Research into the operation and performance of distribution branches within the building supply market: An empirical analysis
Abstract
The initial motivation for this study was to explain the wide performance variations across 30 distribution branches during the years 1990-1992. Of particular interest is that the branches were all part of the same division within a larger corporation, operated in an autonomous manner, sold the same type of products, serviced the same type of customer, and were evaluated and rewarded on the same criteria. The objectives of this study were: (1) to explore the factors causing the variation in performance, (2) to discern the relative importance of these factors, and (3) to provide some insights into how the explanatory variables affect each other. An initial model using four variables--competitive strategy, fit between strategy and operational elements, productivity of operations, and local market conditions--to explain branch performance was used to structure the research design and analysis. Two additional explanatory variables--complexity of operations and relative cost of operations--were added to the model at a later stage. An adjusted profit after tax financial measure was used as the dependent measure of business performance. Multiple regression was employed to analyze the strength and explanatory power of the model variables. A multiple case-study research methodology was utilized, each branch representing a unique case. The branch visits and interviews were conducted in the latter half of 1992, and the operating data are for 1992. Several interesting concepts and…
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