Case Study – Ruth’s Chris – The High Stakes of International Expansion Analysis
1. What did Hannah do to make a first cut in the list of potential countries? Hannah to make sure that customers were beef eaters. Ruth’s Chris was a steak house and its primary customers were people who enjoy beef. With the target customer being a well-to-do beef-eater, restaurants, needed to be in densely populated areas to have a large enough pool. Most large centers would probably meet this requirement. Which variables seemed more important in his decision making? The most important variable in the decision-making process was to make sure that his target customers were well-to-do beef-eaters. Which unused variables might have been useful? Unused variables that might have been helpful would have been the countries that allowed the importation of U.S. beef. 2. What would be your choice for the top five opportunities? My top five opportunities would be: Bahamas, France, Hungary, Ireland, and Spain. The top 10? My top 10 opportunities would be: Bahamas, France, Hungary, Ireland, Spain, Netherlands, Portugal, Germany, Israel, and Belgium. How did you reach your conclusion and why? My conclusion was based on the analysis of the beef consumption and population of the particular countries that are listed in Exhibit 4. With the target customer being a well-to-do beef-eater, restaurants needed to be in densely populated areas to have a large enough pool. Most large centers would probably meet this requirement.
3. Hannah was focused on franchising as his mode of entry. Do the critical variables change if a different mode is employed? Ruth’s Chris regularly received inquiries from would-be franchisees all over the world, but strict criteria – liquid net worth of at least U.S. $1 million, verifiable experience within the hospitality industry, and an ability cost of a franchise – a U.S. $100,000, per restaurant franchise fee, a 5 percent of gross sales royalty...
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