Ruth Chris Case Study
Ruth’s Chris: ‘The High Stakes of International Expansion’
Defining the Issues
As a newly publically traded company, Ruth’s Chris was responsible for the development of a new business strategy to focus their efforts on revenue growth in order to meet shareholders expectations.
By maintaining continued growth in established restaurant locations, this strategy needed to concentrate on building equity capital by planning/executing an international expansion to increase profitability of new franchisee-operated restaurants globally. Ruth’s Chris needed to address the challenges of deciding: • What region(s) were the ideal markets? • Are qualified Franchisee prospects viable as per criteria (Franchisor agreement)? • Will our key success factors be achieved to capture any potential barriers that could impede expansion success?
Cause & Effect
Development models have been explored and evaluated with the main plan geared toward the market development model (more of the same restaurants in new markets) and outlining a well-suited plan focusing on market selection criteria to generate the desired growth.
In doing this, the following needed to be considered: • Which international market would be the ideal region for expansion: a. greatest growth potential with the least risk b. culturally accepting of menu offerings (region with high ratio of beef consumption per capita) • Franchisee base selection: c. well equipped, financially adequate, experienced owners d. potentially changing Franchisee criteria to meet majority of investors • Market entry critical path analysis – key success factors: e. new concept for region f. global product consistency - availability of spec USDA Prime beef g. stability of foreign supply chain, operations and logistics teams h. consumer targets (population, beef-eaters, income, etc.) i. competition (other fine dining steak houses, QSR’s) j. brand recognition
Defining the Issues
As a newly publically traded company, Ruth’s Chris was responsible for the development of a new business strategy to focus their efforts on revenue growth in order to meet shareholders expectations.
By maintaining continued growth in established restaurant locations, this strategy needed to concentrate on building equity capital by planning/executing an international expansion to increase profitability of new franchisee-operated restaurants globally. Ruth’s Chris needed to address the challenges of deciding: • What region(s) were the ideal markets? • Are qualified Franchisee prospects viable as per criteria (Franchisor agreement)? • Will our key success factors be achieved to capture any potential barriers that could impede expansion success?
Cause & Effect
Development models have been explored and evaluated with the main plan geared toward the market development model (more of the same restaurants in new markets) and outlining a well-suited plan focusing on market selection criteria to generate the desired growth.
In doing this, the following needed to be considered: • Which international market would be the ideal region for expansion: a. greatest growth potential with the least risk b. culturally accepting of menu offerings (region with high ratio of beef consumption per capita) • Franchisee base selection: c. well equipped, financially adequate, experienced owners d. potentially changing Franchisee criteria to meet majority of investors • Market entry critical path analysis – key success factors: e. new concept for region f. global product consistency - availability of spec USDA Prime beef g. stability of foreign supply chain, operations and logistics teams h. consumer targets (population, beef-eaters, income, etc.) i. competition (other fine dining steak houses, QSR’s) j. brand recognition