Case Analysis: Ruth’s Chris Steakhouse
2006 appeared to be a pivotal year for Ruth’s Chris Steakhouse. After raising more than $154 million through its IPO, the newly public company was focused on expanding its business through both company-owned and franchised locations, including expansion of its global business. While the company already had successful operations in 10 international locations, including Canada, Mexico, Taiwan, and Hong Kong, Dan Hannah, vice president of business development, felt that the addition of new global markets would help the company reach its expansion goals. However, Hannah faced a variety of issues and roadblocks along the way to meeting these goals. In the following analysis I will discuss these challenges, and though there are many, I will suggest the one that I feel is the most critical. I will then offer two alternatives and evaluate them both before I offer a final recommendation. Though the case states that the management team felt the market development model was the most obvious mode of entry, I feel they were quick to disregard the penetration model. The fact that their only limiting factor was that “fine dining establishments would never be as ubiquitous as quick service restaurants like McDonalds” (Kutpetz and Alon, 2006) leads me to believe they did not give it enough thought. Otherwise, they would have realized that comparing fine dining to fast food is like comparing apples to oranges, and they should not base such an important decision on the result of this comparison. In addition to deciding the best mode of entry, Hannah faced a variety of issues and challenges, the most critical of which I feel include the following: • Whether they should explore new international markets, or focus on saturating the international markets that have already proven to be successful. • Should they continue using franchised locations in the global markets or should they consider opening...
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