Ruth's Chris Steakhouse Case Study

It is crucial for a business to know where their customers come from in order to select the best location for the store. Choosing the best geographic area can help in the success of the business or the failure of the business. This is why Trader Joe’s has particular criteria when choosing new store locations. Trader Joe’s is aware who their target consumer is and utilizes the data they receive to place their locations in the areas that will benefit in the growth of the organization.

It also requires more of an investment and commitment by the international company which creates a higher risk. There is also the down side of having difficulty managing local resources.

Entering the market requires heavy investment in establishing a name and make lots of outlets. It is a growing market with lots of pioneers that can make branches anywhere and threat the other chain in there selling areas.

• Once a firm loses the opportunity to be a first mover, it is difficult to regain competitive advantage

product and starting a price war with competitors that would damage margins. In addition, a low priced

1. Competitor The competitor might out beat them and threat is higher for their market share. Lack of planning would have big impact to the company. They should anticipate for the rivalry between them. Timing and being competitive is important. If they are not met, this would incur loss in the company.

The foreign market must offer a location advantage that makes it profitable to produce the product in the foreign country rather than simply produce it at home and export it to the foreign market. It includes resource endowments, economic and social factors, such as market size and structure, prospects for market growth and the degree of development, labour and input materials costs, the cultural, legal, political and institutional environment, government legislation and policies

But where are the highlights on the duties of those who play key roles in the company’s evolution?

...................................................10 Alternative 3 – Review Existing Locations..........................................................................................11 Alternative 4 – Expansion through Franchise Operations.....................................................................11 Alternative 5 – Expand Catering Segment ...........................................................................................12 Recommendations and Action Plans .......................................................................................................12 Recommendations ..............................................................................................................................12 Action Plans .......................................................................................................................................13 Contingency Plan ...................................................................................................................................14 Attachments ...........................................................................................................................................15 Exhibit 1.............................................................................................................................................15 Exhibit 2.............................................................................................................................................16

To evaluate the alternatives, the key factors would be costs of setting up in other cities within Canada and if it will generate more sales by setting up there. If by expanding, more sales, more market shares and profits are generated then it is better to expand in that specific city but if the costs of setting up there are more than the amount of sales you will make in that city then it is better not to set up there.

The more prospective the competitive advantage the more it becomes hard for it's advantage to be neutralized .

You could contractually require them to personally participate in the business, and restrict them to one property until they’ve proven themselves.” He then described typical terms in the franchise restaurant agreement: a 20 – year term with renewal at the franchisor’s option; a 5% to 6% royalty on gross revenues, and an up-front fee. “That fee depends on the strength of the brand,” he noted. “And you can structure the deal so that each franchisee is responsible for his own financing.” He explained that some franchisors handled all development, including market analysis, feasibility studies, site selection, and construction themselves, then lease the property to the operator. “But in others,” he continued, “franchisees must buy or lease the land in an attractive location, and build the restaurant themselves. Since Porcini’s doesn’t have a construction department, which might be the way you should begin.”

You would hope that businesses all over the world would work to the best of their ability in order to be the best. However, this is not always the case as there are many differences when it comes to businesses that are based in different countries. The way that a UK McDonalds functions is very different to the way Haveli in India does, due to the political, social and legal factors that cause them do so.

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised

After sifting through the leads and finding the right ones to investigate management must formulate an international marketing plan. This further helps management in locating potential markets for their products. The first step is to use secondary research to find out what the sales potential is in a given market. Asking the questions of need, demand, and support gives one a starting point for research. If we were a company that sold pants we might want to ask the following questions. Is there a need for pants? Is it cold enough there to wear pants? Do people that demand the pants have money? These are the questions that one should ask of potential markets. Table 1-located at the end of the paper-shows the statistics that are needed for a general market picture. After gathering the information from the secondary research, the picture of a potential market becomes more evident. However, to make the picture clearer, one must conduct primary research. This research outlines the specifics of the potential market that directly pertain to the product. Robert Douglas' book, Penetrating the International Market, addresses the issue of locating potential markets in greater detail.2