olavide

    Sevilla, España

    ROR https://ror.org/02z749649

  2. 2 Università de Roma La Sapienza
    info

    Università de Roma La Sapienza

    Roma, Italia

    ROR https://ror.org/02be6w209

Journal:
Revista de métodos cuantitativos para la economía y la empresa

ISSN: 1886-516X

Year of publication: 2018

Volume: 25

Pages: 318-334

Type: Article

DIALNET GOOGLE SCHOLAR lock_openRIO editor

More publications in: Revista de métodos cuantitativos para la economía y la empresa

Abstract

Franchising is a commercial form which enables firms to successfully penetrate the market and expand in an environment of growing global competitiveness. This form of business is present in many different activities and sectors, having its own characteristics and structures and significant differences among firms. It is therefore important to identify possible homogeneous groups of franchisors which share the same business strategies. This work is centred on the system of franchises in Italy. The figures about the high number of franchisors and franchised establishments, the quantity of chains operating over many years and the high penetration in the different sectors mean that franchising in Italy has a high degree of competitiveness and maturity. All this, along with the scarcity of studies about strategic groups in franchising in Italy, justifies this study. Specifically, the objectives are: 1) to identify the possible existence of strategic groups in Italy’s franchising system; 2) to carry out a multisectoral analysis of strategic groups to determine whether the same strategic groups exist in the different franchising sectors; and 3) to characterise the different strategic groups and show their most significant variables. The results indicate that the most numerous strategic group is made up of chains which fully trust the domestic market, so the majority have not undertaken a strategy of internationalisation. On the other hand, the least numerous strategic group is composed of chains which have grown rapidly. This reaffirms the degree of saturation of the franchising market in Italy, as there is a great number of brands but few franchised establishments. The results attained in this work allow an understanding of the keys to the success of franchises in the Italian market for the franchisors to be able to maintain their position or, contrariwise, make changes and reposition themselves.

Bibliographic References

  • Aaker, D.A. (1988). Developing Business Strategies. New York: John Wiley & Sons.
  • Alon, I. (2001). The use of franchising by U.S-based retailers. Journal of Small Business Management, 39(2).
  • Assofranchising Italia. (2015). www.assofranchising.it
  • Baena, V. (2010). Teorías y líneas de investigación en el sistema de la franquicia: una revisión desde los años 60 hasta 2009. Cuadernos de Gestión, 10(2), 43-66.
  • Barroso, C., Casillas, J. & Moreno, A. (2001). Los grupos estratégicos en el sector minorista: El caso de Andalucía. Non idem iterum semper novum. Seville: Digital@tres.
  • Bradach, J.L. (1997). Using the Plural Form in the Management of Restaurant Chains. Administrative Science Quarterly, 42, 276-303.
  • Brickley, J.A. & Dark, F.H. (1987). The choice of organisational form: the case of franchising. Journal of Financial Economics, 18, 401-420.
  • Carney, M. & Gedajlovic, E. (1991). Vertical integration in franchise systems: Agency theory and resource explanations. Strategic Management Journal, 12(8), 607-629.
  • Carroll, C., Lewis, P.M. & Thomas, H. (1992). Developing Competitive Strategies in Retailing. Long Range Planning, 25(2), 81-88.
  • Castrogiovanni, G.J., Bennett, N. & Combs, J.G. (1995). Franchisor types: Reexamination and Clarification. Journal of Small Business Management, 33(1), 45-55.
  • Combs, J.G. & Castrogiovanni, G.J. (1994). Franchisor strategy: A proposed model and empirical test of franchise versus company ownership. Journal of Small Business Management, 32(2), 37–48.
  • Combs, J.G. & Ketchen, D.J. (2003). Why do firms use franchising as an entrepreneurial strategy? A meta-analysis. Journal of Management, 29(3), 443-465.
  • Combs, J.G., Ketchen, D.J. & Hoover, V.L. (2004). A strategy groups approach to the franchising-performance relationship. Journal of Business Venturing, 19(6), 877-897.
  • Combs, J.G., Ketchen, Jr., D.J., Shook, C.L. & Short, J.C. (2011). Antecedents and consequences of franchising: Past accomplishments and future challenges. Journal of Management, 37(1), 99-126.
  • Cool, K. & Schendel, D. (1987). Strategic group formation and performance: The case of the U.S. Pharmaceutical industry 1963–1982. Management Science, 33(9), 1102–1124.
  • Díez, E.C. & Rondán, F.J. (2004). La investigación sobre franquicia. Investigaciones Europeas de Dirección y Economía de la Empresa, 10(3), 71–96.
  • Garcia Lopes, H.E., Naves Moura, T. & Gianinni Oliveira, C.C. (2010). Strategic profiles in Brazil: a study of postal agents franchisees from the typology of Miles and Snow. Revista Brasileira de Gestão de Negócios, 12(57), 388-404.
  • Garg, V.K, Rasheed, A.A. & Priem, R.L. (2005). Explaining franchisors’ choices of organization forms within franchise systems. Strategic Organization, 3(2), 185-217.
  • Harrigan, K.R. (1985). An application of clustering for strategic group analysis. Strategic Management Journal, 8, 55-73.
  • Hatten, K.C. & Hatten, M.L. (1987). Strategic groups, asymmetrical mobility barriers and contestability. Strategic Management Journal, 8, 329-342.
  • Hunt, M. (1972). Competition in the major home appliance industry 1960–1970. Ph. D. dissertation, Harvard University.
  • IFA (2015). Educational Foundation 2010 franchise business economic outlook. Price Waterhouse Coopers, 1–13.
  • Inma, C. & Debowski, S. (2006). Analysis of Franchise Performance through Use of a Typology: An Australian Investigation. Singapore Management Review, 28(2), 1-30.
  • Johnson, J. & Alon, I. (2006). How do international franchisors cluster, in Alon, I. 2006. Service franchising. A global perspective. New York: Springer, 93-138.
  • Kaiser, H.F. (1974). An index of factorial simplicity. Psychometrika, 39(1), 31-36.
  • Ketchen, D.J., Combs, J.G. & Upson, J.W. (2006). When does franchising help restaurant chain performance? Cornell Hotel and Restaurant Administrative Quarterly, 47(1), 14–26.
  • Kotler P. (2002). Dirección de marketing, conceptos esenciales. Mexico: Pearson Editorial.
  • López, B. & Ventura, J. (2001). Grupos Estratégicos en las Franquicias Españolas. Economía Industrial 340, 163-176.
  • Mainardes, E.W., Ferreira, J.J. & Raposo, M.L. (2014). Strategy and strategic management concepts: are they recognised by management students? E+M Economics and Management, 17(1), 43–62.
  • Melo, P.L. de R., Borini, F.M., Oliveira Junior, M. de M. & Parente, R.C. (2015). Internationalization of Brazilian franchise chains: a comparative study. RAE-Revista de Administração de Empresas, 55(3), 258-272.
  • Nath, D. & Gruca, T. (1997). Convergence across alternative methods for forming strategic groups. Strategic Management Journal, 15(1), 43-61.
  • Nath, D. & Sudharshan, D. (1994). Measuring strategy coherence through patterns of strategic choices. Strategic Management Journal, 15(1), 43-61.
  • Navarro, A., Díez, E.C. & Rondán, F.J. (2006). Franchisors Types in Portuguese Franchising. Portuguese Journal of Management Studies, XI (2), 97-114.
  • Peteraf, M. & Shanley, M. (1997). Getting to know you: A theory of strategic group identity. Strategic Management Journal, 18, 165-186.
  • Ramírez, J.M. & Quattrociocchi, B. (2009). An update of the franchisee motivations: a study in Spain. Journal of Applied Economic Sciences, 4(2-8), 210-220.
  • Revuelto, L. & Fernández, R. (2009). La utilidad del análisis de los grupos estratégicos. Journal of Applied Economic Sciences, 3 Iss. 3), 49-57.
  • Roh, Y.S. (2002). Size, Growth Rate and Risk Sharing as the Determinants of Propensity to Franchise in Chain Restaurants. International Journal of Hospitality Management, 21(1), 43-56.
  • Rondán, F.J., Navarro, A. & Díez, E.C. (2006). Grupos Estratégicos en el Sistema de Franquicia: el Caso de España y Portugal. In Decisiones Basadas en el Conocimiento y en el Papel Social de la Empresa. AEDEM, Vigo, Spain.
  • Rondán, F.J., Navarro, A. & Díez, E.C. (2007). Proposing New Variables for the Identification of Strategic Groups in Franchising. International Entrepreneurship and Management Journal, 3(4), 355-377.
  • Rondán, F.J., Navarro, A., Díez, E.C., Rodríguez, C. & Guisado, M. (2010). Estudio del performance de los grupos estratégicos en el sistema de franquicia español. Investigaciones Europeas de Dirección y Economía de la Empresa, 16(2), 43-62.
  • Shane, S.A. (1996). Hybrid organizational arrangements and their implications for firm growth and survival: A study of new franchisors. Academy of Management Journal, 39, 216–234.
  • Sigué, S.P. & Rebolledo, C. (2004). La franquicia en Colombia: ¿una alternativa a la escasez de recursos o una opción para aumentar la eficiencia? Management International, 8(2), 15- 24.
Data source: Dialnet