Clearwater Case Essay

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Ruth’s Chris: the high stakes of international expansion Qiuyu Li A00371649 1. Problems * As a public company, Ruth’s Chris had to meet Wall Street’s expectations for revenue growth. New restaurants were critical and the international opportunities offered a tremendous upside. * It was not a big international restaurant, so the challenge for the company was to decide to expand into the international market. * The company set strict criteria for would–be franchisees all over the world, which eliminated many of the prospects. 2. Analysis a. Consumers * Grass rooted in the United States, where it was the largest fine dining steak house in the United States, and it focused on customer satisfaction. * The target consumers were well-to-do beef-eaters with high disposable income. b. Competitors * Ruth’s Chris (with 92 restaurants in 2005) had some competitors in United States-- Morton’s with 66 restaurants, and Felming’s with 32 restaurants. * Because the company had only four international markets, the competition for international expanding was very intense. The potential competitors included some strong native brands and some famous and successful international brands. c. Capability * In 2006, Ruth’s Chris was fresh off a sizzling initial offering (IPO). * In 2005, it had 82 locations in United States and 10 international locations including Canada, Hong Kong, Mexico and Taiwan. * It focused on the customer satisfaction and broad selection of USDA Prime grade steaks * It provided a variety of products: steak, lamb chops, veal chops, fish, chicken and lobster with high quality. * The company focused on the penetration model and the market development model. d. Weakness * It had restaurants in just five countries, including the United States. * Although the company had 51 franchisee-owned

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