OUTBACK STEAKHOUSE: GOING INTERNATIONAL
Mehak Kohli Praful Anchaliya Rohit Jain Sheetal Vishnoi
Outback Steakhouse Inc. (OSI) Background
• Started in 1988• One of the largest casual dining operators• Over 1500 restaurants in 20 countries worldwide• Includes 7 brands
Challenge 1:
Target Countries?
Coefficient Canada Germany Japan Mexico SouthKorea
UK
Infrastructure 30% = .30 3 2 3 1 2 3
Demographics 40% = .40 3 3 2 2 2 3
Income 20% = .20 3 3 3 1 1 3
Trade Laws 10% = .10 3 2 1 3 1 2
Total 100% 3.0 2.6 2.4 1.6 1.7 2.9
Decision Grid
Income
Infrastructure
DemographicsTrade laws
Markets to Enter•Similar in purchasing power and infrastructure to U.K
P1: Canada
•Lend themselves to leveraging Outback concept “as is”
P1: United Kingdom
•Overcoming perceptions and competition in Germany
P2: Germany
•Mexico (recession, price sensitive economy, physically proximate)
P3: Mexico
•S. Korea (Standards and regulations in flux can pose challenges
P3: South Korea
•Recent launch in Kingdom of Saudi Arabia•Hints Success in UAE
•Diverse immigrants•Tourist Destination•Sea food imports
•Incurring high costs in Japan
SWOT Analysis
Strength •Excellent Human Resources •Differentiation strategy
Weakness•Narrow product line- Restricting main product to beef•Lack of innovation•Hours of operation•Serving only dinners
Opportunity•Diversify menu offerings•Vertically integrated backwards•Expand business internationally
Threat•Economic downturn•New entrants will be coming up with new innovations•Relaxed structure might not work well in nations that respect hierarchy•Health concerns over red meat consumption
Porter’s Five Force Model
Challenge 2:
How the Outback Concept be adapted to overseas market?
Overseas Strategy
Food Service
Industry
•Local responsiveness pressures are high •Multi-domestic strategy with menus configured to appeal to local tastes
Leverage Australian theme
and American brand name
•International Strategy (franchising / joint venture )•Need local knowledge on permits, marketing & wholly owned subsidiary
Challenge 3:
Whether to franchise, directly manage, or joint venture?
Outback should pursue Business Format Franchising
Involves a complete
business format
Capture more of the entire market
Low Cost compared to
pure company expansion
Portfolio Risk reduced by
diversifying into new consumer
markets
Way to learn to handle a business
internationally
Franchising
Challenge 4:
What pace of expansion to target?
Action Reason - Logic Timing
FRANCHISING Secure Market Leadership position in short term, buy back later
Immediate
Increase Profit
Increase Shareholder Wealth
TAKE OUT/ DRIVE THROUGH
Related Diversification Test
Increase Sales Volume/Profit
Increase Shareholder Wealth
MENU ENGINEERING Diversify Menu Regionally Immediate
Strengthen Market Position
Increase Sales Volume/Profit
Action Reason - Logic Timing
SITE SELECTION Decrease Market Saturation Immediate
Strengthen Long-term Market Position
Increase Sales Volume/Profit
Increase Shareholder Wealth
RELATED DIVERSIFICATION
Reduce Financial Risk Immediate
Increase Sales Volume/Profit
Increase Shareholder Wealth
THANK YOU