Analyse d'une chaîne de restaurants Outback Steakhouse (document en anglais)

Background:

The creation of Outback Steakhouse dated back to 1988 thanks to its creators: Chris Sullivan, Bob Basham and Tim Gannon. That year, they opened their first two steak restaurants in Tampa, Florida. They were experienced in this type of business because they attended Stake & Ale’s trainee program and they experienced success through owning franchise operations. The timing of this launch didn’t seem good because the American consumption of meat was declining at that time due to new phenomenon – healthier consumption and low-fat diet. Between 1976-1990 the American consumption of beef declined by more than 50%. In addition, there was severe competition; the market was very fragmented and dominated by fast food restaurants such as McDonald, Burger king and so on. Nonetheless the Outback’s creators trusted in prosperity and success and they recognized that people still wanted to go out and enjoy a good steak dinner.

Within seven years, the company ranked itself between fastest growing US steakhouse chain with over 200 stores throughout United States, was awarded many times and very soon received hundreds of franchise requests from all over the world.

Beginning strategy and key success factors:

Their strategy was based on differentiation to other competitors, which could be considered as their first key success factor. They targeted aging population and dinner crowd, providing seasoned high-quality handmade steaks (40% of their total costs were dedicated to high quality products and ingredients), prime rib and they enhanced flavour profile along with cheerful, fun and comfortable experience. Their steaks were positioned between high priced and budget steak houses, with the price from $ 15-$ 16. They served only dinner and focused on customer satisfaction.

Also their corporate strategy focused on their strong corporate culture and leadership. They motivated managers by higher wages than in the rest of the industry, they provided restaurant management the opportunity to purchase a 10% in the restaurant they manage and employees received benefits, health insurance, their working time was shorter (about 50 hours a week) and they developed with them a strong relationship. In addition, the employees were high qualified and trained; everyone had only three tables to guarantee good service. We can say that the quality of staff is as important as food served. If you, like a customer, aren’t satisfied with the staff, you will never come back. In addition you will warn your friends and they will warn their friends and it is what we call: Word of mouth, which was the main way of Outback’s advertising.

Also the location was a kind of differentiation. Outback located its restaurants in residential areas where there were more people in the evening ("B-locations [with] A-demographics strategy"). Another principle feature was the entry into other market or restaurant concepts by joint venture with Carrabba’s Italian Grill. All features mentioned above provided huge success to Outback Steakhouse.

Decision for going international:

US market could accommodate only limited number of Outback Steakhouse restaurants and as the company was used to open 70 new stores annually in 5 years the US market would be saturated very soon. If they wanted to grow, they would need to go international because the international market offers unlimited growth opportunities. On the other hand going international brings a lot of threats such as high risks, unknown customers and markets, high investment and so on. Anyway, Outback management was for going international.

Motivations for going international:

As it was mentioned above, the main motivation of going international was the saturated US market. If the company wanted to maintain its growth, it should internationalize. The second motivation could be the loyalty of Outback’s managers, who were also very successful and thanks to them the restaurant received a lot of awards. In addition there was a huge demand for Outback’s franchisee from all over the world, so they should use this opportunity. The last motivation was related with the globalization because the world was becoming a huge market and so the big opportunity for successful companies.

SWOT ANALYSIS:

• Strength – differentiation strategy, excellent HR

• Weakness – lack of innovation, focus only on dinner, hours of operation, narrow product line

• Opportunity-

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