The principal features of Outback Steakhouse’s Strategy in the US Chris Sullivan, Bob Basham and Rim Gannon founded Outback Steakhouse. They saw an untapped opportunity for serving quality steaks at an affordable price thereby filling the gap between high priced and budget steakhouses. Outback was able to position itself as a firm that provides not only excellent food but also cheerful, fun and comfortable experiences. There are a combination of business practices and features that made Outback Steakhouse successful in the US market, which are: 1) Astute positioning within the intensely competitive US restaurant business through differentiation strategy. Outback Steakhouse offered high quality food and service, relaxed ambience and comfortable experience. They used consistently high quality ingredients to prepare their meals, provided hand made dishes and the quality of food was central to the chain’s differentiation. Also, Outback Steakhouse offered generous portions at moderate prices, had a casual dining atmosphere with high attentive service attracting a diverse mix of customers. They not only offered bigger menu than the typical casual restaurant did in the 1980s but also, the restaurant was fully staffed with fully trained employees. Their servers had not more than three tables so as to guarantee good service as well as provide familiar feeling to the customers. 2) Limiting service to dinner – Outback Steakhouse limited their service to only dinner. They operated from 4:30pm to 11:00pm thereby reducing the hours of restaurant management and employees. This strategy ensured that the food was fresh, as they were prepared in the evenings and not in the mornings. 3) Customer satisfaction and location of stores with Australian theme – the firm ensured that employees were properly selected and trained to do what ever is needed to meet the needs and preferences of customers. The stores where situated in residential areas rather than downtown, this meant low rents. 4) Management and Ownership structure - the company provided restaurant management the opportunity to purchase a 10% interest in the restaurant they managed. Each restaurant was managed by a managing partner and 10-20 restaurants are overseen by a regional manager/joint venture partner (JVP) 5) Human resource – selection of managers and employees. The company was tough on results, but kind with people. They carefully selected each franchisee to ensure that all franchise was fully committed to Outback’s principles and beliefs. Employees had to write and aptitude test and were interviewed with at least two managers. Their goal was to create an entrepreneurial climate that fosters learning and personal growth. 6) Long-term relationship with suppliers – Outback created long-term relationships with its suppliers; its suppliers were referred to as partners. Why the Strategy was Successful
Outback’s differentiation strategy from other competitors guaranteed that the company provided high quality of food and services to its customers. They put customers needs as the highest important value to the firm. The location of the restaurants in suburbs reduced cost of rent and the management and ownership structure guaranteed self identification of managers to work for their own business thereby bring out the best in them. The benefits package and hiring system ensured they were able to select talented workers that share the same values and beliefs with them and keep them motivated and the long-term relationship with suppliers ensured high quality of raw materials. Key Elements of the International Expansion Strategy being proposed by Hugh Mr Connerty’s key elements of international expansion strategy includes: 1) To focus on its pure strength - support operation. Hugh’s international strategy was to provide opportunities for their suppliers internationally to build plants abroad. Also, Outback has an underlying commitment to their suppliers – never changed...
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