Ruth Chris

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Case #1
3/7/2013

Ruth’s Chris Steak House was looking for a new business strategy focusing on continued growth of franchise and company-operated restaurants in 2004. Since it was currently a publically owned company, Ruth’s Chris Steak House had to meet Wall Street’s expectations for revenue growth. The question was, “How will we do this?”

The most logical chosen model to do so was looking at Market Development which means having the same product but in a new market. With franchises in four international markets – Canada, Hong Kong, Mexico and Taiwan – it seemed like these were the top choices to increase revenues since they were already profitable. From here, the management team had to decide on their market selection criteria by analyzing which factors would lead to the most success for the organization. Ruth’s Chris looked at things like the foreign country having potential for beef consumption, if it was legal to import US beef, if it was in a densely populated area to provide customer pool, if it had high disposable income and the citizens must enjoy dining out. Most importantly the country must be U.S. brand friendly. All of these were taken into consideration. If a certain country were to lack in one of these categories it would drop further down the “list.”

Most of those factors were measurable while others, like that of affinity for U.S. brands, are harder to measure. These lead to helping Dan Hannah, vice-president for business development, figure out where a profitable target market could be in the future. Ruth’s Chris was then facing critical issues like which market should they enter first and if franchising should continue to be the exclusive international mode of entry. I believe that Ruth’s Chris entry strategy into a foreign market had to be along the lines of the Contractual Entry Mode which meant franchising to local entrepreneurs.

Which markets should Ruth’s Chris enter first was their main concern at this point....
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