Case Study: Outback Goes International

2357 words - 9 pages

Outback Goes InternationalExecutive SummaryAs a conglomerate, Outback must be able to overcome the complexity of expanding into international markets. The company's commitment to continue its fast paced growth will require them to develop a strategy for expansion and operations in different global regions throughout the world. In developing a business strategy, Outback must create guidelines to ensure success in these new and diverse markets abroad.It is my view that Outback should implement a "Value Creation" strategy that focus on lowering cost and differentiating the product to achieve a competitive advantage. As a result, this will improve the profit making abilities of the company. This will allow the company to expand into many markets while creating value for its company. Outback's distinctive competencies and its unique strengths will allow the company to succeed internationally. By pursuing this strategy, Outback is building on its existing resources and capabilities. International expansion will also formulate and build additional resources and capabilities for the company.OverviewChris Sullivan, Bob Basham, and Tim Gannon meet in the early 1970's shortly after they graduated from college. In the 1980's, Sullivan and Basham became successful Franchisees with seventeen Chili's restaurants in Florida and Georgia, while Gannon played significant roles in several New Orleans restaurant chains. In 1987, Sullivan and Basham sold their franchises and Gannon quit his current position. The three entrepreneurs, each with more than twenty years experience in the restaurant industry used the proceeds from the sale of the franchises to start two Outback Steakhouse restaurants in 1988. The opening of the two Outback Steakhouse restaurants was positioned with an Australian theme associated with the adventurous outdoors.Early financing came from limited partnerships from family, friends and associates. They did not anticipate extensive expansions or franchising. However, in 1990, friends approached the three entrepreneurs and asked for a franchise of the Outback Austrian theme. With the success of these franchises, they decided to expand and organized a joint venture with Carrabbas, leading them into the lucrative Italian dining segment of the restaurant industry. Additional opportunities with other individuals arose shortly. In just six years, Outback was voted the best steakhouse chain in the country. On top of that, in 1994 Outback was awarded Inc's prestigious Entrepreneur of the Year award. By that time, Outback had 164 directly owned restaurants, 6 restaurants that operated through joint ventures and 44 franchised restaurants. At the rate the company was growing, Outback would near the U.S. market's saturation within four to five years.In late 1994, the company acknowledged is ability to expand abroad by appointing Hugh Connerty as president of Outback International. As the company moves toward international expansion, they knew that a strategic...

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