Ruth’s Chris: the High Stakes of International Expansion
1365 words 6 pages1. What did Hannah do to make a first cut in the list of potential countries? How did he get from 200 to less than 35 potential new markets? Which variables seemed more important in his decision-making? Which unused variables might have been useful?
Hannah created a criterion that included the factors that played an important role in Ruth’s Chris success and used that to narrow down the potential new markets. These factors were beef-eaters (i.e. the market has their primary customers as beef eaters), legal to import U.S. beef (Ruth’s Chris only used USDA Prime beef therefore it had to be exportable to the new country), Population/high urbanization rates (restaurants needed to be in densely populated areas), high disposable income …show more content…
All these factors make it a potential top five countries to be explored as compared to other countries.
U.S.: This country is like a home ground for the company and all the three factorsdiscussed above are at the top ranking. So with no doubt company should continue to open new restaurants in US so as to enhance his presence and brand image.
Hannah was focused on franchising as his mode of entry. Do the critical variables change if a different mode of entry is employed?
Dan Hannah, vice president of business development, used to regularly receive inquiries from would-be franchisees all over the world. However, strict criteria prevented the organization from being able to expand. “Liquid net worth of at least U.S. $1 million, verifiable experience within the hospitality industry, and an ability and desire to develop multiple locations – eliminated many of the prospects”. Since this criteria halted Ruth’s Chris expansion, Dan Hannah must look elsewhere for international opportunities. Since each franchisee prior to 2004 was granted territorial protection because franchise agreements, the company should develop the maximum number of restaurants in the respective territories.
In order for Ruth’s Chris to ultimately succeed in the long run, the management team needs to consider all the standard international business models available. The product development model is based on opening new kinds of restaurants in existing markets. While this model