Group 5 Research Outlined Proposal
Group 5 Research Outlined Proposal
Group 5 Research Outlined Proposal
INDUSTRY
A Research Proposal
Presented to the
_______________________________
In Partial Fulfillment
By
AL-OS, ANGEL A.
CARBON, GIFFERSON L.
May 6, 2023
ii
APPROVAL SHEET
This research proposal entitled “An Analysis of the Implementation of Cost Management
Techniques in the Philippine Restaurant, Food, and Beverage Industry” submitted by Angel A. Al-
os, Gifferson L. Carbon, Heavenly Joy L. Cuaresma, Ciana Theresa A. Hinotan, Shara Monique
P. Roluna, and Kayla Madison O. Torres in Partial fulfillment of the requirements for ACM 3105
– Research Proposal, has been examined and accepted for Proposal Hearing.
Research Committee
Chair
Member Member
Faculty Adviser
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TABLE OF CONTENTS
Page
TITLE PAGE i
APPROVAL SHEET ii
LIST OF FIGURES vi
Chapter
1 INTRODUCTION
THE PROBLEM
2 THEORETICAL BACKGROUND
3 RESEARCH METHODOLOGY
Research Environment 32
Gathering of Data 33
4 BIBLIOGRAPHY 35-44
5 APPENDICES
LIST OF FIGURES
Figure 2.1 28
Figure 2.2 29
Chapter 1
INTRODUCTION
Management accounting in the restaurant industry dates back to the early 20th century, when the
industrial revolution brought about significant changes in the way businesses were managed and
organized. According to Birdseye (1921), the 20th century saw a shift in the restaurant industry
towards more formalized management accounting processes due partly to the increasing size and
complexity of early restaurants as well as the growing importance of cost control in the industry.
With the growth of the industry, it became clear that traditional accounting practices were not
sufficient to meet the needs of the industry, leading to the development of specialized cost
accounting techniques.
While there is limited historical data on the effects of cost management techniques in the Philippine
restaurant, food, and beverage industry, it is safe to say that businesses in the industry have always
faced challenges related to cost control. Furthermore, cost management techniques such as cost
control is essential in controlling food and beverage costs, which typically account for a significant
portion of a restaurant’s expenses along with regular inventory checks, portion control, and menu
engineering to minimize wastage (Dela Cruz, 2017). Over time, however, there has been a growing
recognition of the importance of cost management in the industry. As the industry has grown,
businesses have had to become more competitive and cost-efficient to survive. Many have adopted
various business strategies and cost management techniques, such as inventory management, waste
reduction, and energy efficiency, to reduce their costs and increase profitability.
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In recent years, there has been an increased focus on sustainable and responsible business practices
in the hospitality industry (Goodwin & Francis, 2003). This includes the adoption of business
strategies that not only reduce costs but also have a positive impact on the environment and local
communities.
The COVID-19 pandemic has also had a significant impact on the hospitality industry (including
food and beverage) worldwide, with many businesses struggling to stay afloat (Norris et al., 2021).
Cost management has become more critical than ever, as businesses have had to identify and
reduce costs to maintain profitability and survive the pandemic's economic impacts.
This study will focus on the sector of the food service industry instead of the hospitality industry
as a whole since the latter is too broad for the researchers to accomplish. It encompasses
entertainment, food service, accommodations, and airlines, among many others. Moreover,
studying it separately can help researchers better understand the specific issues faced by food
service businesses in detail. Furthermore, according to the Annual Survey of Philippine Business
Industry (2019), the food service industry consists of 74.2% of the market share in the food service
and accommodation industry and contributes to 63.72% of the hired labor force in this sector. In
the same survey, the food service industry sector also accounted for 70.1% and 71.1% of revenues
Overall, business strategies in the restaurant, food, and beverage industry continue to be an
important area of focus, as organizations seek to maximize their financial performance and remain
competitive in an increasingly complex and dynamic marketplace. With these, the researchers are
interested to know more about how business strategies implemented benefit the business decisions
THE PROBLEM
This study aims to provide an analysis on the implementation of cost management techniques
applied by the Philippine restaurant, food, and beverage industry, in order to provide an actionable
plan to maximize resource utilization. Specifically, this will address the following:
1. To determine the cost management techniques implemented by the Philippine restaurant, food,
2. To evaluate the Cost Control and Cost Reduction Techniques implemented by the industry using
SWOT Analysis.
This study hopes to provide a further structured understanding on the cost management techniques
used by the Philippine restaurant, food, and beverage industry in order to provide a framework for
better utilization of business resources. Furthermore, the study could benefit the following:
The Researchers
As future employees, employers, and leaders of society, this study will tremendously guide the
researchers in their careers in having an overview of what the real world is. Having a glimpse of
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an industry that is partly one of the backbones that drive the country’s economy, the researchers
expect this study to help them make better decisions for their career and personal growth.
Provided that the researchers’ main focus is to create a framework that aids businesses maximize
their resources to generate more income, the researchers hope that this study helps restaurant
owners and managers to stay afloat in the current economic uncertainty threatened by foreign war
Investors in the restaurant industry need to make informed investment decisions. Understanding
the cost management processes of restaurants can provide insights into their financial health and
their ability to generate profits. Furthermore, investors need to evaluate the performance of their
restaurants, and with this study, the researchers aim to provide a framework for restaurant owners
to be able to maximize their financial and operational resources to its utmost potential.
Philippine Government
Understanding the cost management processes of restaurants can provide further information into
the socio-economic health of the industry as a whole and its potential for growth and investment.
Furthermore, this industry is also a significant employer in the Philippines and effective cost
management can contribute to the sustainability of restaurant businesses and the preservation of
General Public
This study can create awareness since consumers need to be aware of the factors that contribute to
the prices of the food and drinks they consume at restaurants. Understanding the cost management
processes of restaurants can help consumers make more informed decisions about where to dine
Environment
Food security and sustainability should be the top priority in a country where hunger and
malnutrition is not uncommon. Food wastage is a lingering problem where more than 35% of food
waste comes from the food service and retail sector (Philippine Institute for Development Studies,
2022). With this study, the researchers hope to provide recommendations for restaurateurs to only
Academe
Students studying hospitality, restaurant management, or related fields can gain valuable
knowledge and skills related to cost management in the hospitality industry, which can prepare
them for their careers in their field. Understanding cost management processes can provide insights
Future Researchers
The findings of this study can serve as a basis for future research in related fields, identifying gaps
in knowledge and areas where further research is needed. This study can identify the best practices
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for optimizing financial performance in restaurants. Future researchers can use these insights to
This research aims to determine the implementation of cost management techniques in the
Philippine Restaurant, Food and Beverage Industry to provide a framework to maximize resource
utilization even further. This study will be dependent on qualitative data. The constraints of this
study are: (1) it only focuses on the restaurant, food, and beverage industry in the Philippines, and;
(2) the researchers will not obtain information conducted from questionnaires and interviews.
Definition of Terms
To facilitate the understanding of this study, different terms are defined herein:
Bargaining power of buyers - when someone wants to buy something, they can either buy it from
one seller or from another seller who is selling the same thing. When buyers have more options to
choose from, they have more bargaining power. This means they can ask for a lower price or better
quality, because they can easily go to another seller if they don't get what they want.
Bargaining power of suppliers - assesses the industry in terms of the influence suppliers have in
terms of the prices, quality, and terms of products and services offered by an industry.
Cost control - involves implementing measures and processes to regulate and manage expenses
within an organization. It aims to ensure that costs are kept within budgets through monitoring,
analyzing, and taking corrective actions when necessary.
Cost reduction - refers to the implementation of measures and initiatives aimed at minimizing
expenses and achieving cost efficiencies within an organization. It ivolves identifying areas of
unnecessary costs, finding ways to eliminate or reduce them.
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Competitive rivalry among the competitors in the industry - degree of competition among existing
players in a particular industry or market. This force helps businesses understand the competitive
Cost management techniques - refer to strategies and methods used to control and reduce the costs
Exposure to globalization - this aspect is based on the concept that for successful
internationalization, firms must manage far-reaching networks of partners and develop long-
Financial strategies - refer to the specific plans and approaches used by organizations to manage
their financial resources and achieve their financial goals and objectives. These strategies typically
involve identifying key financial objectives, such as revenue growth, profitability, cash flow
management, and risk management. Effective financial strategies help organizations to optimize
their financial performance, reduce financial risks, and ensure long-term financial sustainability.
Framework to maximize resource utilization - a structured action plan or set of guidelines designed
to optimize the use of available resources within an organization’s projects or process. The main
objective of this output is to improve efficiency, reduce wastes, and achieve better outcomes with
the available resources at hand such as human resource, financial resource, time, or other assets
Industry exposure to deregulation activities - a process in which certain industries are deregulated
to encourage free business activities governed and directed by the free market.
Marketing Strategies - plans and tactics used by companies to promote and sell their products or
services to potential customers. These strategies involve identifying target markets, researching
customer needs and preferences, and developing a plan to communicate the value of the product
Management strategies - plans and approaches used by organizations to achieve their goals and
objectives. These strategies typically involve identifying key areas of focus, developing a plan of
action, allocating resources, and measuring progress to ensure success. It can also apply to different
Maximizing resource utilization - process of using resources such as time, money, materials, and
personnel, in the most efficient and effective way possible to achieve maximum profitability, This
involves identifying the available resources, determining the most effective ways to use them, and
monitoring and adjusting the usage of resources as needed. By maximizing resource utilization,
Porter’s Five Forces Model - is a strategic analysis tool used to assess the competitive forces that
affect an industry or market. By analyzing these five forces, businesses can gain a better
understanding of the competitive dynamics of their industry or market and make informed strategic
decisions. The model can also be used to identify areas where a business can improve its
SWOT Analysis - a strategic planning tool used to identify and evaluate internal strengths and
weaknesses of an organization, as well as the external opportunities and threats that may affect its
success. It can be used to identify areas where an organization can improve, as well as potential
areas of growth and opportunities. The results of the SWOT analysis can be used to develop a
strategic plan that leverages organization’s strengths, addresses its weakness, takes advantage of
and managing the constraints that limit the performance and effectiveness of an organization.
Technical strategies - refer to the specific plans and approaches used by organizations to achieve
their technological goals and objectives. These include software development, software utilization,
and employee technical training. Effective technical strategies help organizations to leverage
Threat of digitalization - refers to the potential negative consequences of the increasing use of
digital technology in various aspects of the industry. Competition within this industry is expected
Threat of substitute products - refers to the risk that a company’s products or service may be
replaced by a similar product or service offered by a different company or industry. This threat is
especially high when there are many substitutes available that can fulfill the same customer needs
or perform the same function as the company’s product or service, and when these substitutes are
Threat of new entrants - a concept used to describe the risk that new competitors could enter an
industry or market and threaten the market position of existing players. In simple terms, the threat
of new entrants is the possibility that someone new could come in and take businesses away from
existing companies.
The organization of the final thesis is laid out in this section. The introduction, theoretical
background, research methods, results and discussion, summary, conclusion, and suggestions are
The introduction will be Chapter 1 of this thesis document. In addition to outlining the relevance
of the study, its scope and constraints, definitions of keywords, and the study's organization, this
part presents the issue statement and explains why the study was chosen. The theoretical
background of the research is discussed in Chapter 2. The whole chapter is focused on discussing
the theoretical background of the study, including similar studies, the theoretical framework, and
The type of research that will be used to conduct the study is further presented in Chapter 3, which
is focused on the research methodology. Furthermore covered will be the research environment,
respondents, research instruments, and research process. The study findings and discussion will be
in Chapter 4. In this chapter, the researcher's data are presented, examined, and interpreted. Lastly,
Chapter 2
THEORETICAL BACKGROUND
This chapter includes related studies of different researchers about: (1) a brief history of
restaurants; (2) market environment of restaurants in the Philippines (3) fundamentals of cost
management (4) cost management techniques applied in the restaurant, food, and beverage
industry; (5) the challenges experienced by restaurants in the Philippines, and; (6) an overview on
previous related studies about the Porter’s Five Forces Model in the Food Industry from other
countries.
Beginning of restaurants
It is important to know where industries have started, because by studying history, we can gain
insights into how past events have shaped the present (MOOC, 2021). Furthermore, it gives us the
opportunity to avoid repeating past mistakes and to create more positive and productive paths for
our communities and societies (Peters, 2009). The French revolution during the 1790s played a
vital role in the rise of fine dining. Before the revolution, French cuisine was characterized by its
luxuriousness and extravagance, with meals consisting of multiple courses and iconic
presentations. However, during the revolution, the aristocracy who were the main customers of the
high-class cuisines were overthrown and many of their private chefs were left unemployed and
The transformation of travel in the 19th century helped establish luxury dining venues in Europe
and other parts of the world. During the industrial revolution, there was a significant increase in
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urbanization and the growth of cities (Jedwab & Vollrath, 2015). The rise of factories and other
industrial workplaces meant that workers had less time to prepare meals at home and needed to eat
out more frequently. According to Mealey (2018), this led to the emergence of restaurants that
catered specifically to the needs of the working class. As a result, the demand for restaurants also
grew rapidly during this time which led to the emergence of a new style of restaurant where patrons
could order from menus and pay for their meals at the end (Mealey, 2018).
The history of the food industry starts with the most common Filipino staple where any meal
without it is not fulfilling – rice. Archaeological evidence suggests that rice cultivation in the
Philippines dates back to around 3400 - 125 B.C. in Cagayan Valley, with early rice varieties being
adapted together with the region’s environment and climate (Rice Matters, 2011). According to
the Philippine Institute for Development Studies (2012), rice cultivation played an important role
in the socio-economic development of pre-colonial Philippines, with rice being used not only as a
staple food but also as a form of currency and tribute. In the same study, rice surplus at the time
was being traded with neighboring communities and used to build social networks and alliances.
In the 2nd Century AD, the Chinese found their way around the archipelago and made their first
trade within the Philippines, which they called “Mal” at the time (Melchor & Vizconde, 2021).
According to the same book, the Philippines, which was known as the “Land of the Gold” to the
Chinese during this time, became an important trading partner for China, because the country was
attracted to the Philippines for its rich natural resources, including gold, pearl, and tropical fruits.
This means that the Philippines was not a barren wasteland of natives who were uncultured,
barbaric, uncivilized, and even sub-human which was how Spanish colonizers viewed indigenous
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tribes at the time (Pagulayan, n.d.). Furthermore, as barter and trading of race was practiced, China
introduced the Philippines to soy sauce, fish sauce, anmelchod the method of stir frying and this
led to the birth of many Filipino-Chinese dishes such as pancit, lumpia, siopao, and siu mai
In the Spanish era, colonizers brought with them a culture of fine dining and established restaurants
that offered European cuisine and with such, these restaurants were mainly frequented only by
Spanish colonizers and wealthy Filipinos who could afford its high prices (Fernandez, 2000). The
American colonial period taking over the Spanish colony also had its own take in influencing the
American-style diners and fast food chains to the country, which quickly gained popularity among
the younger generation at the time and became a new standard for the Filipino restaurant scene.
The mass propaganda of fast foods such as hamburgers, processed foods such as hotdogs, junk
foods, and soft drinks at the time can even make one believe that it is what Filipinos culturally ate
from the very beginning (Fernandez, 1998). This means that the Philippines’ culinary practices are
a mixture of both the western and eastern cultures – the Americans, Chinese, Japanese, and even
According to the Annual Survey of Philippine Business Industry (ASPBI) done by the Philippine
Statistics Authority – in the Food Service and Accommodation in 2019 (2022), the restaurant, food
and mobile food service activities shared the highest percentage of market share with a 74.2%
followed by short-term accommodation activities. In the same study, the total number of employed
in the food service industry is at 63.72% of the total employed of 611,271. Furthermore, the food
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service sector accounted for 70.1% of total revenues and 71.1% of the total expenses amounting
In a survey conducted by Flanders Investment & Trade Market or FITM (2019), the food service
industry in the Philippines is thriving due to the increasing need for convenience brought about by
the rise of urbanization and busy lifestyles. In the same study, the worsening traffic and
transportation problems have resulted in an increase in the popularity of home delivery and takeout
outlets. This has led to a growing demand for cooked food and dining out since customers prefer
instant services due to its convenience and accessibility (Fareye, 2022). However, many food
businesses, which reacted quickly enough in the demand to serve food deliveries suffered a decline
in profitability (Li et al., 2020), in spite of them being early adopters to the modern technology.
Interestingly, the growing middle class resulted in a bigger demand for a wider range of good food
and high quality products (FITM, 2019). This is also what we observed in the previously
mentioned beginning of restaurants where the working middle class’ growth spiked the demand
for restaurants serving cooked foods. This is most likely due to the fact that 40% of the population
is middle class (Philippine Institute of Developmental Studies, 2022). As FITM (2019) says that
one of the factors for the growth of the food sector is the rise of middle income earners. Therefore,
as the average disposable income of Filipinos continues to rise, more people are dining out and
spending more money in the food industry. According to FITM (2019), “the trend towards value-
oriented dining has also contributed to this increase in spending.” With this, we can conclude that
increased spending in the food service sector is not solely caused by food being a basic need,
because demand for dining reflecting experiences and cultures also play an important role in the
In relation to the previously mentioned rich culture of trade and industry of the pre-colonial and
colonial Philippines, the country contrastingly is already an extremely and heavily reliant food-
importing nation (Gamboa, 2022). In a recent study by the United States Department of
Agriculture (n.d.), “the Philippines is the country’s 9th largest export market (buyer of goods for
export) while the US is its [Philippines] largest single-country supplier of agricultural products
with a 24% market share.” Additionally, with the more updated study by the International Trade
Administration (2022), “the Philippines is the seventh-largest market for the U.S. Agricultural
Exports and the top market in Southeast Asia.” However, based on the study of the Philippine
Institute of Development Studies (2021), local agriculture faces threats in long-term sustainability
mainly with the following factors: low fish supply due to overfishing and human activity, declining
forest cover due to expansion of human habitats, climate change, and the decline of water
availability. With these problems unresolved by the government, there is no choice for restaurants
Ideally, a population growth requires an increase in food production to support demand for basic
food resources, however, Philippine Institute for Development Studies (2020) show that the
number of people working in agriculture has been declining both in relative [to population growth]
and absolute terms. This means that in cases such as the war in Ukraine and disruptions of food
supply chains caused by a pandemic, the Philippines will definitely experience food shortages in
the long-term as being a heavily import-reliant nation, the Philippines wouldn’t be able to stand
on its own and feed its people. As the Briones et al. (2017) notes, “most Filipinos suffer from lack
of food or poor diets, despite rising food availability because of inadequate access to food due to
high poverty and low income especially among the rural population that are generally engaged in
agriculture.” With the existing supply chain crisis and the constant battle for inflation, we can
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conclude that 5 years after that study was conducted [2017], things are definitely worse. This is
proven by a study conducted by the Food Security and Nutrition in the World (2022) with findings
that more than a quarter of children under five in the Philippines suffer from stunted growth.
According to the Institute of Chartered Accountants of India (2020), there are two main types of
cost management techniques and these are: (1) cost control, and; (2) cost reduction. Firstly, cost
control involves the management's efforts to regulate and reduce the costs incurred by a company.
By making continuous comparisons between actual and expected costs, executives can determine
how well the company is achieving its goals and adjust it whenever needed to maximize costs.
(Institute of Chartered Accountant of India, 2020). In contrast, cost reduction is the process of
achieving long-term and sustainable decreases in the cost of producing goods or services. In a
nutshell, cost control is defined as a preventive measure while cost reduction is a corrective action.
Furthermore, Lockey (2002, as cited in Lawal, 2017) stated that cost control is concerned with a
component of marginal cost that involves figuring out unit cost, measuring, and improving the
performance of subordinates in order to ensure that the enterprise's goals and the means to achieve
them are achieved efficiently. Cost control, which regulates how much it costs to run a business,
focuses on maintaining costs within reasonable bounds. In a formal operational plan, these are
typically listed as standard costs or target cost limits. Meanwhile, cost reduction is to be defined
as the achievement of a true, constant decrease in the unit of goods manufactured without
compromising their suitability for the intended application. As such, the term "cost reduction"
refers to actual or true savings in production, administration, selling, and sharing expenses as a
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result of the removal of unnecessary and inefficient components from product design as well as
Cost control and cost reduction are both important cost management techniques in the restaurant
industry. Cost control techniques such as budgeting and forecasting, inventory management, and
labor cost control are preventive measures that help to ensure that costs are kept in check (Gyaan,
2018). As Egan (2015) notes, controlling food costs is a critical component of maintaining
profitability in the food service industry. Therefore, by setting and regularly reviewing budgets for
food, beverage, and labor costs, restaurant managers can ensure that these expenses are under
In reference by the Institute of Chartered Accountants of India (2020), cost reduction techniques
are corrective measures that seek to achieve sustainable and long-term cost reductions. One cost
reduction technique gaining traction recently in restaurants is menu engineering. In a study by Dela
Cruz (2017), menu engineering is a method of assessing and optimizing menu pricing, design, and
decision-making for both the present and the future. With menu engineering, the restaurant’s menu
is analyzed to identify which items are profitable and which are not (Ardiansyah, 2020). Therefore,
its main objective is to maximize profits by strategically pricing and promoting high-margin items,
and food waste are among the primary loss culprits [of restaurant businesses] (Oracle, 2015). The
same report claims that 50% of independent operators do not track prepared waste and 60%
reported they do not use forecasting systems to improve ordering, which likely contributes to the
waste problem. This is why portion control is also closely related to another cost reduction
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technique which is waste reduction. According to the Department of Science and Technology –
Food and Nutrition Research Institute (2022), “1,717 metric tons of food are wasted every day in
the Philippines and this wastage adds to the growing hunger in the country.” Furthermore, the
Philippines ranks 69th out of the 121 countries with sufficient data to calculate the Global Hunger
Index (2023). Waste reduction, therefore, not only benefits the restaurants in terms of costs and
Moreover, Dingil (2023) emphasized that having no clear technique in cost management leads to
a lot of operational problems. Costs that should be included are sometimes ignored and costs that
are ignored are sometimes included (Ballesfin, 2011). Among the fifty-five managers surveyed in
the study, the majority did not have a concrete & established plan of action for the business. In the
goal of cutting costs, they tend to disregard consumption emotions and price perception which
leads to customer dissatisfaction and eventually reduces customer retention. This proves that
managers should take into consideration all aspects of the business in creating their own cost
management technique.
implementing cost control and reduction strategies such as menu engineering, menu design
optimization, food waste reduction and management, menu forecasting, and portion control,
businesses can increase their profitability, efficiency, social, and environmental responsibility
which all leads to this study’s main objective – to provide a framework to efficiently manage the
resources of restaurants.
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The Philippine restaurant industry even faced more challenges aside from food hunger when the
lockdowns started in 2020. With lockdowns and restrictions on public gatherings and the
uncertainty of the effects of the virus, many restaurants have experienced a decline in customer
traffic which led to a decline in revenue. This reduced foot traffic forced some businesses to close
down either temporarily or permanently which has also greatly affected the country’s economy
which is consumer-led and whose biggest sector is food consumption (Masigan, 2021).
Furthermore, restaurants were required to implement strict safety and hygiene measures to prevent
the virus’ spread. Limitations on how many customers are able to dine in the restaurants slashed a
chunk of the restaurants’ profitability as regulations such as a strict 50% maximum capacity limit
were implemented (Masigan, 2021). Furthermore, changes in consumer behavior also affected the
profitability of restaurants as many people were forced to dine out due to safety concerns (Pärson
& Vancic, 2020). Around 59 million Filipinos suffered from moderate to severe lack of consistent
access to food (Villanueva et al., 2021). In contrast, online food purchases by Filipino households
increased to a record high of $60 million in 2020 (Global Agricultural Information Network,
2020).
In contrast to the decline in customer traffic in restaurants, the unprecedented shift from food
service to food retail has created opportunities for more US food and beverage grocery products
to enter the market (Arcalas, 2020). However, we cannot assume that the demand in the food
industry is not really declining since it is a basic need for us to survive and that preference simply
shifts depending on how or where they want to consume their meals. According to Masigan (2021),
the government cannot assume that take-out sales alone are sufficient to sustain restaurants during
challenging times as take-out sales typically make up less than 10% of gross sales for most types
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of restaurants. This is most likely due to the fact that the shift in preference affects restaurant
businesses in terms of their payment for leases and rental expenditures which is part of what the
restaurants also sell – the experience of dining in, the ambiance, theme, and culture of their
business.
With the lack of interaction, presentation, and themes due to the restrictions, the restaurants’
investments in capital expenditures such as furniture, fixtures, interior designs, leases, rentals and
equipment [except cooking equipment] is a big financial loss on their part. Afterall, customers are
not satisfied with just buying an individual product or service; they instead wish to experience it
with an enduring and positive memory that delights (Ozdemir & Caliskan, 2014). This means that
the lack of experiencing dining in the restaurant may affect the business’ profitability since it is
part of what it sells. This is also in line with the study of Jeong & Jang (2011) claiming, customers
who retain a memorable dining experience directly impacts on a customer’s behavior and return
intention towards a restaurant. Another challenge faced by restaurateurs are the sudden increase in
supplies, and operating costs. The pandemic has already disrupted the supply chains making it
more difficult for restaurants to source ingredients at a reasonable price (Pujawan & Bah, 2022),
yet they still have to pay more for transaction fees ranging from 1-5% of each sale to banking
companies for contactless payment systems (J.D. Power, 2023) to reduce viral transmissions.
According to a survey done by Samonte et al. (2022), the most common marketing strategies
implemented by the food service industry in the Philippines are (1) increased marketing efforts;
(2) offering lower prices; (3) advertising in social media, and; (4) online selling. These marketing
strategies made them survive against the challenges of the pandemic making them generate sales
and gain profits. The increase in sales and gain in profit from shifting in marketing strategies,
especially in social media and online selling, supports Gianotto’s (2020) claim that in spite of the
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COVID restrictions and limitations, “the COVID-19 pandemic demonstrated what a lifeline social
In addition, developing a research-based social media marketing strategy not only guides and
informs actions relevant to the audiences trying to be reached, it also saves time, money and effort
by reducing the margin for error through the use of data. While nothing is ever 100% certain where
social media management is concerned, developing an evidence-based strategy can certainly allow
Furthermore, various techniques are used to improve the efficiency and effectiveness of restaurant
operations. These strategies can range from implementing new technologies to streamlining
processes. According to Samonte et al. (2022), the most common technical strategies implemented
by restaurants are: (1) reassurance of strict restaurant safety and sanitation measures; (2)
adjustment of hours of operations; (3) reduction of utility costs and other operating costs; (4)
communication of takeout or delivery solutions effectively, and (5) sourcing of new local
suppliers. Many restaurants now offer online ordering, which enables customers to place orders
via the restaurant's website or mobile app. This can help to reduce wait times, increase order
accuracy, and improve overall customer satisfaction. According to the study by Prasetyo, et al.
(2018), the number of online food ordering users in the Philippines was estimated to be around 8
million in 2018, with an expected growth of up to 20% annually. By offering online ordering
services, restaurants can reduce wait times by allowing customers to place their orders in advance,
and also increase order accuracy as customers are able to select their menu items without any
confusion or miscommunication.
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Additionally, it is crucial for industries that manufacture food and beverages to comprehend the
virus from an operational viewpoint (Telukdarie et al., 2020). The food and beverage
manufacturing industry must develop health and safety standards to ensure employee safety.
Operational constraints are significant additional factors for the sector. Thus operations are
reformed to produce the necessary food items in a fiscally and environmentally secure manner.
Samonte, et al. (2022), surveyed management strategies by food service businesses to survive the
impact of COVID-19. The result shows (1) social distancing; (2) reconfiguration of facilities to
mitigate COVID-19 spread, and; (3) temporarily reduced employment, respectively, meaning the
respondents observe health and safety protocols in ways such as social distancing and the queuing
of customers for their orders by stepping-in to the mark to avoid close contact with others.
In the study by Samonte, et al. (2022), the number one financial strategy that the food service
industry used in Cabanatuan City was the reduction of operating costs such as downsizing their
employees and implementing salary deductions. This strategy, though, seems like a band-aid
solution to a long-term problem and affects the remaining workforce negatively. It decreases
employee morale and increases their level of stress, anxiety, and competitiveness with each other
which consequently affects the company badly. On the other hand, there are other methods to
maximize profits during and after the pandemic. According to Brinded et al. (2020), cost recovery
methods such as delaying capital expenditures and reducing marketing spending are key strategies
factors that can help or hinder a company in creating a strategic plan. In addition to this, Lubis et
23
al. (2011) claims that to make a SWOT analysis effective, it is important to clearly define the
company’s business operations, future goals, and the metrics used to evaluate the success of the
company’s management in achieving its objectives and goals. Therefore, a SWOT analysis is only
effective when goals, objectives, and operations are clearly analyzed and main key points that help
and hinder the business’ growth are clearly identified. As Kotler and Armstrong (2012) concludes,
a SWOT analysis is the overall assessment of the strengths, weaknesses, opportunities, and threats
that a business has. Additionally, the SWOT analysis is a method that delivers insights by
examining a given situation and categorizing it into internal factors [strengths and weaknesses]
and external factors [opportunities and threats] (Ferrel & Hartline, 2011). A SWOT analysis can
assist restaurants by identifying their internal strengths and weaknesses, as well as addressing their
As provided by Gregory (2019), a SWOT analysis can then enable restaurants to: (1) capitalize on
its strengths by recognizing their unique selling points as they can emphasize these aspects even
more to attract or retain customers; (2) address weaknesses to identify areas for improvement
allowing restaurants to implement strategies to enhance operations, service, and menu offerings;
(3) seizing opportunities as market trends, local events, consumer preference changes may provide
opportunities for restaurants to grow and expand by being aware of these factors, and lastly; (4)
regulations or economic turndowns, may help restaurants develop contingency plans for enterprise
continuity minimizing its impacts and maintaining stability. To sum it up, a SWOT analysis helps
determine if the information points to aspects that can assist an organization in achieving its
objectives or emphasizes potential hurdles that must be managed or lessened to reach maximum
efficiency and profitability. Furthermore, incorporating the financial implications of each factor
24
included for SWOT analysis will make data-driven decisions to maximize resource utilization.
This approach ensures that financial considerations are integrated into strategic planning, enabling
Theoretical Framework
Figure 2.1 portrays the SWOT Model to be used in categorizing the factors that affect the industry
as a whole based on the study by Rangkuti (2013), Lubis et al. (2011), Kotler and Armstrong
(2012), and Ferrel and Hartline (2011), with their general coverage of SWOT Analysis. Its aim is
to assess the external and internal factors of an organization and address these factors in terms of
utilizing the strengths, leveraging the weaknesses, seizing the opportunities, and mitigating threats
(Gregory, 2019). By assessing these internal and external factors, a SWOT Matrix is made that
consists of sets of conclusions that help guide business owners create better decisions. Therefore,
by evaluating the restaurant industry using the SWOT analysis, we have to first figure out the main
key factors that affect it in order to be able to create a framework for maximizing resource
utilization.
26
Conceptual Framework
Figure 2.3 illustrates the conceptual framework of the study. This is based on the studies of
Rangkuti (2013), Lubis et al. (2011), Kotler and Armstrong (2012), and Ferrel and Hartline (2011),
but the main coverage of this study is the restaurant, food, and beverage industry of the Philippines.
In the figure above, the restaurant industry will be assessed based on its strengths, weaknesses,
Chapter 3
RESEARCH METHODOLOGY
An exploratory qualitative research strategy will be employed in this study to explore the dynamics
of the Philippine restaurant, food, and beverage industry. This approach will allow the researchers
to do an in-depth investigation of: (1) specific organizations of the industry; (2) events/happenings
in the organizations, and; (3) industry practices, which enables the researchers to a detailed
understanding of the real-life scenarios in which the industry operates. The qualitative exploratory
research strategy is particularly applicable for examining complex situations that cannot be easily
Research Environment
The focus of this study is the Philippine restaurant, food, and beverage industry given its
significance to the nation’s economy, culture, and overall growth. The study covers selected
establishments in both urban and rural areas, providing a diverse perspective on cost management
Data Selection
The selection of secondary data will be based on a criterion purposeful sampling strategy to ensure
that the chosen sources are rich, diverse, and relevant to the aims and objectives of this study.
qualitative research which focuses on selecting sources that are rich in information and can
maximize the utilization of limited resources and that this approach also ensures that the chosen
sources of data provide valuable insights and contribute effectively to the study’s objectives based
28
on a specified criteria. Sources of data will be selected to represent various organizational types,
sizes, and market positions, as well as to capture the range of challenges and opportunities faced
by businesses in the industry. To do this, the researchers will utilize the subproblems as its criteria
in whether the data gathered are relevant to it or not. Additionally, the process of selecting data
sources will consider the accessibility of the data from business organizations that are published
in different mediums such as interviews, news reports, books, articles, newspapers, and blogs
Gathering of Data
Multiple sources of evidence will be used to collect data, including: (1) narratives; (2) document
analysis; (3) direct observations. Narratives will be gathered from previous timely interviews that
are easily accessible from the internet with interviewees that play a vital role in the operations of
restaurant businesses such as CEOs, managers, and employees to gain insights into their
also involve examining internal and external documents such as annual reports, policy documents,
and industry publications to gather more relevant information. Lastly, direct observations, if
possible, will be utilized to corroborate the information gathered from interviews and documents,
Treatment of Data
The data analysis process will involve organizing and synthesizing the collected data to identify
emerging trends, patterns, themes, and insights, if there are any, that are relevant to the research
objectives. Subsequently, a cross-data analysis will be conducted to compare and contrast the
29
findings from the information gathered, allowing for the identification of similarities and
differences between them. In order to analyze the data further, a SWOT Analysis will subsequently
be conducted from the data gathered in the cross-data analysis to provide a determined overview
of the variables that affect the industry in terms of the factors provided by the two models. This
repetitive process will help the researchers develop a deeper understanding of the Philippine
restaurant, food, and beverage industry dynamics, challenges, and opportunities, as well as the
strategies employed by successful businesses within the industry. With the full theoretical
understanding of the condition of the Philippine restaurant, food, and beverage industry, the
researchers will then create an actionable plan to further maximize the utilization of resources
within organizations in the industry. Furthermore, the findings from this research will contribute
to the existing body of knowledge and offer valuable insights to practitioners, policymakers, and
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APPENDIX A
TIMETABLE OF ACTIVITIES
Week 1
Week 2-3
b. Analyze and synthesize key findings and trends in cost management techniques in
the industry
Week 4
—--------------------------------—----------------DONE—--------------------------------—----------------
41
Week 1-2
a. Compile data from government and industry reports, market research and company
filings
the industry
Week 3-4
6. Analyze data
b. Assess the effectiveness of these techniques in the context of the SWOT analysis
Week 5-6
Week 7-8
b. Provide recommendations on how companies in the industry can improve their cost
management practices
42
Week 9
references
Week 10
Week 11
CURRICULUM VITAE
Personal Information
Educational Background
Affiliations/Membership in Organization
Entrepreneur | Proprietor
Full time proprietor for a local online shopping site, part-time student, food service
supplier, agriculture machinery importer, and casual FOREX trader.
Trainings/Seminars/Workshop
Personal Information
Educational Background
Ramon Teves Pastor Memorial - Dumaguete Science High School (High School)
Accountancy, Business, & Management | 2013-2019
Affiliations/Membership in Organization
4H of the Philippines
Member, 2016-Present
Project Manager
Spec G Construction Services Social Media Team
Trainings/Seminars/Workshop
Personal Information
Address: 378 O, Tres de Abril Ext., San Nicolas Central, Cebu City
Educational Background
Affiliations/Membership in Organization
Zamboanga del Sur National High School (SPST) - Teen Health Force
Member, 2014 - 2015
Trainings/Seminars/Workshop
Personal Information
Educational Background
Affiliations/Membership in Organization
Personal Information
Educational Background
Affiliations/Membership in Organization
TESDA Housekeeping
Housekeeping NC II completer
Trainings/Seminars/Workshop
Tax - ACE - tion: A Tax Webinar with Sir ACE - November 2021
What Lies Ahead 2021: The Annual NOF-JPIA Accounting Conference - August 2021
56
Personal Information
Educational Background
Affiliations/Membership in Organization
Trainings/Seminars/Workshop
Tax - ACE - tion: A Tax Webinar with Sir ACE - November 2021
What Lies Ahead 2021: The Annual NOF-JPIA Accounting Conference - August 2021