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Information Technology and the Performance of the Restaurant Firms

Roosevelt University

Information technology has the potential to provide easier access to penetrate new and/or existing markets, to provide cost-effectiveness, and to present goods and services more ef fectively. The objective of this study is (a) to observe changes in the competitive position of restaurant firms as measured by relative profitability and market share before and after the installation of the information technology and (b) to determine the factors affecting sus tainable competitive advantage. This study evaluates longitudinal changes in performance measures of 57 restaurant firms that have used and installed information technology. The results of this study indicate there are "sustainers" and "nonsustainers in the competitive advantage, as measured by profit margin and market share. In addition, industry factors that affect determination of sustainers and nonsustainers were tested. Results indicate that a technological base along with capital availability could be a prerequisite for restaurant firms to increase profitability and market share.

Key Words: information technology • performance • market share • profit margin • sus tainers • nonsustainers.

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