Improving of the efficiency through benchmarking: a case of Ukrainian breweries

Abstract

Purpose – The purpose of this paper is to investigate the use of competitive and international performance benchmarking in order to estimate efficiency, determine key factors, find the internal and foreign benchmarks, and reveal the full reserves of inputs reduction and potential growth efficiency for brewing companies. Design/methodology/approach – Data envelopment analysis (DEA) and other tools of performance benchmarking are used to analyse the efficiency of brewing companies. Some key factors are examined for their impact on efficiency: the scale, regional location, proprietors and other endogenous and exogenous factors. The results are based on the samples of 34 Ukrainian brewing companies and 20 foreign brewing companies. Findings – Only one domestic company can be recognized as a world-class efficient company. The proprietors, location and the scale factors exert sufficient influence on efficiency of the brewing companies. The international benchmarking allows to widen essentially the capability of reduced consumption of various inputs and provides considerable benefit to Ukrainian breweries and industry efficiency. Some variants for improving of the efficiency of Ukrainian breweries and industry, including cooperation, mergers or friendly acquisitions, are proposed. Research limitations/implications – The research is limited by single industry that is explained by requirement of technology (product) homogeneity while using DEA tools. Practical implications – The results of the study contain data and recommendations that can be practicable for brewing companies' management, present and potential investors and proprietors. The foreign and domestic benchmarks most suitable for benchmarking implementation are established for each of the Ukrainian brewing companies. Originality/value – This is the first study that adopts the various DEA models for measuring of efficiency in the brewing industry with the tools of competitive and international benchmarking.