Outback Steakhouse - Competitive Strategy
Executive Summary
Outback Steakhouse has enjoyed a dominant position in the casual dining market since inception. They have exponentially increased the number of locations each year; however their growth has apparently reached a plateau and they could potentially loose market share.
There is significant competitive pressure from rivals using marketing and advertising in attempts to lure away customers. Consumer loyalty is highly valuable and rivals will use whatever tactics necessary to gain that loyalty and establish a strong customer base. Competitive rivalry is relatively strong mainly due to the threat of new entrants and competitive pressure from rivals.
A restaurants success depends largely on a few key attributes including brand identity, location, price and quality of food and service. Strong supply chain management and motivated, friendly staff are also valuable competitive resources. Outback has managed to acquire all of these resources, particularly their superior quality of service and strong employee culture.
In order to maintain market leadership and grow, the following alternatives for implementation are considered:
1. Redesign the menu to include healthier alternatives
2. Open for lunch and develop a lunch menu
3. Launch an innovative new marketing campaign
Based my analysis, I recommend that Outback choose alternative 2 – to open for lunch and develop a lunch menu. Their primary interest is gaining market share, therefore it would be sensible to be open for longer hours and target a wider market. They will also be able to more effectively compete with other casual dining restaurants already open for lunch, and gain a competitive advantage over those who are not.
This strategy will satisfy the primary decision criteria facing the restaurant industry, which includes gaining additional market share, profitability, and a strong employee culture.
NOTE: This report has been prepared to develop alternatives for Outback Steakhouse
Outback Steakhouse has enjoyed a dominant position in the casual dining market since inception. They have exponentially increased the number of locations each year; however their growth has apparently reached a plateau and they could potentially loose market share.
There is significant competitive pressure from rivals using marketing and advertising in attempts to lure away customers. Consumer loyalty is highly valuable and rivals will use whatever tactics necessary to gain that loyalty and establish a strong customer base. Competitive rivalry is relatively strong mainly due to the threat of new entrants and competitive pressure from rivals.
A restaurants success depends largely on a few key attributes including brand identity, location, price and quality of food and service. Strong supply chain management and motivated, friendly staff are also valuable competitive resources. Outback has managed to acquire all of these resources, particularly their superior quality of service and strong employee culture.
In order to maintain market leadership and grow, the following alternatives for implementation are considered:
1. Redesign the menu to include healthier alternatives
2. Open for lunch and develop a lunch menu
3. Launch an innovative new marketing campaign
Based my analysis, I recommend that Outback choose alternative 2 – to open for lunch and develop a lunch menu. Their primary interest is gaining market share, therefore it would be sensible to be open for longer hours and target a wider market. They will also be able to more effectively compete with other casual dining restaurants already open for lunch, and gain a competitive advantage over those who are not.
This strategy will satisfy the primary decision criteria facing the restaurant industry, which includes gaining additional market share, profitability, and a strong employee culture.
NOTE: This report has been prepared to develop alternatives for Outback Steakhouse
Bibliography: http://www.answers.com/topic/lone-star-steakhouse http://www.entrepreneur.com/tradejournals/article/175173870.html http://en.wikipedia.org/wiki/Outback_Steakhouse Thompson, Strickland & Gamble. Crafting & Executing Strategy – The Quest for Competitive Advantage. 15th edition. New York, NY: McGraw-Hill/Irwin, 2007