Ruth restaurant - Broome Community College International...

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Broome Community College International Business Environments Yetsko Ruth’s Chris Steak House Adriana Villa Cebado Thalia Ferro Estrada Emanuel Pacheco Aguilar November 28 th , 2011 Brief overview In 1965, Ruth Fertel mortgaged her home for US$22,000 to purchase Chris Steak House, a 60-seat restaurant in New Orleans.In 1976, the thriving restaurant was destroyed in a kitchen fire. Tom Moran, a regular customer and business man , open the first Ruth’s Chris franchise in 1976.In the 1980s, steak house grew into a global phenomenon consequently Fertel became The First Lady of American Restaurants. Ruth’s Chris use USDA prime meat and the menu also include quality lamb chops, veal chops, fish, chicken and lobster. Entrees were generally priced between US$18 to US$38. In their 2005 Annual Report sales grew to a record US$415.8 million from 82 locations in the United States and 10 international locations including Canada, Hong Kong , Mexico and Taiwan. Issue Ruth’s Chris Steak House had to decide the new locations and the way of entry into the international markets.
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Key points The key points of Ruth’s Chris Steak House that we need solve: Decide the new locations of the next Ruth’s Chris Steak House. The methods Hannah has decided to expand the MNE are: penetration (more of the same restaurants in the same market)and market development (more of the same restaurants in new markets) The way of entry in the international markets could use: franchising, joint ventures, establish more company-owned restaurants or acquisitions. Questions 1. What did Hannah do to make a first cut in the list of potential countries? How did he get from 200 to less than 35 potential new markets? Which variables seemed more important in his decision making? Which unused variables might have been useful? Liquid net worth of at least 1 million dollars: This amount is necessary in order to get the franchise agreement. Experience within the hospitality industry: The hospitality industry refers to the level of service a country or a culture is able to offer to the customer. Ability and Desire to make multiple locations: This variable refers to the possibility of establish multiple stores in different locations of the same franchise. Cost of the franchise: The franchisee must be able to afford $100,000 per restaurant. Royalty fee: The royalty fee is five percent of the gross sales, so the sales of the potential country must be good enough to contribute to the whole income in the annual report. Contribution for the national advertising campaign: In order to contribute to the advertising campaign, the potential franchisees must gather the 2 percent of gross sales fee. In order to identify the potential markets in the world, Hannah used the following
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This note was uploaded on 12/02/2011 for the course ECON 1210 taught by Professor Mannigs.waters during the Fall '08 term at Broome Community College.

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Ruth restaurant - Broome Community College International...

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