COMPETITIVE FORCES OF RESTAURANTS IN BATANGAS: BASIS FOR MAXIMIZING PROFITABILITY A Thesis Presented to the Faculty of College of Accountancy, Business, Economics and International Hospitality Management Batangas State University Batangas City In Partial Fulfillment of the Requirements for the Degree Bachelor of Science in Management Accounting By: Delacion, Jean Irene C. Magboo, Ericka R. Mayo, Jennifer Leigh S. December, 2021 2 TABLE OF CONTENTS Page TITLE PAGE ………………………………………………………………….... i APPROVAL SHEET …………………………………..………………..……. ii ACKNOWLEDGEMENT … ……………………………………………..…… iii TABLE OF CONTENTS ……………………………………………………… v LIST OF TABLES ……………………………………………………………... vii LIST OF FIGURES ……………………………………………………………. viii ABSTRACT ……………………………………………………………………. ix CHAPTER I. THE PROBLEM II. Introduction ……………………………………….………………….. 1 Background of the study ...………………………………………….. 2 Statement of the Problem .………………………………………….. 4 Theoretical Framework ….………………………………………….. 5 Conceptual Framework ….………………………………………….. 6 Scope and Limitation of the Study ……….………………………….. 7 Significance of the Study ..……………….………………………….. 9 Definition of Terms ……………………….………………………….. 11 REVIEW OF LITERATURE Conceptual Literature …..…………………………………………… 15 Research Literature …….…………………………………………… 24 Synthesis ……………….…………………………………………… 34 III. RESEARCH METHODOLOGY Research Design ………..…………………………………………… 38 Respondents of the Study …………………………………………… 38 3 Data Gathering Instrument …………………………………………… 39 Data Gathering Procedure …………………………………………… 40 Statistical Treatment of Data……………..…………………………… 42 IV. PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA Profile of the Respondents ………….………………………………… 44 Competitive Forces of Restaurants …………………………………… 49 Comparison of Assessment of the Competitive .…………….……… 64 Forces of the selected Restaurants Proposed Program ………………………..……………………………. 71 V. SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS Summary ….…………………………………………………………….. 81 Findings …...…………………………………………………………….. 82 Conclusion ..…………………………………………………………..… 86 Recommendations ………….……………………………………….… 87 BIBLIOGRAPHY …….…………………………………………………..…….. 91 APPENDICES …….…….………………………………………………..…….. 102 CURRICULUM VITAE …….…………...………………………………..…….. 106 4 LIST OF TABLES Table No. 1 Likert Scale Title Page 40 2 Distribution of Selected Restaurants in terms of Forms of Business Organization 44 3 Distribution of Selected Restaurants in terms of Number of Employees 45 4 Distribution of Selected Restaurants in terms of Number of Years in Operation 47 5 Distribution of Selected Restaurants in terms of Type of Restaurants 48 6 Competitive Forces of Restaurants in Batangas in terms of Competitive Rivalry 50 7 Competitive Forces of Restaurants in Batangas in terms of Supplier Power 53 8 Competitive Forces of Restaurants in Batangas in terms of Buyer Power 56 9 Competitive Forces of Restaurants in Batangas in terms of Threat of Substitution 59 10 Competitive Forces of Restaurants in Batangas in terms of Threat of New Entrants 62 11 Comparison of the Competitive Forces of Restaurants in terms of Form of Business Organization 64 12 Comparison of the Competitive Forces of Restaurants in terms of Number of Employees 66 13 Comparison of the Competitive Forces of Restaurants in terms of Number of Years in Operation 68 14 Comparison of the Competitive Forces of Restaurants in terms of Type of Restaurants 69 15 Proposed Plan for Assessment of Competitive Forces in Shaping Strategy of the Selected Restaurants 73 5 LIST OF FIGURES Figure No. Title Page 1 Porter’s Five Forces 6 2 Conceptual Paradigm 7 6 ABSTRACT This research was conducted to understand how the restaurants during the pandemic surge, continue to strive even at the middle of economic fallout, inconsistent revenues, increasing costs and expenses, heightened precautionary measures, decreasing number of consumers, and such. The abovementioned factors were included in the Five Competitive Forces by Michael Porter as used by the researchers to further determine the analysis of the restaurants’ competitive advantage. 80 restaurant managers/owners participated in the online survey who were selected using the convenience sampling. A questionnaire developed by the researcher was used to gather data with mean, weighted mean, composite mean, frequency and percentage, and descriptive statistics were performed to treat data. Under all factors that are compared to competitive forces - competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants, corporations consistently ranked the highest weighted average. There are 54 restaurants operating for one to five years while there are only three restaurants operating for eleven to fifteen years and inferred that those restaurants that are new in the industry are afraid to fail and are more focused on surviving, especially in times of pandemic. The interpretation and findings enable the researchers to propose a symposium entitled: The Symposium: Roadmap to Industry Profitability where it is intended to provide in depth knowledge about Porter’s Five Forces where the 7 attendees will gain awareness and will know what to improve or what to change in their strategies on profit maximization, hence creating a competitive advantage among competitors. 8 CHAPTER 1 THE PROBLEM This chapter provides a brief description of the introduction, background of the study, statement of the problem, theoretical framework, conceptual framework, research hypothesis, scope and limitation, the significance of the research, and definition of terms. Introduction Restaurants are the heart of many communities. It is where people enjoy, celebrate, and gather. However, because the world combats with the COVID-19, both national chains and independently owned restaurants quickly adapt and make strategies to search for new ways to serve the communities. The pandemic has redefined businesses and their operations. Restaurant owners are searching for ways to strategically reduce their costs while making a profit during this seemingly never-ending pandemic. Today has been hard for the restaurant industry, yet they continue to make changes to keep people safe without having a loss. They still make strategies to maximize their profit and the safety guidelines for their customers. From the competitive forces, the competitive rivalry has been referred to as the scope of competition among businesses as determined by several factors, mainly its marketing mix contributing massive impact to the profitability of a business, in this study, restaurant. As the competition increases, the profitability of a restaurant gradually decreases as it reflects the price cutting, massive spending on 9 promotional materials, and product and service innovation. As a restaurant continues to compete with the other restaurants, it needs to be considerate of the prices of its product quality and uniqueness to become more attractive and appetizing to the customers. This force helps the managers find the best suppliers to create or produce from raw materials to finished goods that are readily offered to their restaurants. It is a vital force that controls the profitability of the business as to the lowering and increasing of the prices of the raw materials. Whereas, the customers also hold great positions in the food industry such as restaurants because they are the main goal of this industry. They target specific customers for their restaurants and serve them with best quality taste and with the service they are giving to these stakeholders, the price of the product can be changed as to their satisfaction. As to how the food tastes, the ambience of the restaurant, safety of customers through their utensils, tables, chairs, and others that affect their health when it comes to food, the attendants/serves, and many more, relate to the customers’ satisfaction. If the preceding factors did not meet the customers’ preference, there will be a threat of substitution to the possible food substitutes such as home-made food and ready-to-eat meals from other types of food establishment. This will highly affect the profitability of a restaurant with respect to its sales and reputation. Even if the restaurants possess many great competitive edge, but lack on high brand loyalty, high initial capital investment, strong government regulations, and limited suppliers and others affecting the start-up of a possible competitors, a restaurant won’t be exempted by the threat of new entrants which will have significant effect on the restaurant’s profit maximization. 10 Background of the Study There was a virus outbreak in Wuhan, China, last December 2019, which rapidly spread across the globe then hit the Philippines on January 30, 2020. In March of the same year, the country declared a lockdown that dragged everyone down, especially the economy. Most businesses close and reduce employees through lay-offs and downsizing to minimize costs and prevent future losses. The country's economy declined further amidst pandemic based on the Asian Development Outlook (ADO) 2020 Update since June, forecasting a 3.8% contraction and expecting uncertainties due to global economic slowdown. Based on the TVET Brief Issue no. 6 COVID-19 Impact to Economic Sectors, the most at risk of this pandemic ranked by the International Labor Organization (ILO) are labeled High Risk, Medium-High, Medium, Low-Medium, and Low. Focusing on the High-Risk economies affected by the pandemic, listed are wholesale and retail trade, repair of motor vehicles and motorcycles, manufacturing, real estate, renting and business activities, accommodation and food services/ hotel and restaurants, and other personal services. These businesses are affected because they mainly offer face-to-face services through dealerships and offline assistance. Businesses must have their competitive advantage over their competitors to engage and practice their company for sustainability and stability. Restaurants are the best examples of industries with many competitors from new entrants and even existing ones thriving before the pandemic occurs and maybe declining now 11 considering the situation. However, it is undeniable that restaurants still at their peak despite the happenings have consistently outgrown their mistakes in facing the organization's challenges. These are understanding their strengths and weaknesses better, handling well the opportunities and threats coming their way, and most importantly, having a clear focus on the company's vision and mission. These achievements were so far significant to circumstances like this pandemic leaving uncertainty to vast companies that even those growing businesses in late years struggle to absorb and withstand. The researchers found out that as one of the most popular tourist destinations in the Philippines, Batangas has created bright minds entrepreneurs who are knowledgeable about building businesses. Such attracting customers targeting students, low-income earners, young professionals, employees/workers, and even high-net-worth individuals—merely catering to all kinds of individuals serving them food, special orders, and offering services that vary from different price ranges affordable and reachable by each type. Nevertheless, these are all worthless when their customers are detected carrying viruses just because they dined in and ate at the restaurant they used to go to and spend time. Businesses like restaurants are positively affected because the sales and revenues might be dropping in this one factor. The costs are constant (e.g., fixed costs). There are unavoidable costs spent daily to maintain the operation and service. Additionally, the pandemic risks put consumers and businesses at stake at all times. To maximize their profit and minimize costs is to sustain the company in the long run. 12 The researchers want to know how these restaurants survive the current situation upon experiencing economic uncertainties in their industries and how they compete against the rising and new entrants in profitability and stability in positioning themselves in the business. This study will help start-up businesses manage their daily operations and gain core competencies throughout and starting from the basics and familiar to each company. Statement of the Problem The overall objective of the paper is to assess the competitive forces of restaurants in Batangas. Particularly it seeks to find the answers to the following questions: 1. What is the profile of respondents in terms of: 1.1 form of business organization; 1.2 no. of employees; 1.3 no. of years in operation; 1.4 type of restaurant 2. How may the respondents assess the competitive forces in terms of: 2.1 competitive rivalry; 2.2 supplier power; 2.3 buyer power; 2.4 threat of substitution; 13 2.5 threat of new entrants 3. 4. How may the responses be compared? Based on the result, what program may be proposed to maximize the profitability of restaurants in Batangas? Theoretical Framework For the restaurants to sustain and maximize their profitability, the researchers determined that understanding Michael Porter’s Five Forces and setting them as a guide will enable them to adjust their strategies on point depending on their needs. Although these businesses are seemingly applying these competitive forces, it will be significant if the management studies and uses more of the analysis considering sudden changes and uneven routines performed by the workforce due to fortuitous events such as the COVID 19 pandemic. The five forces are as follows: the threat of new entrants, customer bargaining power, seller bargaining power, threat of substitute products or services, and rivalry between existing competitors (Porter 1979). The first four forces influence the fifth, competitive rivalry, which can be mild or intense, depending on the number and intensity of competitors. Both of these powers have a detrimental effect on profitability. Notably, Porter believed that these five powers applied to all industries, regardless of their technological sophistication, whether in developed or emerging economies and with or without government interference (Porter, 2008). These theories are now being challenged, or at the very least are being vigorously debated yet again. The structure is depicted in Figure 1. 14 Figure 1. Porter’s Five Forces A force explicitly explains that every business has created its competition inside the industries. For the competition to go bolder and fiercer, a business will have to spend higher costs and expenses. The suppliers' power in influencing the restaurants is evident if few suppliers and limited supplies are available in the market. Most restaurants in Batangas may not have familiarities among them to inculcate that they are similar to each other. Conceptual Framework The Conceptual Framework of the study used was Input-Process-Output. The input refers to the things that matter in the restaurant business. It includes Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of New Entrants, showing how competent restaurants are. 15 Information gathered on each force will be evaluated, analyzed, and then displayed in a diagram. After that, a formulation strategy based on conclusions will follow. Then there will be proposed recommendations for the restaurant to increase/improve their profit maximization. Input Process Output Figure 2. Conceptual Paradigm Scope and Limitations of the Study The study will analyze Porter's five forces that affect the competitiveness of the restaurants, particularly the Competitive Rivalry, Supplier Power, Buyer Power, 16 Threat of Substitution, and Threat of New Entrants in Batangas, specifically in Batangas City, Lipa City, Tanauan, and Sto. Tomas. This study will determine how restaurants survived and maximize their profit in times of pandemic. The respondents of the study were the managers/owners of the selected restaurants in the said location. However, due to the lack of sources to provide a list of registered restaurants in Batangas and the effect of the pandemic, the researchers will use convenience sampling for a convenient source of data and the safety of everyone. The primary tool that the researchers used in gathering the data was a researcher-made questionnaire. This instrument was disseminated to the respondents by messaging them on Facebook pages and their email addresses. Due to the pandemic and unresponsiveness of the respondents, the researchers only gathered 80 responses that were supposedly 100. The survey questionnaires, which the restaurant managers/owners answered, comprise their business profile, particularly the forms of business organization, number of employees, number of years in operation, and the type of restaurant business the respondents have. It also comprises the following items that assess the competitive forces of the restaurants in terms of competitive rivalry, buyer power, supplier power, the threat of substitution, and the threat of new entrants. The study was limited to the five forces analysis by Porter Michael Porter which includes the Competitive Rivalry, Buyer Power, Supplier Power, Threat of Substitution, and Threat of New Entrants that serves as the framework of this 17 study. Consequently, the restaurant managers/owners in the four key cities in Batangas were selected to be the respondents to know how they are surviving in this pandemic and to assess its competitive forces, which can maximize its profitability. The data gathered by the researchers from the respondents’ answers helped them assess the competitive forces of the selected restaurants and made comparability of respondents’ responses. This study is limited only to restaurants with the following types: cafes, family-style restaurants, fine dining, and fast-food restaurants. The study also limits the restaurants operating for less than a year. This is to assure that the study will develop more established answers. Significance of the Study The researcher conducted this study to assess how restaurants maximize their profit in times of pandemic. The value of this study will depend on the helpfulness and benefits it provides. To the restaurant owners, this research will provide strategies to maximize their profit. This study will also give them information on how to survive in times of pandemic. Thus, make their restaurants excellent and competent. It will give them a good image of how restaurants can manage to overcome this pandemic to the investors. Thus, it can provide them high accuracy on Return of Investment (ROI). 18 To the future owners, this study will give them information and view on how to start a restaurant business. Thus, they will learn how to make a proper business plan and strategies of how their restaurants will be profitable and successful. To the future investors, this study will serve as their guide on how they will know when a restaurant business is a good and profitable business. Therefore, they can prevent losing investments and their money will be put on the business that has a good return on investment only. To the customers, it will serve them satisfying services and more highquality products. Thus, make them feel that they are the foremost priority and essential to the business. To the researchers, this study will be the best way for them to improve their knowledge and skills. Through this study, researchers will gain strategies and ideas that can be useful in the future. It will also help them to improve their skills in data gathering and data analysis. Thus, make them more competitive and ready for life. Lastly, to the future researchers, the results will all be beneficial to them; the data, ideas, strategies, and all the information of this study as their reference to their study. The study can be used as a reference to amplify the validity of the findings. Furthermore, this study will give them information about the effect of a pandemic on restaurants and how they can surpass it. 19 Definition of Terms The following significant terms used in this study are defined conceptually and operationally for the user’s better understanding of the contexts stated. Competitive Rivalry. Competitive rivalry is a measure of the extent of competition among existing firms. It is an external force that has some advantages and some disadvantages for organizations in specific fields (Indeed Editorial Team, 2021). Intense rivalry can limit profits and lead to competitive moves including price cutting, increased advertising expenditures, or spending on service/product improvements and innovation. Competition in business is the contest or rivalry among the companies selling similar products and/or targeting the same target audience to get more sales, increase revenue, and gain more market share as compared to others (Pahwa, 2020). In this study, it pertains to the businesses’ competitors. Costs. Cost is a monetary value of efforts, materials, resources, time and utilities consumed, risks incurred, and opportunities foregone in the creation of a thing or service, according to economic theory (Nitisha, n.d). The term "cost" in this study refers to the amount that must be paid or given up in order to obtain any resource or service. COVID - 19 Pandemic. It's a disease outbreak that's affecting a big number of people. Viruses, such as Coronavirus Disease 2019 (COVID-19), are the most common cause of pandemics because they can quickly transmit from person to person (Ready, 2021). 20 Economic slowdown. A situation in which economic growth slows but does not stop. An economy is experiencing a slowdown if GDP grows at a rate of 3% instead of 5%. Most analysts do not consider a slowdown to be a recession, but unemployment may rise and productivity may decline (Farlex Financial Dictionary, 2012). In this study, this refers to the economy of the Philippines during a pandemic. Lockdown. It's a process that's implemented when the building's occupants are in immediate risk. In the event of a lockdown, students, instructors, and staff would be asked to stay in their rooms and not leave until the problem has been resolved. This allows emergency personnel to secure the children and staff in place, deal with the immediate threat, and evacuate any innocent bystanders to a safe refuge (University of Pennsylvania, 2016). In this study, it is when the pandemic strikes hard at the country and the President declares that no one will be going out unless told. Porter’s Five Forces. It is a model that defines and analyzes the five competitive forces that dominate any market, thus assisting in determining an industry's strengths and weaknesses. Five Forces analysis is commonly used to evaluate the structure of a market and therefore corporate strategy. Porter's model can be extended to any sector of the economy in order to better understand market competition and to increase a company's long-term profitability. Michael E. Porter, a Harvard Business School professor, is the creator of the Five Forces paradigm (investopedia.com). 21 Power of Buyers. It refers to the pressure that customers/consumers can put on businesses to get them to provide higher quality products, better customer service, and/or lower prices (Corporate Finance Institute, 2021). Buyers have the power to influence price and the quantity of products sold. Powerful buyers can bargain on volume or switching costs or they can simply find substitute products. Power of Suppliers. Power of suppliers can be understood by observing how suppliers can put pressure on organizations by raising their prices, lowering their quality or reducing the availability of their products. It is a standard component of business strategies for most organizations, (Harappa, 2021). Suppliers have the power to influence the price as well as the availability of resources/inputs. They are the most powerful when companies are dependent on them and cannot switch suppliers because of high costs or lack of alternative sources. Profit Maximization. In financial management, it refers to the process or strategy for increasing earnings per share (EPS). Simply said, all decisions, whether investment or financing, are made with the goal of increasing profits to maximum levels (Finance Management, 2021). In this study, it means making use of the resources and taking benefit of the costs and expenses to maximize the profit. Restaurants. According to 21 CFR 1.328 [Title 21 — Food and Drugs; Chapter I — Department of Health and Human Services, Food and Drug Administration], a restaurant is described as "a facility that prepares and sells food directly to customers for immediate consumption." Facilities that supply food to interstate conveyances, central kitchens, or other comparable establishments that do not 22 cook and serve food directly to customers are not considered "restaurants." (US Legal, nd). Risks. Risk in financial terms is defined as the chance that an outcome or investment's actual gains will differ from an expected outcome or return. Risk includes the possibility of losing some or all of an original investment, (investopedia.com). Additionally, it can refer to circumstances involving the loss of property or facilities, as well as adverse effects on the environment. In this study, it is the general and also profitability risks that the restaurants or other businesses might experience in the long run because of the competition. Saturated market. It is a situation in which companies satisfy all customer demand for a service or good. As a result, existing companies' growth potential will become highly constrained. When there are more products than buyers, companies must compete for customers (Indeed Editorial Team, 2021). Sustainability. It has been widely used to describe improvements in areas such as overexploitation of natural resources, manufacturing operations (energy use and polluting sub-products), linear product consumption, investment direction, citizen lifestyle, consumer purchasing behaviors, technological developments, and business and institutional changes (YouMatter, 2021). In this study, it refers to the stability and survivability of the businesses. Symposium. a gathering of people with extensive knowledge of a given subject to discuss a topic of mutual interest (Cambridge University Press, 2022). 23 Threat of New Entrants. When new competitors enter into an industry offering the same products or services, a company’s competitive position will be at risk. Refers to the ability of new companies to enter into an industry, (CFI, 2021). Threat of Substitution. Is the availability of other products that a customer could purchase from outside an industry, (Accounting Tools). The threat of substitution can affect the brand’s profitability and it is easy for customers to switch to the substitute if the threat is high and vice versa, (Harappa, 2021). The threat of substitutes is high when rivals or even companies outside the industry offer more attractive and/or lower cost products. Buyers then have the opportunity to make a price/performance trade-off. The cost of switching is also a factor; if it is high, the threat of substitution is low. 24 Chapter II REVIEW OF LITERATURE This chapter deals with a review of related studies. The primary aim of this literature review is to analyze research concerning the topic under study. This review will provide profound insight into the subject and facilitate the interpretation of the findings. The resource of this literature has been academic journals, the internet, newspapers, and magazines, newsletters, and reports of specific institutions. Conceptual Literature This section gives the readers a better understanding of the critical concepts of the study through the research and related literature reviewed by the researchers. Competitive Rivalry Competitive rivalry refers to the scope of competition among the companies. Huge rivalry can limit the company's profitability and pushes them to competitive moves such as price cutting, massive spending on advertisements, or service/product improvements and innovation (The William and Anita Newman Library). Competition proves the capability of every business as they carry on improving every aspect of their business, and it tests how long they will operate in the industry. Customers' preferences are linked with the competition within the industry as it plays a role in building brand equity which determines a brand's 25 popularity and strength in the market industry against competitors. In addition, the objective of competitive strategy is more about how the company will outlast its competitors. These competitive forces may be overcome and succeed in the long run if the ‘management can select from several competitive strategies: cost leadership, differentiation (Najib and Kiminami, 2011). There has been an article emphasizing that for a company to become competitive, it shall excel at least in one of the three critical competitive areas cited by Ordenes 2018, in Treacy & Wiersema's book The Discipline of Market Leaders, the customer intimacy, product leadership, and operational excellence. The degree of discipline that each restaurant manager or even other sectors possess may also significantly affect its profitability. In addition, the Corporate Finance Institute defined rivalry as an extent to which companies exert pressure on one another in connection with strategy. Some level of competition is healthy because it motivates every innovation in a company. Rivalry compels each company to give its best and do better among other competitors. Furthermore, as de Bruin (2016) stated, a rivalry is intense when there are many competitors within the industry when it is growing, and when consumers get the chance to switch to another competitor or brand easily, they can save up by choosing the other option. A good indicator of this is the concentration ratio of an industry. The lower the ratio, the more intense the rivalry will probably be. Intense competition typically happens when a market is saturated. When a company produces a product and is new in the market, there is a vast untapped market. However, today, it is hard to find an untapped market, and companies have to steal 26 market share from each other as everyone is producing identical products. Competitors are focused more on advertising the product and price wars when the rivalry is fierce, which affects the business's bottom line. The intense rivalry also happens when barriers to exit are high, and companies remain forced in the industry even if their profit margins are declining. Most of the restaurants upon the emergence of the pandemic closed and stopped their operations due to the major adjustments from the services such as onsite serving. This explicitly pressurizes diverse companies to transition their operations from a very traditional and common function to more innovative, efficient, flexible, and adaptive business practices. Currently, the restaurants that are still on track gained a higher reputation and developed extensive rules and regulations giving them opportunities to progress and respond to the recession. This action will position these restaurants in the larger perspective of becoming more competitive and contribute to their edge among other competitors. Similarly, Batangas, as one of the richest provinces in the Philippines, has established various businesses by entrepreneurs of the food industry, which is why the majority of businesses in the province count to restaurants or food outlets. This is a negative factor for the competitors of the restaurant industry and one reason for this is the high density of restaurants and cafés in a small area, which allows customers to easily choose one over another, especially since there are no costs associated with the change, and also because it provides variety, which makes consumers appreciate a broader range of alternatives and differentiation among competitors, as stated by de Brito (2019). 27 Supplier Power The bargaining power of suppliers is utterly opposite of the bargaining power of buyers because this time, suppliers are the ones who can increase the price and limit the quality of products or services. They can put much pressure on the companies through decreasing product quality, increasing the costs, or reducing the product availability (Patel, 2020). Suppliers are said to be assertive if they can reduce the profitability in an industry, which cannot increase any cost. The number of suppliers compared to buyers, the reliance of a supplier's sale on a single buyer, the switching costs of supplies, the availability of suppliers for immediate purchase, and the feasibility of forward integration by suppliers all affect supplier power, as stated in Patel’s Porter’s Five Forces Analysis Fast Food (2020). Accordingly, de Brito (2019), in his research mentioned that maintaining positive relationships with several suppliers is critical to ensuring that the best quality and price are obtainable for each type of product or service. Additionally, it is critical to establish strong relationships with many suppliers of the same (or similar) goods (or similar) so that, in the event of one supplier failing, the other can respond without jeopardizing the workflow. This firm will require the following suppliers: raw materials and all food products, kitchen equipment and decoration, communication services, accounting, insurance, management software, as well as water, power, and gas. Not all suppliers may have equal bargaining strength. Suppliers delivering restaurant packaging materials, for example, may not have greater bargaining power due to the availability of similar products from other 28 suppliers. As a result of the reduced prices, the industry may save money. However, the oligopoly in the restaurant business concerning other products and services poses a danger to the industry's profitability (IvyPanda, 2020). There is indeed a need for quality relationships with suppliers and independent business organizations to create steady operations and maximize profitability. This force increases as in the case of the catering industry, as mentioned by de Brito (2019), 'the quality of food served is a critical factor for success and source of competitive advantage, choosing suppliers a necessary process to ensure customer satisfaction and retention, to maintain the value of the products or services delivered or performed to the customers'. Suppliers of raw resources, labor, and specialist services supply industries and wield power over them (Quick MBA, 2010). The price of the commodities or services given is the source of bargaining power. Many industries have a multitude of providers who provide these necessities, while some do not. Some industries have only one or two suppliers, and those suppliers can charge whatever they want for the materials/services they provide. This is one of the more powerful forces in the restaurant business. Despite the fact that supplier power is typically modest, it has a significant impact on the sector. The majority of restaurants in the business acquire their food from butchers, farmers, and packaging companies; they do not produce their own. Most restaurants, for example, serve meat. There are numerous possibilities for restaurants to pick from, and the price at which they will sell their items will be determined by this (Booth, 2017). 29 The restaurants located in Batangas however explicitly consider supplier power as a low force that contributes greatly to the competition because some of them have lots of suppliers and have built strong partnerships with them. It is a big deal for them to be able to control the suppliers for their daily operations and maintain profitability along the way. Buyer Power According to DeBusk (2019), customers' bargaining power affects how many customers exist in the market and how much it costs to attract new ones; the more customers in your industry, the stronger their bargaining power, especially if nothing distinguishes your products or services from those offered by your competitors. Customers are one of the key stakeholders of a business. They play a vital role in the profitability of the business. Restaurant owners must focus on the factors that will satisfy their customers as it is very important in every business. Customers are the determining factor of the success of every business. Businesses need not only to maintain their current customers but also to attract new ones and expand their base significantly (Journal of Business Strategy, 2014). Satisfying customers should be the first priority of every business because it could create brand loyalty, thus, having a competitive advantage among all competitors in the industry. The determinants of buyer power includes the number of important buyers, availability of substitutes for the industry products, buyer’s switching costs (which is included as determinants of the other forces), buyer’s threat of backward integration, industry threat of forward integration, contribution to quality or service 30 of buyer’s products, total buyer’s cost contribution by the industry, and buyer’s profitability, as mentioned by MBA Crystal Ball. A critical part is the online and offline systems that enable clients to rate and review restaurants based on their quality and service, keeping them informed and updated. de Brito (2019) in his Strategic Plan for A New Restaurant Business, it is critical not to underestimate the power of word-of-mouth, since a positive review on any site or social network can result in future business clients, and vice versa. Finally, there is the challenge of consumer loyalty, since the increased diversity of possibilities instills in the customer a persistent desire to try new places and flavors, resulting in location switching based on trends, pricing, service, and other factors. The buyers take advantage of their impact on the businesses by forcing the market to lower the prices of the products or services offered to become a major driving competitive force that each business faces; this may involve eventual backward integration. As stated by Muriuki (2013), the 'buyers compete in the industry by forcing the prices down, bargaining for higher quality or more services and playing competitors against each other at the expense of industry profitability.' The power of buyers depends on how the business perceives them such that it will determine if there are significant effects when viewing them, whether as individuals or communities. They will differ in the level of losing their interests and loyalty to the business relevant to the overall effect of this force on its competitive advantage, among others (de Brito 2019). And so, buyers are demanding better quality services/products and pressure the market. According to the study, buyers are 31 considered influential if they can set prices and limit the supply industry's profitability. Buyers are convincing when they concentrate, possess credible backward integration options, purchase a significant portion of the supplier's output, and quickly and cheaply switch to other suppliers or substitutes (CFI, 2020). Clients, or customers, are the existing and prospective purchasers of a business's goods and services who shape the market and affect demand. When it comes to restaurants, the primary clients are those seeking to purchase meals. It is critical to recognize and identify the target audience that the restaurant wants to serve; only then can a strategy be defined that will result in the achievement of objectives, which obviously implies gratifying consumers in order to earn their loyalty. Clients in this situation will mostly be locals, whether residents or workers, as well as those who, despite not living in the physical area on a daily basis, identify with the concept and visit for that reason, as mentioned in de Brito (2019). These restaurants in Batangas consider this force as a competitive driver that influences their profitability as they lower their prices to compete with other restaurants and build a good image while serving the same quality to customers. Threat of Substitution A threat of substitute is a substitute product or service used to replace the company's products or services. It is a threat because when there are substitute products or services, you can't increase your profit which is unfavorable and can weaken your business power. The threat of substitution exists when the change of price influences product demand in the sector analyzed. When consumers elect to 32 dine at a casual or fast food restaurant or at home, the fear of alternatives enters the picture. This force is relatively strong as a result of a vast number of alternatives. Fast food restaurants can compete with fast casual restaurants since they can offer lower prices. In difficult economic circumstances, people may avoid quick casual restaurants in favor of eating at home or at fast food restaurants. Fast casual restaurants continue to have the upper hand since they provide superior meal preparation and quality, as well as a more casual eating lounge. Casual restaurants are only a threat if the customer wants to sit down and be served, and if they are willing to spend extra. Companies can lessen the threat of replacements by staying in tune with their customers' tastes. If the company can offer a variety of items that are in line with what customers want, it will be able to maintain a competitive advantage over other firms and retain clients rather than losing them to replacement eateries, according to Booth (2017) from Fulton, Akridge, and Ehmke (2001). According to de Brito (2019), due to the dynamic interests of the consumers, they tend to explore more of the unique tastes and preferences in distinct ventures present in the market like ubiquitous restaurants. However, the non-traditional type of business still has extreme competition with small establishments. Parallel to this, the cafes, bars, tea houses, pastry shops, takeaway, and others similar to these are considered substitutes to restaurants despite differences in serving and food quality; consumers still think the delight that they are receiving is alike but cheaper and consistent too in filling their hunger and thirst. 33 And as McLeod (2020) stated, 'equally threatening, it will be a long time until the social distancing rule of four square meters is relaxed and many restaurants cannot survive devoting so much space to each person,' most families, as well as those belonging to other sectors, are rather to stay at home and cook foods for themselves for higher prevention. The same with Lucas' (2020) article showing a transcript of what Oliver Wright, a global lead of Accenture, said, "I think restaurateurs are going to have to think increasingly more systematically about if the food in the home is going to become much more the norm," and that "in terms of what we eat and where we eat, it's probably going to be the biggest shakeout we've seen in our adult lifetimes." Restaurants, because of their near proximity to one another, the sector remains competitive. Furthermore, their rates vary in accordance with the quality of services and facilities provided. As a result, guests face significant hurdles while deciding on a specific restaurant (IvyPanda, 2019). For the price management, the study obtained from Restaurant Revenue Management by Heo (2013), stated that customers are willing to switch their dining time to hours where discounts are made available in connection within its menu, proving that price ranges and discounts are vast determinants of consumers in choosing restaurants in their meal period. The price that consumers are willing to pay per meal is determined not only by the price of the meal itself, but also by the price of nearby substitutes, the healthiness of the food, the degree of services provided, and the location in which a restaurant is located. Consumers will find it easy to switch because these near substitutes provide the same services, quality, convenience, and are sometimes closer to them. These will have a stronger impact 34 on how restaurants operate and compete, resulting in a decrease in industry sales and profitability. Restaurants must emphasize how eating out saves customers time and bother in the kitchen, as well as how customers can relax while eating and not have to worry about cleaning up afterwards (Knowledge Center for Students, 2011). For restaurants in Batangas, the threat of substitution remains quite evident and has grown in strength, harming business profitability even more in this current circumstance. Customers who have lots of time to spend at home and discover new things are more likely to want to cook their own meals and add more spices that are far different from what they may obtain if they continue to order from restaurants as they did previously. Threat of new entrants The threat of new entrants is the ability of new companies to enter into an industry offering the same products or services. The position of a competitive company will be at risk once a new competitor enters into the same industry because people will now have the choice, unlike before. Moreover, entering an industry is also not that easy because you have to compete with other businesses with more experience. Thus, the threat of new entrants largely depends on the reactions of available competitors and entry barriers, economies of scale, product differentiation, initial capital requirements, access to distribution channels, cost disadvantages, and governmental policies. In this case, de Brito (2019) mentioned 35 that the threat is primarily posed by small businesses and new restaurants seeking to diversify their operations and concepts, because not only are the "typical" (less differentiated and more traditional) restaurants reaching maturity or even declining, but they are also what consumers want. This dynamic promotes the growth of new eateries, hence increasing the threat level of new competitors. Additionally, renting premises, equipment, furniture and furnishings minimizes initial capital expenses and borrowings in the restaurant industry. Franchising allows operators to enter the business with pre-installed equipment, training and infrastructure. Given the high owner/operator income in this field, it may be conceivable to buy an existing firm or a closed restaurant. Increasing competition and decreasing profit. Competitor advantage will be built on non-price product differentiators such as food quality and nutrition (KCS, 2011). Among those possible threats, Porter highlighted five significant forces that highly concern the companies throughout their plan and influence their tactical and strategic decisions. There is a massive increase in competition, especially nowadays that the technology has been continuously evolving. Companies are thriving more due to the high demand for acceleration in advancement, and consumers are looking for new and innovative products or services offered to the market. Some of the existing firms are currently seeking more excellent profitable products that are different from those being served and built by the other firms proactively to become more competent. Several huge companies set high standards such as a large amount of capital invested in the business, for instance, the restaurants in real estate constructions or leasing, economies of scale, built a 36 solid independent organization of suppliers and specific market, thereby constituting high customer loyalties, and have been strictly complying with the government regulations and policies (Muriuki 2013). These restrictions within the location for new entrants implemented by the government may become one of the most significant barricades in starting up a business to a vastly competitive environment over its strict compliances and licensing requirements. Conforming to de Brito (2019), without the licenses and policies bestowed by the government, the companies, even in the existing market, will be limited in getting the beneficial aspects for a business to run competitively through easy access to distribution channels, technology, and suppliers. The restaurants in Batangas is moderately evident that this force strikes the businesses’ competitiveness and may allow several newcomers as seemingly possible even at times of recession such as the global pandemic. This is because various young entrepreneurs or even other people grabbed the opportunity of many food industries closing because of the losses brought by the situation, and starting even from a small amount of capital. The existing restaurants might have started from high capital costs but as the new entrants began differently may seem profitable and a lot better to survive and sustain its operations for the next few years. Customer satisfaction Customer satisfaction is an attitude, assessment and emotional response shown by the consumer after the purchase process. It is an indication of being 37 pleased with a product or a service according to Ningsih and Segoro (2014). Customer satisfaction is very important in the business, it is one of the factors that makes the business successful because satisfaction is what makes the customers trust the business. It is supported in the study of Gul (2014) that empathized that when customers are loyal towards a product or service it means that they are basically trusting in it and according to Ahmed, Rizwan, Ahmad and Haq (2014), he highlighted that a customer can't enter in loyalty set without the trust of a brand. Customer satisfaction meets the customers' expectations in terms of parameters associated with satisfaction (Malik & Ghaffor, 2012). It is a customer's feeling of pleasure or disappointment due to a comparison of the product's perceived performance to expectations according to (Tarus and Rabach, 2013). In the study of (Eid, 2015), customer satisfaction can also be described as an overall emotional response towards the customer's experience after the purchase and consumption of a product/service. If the customers are satisfied with the services or products, they tend to be loyal to the business (Vithya Leninkumar 2017). In the context of relationship marketing, customer satisfaction is the way that leads to long-term customer retention because unsatisfied customers have a very high switching rate (Lin & Wu, 2011). Pertinent to this, Haghighi et al. (2012) stated in their study that restaurants are giving more importance to retaining their existing customers rather than attracting new ones. This strategy will assure greater effect in the long run because of the probable increase in restaurants’ profitability. It is important to be on the good side of the customers because it is what will help the business to grow and be successful. 38 Profitability As defined by Hofstrand (2019), profitability is the primary goal of all business ventures. The business will not survive in the long run without profit. The company's income and expenses measure it. Revenue is generated from the business's daily operations, while expenses are the cost of resources used up in the said operation of the company. Besides, Bragg (2020) defines profitability as a situation when an entity is producing a profit. A company is profitable when the revenue is greater than the number of expenses in a reporting period. However, if an entity uses the accrual basis of accounting, the profitability condition will probably not be matched by the company's cash flows since some of its transactions, like depreciation, do not involve cash flows. Furthermore, they can become more profitable by selling assets that accumulate immediate gains; however, it is not sustainable since they must have a business model that allows their ongoing operations to generate a profit or eventually fail. Research Literature The research literature is composed of different studies which are relevant to the present study. Those critical details were taken mainly from published and unpublished thesis to understand better how to achieve financial sustainability. The recent health crisis caused by the COVID-19 pandemic quickly turned the businesses into a financial downturn due to the restrictions imposed to control and eliminate the spread of the pandemic. The restaurant business has been one of 39 the most affected by this unexpected crisis and was forced to close its businesses or to operate with many limitations. As the COVID-19 pandemic increases severely, it shows an adverse impact on restaurant firms' liquidity and operational risks. Ozili and Arun (2020) conducted a study entitled ‘Spillover of COVID-19: impact on the global economy. The researchers used secondary data containing COVID-19 statistic in different countries. The variables used in the study are the number of lockdown days (SDL), restriction in internal movement (RIM) and international travel restrictions (IR). Also, the researchers used monetary policy decision (MP), size of fiscal policy spending (FP), and the number of COVID-19 confirmed cases (CC). The findings revealed that at the size of the coronavirus crisis, the increasing number of lockdown days, monetary policy decisions, and international travel restrictions severely impacted the level of general economic activity as well as the opening, lowest, and highest stock prices of major stock market indices. The imposition of internal movement restrictions and fiscal policy spending, on the other hand, had a beneficial impact on the level of economic activity, while the number of confirmed cases was positively associated to the opening, highest, and lowest stock prices of major financial stocks. In relation to the study, restaurant firms experience significant shortfalls in their revenue since there is an intense decrease in customer demand and even temporarily interrupted operations. Since there is no certainty as to when COVID-19 damage abated, the sudden increase of operational risks and shortage of liquidity would possibly make the shareholders sell stocks they hold, thereby leading to a sharp decline in restaurant firms. Ding et al (2021) examined stock price reactions to COVID-19 40 cases as basis of five pre-2020 firm traits through their study entitled ‘Corporate immunity to the COVID-19 pandemic’. The following are the variables used in the study; financial conditions, international supply chain and customer locations, CSR activities, corporate governance systems and ownership structures. The researchers revealed that firms with stronger financial condition before pandemic experience a better stock price reactions than the other firms. Also, Companies that are more susceptible to the COVID-19 pandemic through their supply chains and client locations experience a greater decline in stock prices as a result of the pandemic. The study also revealed that enterprises with stronger CSR activities before to the pandemic exhibit improved stock market performance in response to COVID-19 and The CSR-resilience nexus is greater across economies with social norms that set a higher value on environmental and social issues. In response to COVID-19 cases, companies with fewer entrenched executives perform better and stock price reactions to pandemic incidents are highly linked to ownership. According to the study of Yang Yang et. al (2020) entitled ‘COVID-19 and restaurant demand: early effects of the pandemic and stay-at-home orders’, the world has been shocked by the emergence of the pandemic which has put the restaurant industry's survival in doubt. Due to the continued spread of the said virus, the government imposed physical separation measures, prohibiting restaurants from serving dine-in customers. As a result, numerous restaurants experienced financial losses and were forced to shut down. As the virus spreads, many individuals are unable to go outdoors due to the fear of COVID-19. Many people enjoy eating but are afraid of becoming infected with the virus, which is why 41 food delivery has become more popular. According to this study, customers prefer takeaway, food delivery, and drive-thru services to on-site eating during this pandemic since they can order their food without rushing or worrying about becoming infected with the virus. As a result, the negative effect of COVID-19 is less for fast-food restaurants than for full-service restaurants. According to the study, the negative impact of COVID-19 pandemics differs between fast food and all restaurants. One possible reason is that, due to the pandemic situation, restaurant customers had universally switched to off-site consumption, and thus, fast food restaurants take the financial hit no less than other restaurants during stay-at-home orders. Evidently, this pandemic serves as the recession of many businesses in various industries where the hotels and restaurants were highly affected. Numerous and apparent changes made some companies temporarily close their operations while most small and micro restaurants remain profitable and sustainable for a few years. Included in these micros were the fast-food eateries and chain restaurants that perform significant rebounds despite the pandemic due to cheaper offers, drive-thru lanes, and even the service they offer. According to Lucas (2020), 'Technomic is projecting that the fast-food sector's market share will grow about 8% this year. Domino's Pizza and Papa John's are the two most obvious winners since consumers quickly transitioned to ordering their pizzas for delivery during lockdowns. But burger chains like McDonald's and Wendy's, which saw sales take deeper dives in March and April, also reported relatively quick rebounds to their U.S. businesses.' 42 Under such circumstances, every company inside the industry aims to maximize its profit through various ways and processes aligned to the vision and objectives from its day-to-day activities to its sustainability. Each day, the companies do not only operate for survivability and serviceability to the market but also to establish a significant position in the industry and gain competitive advantage among the competitors, as well as the external factors affecting them and those opportunities that may or may not be visible to the public. Due to the never-ending high demand of the buyers and increasing competition in the industry specifically in the restaurant industry, different studies were made in order to determine the possible factors that could be the basis of the profitability of the said businesses, how to sustain and maximize it especially now in the time of the pandemic. Agarwal & Dahm (2015), conducted a study entitled ‘Success Factors in Independent Ethnic Restaurants’, which identified the factors contributing to overall restaurant success. The researchers interviewed twenty (20) successful independent ethnic restaurant owners to find out which factors is the most essential. According to their gathered data, ethnic restaurant owners agreed that “competent management” was the most essential contributor to its success. Business and/or culinary experience were also considered as important. Cost controls, market-driven pricing, and loyal patrons were deemed to be more essential rather than the formal hospitality education. Another study related to the success factors of restaurants is the study of Noone and Maier (2015). The researchers conducted a decision framework for restaurant revenue management restaurant owners with a comprehensive decision making framework for restaurant 43 revenue management. The model encourages the systematic use of data created both internally and externally to support RRM-related decisions. This framework reflects a broad RRM goal that focuses on creating long-term demand and profitability while assisting with short-term revenue growth too. The study also recommended that well-designed and flexible menus along with strategic pricing and design decisions will lead to sustained revenue in growth and profitability. In relation to the study, implementing the framework of Porter's five forces may heightened competitiveness, enhance cost controls, and satisfy the needs of exacting customers. One of the factors that were associated with the profitability of the restaurant industry is the competitive rivalry. This happens because there are numerous existing competitors, and all of them are equal in size and position in the market. Quality, prices, and satisfaction are the common factors in the competition. As stated in the study of Mohammad Movahed (2018) entitled ‘Quality Competition in Restaurants Industry: How Restaurants Respond to Fluctuating of Consumers’ Review Rating of Rivals’, in which it examines the theory through an assessment of the longitudinal data set of a restaurant’s quality. The researchers uses the average customer review ratings from 7,610 restaurants in Phoenix Metropolitan Area. The ratings were collected from yelp.com from the each month, from the year 2014 to 2017 to investigate the effect of the rivalry on restaurants’ quality. It is said that the goal of every businesses is to generate profit which is affected by the quality competition. According to the quality competition theory, as competitors' quality improves, the market becomes more competitive, causing a business to 44 improve its quality. The result indicate restaurants having the same category and price range have influence on its competition and rivalry. The findings of the study also revealed that quality competition has a more significant impact on the restaurants with a high price range than the lower ones. Consequently, quality and price are the two key components of spatial rivalry among the said industry. Another study that will support the previous one is cited on the study of Mohammad Movahed (2018). Biscegliay et al (2018) added to the previous research on spatial quality competition by looking at government-regulated markets. They discovered that in order to attract customers, businesses improve their quality. In an oligopolistic market, Chioveanu (2012) suggested simultaneous price and quality competition. He emphasized the tradeoff between quality and price and how profits change when some consumers consume the high-quality product, and others spend less money to finish a lower quality product. As stated in the study of Kotler et al. (2011) as cited in the study of Haghighi et al (2012), customers are looking for benefits inside the restaurants by the services they offer such as the unique product packaging where their foods are taken out or maybe the utensils they use whenever they go to the restaurant. Moreover, this certain service might elevate customers’ preferences in selecting restaurants as they exceptionally serve their customers differently. Having quality service in the restaurant industry leads to customer satisfaction thus, creating brand loyalty and competitive advantage among competitors. The study of Janghyeon et. al (2011) investigates the conciliating effects of customers’ satisfaction on the relationship between customer-based brand equity and brand 45 loyalty in the hotel and restaurant industry. The five dimensions of brand equity which are physical quality, staff behavior, ideal self-congruence, brand identification, and lifestyle congruence are said to have positive effects on customer satisfaction. The findings of the study suggest that customers’ satisfaction partially conciliates the effects of staff behavior, ideal self-congruence, and brand identification on brand loyalty. The effects of physical quality and lifestyle congruence on brand loyalty are fully conciliated by customer satisfaction. On the other hand, in today’s crisis, most restaurants are communicating with their customers online since customers cannot easily go outside and eat in their preferred restaurant because of restrictions and limitations caused by the COVID19 pandemic. Madeira et al. (2020) discussed the impact of the Pandemic Crisis on the Restaurant Business, which states that the restaurant industry should consider increasing the advertising expenditure during this crisis to start recovery immediately and communicate its business to the customers the essential safetyrelated information. Thus, focusing on this is a strategy to be followed by entrepreneurs. Additionally, restaurants should develop businesses located in large cities more sustainably and all marketing contexts for the hotel industry, starting with products and going through prices, promotion, and distribution. According to the study, restaurants use more proactive strategies than passive ones in response to certain types of crises. The methods observed in the study with concern about hygiene regulations to provide safety protocols to customers. The main originality of the study lies in the fact that it began during the first moments of awareness of the pandemic. 46 The restaurants are ventures of food and services experiencing wide competition with their relative players in the market serving the same products to satisfy the customers' preferences and meet the demand of consumers in the sense of quality, efficiency, and loyalty. Accordingly, the businesses' needs were all destined to achieve as they strategically plan for the short, medium, and long-term goals. They first encompass environmental analysis, whereas highlighted by de Brito 2019 in the study they conducted entitled, ‘Strategic Plan for a New Restaurant Business’, identifies the company's position in the market depending on its surroundings and how they can use the resources effectively and efficiently. Another factor that was considered by the researchers is the buyer's power that is affiliated with the threat of substitution. As the pandemic continues, consumers tend to discover new talents and skills they can apply to their daily living, and one of these is cooking. They slowly appreciate the essence of homemade meals, delicacies, and even those steaks you can exclusively buy as you order in most restaurants nearby. While some see this pandemic as a glimpse of their retirement days and started cooking meals for themselves for their safety and health, the restaurants view these home-cooked meals as a threat of substitutes that are currently becoming steady in the long run because of the existing endless situation. In addition, for the market players to gain a competitive advantage in the restaurant sectors, the operators must maximize revenue through its subordinating management such as capacity, price, menu, time, and customer perception, which are all essential contributors to profitability maximization towards sustainability. Aside from this, take the study in South Africa inscribed by Muriuki 2013, focused 47 on Micro and Small Restaurants in Nairobi's Strategic Response to their Competitive Environment said 'the key factors that promote competition in the quick-service restaurants are speed of service, quality of food and a good price to value relationship.' These are directly attributable to the success of the companies showing excellent performance not only by focusing on internal strengths and converting weaknesses but improving relationships with external stakeholders. According to the research analysis, of all the hypotheses conducted among the factors affecting customer satisfaction, the impact of food quality, service quality, price, and customer satisfaction on customer trust are accepted at the 95% confidence level, all was analyzed using data envelopment analysis, structural equation modeling, and LISREL software (Haghighi et al. (2012). It only proves that most of the considerations provided for the customers to stay and develop loyalty to restaurants were the critical factors in their profitability. Similarly, 'to survive in a competitive market, restaurant operators need to provide good value as well as quality food and services; a high level of customer satisfaction should maintain and to increase the customers' return visits and give them a greater market share,' acquired from Restaurant Revenue Management (Heo 2013). According to the study of Rosalin et al. (2016), entitled ‘Strategy Communication in Family-owned restaurants: Ad Hoc and Ad-Lib where it investigates the communication of strategies in family-owned restaurants possible effect of family ownership on strategy communication. The data was gathered through the means of interview. The findings revealed that communication was largely ad hoc, relating to tactics more than strategies. It was also stated that many 48 restaurant owners lacked the skills necessary to operate a going concern business. Another factor was presented from the study of Muriuki (2013). The study was entitled ‘Micro and Small Restaurants in Nairobi’s Strategic response to thei Competitive Environment’ wherein its objectives is to investigate various strategic responses to combat competitive pressures. A survey was done in 311 licensed micro and small size restaurants in Nairobi. According to the researcher, finding an advantage in a competitive environment is connected to strategies ranging from franchising, co-branding, market coordination, product differentiation, service differentiation, and customer relationship management (CRM) strategies. The researcher found out significant forces that are concurrently active in the restaurant industry large enough to create competition, notably to micro and small restaurants, as evidenced in the study made in Kenya. It conducted surveys falling into Porter's five competitive forces and respectively segregated them from one another as they categorically simplified strategic responses obtained from the managers of the restaurants. Among those forces, the highest which mainly triggers the restaurants is the supplier power, where they raise prices of raw materials needed for the operation of their products to perform the services. In response to this, restaurants strategically develop relationships with lots of suppliers and, as much as possible, low-cost and employ high inventory level maintenance. As ranked in the study acquired, the competitive forces experienced by MSE Restaurants in Kenya started from the issue of supplier power having a mean of 3.48 and a standard deviation of 1.34, as an average rate; followed by 49 customer demand fluctuations with a mean of 3.45 and standard deviation of 1.39 producing the same rate; then to the lowest effect of a mean 2.48 and standard deviation of 1.53 of new entrants performing similar services. Restaurants are engaging in a strategy that best incorporates their goal to become the market leader in the industry. Based on the research entitled performance of restaurants: Recognizing competitive intensity and differentiation strategies, obtained by Kankam-Kwarteng, Osman, & Acheampong (2020), there examine the relationship between differentiation strategies, competitive intensity and restaurant performance. The study also estimate how the interaction of differentiation strategies and competitive intensity affects the restaurant performance. The following data were gathered from 160 restaurants managers/owners in the Ashanti region of Ghana through the means of structured questionnaire. Regression Analysis was used to estimated and test the paths of the relationships. The study revealed that differentiation strategies have a significant effect on the restaurant performance while competitive intensity partially affect the performance. Competitive intensity was then found not to moderate the relationship between differentiation strategies and restaurants’ performance. Consequently, having a power that creates a unique product or service is quite hard to compete with and tends to avoid the threat of new entrants as the business is considered unique and only a certain firm can only produce the product or service. Houqiang Wu and Zaoxuan Xu (2013) also conducted a study about rivalry specifically, analysing how companies respond to competition in an industry. The objectives of the study is to demonstrate some of the competition that businesses 50 face and assess how businesses respond to it when operating in the e-commerce sector. The researchers conducted a case study to investigate the competition tactics of two organizations in order to gain a better understanding of the ecommerce competitive environment and recognize the relevance of responding to various competitors in the e-commerce industry. They interviewed respondents from two Chinese B2C enterprises in order to acquire vital information. JD Company and Amazon China are two B2C enterprises. Amazon China is a worldwide corporation, while JD Company is a domestic corporation. This study illustrates that businesses must increase their competitiveness in order to adapt to competition, such as by enhancing product quality, logistics, and after-sales service. Furthermore, it is preferable for businesses to develop strategies such as low-cost strategy and differentiation strategy in order to adapt to competition. Porter's five forces which are the competitive rivalry, suppliers power, buyers power, threats of substitution, and threat of new entrants are the most critical and most influencing forces to the companies' profitability. These forces were to analyze competition and compare the influence of forces on a particular company with other competitors. Exploring the companies' and competitors' five forces can make a strategy to improve one's position like the differentiation of products or new positioning. These five forces can also explain how the companies will prevent the new entrants and how to manage the substitute products. The bargaining power of suppliers and buyers is significant to the companies because the bargaining power of the companies is changing with the bargaining power of industry competitors. 51 Moreover, based on Porter's work, analyzing an industry in terms of the five competitive forces would help the firm identify its strengths and weaknesses relative to the actual state of competition. He supported his idea with the main argument that if the firm knows the effect of each competitive force, it can take defensive or offensive actions of firms to place itself in a suitable position against the pressure exerted by these five forces. In these five forces models, Porter helps businesses evaluate their industry as a whole in any cluster, forecast the industry's growth, and conceptualize their positions compared to one another. Thus, awareness of the five forces can help a company understand the structure of its industry and stake out a more profitable position, and be less vulnerable to attack. Following the evaluation, a business should implement a competitive strategy, in other words, favorably position itself or at least protect its situation to succeed, particularly in a hostile environment with a deep consideration at the threat of available and new entrant competitors, product substitutes, and bargaining power of suppliers and customers. Synthesis The literature presented in this chapter provides additional information in conducting this study. Furthermore, the studies considered in this research were found to be similar to the present study in some aspects. The study of Ozili and Arun (2020) investigates the Impact of COVID-19 on the Global Economy. The study is relevant to the present study as the researchers aim 52 to investigate Porter's Five Forces as the basis for profitability of the restaurant industry in this time of the pandemic. In relation, the study of Ding et al (2021) evaluates the connection between corporate characteristics and the stock returns to the COVID-19 pandemic. The researchers consider the five pre-pandemic characteristics which are the financial conditions, international supply chain and customer exposures to the pandemic, corporate social responsibility, corporate governance, and ownership structure. Yangyang et al (2020) cited different studies regarding the food deliveries that have been on trend since the pandemic started. In this study, it is evident that fast food restaurants have less negative impact on the pandemic since they have been doing food deliveries. As a result, with or without pandemic, they can still survive and maintain sustainability. In the article published by Lucas (2020) named Pandemic forces a reckoning for restaurants coping with capacity limits and new consumer habits, stating a bigger picture of most businesses gave great rebound despite the pandemic for survivability through cheaper deals, fast service, and drive-thru lanes. Agarwal & Dahm, (2015), study of the importance of business plans in the success of the business is also related with this paper. In relation to this, the study of Noone & Maier, (2015) is also relevant to the present study which stated that implementing Porter's five forces may enhance the competitiveness of the business. The study of Mohammad Movahed (2018) is also relevant to the present study. In his theory of quality competition, he stated that an increase in quality will create a 53 more competitive market. Biscegliay, Cellini, and Grillix (2018) found that firms are increasing their quality so that they can attract customers. In price and quality competition according to Chioveanu (2012) high quality means high prices and low quality equals low prices. Meanwhile, the study of Kotler et al. (2011) cited in the study of Haghighi et al (2012), customers prefers to have something unique in the restaurants. As product uniqueness being associated with quality, having these characteristics will most likely prevent customers from switching products. This study has a relationship to the current study since product uniqueness and quality is associated with competitive rivalry which is one of the variables being used in this study. The study of Janghyeon et al (2011) also relates the current study through their variables. The study of Madeira et al (2020) discusses the Impact of the Pandemic Crisis on the Restaurant business which is relevant to the present study, it focuses on the strategy needed in this time of the pandemic. Similarly, the research conducted by de Brito (2019) highlighted the significance of analyzing the environment to effectively manage the competitive forces for restaurants in the competitive environment. As stated in Micro and Small Restaurants in Nairobi’s Strategic Response to their Competitive Environment by Muriuki (2013), strategic responses were developed into action to the competitive forces experienced by the restaurants in Kenya which circulate within the supplier power, buyer power, and new entrants. 54 In connection with this, Haghighi et al. (2012) in their study Evaluation of factors affecting customer loyalty in the restaurant industry, customer loyalty has become one of the significant factors in maximizing profitability along with customer satisfaction. Whereas, the research published by Heo (2013) showed characteristics for which it will contribute more in the maximization of profits of the firms such as through capacity management, time management, menu management, price management, and customer perception management. In relation to this, the study of (Rosalin et al., 2016) is also relevant to the present study. The researcher recommends that loyalty may provide a competitive advantage. The study of Kankam-Kwarteng, Osman, & Acheampong (2020) also relates the current study since the researchers examined the relationship between differentiation strategies, competitive intensity and restaurant performance which is subclassified under competitive rivalry of Five Forces which may help create a competitive advantage within the industry. Houqiang Wu and Zaoxuan Xu (2013), analyzes how companies respond to competition in an industry, Porter’s five forces were highlighted and had a great influence on the companies’ profitability as stated in the study. These five forces help each company to gain a competitive advantage among others. 55 Chapter III Methodology This chapter presents the research methodology that was utilized by the proponents. It includes design, research procedures, data analysis, and the assumption for the gathered data. Research Design In order to identify, define and assess the competitive forces of restaurants in Batangas: basis for maximizing profitability, descriptive research was utilized in this study. This research design was chosen because it seeks to characterize a population, circumstance, or phenomenon accurately and systematically. A descriptive research method is also a good option when the aim of the study is to find out about characteristics, frequencies, trends, and categories (McCombes, 2019). The researchers adopted this method because it is an appropriate method and would greatly contribute to a better understanding and easy interpretation of data. Respondents of the Study The respondents of the study are the selected restaurant owners/managers in Batangas, specifically Batangas City, Lipa City, Tanauan, and Sto. Tomas, as they are the person who truly knows everything about the business and they are the best respondents who the researchers think can answer the questionnaires. 56 The researchers chose restaurants specifically cafes, family-style restaurants, fine dining, and fast-food restaurants as the respondents of the study. The researchers chose these restaurants mentioned because they have the most type of restaurant in Batangas. The researcher sent an email to the office of Department of Trade and Industry (DTI) in Batangas City branch to ask for the copy of the list of restaurants in Batangas City. However, the researcher wasn't able to get the copy of the list, fortunately the other group of researchers from BSA are able to get that list and even though the researchers are shy to ask for the list they still humbly ask them for the copy of the said list. The researchers didn't have the exact numbers of the restaurant as they used convenience sampling for a convenient source of data and for the safety of everyone as the researchers are not allowed to go outside and do an actual survey due to this pandemic. The list that the researchers obtained is only in Batangas City where almost half of the list are unreachable, the researchers assumed that those restaurants are already closed due to the pandemic or busy with their operation. The researchers messaged hundreds of restaurants but received only 80 responses that should be 100, as the others didn't even see their message and ignore it and the others are too busy to answer the questionnaires. The researchers encountered many difficulties in obtaining those respondents, their main channel that used to deliver the questionnaires was the messenger but unfortunately after sending a few links they got banned from the fb thinking that 57 they were sending spam messages. After the hard work, the researchers are still lucky to obtain 80 respondents despite all the obstacles that they encountered. Data Gathering Instrument The researchers used a survey questionnaire as the primary data gathering instrument in assessing the competitive forces of restaurants in Batangas specifically in Batangas City, Lipa City, Tanauan, and Sto. Tomas. The researchers used a research-made questionnaire, this instrument was disseminated to the respondents by messaging them on email, contact numbers and messenger through their Facebook pages. The data gathering procedure will be done through an online survey particularly google forms. The questionnaire sheets consist of two parts. The first part will be for respondents’ profiles in terms of the form of business organization, number of employees, number of years in operation, and type of restaurant. The second part of the questionnaire consists of the variables used in conducting the research. The researchers presented the first draft of the questionnaire to the research adviser to seek comments and suggestions. The questionnaire was improved and presented to panelists, grammarian, statisticians, faculty experts, and Department Dean for further checking and validation of its content and format. Then, a dry run was conducted online through messaging the Facebook pages of the restaurants or emailing them to test its reliability and determine if it is anchored with the objectives of the study. During the dry run, 16 respondents answered the questionnaire using convenience sampling in Lipa City. 58 Consecutively, the results were properly tallied, tabulated, and submitted to the statistician through email for interpretation. The reliability test of the dry run passed with the result of .901. It was determined that the questionnaires are reliable and ready for dissemination to the respondents in the actual survey. The scoring of the questionnaires will use a four-scale Likert instrument as shown in table 1 and a checklist to assure the manageability of the data collected. The respondents will check only their corresponding answers to the items in the questionnaires. Table 1 Likert-type Scale Scale Range Verbal Interpretation 4 3.50 - 4.00 Strongly Agree 3 2.50 - 3.49 Agree 2 1.50 - 2.49 Disagree 1 1.00 - 1.49 Strongly Disagree Data Gathering Procedure The researchers used secondary data mainly books, journals, theses and dissertations, and other reliable electronic preferences to explain the variables of competitive forces of restaurants in terms of competitive rivalry, supplier power, 59 buyer power, the threat of substitution, and the threat of new entrants in Batangas which could be a basis for maximizing profitability. Prior to that, the researchers acquired information about SMEs in the Batangas City area through the generosity of other researchers who had access to the same data. They sorted restaurants from the Q1 2021 list and conducted a dry run to determine whether the survey's methodology will result in a possible pandemic effect on the subject by utilizing Porter's Five Forces and determining their relevance to profit maximization. There were 200 restaurants on the list, but the majority of them were already closed when the list was compiled, and some were newcomers to the business, rendering them irrelevant to the study. As a result of these conditions, the researchers requested that the city be reconsidered to include other important cities in Batangas in order for an interpretation to be successful and useful. This request was authorized and considered, notably Lipa City, Tanauan, and Sto. Tomas. The researchers distributed google forms to conduct an online survey. Due to the respondents' convenience in responding to the questionnaire and the fact that it is pandemic, the researchers were not permitted to conduct the actual survey physically. The researchers gathered respondents and compiled a list by searching Facebook for restaurants in Batangas City, Lipa City, Tanauan, and Sto. Tomas. The researchers began by creating an excel file that had the names of restaurants, their locations, their styles, a business URL, an email, a contact number, and any notes or status of the communication. These specifically targeted restaurants and assisted researchers in contacting them via phone calls, text messages, email, and 60 social media channels. Some restaurants were unable to respond to the survey due to their busy schedules regardless of the scenario, while others were short on personnel, forcing them to focus on their operation more and keeping them fully occupied every day. A few restaurants were completely unresponsive. Despite this, the researchers acquired eighty (80) responses that were apparently one hundred (100) responses. Statistical Treatment of Data Following the collection of data from respondents, the study will employ descriptive and inferential statistics to determine these quantitative data. Frequency and Percentage. This measures the profile of respondents in terms of the form of the business organization up to the location which is highly important in determining the different sizes of restaurants. The Mean.This will help the researchers analyze how the respondents assess the competitive forces of their restaurants, determined by various factors, including the financial situation, the organization of the management team, and the ability to take risks, and in terms of competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants. Several metrics indicate whether or not an organization can change. 61 Chapter IV PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA This chapter consists of the presentation, analysis, and interpretation of necessary data acquired from the study. The researchers exhibited the results in each table, followed by the analysis and interpretation. 1. Profile of the selected restaurants This part of the study shows the profile of the selected restaurants in the four key cities in Batangas. It includes the form of business organization, number of employees, number of years in operation, and type of restaurant. 1.1 Form of Business Organization Table 2 shows the frequency distribution of the respondents in terms of the Form of Business Organization. Table 2 Distribution of selected Restaurants in terms of Form of Business Organization Forms of Business Organization Frequency Percentage (%) Sole Proprietorship 59 73.8 Partnership 8 10.0 Corporation 12 15.0 Limited Liability Corporation 1 1.3 TOTAL 80 100 62 Table 2 shows that the majority of the respondents are Sole Proprietorship with the highest frequency of 59 or 73.8 percent, followed by the corporation with the frequency of 12 or 15 percent. Lastly, the one frequency covers the limited liability corporation. This implies that most of the restaurants in Batangas are operated by a sole proprietorship. The factors why many restaurants are in a sole proprietorship is because according to the CFI Education Inc. (2021), it has several advantages despite its simplicity. First, it is easy to establish and inexpensive compared to other forms of business organization. The process requires little paperwork and minimum to no fees. Second, it complies with a few regulatory requirements unlike corporations, wherein each reporting period, a financial statement is needed to be prepared. Lastly, in a sole proprietorship, the owner is taxed only once and there is no income tax to the entity itself. 1.2 Number of Employees Table 3 Distribution of Selected Restaurants in terms of Number of Employees Number of Employees Frequency Percentage % 1-9 employees 64 80.0 10-99 employees 14 17.5 100-199 employees 0 0 200 and above 2 2.5 TOTAL 80 100.0 63 As shown in Table 3, is the distribution of selected restaurants in terms of the number of employees, whereas the majority of the respondents (80%) said that they employ 1–9 employees in their restaurants. The next figure (17.5%) showed 10-99 employees, way higher than the majority. And only two (2.5%) answered 200 or above employees, as per the actual survey. The results have shown that most restaurants have only 1–9 employees. Several factors contributing to the outcome of the survey, as well as restaurants' having few employees in their workspace, especially during the pandemic, suggest the reason for establishing a workforce in small groups. As shown in the International Journal of Advanced Engineering, Management and Science (IJAEMS) (Vigilia, A. et al, 2021), given the massive impact of the COVID-19 pandemic on the industry, restaurants must increase their employee protection with market preservation as their top priority to continuously navigate business operations. Hence, this implies the proper monitoring of employees through safety health protocols inside their restaurants and ensuring habits of hygiene controls such as regular handwashing, glove changes, and keeping hands away from their faces. If an employee gets a cough or any other virus-related symptom, it may be appropriate to send them home. Within two weeks, an infected person might spread the virus to all staff, forcing a business to close (SGS Philippines, Inc., 2021). This highly concerns the restaurants that is why most of them reinforce fewer employees than the others to effectively equate profitability and safety. 64 1.3 Number of Years in Operation Table 4 shows the frequency distribution of the respondents in terms of the Number of Years in Operation. Table 4 Distribution of selected Restaurants in terms of Number of Years in Operation Number of Years in Operations Frequency Percentage % 1-5 years 54 67.5 6-10 years 10 12.5 10-15 years 3 3.8 15 years and above 13 16.3 TOTAL 80 100 Table 4 shows that the majority of Restaurants operating in Batangas are from year one to five years in the operation with the highest frequency of 54 or 67.5 percent. Followed by 15 years and above in the operation with a frequency of 13 or 16.3 percent. There were also 10 restaurants of about 12.5 percent who had been operating for 6-10 years, while only 3 restaurants or 3.8 percent out of 80 restaurants had been operating for 10-15 years. It can be inferred from the table that most of the restaurants are in their early year of operation. Staying in the operation means that the restaurant business can survive and can adapt to any situation. Being in the operation means that the restaurant belongs to the stronger business who beats the weaker ones. As stated in the study of Chen 65 (2014), the survival rate of the restaurant business was quite low. That is why who remains means they are the stronger ones. As we can see on the table, most restaurants had been in operation in their early years while only few restaurants remained or survived in the long run of operation. In the study of Adam Ozimek (2017), he stated that the claim of American express commercials that 90% of restaurants failed in the first year was false. According to his study, only 17% of restaurants close in the first year, not 90% which is a lower failure rate than the other service providing businesses of 19%. It is stated also in his study that closing restaurants is not necessarily an unsuccessful one. It can be where restaurants were doing well, but family or health problems forced a closure. It can also be in terms of location that wasn't successful but the building was sold for another use or perhaps the owners were making money but decided that they wanted to do something else. There are many factors why restaurants closed so we can't jump into conclusion that a business actually failed. 1.4 Type of Restaurant Table 4 shows the frequency distribution of the respondents in terms of the Type of Restaurants. Table 5 Distribution of Selected Restaurants in terms of Type of Restaurants Type of Restaurants Frequency Percentage % Cafe 18 22.5 Family Style 28 35.0 66 Fine Dining 16 20.0 Fast Food 18 22.5 TOTAL 80 100.0 As shown in Table 5 above, the distribution of selected restaurants in terms of the type of restaurants is shown. Many (35%) of the restaurants are family-style, which are designed for Filipinos to have different and exquisite preferences in the setting and better quality of service and food. Both (22.5%) cafes and fast-food restaurants gathered the next highest number of respondents among others, as people even in the middle-class to lower-class can avail and purchase food and services. Few (20%) of the respondents classified themselves as fine dining restaurants wherein formal and more exclusive services were offered to customers. Most restaurants from the survey answered "family style" as their classification. There are various family-style restaurants around the cities where the researchers have conducted their survey, which is mostly the reason why, despite their differences from other types of restaurants in service and food offered, they are one of the most well-known kinds and can be seen in places where there are many households. As specified by Mealey, L. (2018), what makes a restaurant familystyle is the moderately priced menu, table service, and full bar that is usually separate from the dining room. This style benefits the customers more in that the atmosphere of the dining room makes them control what they eat. Finally, trendy 67 restaurants around the country are embracing family-style dining as an alternative to the tiny plates that have been popular for the past several years. 2. Competitive Forces of Restaurants This part of the study shows the competitive forces of selected restaurants in the four key cities in Batangas specifically in Batangas City, Lipa City, Tanauan City, and Sto. Tomas. It includes Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of New Entrants. 2.1 Competitive Rivalry Table 6 shows the assessment of the competitive forces of selected restaurants in terms of Competitive Rivalry. Table 6 Competitive Forces of Restaurants in Batangas in terms of Competitive Rivalry Item Mean Interpretation 1. Has a large number of competitors 3.54 Strongly Agree 2. Has strong influence on the customers 3.58 Strongly Agree 3. Is competent that makes it hard for customers to switch from other restaurants. 3.23 Agree 4. Has a unique product that makes it hard for customers to switch from other restaurants. 3.44 Agree 5. Is a clear leader in the market 3.18 Agree 6. Offers a low price for its product 3.41 Agree 7. Is growing so fast in the industry 3.15 Agree 68 8. Focuses more on the profitability and quality of the product 3.60 Strongly Agree 9. Values its customers and listens to their opinions for the benefit of the business. 3.85 Strongly Agree 10. Are flexible and can manage to survive in any situation. 3.53 Strongly Agree 11. Always manages to be on the top of the market 3.34 Agree 3.44 Agree COMPOSITE MEAN As shown in Table 6, a competitive rivalry as one of the competitive forces unveils how each restaurant, based on the composite mean of 3.44, competitive rivalry is moderately evident in restaurants, therefore, affects their profit maximization. However, the majority of the restaurants strongly agree, with a mean of 3.85, to the indication that their business values their customers and listens to their opinion for the benefit of the business likewise. It was then followed by the competitiveness of restaurants as they focus more on the profitability and quality of the product, with a mean of 3.60 (strongly agree). Accordingly, Chua, B. et al., (2020) noted in their study that in relation to restaurants giving value to customers’ perceptions and suggestions towards the business, it will build a brand reputation for itself. This is interconnected to developing customer loyalty as they earn their trust. Brand reputation is a composite of a brand's reliability, admiration, benevolence, respect, and confidence. It is a gauge of a company's fundamental quality of its product or service offerings to customers. A well-known reputation makes it easier for 69 customers to prefer one brand over another psychologically. A reputable brand instils psychological assurance in the customer about the brand's quality, hence establishing customer trust. With this, a restaurant can gain a higher competitive advantage among others if it aims for reputation through customer valuation and reputation management. The lowest factor of competitive rivalry on how it influences the restaurants in maximizing their profitability is their rivals growing so fast in the industry, with a mean of 3.15. The next low factor distinguishes that a competition where a clear leader in the market, with a mean of 3.18, does not strongly impact the competitive rivalry to increase the restaurants’ profitability. This was supported by the interview made to Bugia (owner of Mimi & Bros and Bean and Yolk) and Templo (owner of pizza place Gino’s, Tyler’s Cafe, Cello’s Doughnuts, and Mitchell’s Backyard Brewery) at Rappler (Arnaldo, S. 2021) which was about the sales: slow but not steady. By mid-2020, Bugia's sales had fallen to 30% of their pre-pandemic levels. Things began to improve at the end of 2020, during the general community quarantine (GCQ). "Businesses remain precarious, and income is essentially unpredictable," Bugia stated. Banana Pancake Trail's overall sales are still "less than 50%," compared to its pre-pandemic levels of 90% dine-in and 10% delivery. However, now that the economy is reopening, it has recovered somewhat. Sales are now around 60-70% of pre-COVID, according to Bugia. Bugia: "Now that the economy is opening up again, at least it's bounced back a little bit". "It has been a year since the lockdown began, and the situation has not stabilized. Certainly, sales have not returned to pre-COVID levels. When I say a little bit,' I mean just 70 enough to survive. Enough to appropriately compensate our people," Bugia stated. Additionally, Templo stated that the majority of malls granted rent discounts, which significantly reduced his costs for Gino's Shangri-La and Serendra locations. In addition, Bisnar, M (2021) stated in her article entitled, Seeking reassurance: How the restaurant industry can recover, the impact of Covid-19 on informal and upscale dining may be long-lasting. Due to the cessation of business lunches at high-end restaurants, restaurants that rely on them are now struggling to generate revenue. Additionally, several businesses reduced client entertainment spending this year, opting for at-home arrangements. This raises the question of whether these establishments will continue to thrive once business contacts resume normalcy. 2.2 Supplier Power Table 7 shows the assessment of the competitive forces of selected restaurants in terms of Supplier Power. Table 7 Competitive Forces of Restaurants in Batangas in terms of Supplier Power Item Mean Interpretation 1. See the suppliers as significant stakeholders of the sector and play a crucial role in its restructuring and future evolution. 3.50 Strongly Agree 2. Believes that labor exerts a lot of pressure on its profitability. 3.44 Agree 3. Is the major customer of its suppliers. 3.14 Agree 71 4. Is not the only market of its suppliers. 3.14 Agree 5. Prefer sticking to specific suppliers because the switching costs from one supplier to another are high. 3.25 Agree 6. Believes that the market is dominated by a few large suppliers who dictate prices and volumes supplied. 3.16 Agree 7. Source the materials and other inputs from specific suppliers due to lack of substitutes (there exist monopoly suppliers). 3.01 Agree 8. Can manufacture some inputs in-house other than buying from suppliers. 2.99 Agree 9. See the suppliers be influential in the determination of the quality and price of the final products being offered to customers. 3.35 Agree 10. Are able to obtain discounts from suppliers as opposed to other businesses. 3.29 Agree 3.23 Agree COMPOSITE MEAN Table 7 reveals the mean score of the assessment of the competitive forces of restaurants in terms of Supplier Power. A composite mean score of 3.23 indicates that most of the respondents had agreed that the supplier power is moderately evident in the restaurant industry. The table also showed that the majority of the respondents agreed that suppliers are significant stakeholders of the sector and play a crucial role in its restructuring and future evolution meaning that suppliers are an important part of the business and also are influential in determination of the quality and price of the final products being offered to customers with a mean score of 3.50 and 3.35, respectively. According to Jonathan Davies (2021), there are several benefits associated with supplier relationship management. It can 72 reduce costs, a restaurant can strive for cost savings over a long period of time by cooperating with a trusted supplier. This will also reduce other problems such as quality issues, delays, availability problems. It can also minimize price volatility because the supplier gives its consumer a fixed price in exchange for expanding contract terms. In the study of Emrah ONDER and Nihan KABADAYI (2015), the main purpose of the supply chain is to build good relationships between chain members to serve customers accurately. Therefore, definitive operation levels between supply chain members determine the quality of the final product/service in a supply chain. In relation to the study, finding a supplier isn't just about finding who offers the lowest price but who offers good quality products, who delivers on time, and the accuracy of the product. That is why it is important that a restaurant owner establishes a good relationship with the supplier because a long-term relationship means that both parties have trusted each other therefore misunderstanding will be prevented and issues will not be a problem. In addition to this, establishing a satisfactory relationship with suppliers will also make the business gain long-term savings which are generally preferable to short-term savings. Table 7 also shows that respondents are least agreed that restaurants source the materials and other inputs from specific suppliers due to lack of substitutes (there exist monopoly suppliers) with a score mean of 3.01. This result indicates that customers are loyal to their supplier that even though they have choices they stay with their specific supplier. According to the study of (Ronade 2012), there are three most important causes of customers being loyal to one company. First, if the 73 products and services are considered under customer's preferences. The second is if the products and services are considered under customers' value. Lastly, if the customer's experiences, perceptions, and beliefs about the company as well as about its products and services are highly valued. These are the things that need to be considered in order to gain loyal customers. Findings also reveal that respondents have least agreed that restaurants can manufacture some inputs inhouse other than buying from suppliers with a score mean of 2.99. It indicates that buying inputs is way better than making them and also it is way more beneficial to the business. According to the article in Greenlight (2017), suppliers provide a company with the services it uses in providing goods and service to its customers. It stated that without a solid relationship with its suppliers, a company can not offer its own customers a consistently high quality product or service. According to this article, adapting a more strategic approach with key suppliers can have immense long-term benefits for companies. In relation to this, a report from management consultancy Efficio Consulting (2013) showed that there are very few companies that are enhancing supplier relationships, despite the fact that it's not easy to find reliable suppliers. In addition to this, the article also stated that look at suppliers more than just someone who supplies goods and/or services. They must be your allies because the kind of relationship that customer and supplier have can influence the success of the business. 2.3 Buyer Power Table 8 shows the assessment of the competitive forces of selected restaurants in terms of Buyer Power. 74 Table 8 Competitive Forces of Restaurants in Batangas in terms of Buyer Power Items Mean Interpretation are designed for a specific customer target group. 3.01 Agree 2. experiences change in customers’ demands from time to time. 3.39 Agree 3. believe the power of the customers (large or small) influences the prices that are charged for restaurant products and services. 3.38 Agree 4. considers the concentration of customers in a particular geographical area when expanding its operations. 3.49 Agree 5. prefers Word-of-Mouth as a source of information as it is the most effective in reaching out to customers and deeply influencing other potential customers. 3.44 Agree 6. prefers Print Media such as flyers, newspapers, etc. as a source of information since these are the most effective in reaching out to customers and deeply influence other potential customers. 3.08 Agree 7. prefers Electric Media such as TV Commercials, Social Media posts, and other online advertisements as a source of information since these are the most effective in reaching out to customers and deeply influence other potential customers. 3.58 Strongly Agree 8. ensures that the customers are well informed about the products and services being offered in the market. 3.70 Strongly Agree 9. finds it difficult for the customers to switch from its products to the competitor’s products. 3.11 Agree 10. offers standard products and services and differentials are considered low. 3.25 Agree 1. 75 COMPOSITE MEAN 3.34 Agree Table 8 presents the mean score of the assessment of the competitive forces of restaurants in terms of buyer power. It can be seen on the table that the respondents agreed that buyer power is moderately evident, hence, affecting the profit maximization of the industry, with a composite mean of 3.34. The majority of the restaurant owners strongly agreed that restaurant owners should ensure that customers know the products and/or services that their business offers in the industry with a mean of 3.70. Customers can be reached through social media and other online platforms. Approximately 3.6 billion people are using social media worldwide, and in 2025, it is projected to increase to almost 4.41 billion people. Social media has been an integral part of internet usage in our everyday lives (Statistica Research Department, 2021). With the statistics given, social media could be a great platform for every restaurant owner to promote their businesses and attract potential customers. Table 8 also shows that the respondents considered the electronic media, such as TV commercials, social media posts, and other online advertisement materials, the most effective in reaching out to customers, and it has had a great influence in attracting customers with a 3.58 mean. According to Vinerean et al. (2013), the internet enables businesses to reach a wider customer base. Social media, especially social networking sites, provide a virtual space for customers to interact and communicate through the internet, which might be an important factor in 76 customer socialization. Getting a wider audience through boosting and promoting online businesses greatly impacts the brand image of a restaurant business. Meanwhile, the respondents least agreed with the statement that the restaurant business is designed for the specific customer target group, with a mean of 3.01. The respondents also least preferred print media, such as flyers, newspapers, etc., to be used as a source of information in attracting customers, with a mean of 3.08. This implies that the restaurant owners focus on a large group, not solely focusing on a specific group of customers like their age and location. In the same way, the respondents preferred electric media compared to print media since the latter would cost them more. Print media is a tangible medium wherein it requires more effort to produce than the former. This was supported by Quinn (2017). According to the researcher, many people seemed to prefer reading the news from applications on their phones because it is convenient to read. In the past years, many print media companies have diversified from the traditional printing of news to posting it on digital platforms such as Facebook, Twitter, Instagram, and other websites. In particular, millennials seemed to use more digital media than reading printed materials. This means that the world is evolving today because of the pandemic, and the electric media seemed to be more favored because of its convenience. As stated in the study of Panghulan (2021), customers are one of the significant stakeholders in restaurants. They have a significant influence on the success of a business. Restaurant owners should pay attention to the factors that will satisfy their customers, not only the brand image of the restaurants but also the prices 77 and quality of the products and services being offered. Through this, the restaurant can gain a competitive advantage since customers have a great influence on the image of the business within the industry. 2.4 Threat of Substitution Table 9 shows the assessment of the competitive forces of selected restaurants in terms of the Threat of Substitution. Table 9 Competitive Forces of Restaurants in Batangas in terms of Threat of Substitution Items Mean Interpretation 1. Has limited potential returns now due to substitutes that places a ceiling on the prices it can profitably charge. 2.85 Agree 2. Has been replaced by homemade foods that significantly affected the demand since the pandemic started. 2.59 Agree 3. Becomes low on profit due to the grocery stores and supermarket chains’ budget-friendly and personalized meals. 2.84 Agree 4. Gains fewer customers because of the substitutes, such as grocery stores and supermarket chains, with their accessibility and ready-to-eat recipes. 2.55 Agree 5. Has substitutes that inhibit product or service differentiation amongst customers. 2.81 Agree 6. Has a high customer loyalty rate. 3.56 Strongly Agree 7. Competes with substitutes that are easily available and where new ones are emerging. 3.08 Agree 8. Operates with customers high switching costs when choosing another service or restaurant. 2.79 Agree 78 9. Sees the substitutes as those that are attractively priced and have better performance offers. 2.86 Agree 10. Has producers that are less profitable than that of its substitutes’. 2.76 Agree 2.87 Agree COMPOSITE MEAN Table 9 presents the Mean score of the assessment of the competitive forces of restaurants in terms of Threats of Substitution. A composite mean score of 2.87 indicates that the majority of the restaurant owners had agreed that threats of substitution is moderately evident in the selected restaurants in Batangas. The majority of the respondents strongly agreed that they had a high customer loyalty rate and can compete with substitutes that are easily available and where new ones are emerging with the mean score of 3.56 and 3.08, respectively. Therefore they are not that threatened by the substitutions. Customer satisfaction has a very important role in the business because dissatisfied customers tend to switch with another restaurant and might as well ruin the restaurant’s reputation with the other customers. This is supported by the study of Nurnajihah Rosli, Syafiqah MD Nayan (2020) that customer satisfaction is important to the business organization because it is the leading indicator of consumer repurchase intentions and loyalty. It can also keep the company brand ahead of competitors and also can be a help to the growth of the business because people tend to pay more for better customer retention. According to him, satisfied customers can be a sign that the business is running successfully. Therefore, restaurants must prioritize customer satisfaction 79 to gain profit and a good reputation so that customers will trust them and will be loyal to them so that the business will not be threatened by substitution. Findings also reveal that respondents are least agreed that restaurants get fewer customers because of the substitutes, such as grocery stores and supermarket chains, with their accessibility and ready-to-eat recipes. These items score a weighted mean of 2.55. Restaurant owners are also least agreed that they had producers that are less profitable than that of its substitutes with a score mean of 2.76. In accordance with the findings, it indicates that restaurants had many loyal customers and that substitutes aren't threatening them as well as restaurants are still profitable. According to (Ouedraogo and Koffi, 2018), there is intensive competition in the restaurant industry. Owners must focus on innovative ideas to attract new customers and to retain current customers because it helps to improve existing products and services and create satisfaction among customers. Competition is everywhere, it is not something that one business can avoid, that is why the stronger ones remain and the weaker ones are eliminated. According to Agaba (2020), customer satisfaction is being overlooked in the food and drink industry. Every business needs a lot of customers, every single day they should attract new loyal customers and it is only possible when customers receive a very satisfying service. The results obtained from this study showed that customer satisfaction is always involved. Satisfaction is affected (negatively or positively) by food quality, price, ambiance, service quality. Therefore all of this should be balanced because this is the way to make customers fully satisfied and that it has a great effect on the profitability of the business. In order to have a loyal customer 80 and increase profitability, customer satisfaction should be prioritized and be put first. It is believed that a company can generate success if it provides superior value to its customers than its competitors (Kiani et al., 2019). 2.5 Threat of New Entrants Table 10 shows the assessment of the competitive forces of selected restaurants in terms of the Threat of New Entrants. Table 10 Competitive Forces of Restaurants in Batangas in terms of Threat of New Entrants Items Mean Interpretation 1. has utilities and machines that are used in serving the food and are working incapacity. 3.18 Agree 2. differs from any other restaurants with its food and service being served and delivered. 3.34 Agree 3. has menu prices that are affordable and of quality. 3.65 Strongly Agree 4. has a high customer loyalty rate. 3.59 Strongly Agree 5. has high start-up costs. 2.94 Agree 6. has unique assets needed to run the business 3.38 Agree 7. undergoes a critical process or procedure to conduct a start-up. 3.13 Agree 8. sets high standards in obtaining customers for new competitors. 3.38 Agree 9. sets high standards in acquiring or obtaining needed inputs for new competitors to compete efficiently. 3.35 Agree 81 10. needs a license if it plans to open a new branch. 3.53 Strongly Agree COMPOSITE MEAN 3.34 Agree The composite mean showed that the respondents agreed that the Threat of New Entrants is moderately evident and influences the restaurants with a composite mean of 3.34. Most of the respondents offer menu prices that are affordable and of quality and have a high customer loyalty rate with a mean of 3.65 and 3.59, respectively. This indicates that due to the high competition in the restaurant industry, owners have been paying attention to the prices and quality to prevent customers from switching to new same businesses. Whereas, having a high startup cost and undergoing a critical process or procedure to conduct a start-up ranked last having a mean of 2.94 and 3.13, respectively. To support the claim, the study of Panghulan (2021) stated that product differentiation has been relatively low because all restaurants are offering the highest quality product and services. Start-up costs are relatively low, also. One factor is the franchise component of the industry new business obtains ownership which lowers the initial cost of a start-up. Another factor is that most of the restaurant owners are engaged with Sole Proprietorship which has low capital requirements and is easier to conduct. Despite having high competition in the restaurant industry and a weak product differentiation, most of the respondents have a high loyalty rate from their customers. As cited in the study of Diab et al (2016), customer satisfaction is considered as one of the significant factors of 82 customer loyalty. In the industry, it is found that satisfied customers are more loyal to the restaurant compared to those with less level of satisfaction. The customers who are satisfied with the service and products being provided are more likely to revisit the restaurant and more likely to recommend the restaurant to other potential customers. 3. Comparison of assessment of the Competitive Forces of the selected restaurants This part of the study shows the comparison of the competitive forces of selected restaurants in Batangas on the profile of the respondents. It includes Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of New Entrants. Table 11 Comparison of the Competitive Forces of Restaurants in terms of Form of Business Operations Forms of Business Organization Competitiv e Rivalry Supplier Power Mean VI Mean VI Mean Sole Proprietorship 3.428 4 A 3.200 0 A Partnership 3.431 8 A 3.312 5 Corporation 3.568 2 SA 3.316 7 Variables Buyer Power Threat of Substitutio n Threat of New Entrants VI Mean VI Mean VI 3.296 6 A 2.811 9 A 3.3136 A A 3.487 5 A 3.037 5 A 3.3375 A A 3.491 7 A 3.050 0 A 3.5250 SA 83 Limited Liability Company 2.909 1 A 3.000 0 A 3.000 0 A 2.700 0 A 3.0000 Legend: VI – Verbal Interpretation SA – Strongly Agree A – Agree Table 11 shows the difference in the respondents’ assessment of competitive forces in terms of forms of business operation. The findings presented that in terms of competitive rivalry, corporations resulted to have the highest degree of rivalry among the other forms of business organization. It means that the rivalry is highly evident in the restaurant business owned by a corporation. Meanwhile, rivalry is moderately evident and garnered a lowest weighted mean in the limited liability company. The supplier power is moderately evident among all forms of business organization however, sole proprietorship resulted to have the highest weighted average while limited liability got the lowest with a mean of 3.2000 and 3.0000 respectively. The table also revealed that buyer power is also moderately evident among all forms of business. It was also revealed that corporation got the highest mean of 3.4917 and limited liability ranked as lowest with 3.0000 mean. Corporation still ranked the highest in terms of threat of substitution while limited liability ranked as lowest. The threat of substitution is moderately evident in the four mentioned forms of business organization. A 84 Lastly, the threat of new entrants has been highly evident in restaurants owned by a corporation with a weighted mean of 3.5250 while it is moderately evident in limited liability company with a mean of 3.0000. Overall, the limited liability company revealed to be consistent in ranking as the lowest in the five forces. This may be due to the number of respondents who participated to the survey under the said profile. Meanwhile, corporation almost garnered the highest weighted mean in the five forces. The reason for the significant consistency of a corporation strongly agreeing that those competitive forces are the basis for maximizing profitability is about its continuous lifespan, separate legal existence, ability to acquire capital, transferability, taxation and other legal affairs, that makes it competitive and able to maximize its profit with abundant factors and capabilities to pursue unlike other form of business operations like limited liability company having been the lowest but did not disagree in all forces. Table 12 Comparison of the Competitive Forces of Restaurants in terms of Number of Employees Number of Employees Variables 1-9 employees Competitiv e Rivalry Supplier Power Buyer Power Threat of Substitutio n Threat of New Entrants Mean VI Mean VI Mean VI Mean VI Mean VI 3.4219 A 3.201 6 A 3.325 0 A 2.807 8 A 3.301 6 A 85 10-99 employees 3.4610 A 3.228 6 A 3.321 4 A 3.050 0 A 3.442 9 A 100-199 employees 0 n/ a 0 n/ a 0 n/ a 0 n/a 0 n/ a 200 and above employees 4.0000 A 4.000 0 A 4.000 0 A 4.000 0 A 4.000 0 A Legend: VI – Verbal Interpretation A – Agree Table 12 shows the difference in the respondents’ assessment of competitive forces in terms of number of employees. The findings revealed that in terms of competitive rivalry, restaurants who employed 200 and above resulted to have the highest degree of rivalry among the other forms of business organization while having 1-9 employees ranked as the lowest. The supplier power is moderately evident among all number of employees however, restaurants with 200 and above employees resulted to have the highest weighted average while those who have 1-9 employees got the lowest with a mean of 4.0000 and 3.2016 respectively. The table also revealed that buyer power is also moderately evident among all number of employees. It was also revealed that those restaurant business who employed 200 and above got the highest mean of 4.0000 and having 10-99 employees as lowest with 3.000 mean. 86 Restaurants who have 200 and above employees still ranked the highest in terms of threat of substitution while with 1-9 employees ranked as lowest. The threat of substitution is moderately evident in the four mentioned number of employees. Lastly, the threat of new entrants has been moderately evident in restaurants who have 200 and above employees with a weighted mean of 4.0000 while it is also moderately evident in 1-9 employees but with a lowest mean of 3.3016. In conclusion, under all factors that are compared to competitive forces competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants, restaurants with 200 employees and above consistently ranked the highest weighted average. In contrast, restaurants with 1-99 employees have the largest count (64) of respondents, and those with 200 and above employees have the lowest count (2) of respondents. To conclude the comparison of competitive forces with number of employees, the frequency of respondents is one major factor as 200 and above employees is consistent with the mean of the competitive forces. Meanwhile, it is also evident that a restaurant with fewer employees tends to be low in competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entrants having diverse effects to the restaurant itself either negative or positive. It is frightening for the restaurant of 1-9 employees to have low competitive rivalry because it indicates incompetent and lower position in the industry as well as having low buying power and threat of new entrants while low in threat of 87 substitution and supplier power means positive impact to the restaurants despite of having 1-9 employees. Table 13 Comparison of the Competitive Forces of Restaurants in terms of Number of Years in Operations Number of Years in Operation Variables Competitive Rivalry Supplier Power Buyer Power Threat of Substitution Threat of New Entrants Mean VI Mean VI Mean VI Mean VI Mean VI 1-5 Years 3.4209 A 3.211 A 3.3370 A 2.8185 A 3.3037 A 6-10 Years 3.6273 SA 3.2100 A 3.4400 A 2.8900 A 3.5000 SA 11-15 Years 3.4848 A 3.5333 SA 3.4333 A 3.2667 A 3.5667 SA 15 Years and Above 3.3846 A 3.2308 A 2.9692 A 3.3385 A A 3.2615 Legend: VI – Verbal Interpretation SA – Strongly Agree A – Agree Table 13 shows the difference in the respondents’ assessment of competitive forces in terms of the number of years in operation. The findings indicate that in terms of Competitive Rivalry 6-10 years has the highest weighted mean, while 15 years and above has the lowest. It indicates that rivalry is highly evident in the 88 restaurants who is operating 6-10 years and moderately evident to those who is operating 15 years and above 11-15 years reaches the highest weighted mean of 3.53 which explains that the supplier power is highly evident. On the other hand, 6-10 years have the lowest weighted mean of 3.21 which explains that the said force is moderately evident. Those restaurants operating for 6-10 years ranked the highest weighted mean of 3.44 which indicates a moderate evidence of buyer power while 15 years and above had the lowest weighted mean with a total of 3 26 and shows a moderate evidence also. In terms of Threat of Substitution, all of the given profiles shows a moderate evidence as to the level of threats of the said force. 11-15 years has the highest while 1-5 years has the lowest with the total weighted average of 3.27 and 2.82, respectively. Lastly, the Threat of New Entrants is highly evident to those restaurants operating for 11-15 years with a highest weighted mean of 3 57 and moderately evident to those who operates for 1-5 years with the lowest with the total weighted mean of 3.30. It can be concluded that under all variables such as Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution and Threat of New Entrants, those restaurants with eleven to fifteen years of operation ranked the highest weighted average. There are 54 restaurants operating for one to five years while there are only three restaurants operating for eleven to fifteen years. It can be inferred that 89 those restaurants that are new in the industry are afraid to fail and are more focused on surviving, especially in times of pandemic. While those restaurants who operated for eleven to fifteen years are more comfortable and are confident that they can survive and adjust in any situation. Table 14 Comparison of the Competitive Forces of Restaurants in terms of Type of Restaurant Type of Restaurant Variables Competitive Rivalry Supplier Power Buyer Power Threat of Substitution Threat of New Entrants Mean VI Mean VI Mean VI Mean VI Mean VI Cafe 3.5354 SA 3.3222 A 3.4056 A 2.6667 A 3.3889 A Family Style 3.3506 A 3.1500 A 3.2679 A 2.8500 A 3.1607 A Fine Dining 3.3523 A 3.1062 A 3.2313 A 2.9437 A 3.3813 A Fast Food 3.5758 SA 3.3556 A 3.4889 A 3.0333 A 3.5500 SA Legend: VI – Verbal Interpretation SA – Strongly Agree A – Agree Table 14 shows the difference in the respondents’ assessment of competitive forces in terms of the type of restaurant. The findings presented that in terms of competitive rivalry, fast food restaurants resulted to have the highest weighted average of 3.58 while family-style restaurants had the lowest weighted average of 3.35. It indicates that in fast food restaurants, competitive rivalry is highly evident and in fine dining being the lowest is moderately evident. 90 In terms of supplier power, fast food restaurants ranked the highest, and fine dining restaurants ranked the lowest with a weighted mean of 3.36 and 3.11, respectively. In terms of buyer power, fast food restaurants ranked first having a weighted mean of 3.49 while fine dining restaurants ranked last having a weighted mean of 3.23. In terms of Threat of Substitution, fast food restaurants also got the highest rank, and cafe restaurants got the lowest rank with a weighted average of 3.03 and 2.67, respectively. In terms of Threat of New Entrants, fast food restaurants ranked the highest with a weighted mean of 3.55 indicating that the said threat is highly evident while family-style restaurants ranked the lowest with a weighted mean of 3.16 indicating that threat of new comers is moderately evident. It can be concluded that under all variables, competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants, fast food restaurants consistently strongly agreed that those competitive forces are the basis for maximizing profitability. In a fast growing market of fast food restaurants, having an awareness of the five forces can help businesses understand the structure of its industry and shape strategy that would help them be profitable and less vulnerable to attack by the competitors. While family style restaurants seemed to have the lowest mean on the competitive rivalry. This may be due to having a small type of business compared to other types of restaurants. Fine Dining and cafes restaurants see the supplier and buyer power, and threat of substitution as the least basis for profit maximization, respectively. There are 28 family-style 91 restaurants and it is the highest in terms of quantity and fine dining restaurants got the lowest having a quantity of 18 among those restaurants mentioned. 4. Proposed Program to maximize the profitability of restaurants in Batangas 92 93 94 THE RESTAURANT SYMPOSIUM ROADMAP TO INDUSTRY PROFITABILITY Objectives ● Provides in-depth knowledge about Porter’s Five Forces and how it affects the profitability of a restaurant business. ● Helps each restaurant owner/manager to establish harmonious relationships and build a strong connection to support each other through sharing of strategies and some coping mechanisms during a pandemic ● Restaurant owners/managers will gain awareness and know what to improve or what to change in their strategies on profit maximization Description The researchers’ proposed program regards the concerns of this study: competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants of the restaurants mainly cafes, family-styles, fine dining, and fast-foods. This was based on the analysis of survey questionnaires to enhance the findings of the research. With the ultimate goal of creating a competitive advantage in the restaurant industry, a one-day symposium will be conducted which encourages participation from restaurant managers and owners in Batangas City, Lipa City, Tanauan City, and Sto. Tomas. Topics considered for the one-day symposium include analyzing the restaurant industry and creating and sustaining superior performance. The 95 symposium will begin with a simple introduction of the program, followed by the main topic which is Porter’s Five Forces, the testimony of some owners/managers from different types of restaurant (Family Style, Café, Fine Dining, and Fast Food restaurants), and public forum between the invited resource speakers and attendees. Settings The Symposium: Roadmap to Industry Profitability is to happen on March 19, 2022, from 7:00 in the morning until 4:00 in the afternoon at Aquamarine Recreation Center, Lipa City, Batangas. This is participated by restaurant owners/managers from Batangas City, Lipa City, Tanuan City, and Sto. Tomas. There will be resource speakers that are prominent for this industry. Topics to be discussed: PATH 1: Why walking into restaurants is so important 1.1 The intensity of competition in the restaurant industry 1.2 The power of supplier power 1.3 The power of the buyer 1.4 The substitution affects the profitability of the restaurant business 1.5 How newcomers/new players affect the profitability of the restaurant business PATH 2: How to climb and sustain superior performance 96 2.1 The Business Profile 2.2 Single-Supplier Strategy 2.3 Getting Into Buyer’s Brain: Segmentation 2.4 Product Differentiation Strategy 2.5 Business Start-Up PATH 3: Testimonies 3.1 from Family Style Restaurant Owner/Manager 3.2 from Cafe Restaurant Owner/Manager 3.3 from Fine Dining Restaurant Owner/Manager 3.4 from Fast-food Restaurant Owner/Manager PROGRAMME TIME ACTIVITY PERSONS INVOLVED 7:00 - 7:45 am Registration 7:45 - 8:00 am Invocation & Opening Remarks 8:00 - 8:05 am Recognition of Attendees 8:05 - 8:15 am Orientation about the Program Flow 8:15 - 8:20 am Introduction Speakers to the Restaurant Owners/Managers Resource PATH 1: WHY WALKING INTO Antonio “Tony Boy” 97 8:20 - 9:05 am 9:05 - 9:15 am 9:15 - 10:00 am RESTAURANTS IS SO Escalante IMPORTANT? (Antonio’s Group of 1.1 The intensity of competition in Restaurant, owner) the restaurant industry 1.2 The power of supplier 1.3 The power of buyer Intermission Number (Song) Breaktime Don Wilson PATH 1: WHY WALKING INTO Fernando H. Baylosis RESTAURANTS IS SO (F. Baylosis IMPORTANT? Restaurant, owner) 1.4 The substitution affects the profitability of the restaurant business 1.5 How newcomers/new players affect the profitability of the restaurant business 10:00 - 10:30 am SYMPOSIUM ACTIVITY 10:30 - 10:50 am PUBLIC FORUM 10:50 - 10:55 am Intermission Number (Dance) 10:55 - 11:05 am Take-away Sharing 11:05 - 12:05 nn Lunchtime 12:05 - 1:05 pm PATH 2: HOW TO CLIMB AND SUSTAIN SUPERIOR PERFORMANCE 2.1 The Business Profile 2.2 Single-Supplier Strategy 2.3 Getting Into Buyer’s Brain: Segmentation 1:05 - 1:25 pm SYMPOSIUM ACTIVITY 1:25 - 2:25 pm PATH 2: HOW TO CLIMB AND Fernando H. Baylosis SUSTAIN SUPERIOR (F. Baylosis PERFORMANCE Restaurant, owner) Antonio “Tony Boy” Escalante (Antonio’s Group of Restaurant, owner) 98 2.4 Product Differentiation Strategy 2.5 Business Start-Up 2:25 - 2:45 pm PUBLIC FORUM 2:45 - 3:00 pm Merienda Time 3:00 - 3:30 pm PATH 3: TESTIMONIES 3.1 from Family Style Restaurant Fernando H. Baylosis Owner/Manager 3.2 from Cafe Restaurant Owner/Manager 3:30 - 4:00 pm PATH 3: TESTIMONIES 3.3 from Fine Dining Restaurant Antonio Escalante Owner/Manager 3.4 from Fast-Food Restaurant Maine Mendoza Owner/Manager 4:00 - 4:05 pm CLOSING REMARKS BREAKDOWN OF EXPENSES EXPENSES QUANTITY COST AMOUNT Activity & Souvenir Materials Notebooks 80 pcs 80.00 P 6,400.00 Ballpens 80 pcs 30.00 2,400.00 Face masks (cloth) 80 pcs 20.00 1,600.00 Ecobag 80 pcs 120.00 9,600.00 Shirt 80 pcs 150.00 12,000.00 1,135.00 2,270.00 Token for Resource Speakers Jack Daniel’s Black Label Tennessee 2 99 Honey (700ml) Chivas Regal Scotch Whisky (700ml) 2 989.00 1,978.00 Wine glass 4 280.00 1,120.00 Venue Aquamarine Recreational Center 10,000.00 Food & Catering Services 25,000.00 Host 5,000.00 Other Expenses Contingency Fund TOTAL ESTIMATED EXPENSES 1,000.00 P 78,368.00 100 Chapter V SUMMARY, FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS This chapter presents the summary, findings, conclusions, and recommendations drawn from the results obtained in assessing the competitive forces of restaurants in Batangas. The respondents are composed of selected restaurant owners/managers from the four key cities in Batangas. Moreover, recommendations were based on the findings and conclusions of the study. Summary The occurrence of the COVID-19 pandemic brought economic fallout most especially in the restaurant industry, the crisis not only affected the restaurants but also the consumers buying foods for their everyday hustle. Thus, the researchers' objective was to identify the factors affecting the restaurants during their operations at the surge of the pandemic and how they can survive while maximizing their profit despite the economic conflict they have been experiencing. The objective of this study was to evaluate restaurant profit maximization in terms of Porter's Five Forces, which are used to analyze how well the food business, predominantly restaurants in Lipa City, Batangas City, Tanauan City, and Sto. Tomas operate as a means of survival throughout the pandemic. The first objective was about the profile of respondents which are identified through the form of business organization, number of employees, number of years in operation, asset size, and location. The next objective was to consider the competitive forces of restaurants in terms of the five forces namely, competitive 101 rivalry, supplier power, buyer power, threat of substitution, and threat of new entrants. The third objective is about the comparison of the two attributes contributing to the profitability of the restaurants through their profile and as to the competitive forces of the industry. This comparison concluded a proposed program through a one-day symposium as an output of the study. In the process of data collection, convenience sampling was used in selecting the respondents of the study since they will be selected based on their availability. The questionnaire sheets consist of two parts. First part is for the respondents profile while the second part of the questionnaire consists of the variables used in conducting the research. Those were presented to the panelists, grammarian, statisticians, faculty experts, and panel chairman. The statistical treatment towards the data gathering were frequency and percentage for the measurement of profile of respondents. The mean analyzed how respondents assess their restaurants' competitive forces in terms of five forces, as determined by a variety of factors, including financial situation, management team organization, and ability to take risks, and in terms of competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entrants. Findings From the analysis and interpretation, the researchers have come up with important findings that were obtained from questionnaires disseminated to 340 restaurants with only 80 responses. 102 1. Remarkably, the study revealed that in terms of forms of business organization, the majority of the respondents engaged in a sole proprietorship business having a frequency of 59 and a percentage of 73.8. This was followed by corporations with a frequency of 12 and a percentage of 15.0; restaurants engaging in a partnership with a frequency of 8 and a percentage of 10 and restaurants engaging in limited liability corporations with a frequency of 1 and a percentage of 1.3. It also revealed that in terms of a number of employees, the majority of the restaurants had 1-9 staff/employees with a frequency of 64 and a percentage of 80. This was followed by 10-99 employees with a frequency of 14 and a percentage of 17.5 and restaurants who have 200 and above employees having a frequency of 2 and a percentage of 2.5. Moreover, it found out that in terms of a number of years in operation, the majority of the respondents were operating 1-5 years having a frequency of 67.5. This was followed by restaurants that are operating 15 years and above with a frequency of 13 and a percentage of 16.3; 6-10 years with a frequency of 10 and a percentage of 12.5 and 10-15 years having a frequency of 3 and a percentage of 3.8. Furthermore, it was revealed that in terms of the type of restaurants, most of the respondents have a family-style restaurant having a frequency of 28 and a percentage of 35. It was followed by cafes and fast-food restaurants with the same 103 frequency of 18 and a percentage of 22.5. Lastly is the fine dining restaurant with a frequency of 16 and a percentage of 20. 2. The assessment of the competitive forces of the restaurants in terms of competitive rivalry shows the overall composite mean of 3.44. The respondents value their customers and listen to their opinions for the benefit of the business and it got the highest mean of 3.85 with a verbal interpretation of strongly agree. On the other hand, the composite mean in terms of supplier power garnered 3.23. The assessment shows that the respondents see the suppliers as significant stakeholders of the sector and they play a crucial role in its restructuring and future evolution with the highest mean of 3.50 with a verbal interpretation of strongly agree. Meanwhile, the assessment of competitive forces in terms of buyer power accumulated a composite mean of 3.34. The respondents strongly agreed they ensure that the customers are well informed about the products and services being offered in the market with the highest mean of 3.70. In terms of the threat of substitution, the assessment obtained a 2.87 composite mean. Most of the respondents strongly agreed that their business has a high customer loyalty rate having a mean of 3.56. Moreover, the composite mean in terms of the threat of new entrants obtained a 3.34 composite mean. The respondents agreed with the assessment of competitive forces in terms of competitive rivalry, supplier power, buyer power, the threat of substitution, and the threat of new entrants. It indicates that the five forces influence the profitability and growth of the restaurants. 3. The study indicated the comparison of the responses in the respondents’ profiles. Based on the findings, it can be noted that in terms of 104 competitive rivalry, supplier power, buyer power, the threat of substitutes, and the threat of new entrants, corporations garnered the highest mean of 3.57, 3.32, 3.49, 3.05, and 3.53 respectively. Whereas, limited liability companies got the lowest mean of 2.91, 3.00, 3.00, 2.70, and 3.00 respectively. In a comparison of the number of employees to the assessment of competitive forces in terms of competitive rivalry and supplier power, restaurants that have 200 and above employees obtained the highest mean of 4.00 of the same while those restaurants that have 1-9 employees had the lowest mean of 3.42 and 3.20 respectively. In terms of buyer power, restaurants that have 200 and above employees had the highest mean of 4 and those that have 10-99 employees had the lowest mean of 3.32. Meanwhile, in terms of the threat of substitution and threat of new entrants, restaurants that have 200 and above employees consistently obtained the highest mean of 4 while those that have 1-9 employees obtained the lowest mean of 2.81 and 3.30 respectively. This study indicates the comparison of the respondents’ assessment of the competitive forces in terms of the number of years in operation. Based on the findings, it can be noted that in terms of competitive rivalry, restaurants that were operating for 6-10 years obtained the highest mean of 3.63 while those that were operating for 15 years above obtained the lowest mean of 3.38. While in terms of supplier power, the restaurants that were operating for 11-15 years had the highest mean of 3.53 and those that were operating for 6-10 years had the lowest mean of 3.21. Moreover, in terms of buyer power, those restaurants that were operating for 6-10 years garnered the highest mean of 3.44 while 15 years above garnered 105 the lowest mean of 3.26. On the other hand, in terms of the threat of substitution, restaurants that were operating for 11-15 years obtained the highest mean of 3.26, and those that operated 1-5 years obtained the lowest having a mean of 2.82. In the threat of new entrants, those that are operating for 11-15 years had the highest mean of 3.57 while those that are operating for 1-5 years obtained the lowest having a mean of 3.30. In the comparison of the type of restaurant regarding competitive rivalry, the fast-food restaurants had the highest mean of 3.58 and the lowest mean equivalent to 3.35 mean is the family-style restaurants. Regarding supplier and buyer power, fast-food restaurants garnered the highest mean of 3.36 and 3.49 respectively while fine-dining restaurants garnered the lowest mean of 3.11 and 3.23 respectively. On the other hand, in terms of the threat of substitution, those restaurants that are engaged in fast-food obtained the highest mean of 3.03 while those restaurants that are engaged in a cafe obtained the lowest mean of 2.67. In terms of the threat of new entrants, the cafe restaurants obtained the highest mean of 3.39 while family-style restaurants obtained the lowest mean of 3.16. 4. The proposed program to maximize the profitability of the restaurant in Batangas is a one-day symposium aiming to provide in-depth knowledge about Porter’s Five Forces that would help the respondents improve their business, thus creating a competitive advantage among the competitors in this time of pandemic. The symposium will feature empirical or experiential-based presentations prepared by the resource speakers who have developed skills and knowledge in profit maximization through Porter’s Five Forces. 106 Conclusions Based on the findings, the researchers formulated the following conclusions: 1.) Most of the restaurants operating in selected cities of Batangas are family-style and are operated by sole proprietorship with a total number of 1-9 employees from 1-5 years of operations. 2.) Based on the results, the assessment of the competitive forces of the restaurants in terms of competitive rivalry, supplier power, buyer power, the threat of substitution, and threat of new entrants were interpreted as strongly agreed by the restaurant's owner. For the reason that the five forces influence the profitability and growth of the restaurants. 3.) Based on findings when grouped according to profile, the selected restaurants in the four key cities in Batangas which are operated by sole proprietorship under family-style restaurants that were operating for 1-5 years and had 1-99 employees had the highest weighted mean in comparison with the respondents assessment for their competitive forces. 4.) There is a proposed one-day symposium for restaurant owners and managers in improving their strategies on profit maximization and creating a competitive advantage over their competitors in this time of pandemic. The researchers come up with a proposed program through a one-day symposium that aims to provide a depth of knowledge about Porter's Five Forces and how it affects the profitability of a restaurant business. This may help to improve the restaurant's competitiveness among the industry. 107 Recommendations In furtherance of the research, the researchers have found out the recommended solutions that will be effective and efficient during the pandemic and are expected to be advantageous in the next several years concerning profit maximization and sustainability of the restaurants. 1. It is highly recommended that restaurants first rework the three components of the strategic management process such as environmental scanning, strategy formulation and implementation, and evaluation and control. The environment scanning will help them be considerate and aware of the trends in the market during the current situation especially that they will further understand and determine the internal and external factors closely connected to their business (e.g SWOT analysis). With this, the products that will be made and served to the consumers can be as unique as possible from its competitors. 2. Managers are recommended to take greater action towards the formulation and implementation of strategies as resulted from the reworked environmental scanning. They will know how to capitalize the strengths and opportunities valuable and sustainable for the business to continuously maximize its profit and shareholders’ wealth. They are also recommended to minimize the weaknesses and threats directly striking the business and preventing it towards stability and success in the survival of the fittest during the pandemic. 3. It is highly recommended that restaurants still assess their performance through customer evaluations, whether they be online or dine-ins. In relation to 108 that, the restaurants can easily distinguish the customers’ changing preferences about the menus, service, and setting that are relevant for the competitive advantage and develop customer’s positive feedback afterwards. As this will increase the profitability and quality of the service that a restaurant is offering. 4. Based on the observations, restaurants are recommended to adjust their 4Ps: Product, Place, Promotion, and Pricing that are pertinent to the current situation and are flexible to be adjusted in the next few years, considering the various sub-factors affecting them. The product as the object of the business and where best quality and quantity are best expected to continuously meet the primary goal of business - to earn profit. The place or the location of the restaurant must be evaluated if it is still competitive and recognizable than the others. It is likewise vital to consider the promotion of the restaurants to communicate and advertise the business and its products through the most used platforms – social media. 5. It is recommended to reconsider their expenses and minimize the costs. The researchers suggest using different types of pricing, such as relative menu pricing, penetration pricing, and competitive-based pricing. The first one psychologically helps the customers to buy the product that is more costly than the others, but they will become impulsive ordering the costly than the regular or ordinary priced one, thus, resulting in more sales and higher profit. The second is proven to be competent in setting up the prices of businesses as this brought the sales upward mainly during “buy 1, take 1” promos and other kinds of sales marketing. And the last, to establish a great position in the market is to gain 109 competitive prices not far from the market price but also not too close to new entrants and existing ones. 6. Lastly, it is quite important that restaurants choose the best suppliers and assess whether they will maintain revenues and expenses, and next to navigate the point where profit should start maximizing itself. The restaurant owners/managers are also recommended to stick to single suppliers to enable loyalty and intimate relationships and build harmonious partnerships. 7. To the future owners and managers of restaurants, it is recommended to establish a strong foundation through the cycle of strategic management for sustainability and stability and consistently manage the costs while building great connection with the customers through feedback and evaluation. 8. 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