Essay on Ruth Chris Case

1001 Words Oct 9th, 2008 5 Pages
Case
Where Have You Been is an exercise to assess one’s exposure to the rest of the world’s people.
To meet Wall Street’s expectations for revenue growth, Ruth’s Chris must expand. The logically chosen model was Market Development Model, which dictated the entry of Ruth’s Chris into new market with same product. The critical issues facing Ruth’s Chris are:
1) Which market should Ruth’s Chris enter first?
2) Should franchising continue to be the exclusive international mode of entry?
3) Were there opportunities for joint ventures or company-owned stores in certain markets?
4) How could new potential franchisees be identified and evaluated?
5) Was there an opportunity to find a global partner?
II. Analysis
There are three basic
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Also, the upfront cost of US$100,000 for franchise fee plus a total of 7% gross sales royalty and advertising fees are not small for an upstart restaurant. However, it is possible that an existing and successful franchisee of Ruth’s Chris restaurants would be a better fit for the Japan market entry since he would bring valid operational expertise to the new location.
When expanding into a new market using franchising entry mode, the company’s initial investment would be minimal thus would preserve its financial position. The only potential draw back would be a reevaluation of its share value if the new market does not do well against the local establishments.
Next in line were Germany, United Kingdom, France, and Italy. All four of these western European countries are fairly populated, high urbanization rate, and good income per capita. All four were also “beef-eater” countries with very high beef consumption per capita. Far down the list of potential markets, Singapore was noted for having 100% urbanization rate and a significant importer of USDA beef. This would be a potential secondary market to consider after Japan.
The current value of the U.S. Dollar is not very strong against the Euro, and it might be beneficial to a market entry by Ruth’s Chris. Again, Contractual Entry Mode is probably the most effective for starting a new Ruth’s Chris restaurant in Europe. Out of the four western European countries listed, U.K probably has

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