MKTG503 Case #2 Ruth's Chris

.docx

School

New Mexico State University *

*We aren’t endorsed by this school

Course

503

Subject

Economics

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by AgentWildcatMaster189

Ashlyn Barela, Chandima Weerakondabaduge, Kaosi Ezeagu, Molly Kaiser Executive Summary This report evaluates Ruth's Chris Steak House's strategic approach to international expansion. Dan Hannah, vice president for business development leads the initiative within the company and initially, he established strict criteria for potential franchisees, emphasizing financial stability and industry experience omitted many prospects. The strategic reduction phase further refined the list of countries from 200 to under 35, prioritizing key success factors such as beef consumption rates, urbanization, disposable income levels, and legal beef importation feasibility. Later studies showed that the unused variables like affinity for US brands, comparative study of competitors' performance, provided valuable insights into potential market receptiveness. Further, to figure out optimal market entry, a Strategic Equation was developed, assigning weights to Per Capita Beef Consumption, Urbanization Rate, and Per Capita GDP at 0.4, 0.3, and 0.3, respectively. The Equation identified the United Arab Emirates/Dubai, Ireland, Switzerland, Belgium, and the Netherlands as the top five potential markets for expansion. The analysis further examines how variable factors shift with the consideration of different modes of market entry and comprises detailed SWOT analysis for Ruth’s Chris Steakhouse driving Ruth's Chris's global growth ambitions. Strategizing Global Expansion: A Deep Dive into Hannah's Market Selection Process Initial Selection Criteria To make a first cut in the list of potential countries, Hannah implemented strict criteria for potential franchisees interested in expanding Ruth's Chris Steak House into new markets. These criteria included a liquid net worth of at least $1 million, verifiable experience within the hospitality industry, and the ability and desire to develop multiple locations. By applying these rigorous standards, Hannah effectively filtered out many prospects, particularly those from countries with lower economic development or weaker financial infrastructures, thus focusing on markets with greater potential for success and growth. Strategic Reduction: Narrowing Down to 35 High-Potential Markets for Expansion To narrow down the list from 200 to less than 35 potential new markets, Hannah likely utilized key success factors for market selection, such as beef consumption rates, the legal feasibility of importing US beef, urbanization levels, disposable income levels, dining-out culture, and affinity for US brands. By analyzing data and market trends, Hannah identified countries that aligned closely with these criteria. This rigorous analysis would have allowed Hannah to eliminate countries that did not meet the specified criteria, thereby narrowing down the list to fewer than 35 potential new markets that offered the greatest potential for success and alignment with Ruth's Chris Steak House's market expansion strategy. Key Factors Influencing Ruth's Chris International Expansion Strategy In Hannah's decision-making process regarding Ruth's Chris Steak House's international expansion, several key variables emerged as particularly important. Firstly, beef consumption rates were prioritized, as countries with high rates indicated a strong market for the restaurant's specialized offerings.

Ashlyn Barela, Chandima Weerakondabaduge, Kaosi Ezeagu, Molly Kaiser Additionally, the legal feasibility of importing USDA Prime beef from the US was crucial for maintaining quality standards and would have influenced market selection. Moreover, markets with high urbanization levels and disposable income were favored, as they suggested a larger customer base capable of affording the fine dining experience offered by Ruth's Chris. The presence of a strong dining-out culture in target countries was also a significant factor, as it provided a conducive environment for the restaurant's business model. Furthermore, Hannah likely considered the target market's affinity for US brands, recognizing that positive perceptions could impact the brand's reception and overall success in new markets. These variables collectively guided Hannah's decision-making process, helping to determine the suitability of potential new markets for Ruth's Chris Steak House's expansion endeavors. Exploring Untapped Potential To enhance the evaluation of international expansion opportunities for Ruth's Chris Steakhouse, several additional unused factors should be considered. Firstly, dining out habits, cultural preferences such as culinary tastes, dining customs, and attitudes towards fine dining should be thoroughly examined. Even though this data is not readily available, conducting market research beforehand can significantly inform and enhance the investment decision- making process. Understanding these aspects provides critical insights into the suitability of a market and enables tailored approaches to meet consumer expectations. Secondly, an unused variable that would have been useful is Affinity for US brands. This is the compatibility of that brand to the country. The ability to find enough of this data to be useful to determine whether Ruth’s Chris would be successful in a foreign country. However, they could look at their competitors and see their performance in the country. For example, Outback, one of their competitors, has had large success in Japan. With this secondary research, they can determine if they would have similar success within that country. Lastly, analyzing the competitive landscape is crucial to comprehend the presence and strength of competitors in each market. This analysis aids in identifying opportunities for differentiation and establishing effective market positioning strategies. By considering these factors alongside the existing criteria, Ruth's Chris can make well-informed decisions regarding its international expansion endeavors. Optimizing Market Entry: Analyzing Top Ten Opportunities through Strategic Equations Strategic Filtering The report initially examines inevitable factors such as Legality to import US. Beef and Affinity to US Brands. The findings state that Japan, South Korea, Malaysia, Singapore, South Africa and Russia restrict importation of U.S. beef. Even though Hannah feels like it’s a political reason rather than cultural, further research on reasons found that importation restrictions were imposed due to recognition of disease in beef. In such cases, Hannah must eliminate the above- mentioned countries unless he gets into a contract promising supply of Australian beef with the same high U.S. standard for uninterrupted operation.

Ashlyn Barela, Chandima Weerakondabaduge, Kaosi Ezeagu, Molly Kaiser When it comes to affinity, the US Fine Dining Steakhouses Hannah considered gave only a little information. Fleming's, Shula's, Sullivan's, and Del Frisco maintain a domestic presence in the US while Palm, Capital Grille, and Smith & Wollensky show selective international presence with one restaurant in destinations like Saudi Arabia, Mexico, Costa Rica, and the UK. However, Morton's Steak House shows exceptional growth in China expanded with 6 outlets demonstrating significant overseas growth (figure 01). It provides an impression that considering Affinity, along with high beef consumption, urbanization and growing economy, Ruth’s Steak House has a better chance to grow the business in China. Figure 01: US fine Dining Steakhouses considered by Hannah and its geographical expansion. However, the case report considers the global presence of other Beef selling US brands like McDonald’s and Burger king to determine the affinity for US brands not limited to the Fine Dining Sector. However, even though Russia is the 4th highest beef consumption country out of 33 countries, Russia should exclude from the market expansion plans, as even the globally recognized McDonald's faced challenges and does not have an outlet in Russia. Strategic Equation To determine the top opportunities for Ruth's Chris Steak House, we can use a weighted scoring system based on the factors provided in the data table. The factors we'll consider are: 1. Per Capita Beef Consumption (kg): Higher consumption indicates a potential market for steakhouse dining. 2. Urbanization Rate (%): Higher urbanization rates may signify denser populations and greater dining out habits. 3. Per Capita GDP (PPP in US$): Higher GDP per capita suggests greater purchasing power for premium dining experiences. Given that all factors are important but may carry different weights, we'll assign weights to each factor based on their perceived importance. Using the following weights:

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version