Analyzing the Failure of a Fast Food Chain Restaurant in Jordan: A Supply Chain Management Perspective

Supply Chain Management Impact on Restaurant Success:
The case of KUDU Restaurant in Jordan – An Analytical Study
Research Proposal By Reema Kazimi
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Abstract
This paper is prepared as a proposal for Master Thesis. The research covered in this paper
has been conducted aiming to achieve a number of objectives, most importantly to analyze
and outline the main factors behind the failure of a fast food chain restaurant (KUDU) in
Jordan as a sample.
The research is divided into five main chapters:
The first chapter (Introduction), covers the rationale of topic selection (i.e. the significance of
the study), a summarized background of the organization (KUDU Restaurant) and It's
restructuring , the statement of the study (Research Problem), and the research objectives.
The second chapter (Literature review), which explains the previous literature review, and
the researcher's discussion of previous studies.
The third chapter (Methodology), outlines the research approach, the hypothesis
development, research instruments and data collection, and the research model (or
paradigm).
The fourth chapter (Analysis), provides a detailed multi-facet description of data
analysis (PEST) and statistical, theoretical implications, managerial implications, and the
research limitations and ideas for future research
The Fifth Chapter (Discussion), includes the results (or findings) of the research as well as the
recommendations.
The research findings has shown that KUDU management has lacked strategic planning for
its supply chain. Certain recommendations were also enlisted that covers main parties
involved (both types: scholars and industry practitioners).
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Table of Contents
CHAPTER 1: INTRODUCTION..........................................................................................................6
1.1 Rationale of topic selection..................................................................................................6
1.1.1 The importance of Supply Chain Management in any industry.....................................6
1.1.2 The critical role of restaurants on Jordan's economy....................................................7
1.2 Summarized Organization Background and Restructuring of KUDU Jordan.........................8
1.3 Problem statement.............................................................................................................. 8
1.4 Objectives of the study.........................................................................................................9
1.5 Research Questions..............................................................................................................9
CHAPTER 2: LITERATURE REVIEW...............................................................................................10
2.1 The concept of supply chain...............................................................................................10
2.2 The impact of supply chain.................................................................................................10
2.3 Connection with the restaurant performance....................................................................11
2.4 Concept of supply chain management...............................................................................12
2.5 Importance of Supply Chain Management.........................................................................12
2.6 Restaurant Supply Chain Management..............................................................................13
2.7 Factors of Restaurant success............................................................................................14
2.8 Discussion...........................................................................................................................15
2.9 The conceptual Framework................................................................................................16
CHAPTER 3: METHODOLOGY....................................................................................................... 17
3.1 Research Philosophy / paradigm........................................................................................18
3.2 Research purpose...............................................................................................................18
3.3 Research Approach............................................................................................................ 19
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3.4 Research Design................................................................................................................. 19
3.6 Research Main Hypothesis.................................................................................................20
3.7 Data Collection instruments...............................................................................................21
3.8 Ethical Considerations........................................................................................................23
3.9 Key variables...................................................................................................................... 23
CHAPTER 4: DATA ANALYSIS, FINDINGS AND DISCUSSIONS........................................................25
4.1 PEST Analysis: Political....................................................................................................... 38
4.2 PEST Analysis: Economic.................................................................................................... 41
4.3 PEST Analysis: Socio-Cultural..............................................................................................43
4.4 PEST Analysis: Technological..............................................................................................45
4.5 Results and Observations...................................................................................................47
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS................................................................50
5.1 Theoretical implications.....................................................................................................50
5.2 Managerial Implications.....................................................................................................50
5.3 Research Limitations & ideas for future research..............................................................51
5.3.1 Research Limitations....................................................................................................51
5.3.2 Ideas for future research.............................................................................................51
5.4 Recommendations............................................................................................................. 52
References................................................................................................................................... 53
Appendix......................................................................................................................................57
Appendix (1).............................................................................................................................57
Appendix (2).............................................................................................................................58
Appendix (3).............................................................................................................................62
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CHAPTER 1: INTRODUCTION
1.1 Rationale of topic selection
1.1.1 The importance of Supply Chain Management in any industry
Supply Chain Management (SCM) in organizations is a critical issue which attracted a
considerable attention and is the topic of a big debate by scholars as well as industry
practitioners in the last two decades. As a new phenomenon (Wisner et al, 2008) an Integrated
supply chain management has its benefits and problems. Benefits are clearly linked to building
trust between supply chain members, more accurate assessment of the deficiencies or the
realignment of the competitive strategies employed among firms. On the other hand, supply
chain management drawbacks may include its costs, sophistication and time consumption. The
supply chain management of a restaurant consists of many parts. The parts are the purchasing
order management, the vendor management, stock management, consumption and variance
management. The supply chain management can have huge impact on a restaurant business as
per the views of Ciani, Vörös and Fagioli (2016). Taken for example, the traditional supply chain
technology can put the profits of a restaurant at risk. It has been found that the restaurant
companies are using such technologies which do not suit to the running of a complex supply
chain. Running these systems is a growing challenge for the restaurants. According to
Bendeković, Jadranka et al. (2016), the supply chain has to be associated with the enterprise
and across all the partners of the supply chain. On the other hand, the restaurant supply chain
management with the use of spreadsheets, various electronic systems along with the paper
invoices can create staggering monetary loses and still remain invisible. Hence, without an
integrated system, the complexity of managing the supply chain increases upto greater extent.
Although it is time-consuming and costly, but delayed, inefficient and poorly constructed supply
chain can highly affect the business.
This particular research will focus on the importance of supply chain management in
the success of a restaurant. A supply chain consists of the inventory management that is huge
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part in the success of an organization. The paper will draw inference from theories and models
from the scholarly articles to support the research statements. The research statement of the
problem will justify the reason behind conducting the research on this particular topic. The
fulfillment of the customer demand is necessary and at the same time, the waste reduction and
lowering of the overhead costs are also necessary. A proper network is required for the
completion of end–to-end visibility, collaboration and the business intelligence (Mung’onye,
Paul 2008). One such example is the Real Time Value Network that helps to share the real-time
demand along with the information with instant visibility and the automated actions. It also
eliminates the delays and at the same time reduces the costs by the reduction of waste
materials. On the contrary, according to Teddlie and Tashakkori (2009), the supply chain of the
restaurants can be managed by on–time pricing delivery, speed control and adherence on the
service level comments. (Appendix #3)
Thus, the problem statement for this study is that an efficient supply chain
management is an essential factor of success for any industry, including the restaurant industry.
However, to achieve efficiency of supply chain management in the restaurant industry, there are
many factors that need to be addressed in an in-depth manner to get an overview of the
challenges. This study will investigate and evaluate the success and the challenging factors that
affect the efficiency of the supply chain management of the restaurants, which in turn affect the
performance as well as success of the restaurants.
1.1.2 The critical role of restaurants on Jordan's economy
The restaurant industry in Jordan plays a significant role in the growth of its economy, although
it heavily depends on the tourist inflow to the country. In 2016, there are more than 900
restaurants in Jordan, among which 85% are located in Amman (Mustafa 2016). It has been
found that the restaurants located outside Amman faced a 20 to 30% drop in the revenues due
to lack of tourists and adequate capital while the restaurants in Amman have been growing.
However, in 2017, drop in the number tourists have led to a drop of 10-30% of the revenue in
the restaurant industry of Jordan (Mustafa 2017). Due to its strategic importance for the
sustainability of organizations in general and for restaurants in particular, supply chain
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