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Executive Summary:

In 2004, Dan Hannah, vice-president for business development of Ruths Chris Steak
House, was put in charge of formulating a business strategy to ensure the continued
growth of the company, and as a franchise. Hannah believed a great way to expand the
company would be to establish restaurants over seas. The problem was that many
potential investors couldnt qualify to buy into the franchise with the strict company
policies, so Hannah had to brainstorm other ideas for expansion.
After considering multiple models for growth, Hannah decided to go with a market
development approach to international expansion. He believed the best idea for the
company would be to offer the same products and services, but enter new markets. In
order to decide which countries to penetrate, the management team compiled data of
each countrys beef consumption, per capita GPD, and population.
The problem the management team faced was whether to expand internationally or
within the United States, finding countries that could supply USDA Prime beef, and
which countries were good candidates for expansion. The alternative solutions to these
problems were to enter into the European market (specifically Spain, France, and Italy),
and enter giant tourist destinations. By entering the tourist destinations, the countrys
DPD numbers dont play a significant factor in the outcome of the companys profits.
Our recommendation to Dan Hannah and Ruths Chris is to establish restaurants in
Spain, France, and Italy. Each city contains the attributes Ruths Chris is looking for in a
market.

Intro:
In 2004, Dan Hannah, vice-president for business development of Ruths Chris Steak
House, was put in charge of formulating a business strategy to ensure the continued
growth of Ruths Chris as a franchise, and for company-owned restaurants. Hannah
knew that a great opportunity for the company to grow was to expand overseas,
considering they were only operating in five countries. The company had received many
inquiries from would-be franchisees all over the world, but couldnt go through with
these deals because the franchise fees were unaffordable for many people, and strict
policies were intact that potential investors couldnt comply with. Many senior managers
at Ruths Chris did not like the idea of globally expanding the company, leaving Hannah
in a tough position to fulfill his assignment.
Background:
Ruth Fertel founded Ruths Chris in 1976. After many attempts, a local business owner
named Tom Moran convinced Fertel to open Ruths Chris first franchise in 1976. By the
1980s, the franchise grew globally, and was opening up new restaurants regularly in
cities around the nation and the world.
Ruths Chris became the biggest fine-dining steak house in the country. The restaurant
was recognized for its customer satisfaction, and its variety of USDA Prime grade
steaks. Ruths Chris had a vast menu, with the price of entrees ranging from $18-$38.
With its success in around the globe within its industry, Ruths Chris was successful in
completing its initial public offering raising more than $154 million in new equity capital
in 2005. In that same year, the company also hit record restaurant sales at $415.8
million from 82 locations in the United States and 10 international locations.
Case Situation:
After considering the four basic models for growth the VP of product development
determined that Ruths Chris should pursue a market development approach through
international expansion. The company would expand into new markets with its same
product.
The management team defined selection criteria. They determined that they would
select from seventeen countries that could be classified as beefeaters. They would only
expand into countries that had access to USDA prime beef, or its equivalent. They also
needed to choose countries with large population centers. An additional requirement
was the need for populations with substantial disposable income that were inclined to
eat out. Finally, since the company was intent on retaining its U.S centric brand, they
need to select countries that were not substantially anti-United States.
Managerial Problem:
To take decision for the Global expansion of the Ruth's Chris in the context of
1) Decision on target country for the expansion internationally and/or in US
2) Decision on whether to open Company owned or Franchisee owned restaurants
3) Decision on business development model

Subject to
1) Main serve is beef
2) Use of USDA Prime beef (or alternatively Australian high standard beef can be
considered if required)

In consideration of following circumstances
1) Whether the population consumes beef
2) Whether the Trade conditions in favor to import US standard (USDA prime) beef
3) High population and urbanization
4) High disposable income and per capita GDP
5) Affinity of US brands and people tendency to go out for dining and quality of dining
they prefer


Alternative Solutions and Evaluation of Alternatives:
The worlds markets were assessed against the key criteria. The starting point was
exhibit 4 from the case materials (Kutpetz, 2006). The top thirteen beef consuming
countries were extracted and ranked. The U.S. was included only as a reference. The
per capita GPD was also extracted and ranked for these thirteen countries. Next the
number of large metropolitan areas in each country was noted and also ranked
<www.geonames.org>. Finally, the rank was summed and averaged to give a relative
un-weighted rank of each countrys fit to the criteria. Each country was also assessed
to determine if there was a prevailing anti-U.S. attitude that may impact reception of
Ruths Chris U.S. centric brand. Each of the thirteen countries has a substantial
presence of Subway and Burger King Restaurants implying no significant Anti-U.S.
sentiment <www.subway.com> & <www.bk.com

Spain, France, and Italy had the best ranking and are worthy of careful considerations.
The next tier of ranks: Netherlands, Ireland, Germany, Belgium, and the Bahamas
should be assessed further for the merits and risk of the items that garnered them a
lower score. The remaining countries would carry substantial risk and would need
compelling reasons to supersede the established criteria.
An alternative solution that could warrant further study would be tourist destinations.
These would need to be assessed as independent metropolitan areas, irrespective of
country. Tourists disposable income may out-strip the reported national per capital
GPD to make these cities highly profitable possibilities.
Recommendation and Conclusion:
Our recommendation is to enter the European market (specifically Spain, France, and
Italy). Each of these countries rank very high in terms of their qualifications for market
penetration. Each of these countries contains attributes that make expansion into these
markets so inviting. Many other countries around the world lack one or two significant
qualities making expansion into these countries much riskier. Spain, France, and Italy
all have a high beef consumption rate, a high per capita GPD, and highly populated
cities, We believe Ruths Chris best option to continue to grow as a company would be
to enter these markets.






Works Cited
Kutpetz, Alan, H. (2006, November). Ruths Chris: High Stakes of International
Expansion (Exhibit 3) Ivey Management Services
International Locations, (2013, September) Retrieved from http://www.bk.com/
en/us/international/index.html
Explore Our World, (2013, September) Retrieved from
http://www.subway.com/subwayroot/ exploreourworld.aspx