An Analysis of the Attributes Influencing Success of Micro and Small-Scale Food Service Enterprises in Los Baños, Laguna

Date

5-2018

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Maria Noriza Q. Herrera

Committee Member

Normito R. Zapata, Jr., Rachelle A. Mariano, Agnes T. Banzon

Abstract

It was reported by Agriculture and Agri-Food Canada (2014) that in 2012, the food service industry in the Philippines has exhibited strong growth and is still expected to continue growing. In Los Baños, the concentration of food service providers is located in Barangay Batong Malake, the study’s research area, wherein many major establishments, such as the University of the Philippines Los Baños, are located. However, although it was stated that the food service industry in the Philippines is growing, there are still many food service establishments in the area that fail to survive shortly after the start of their operations.

In order to minimize cases of failure, this study aimed to determine the attributes influencing success of food service enterprises in Los Baños, Laguna through studying 31 micro and small-scale food service enterprises (FSEs) in Batong Malake. Specifically, this study aimed to: (1) describe the socio-demographic characteristics of the food service establishments in Batong Malake and their respective owners; (2) identify the significant problems faced by these food service enterprises; (3) determine the attributes influencing success of micro and small-scale food service enterprises; and (4) provide guidance to the current and future stakeholders of the food service industry through the findings of this research.

The factors influencing success were already predetermined by the researcher through reviewing related literature. Among other factors, entrepreneurial characteristics, education, experience, legal policies and support, and resources and finance are the factors most frequently studied by scholars; hence, these factors were the focus of this study. The study focused on micro and small-scale food service enterprises in Batong Malake that have been existing for at least 3 years already and used complete enumeration in determining the number of observations. However, the researcher was only able to interview 31 FSE owners due to the unavailability of the other FSE owners; hence, the results are only applicable to the 31 FSEs that have participated in the study. During the interviews, questions about the socio-demographic characteristics of the FSE and of the owner, problems faced by the FSEs, attributes influencing success, as well as the management of the FSE and other external factors were asked. The FSEs were then classified according to two categories, successful and less successful, based on certain measures from existing literature. A total of 17 successful and 14 less successful FSEs were recorded after classifying them based on the categories. In analyzing the relationship of the attributes to success, contingency tables were used.

When it comes to the problems faced by food service enterprises, it was found out that the problem with the greatest effect to FSEs, as identified by the FSE owners, is the implementation of the K-12 program since majority of their customers are from UPLB. Due to this, there has been a notable decrease in their number of customers since there are many students graduating yet only a very small number of new freshmen enter the university. Another significant problem faced by FSE owners is the lack of loyalty among their employees wherein some employees tend to transfer to other FSEs which offer higher wages/salaries regardless of their tenure in their previous job. This is a problem for FSE owners since it is difficult and costly to find new trustworthy employees. Other problems encountered by FSEs are financial management, increasing prices of agricultural and other inputs, and employee performance.

For the attributes influencing success of the 31 FSEs, it was found out that the entrepreneurial characteristics and experience of the FSE owner influence success among the other factors. It was reported in the contingency table that majority of the successful FSE owners have high entrepreneurial characteristics, such as hardworking, risk-taking, confident, independent, has internal locus of control, and has need to achieve. Experience was found out to influence success as well since a trend can be observed in the contingency table of the years of experience and success, wherein it can be seen that as the years of experience of the FSE owner increase, the number of successful FSEs also increases.

Considering the abovementioned results, recommendations were formulated to address the problems and opportunities identified in this study. Food service enterprise owners should develop fortified plans such as reduction of costs, proper inventory management, and forecasting of sales in order to properly estimate the amount of supply needed to meet their current demand and avoid severe losses due to the lack of customers brought about by the K-12 program. FSE owners should also take advantage of the lean times by finding an alternative source of income for the FSE during vacations in order to prepare for the start of the semester. When it comes to finding loyal and trustworthy employees, FSE owners should do a screening process, which could include background checks, so that the credibility of the employee would be verified. Establishing good professional and personal relationships with the employees is also important to gain their loyalty and trust. An FSE owner should also have a positive outlook towards success in order to fuel his/her drive and confidence to work harder and achieve more each day.

As for the government agencies, their marketing strategies and information dissemination about the programs that they offer for businesses such as food service enterprises should be more intensive and visible for the business owners. Additional programs that tackle the management of the four business functions would also be of great help to improve the capabilities of the FSE owners. Government agencies and financial institutions should also offer financial aid with reasonable and affordable terms and rates so that many FSEs could avail and benefit from it. The process of applying for loans should also be made more efficient by shortening transaction time to avoid discouraging FSE owners from applying for one.

Additionally, mini case studies for 2 FSEs were formulated to describe and analyze the story, challenges, coping mechanism, and factors that had led them to success. Among the 31 FSEs, the cases of Ellen’s Fried Chicken and JJusco Oriental Restaurant were discussed in this study. It was advised that Ellen’s adopt a product development strategy wherein they would improve their current products and introduce new related products to their customers. Meanwhile, JJusco should apply a market development strategy to increase their sales by expanding their market and live their mission and vision by reaching more people in the Philippines.

Language

English

LC Subject

Food service management, Business enterprises--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 L37

Notes

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Document Type

Thesis

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