Benchmarking Firm Capabilities for Sustained Financial Performance in the U.S. Restaurant Industry

Nan Hua, University of Central Florida
Seoki Lee


This study is designed to present an empirical assessment of important firm capabilities appropriate for benchmarking and on which firm capabilities restaurant firms should focus to achieve sustained financial performance. It also examines the key normative benchmarking theory premise that firm capabilities associated with sustained financial performance can be identified and that a firm's capability gaps, defined herein as the capability gaps between the firm and the selected benchmark firms (e.g., Camp, 1995), explain its financial performance. Lastly, this study shows how to use profile deviation to benchmark firm capabilities and extends this methodology by employing a model that incorporates interdependencies among firm capabilities. Findings offer pragmatic guidelines for restaurateurs to exercise benchmarking to pinpoint and enhance firm capabilities that would lead to sustained competitive advantage.