Ruth’s Chris Steak House

Ruth’s Chris Steak House - A Success Story

Ruth’s Chris Steak House started off as a simple restaurant which was started by “Ruth’s Chris” in the year 1965 at a cost of US$ 22,000. The company massive growth can be attributed to the franchise model. The franchises have aided the company in terms of capital as well as raising the profit levels significantly. The move was also supported by the increase in the company-owned restaurants which lead to the spread of the organization all over the world.

Strengths

One of the advantages is that the company has many customers, which means that it has the market power which can favor its course when competing with other companies. The other aspect is that the firm already has a recognizable brand name. The company is already popular and receives high regard from the society. Another positive aspect is that the organization has ventured into the international market, which means that they have already captured a certain ratio of the customers and their presence is also noted. The company provides high-quality products which have grown its customer s significantly.

Weaknesses

The company mainly targets the high-end customers. The problem is that a majority of the customers are not from the high-end which means that the target market is quite limited.

Opportunities

Ruth’s Chris targets a market for the steaks and other meat products such as lamb and chicken, the market is witnessing a major growth. Many customers are interested in the high-quality products offered by the restaurant and this has seen its market grow significantly. Another thing is that the market for the steak is grown widely in the developing countries which mean that they are viable targets that can provide a wide variety of customers to the organization.

Threats

The problem is that many firms have ventured into the international market which means that the market is getting competitive. Therefore, Ruth’s Chris has to be creative and innovative to effectively target the customers. The other challenge is that there are cow diseases affecting the beef obtained in the US, therefore, many potential customers may avoid consuming the products as they fear to risk their health. The other challenge is the economic issues being witnessed in the world which affect all sectors including the food industry.

Question 2

The business-level strategies tend to focus on the business unit performance (Wheelen et al. 28). The restaurant uses the focused differentiation, where the company focuses on differentiating its products. The company deals with only a small segment of the market where they target mainly the steak, where the focus is on customer satisfaction. The companies menu further provides high-quality lamb chops, veal chops, and even chicken. The corporate strategy, on the other hand, tends to a wide range of business activities (Wheelen et al. 30). The corporate strategy by Ruth’s Chris is the growth strategy. The company aims to increase its sales and profits which is evidenced by the fact that there are so many franchises and company-owned restaurants.

The key bundle of resources used by the restaurant is the quality of its products, which has played a huge role in the company’s strong position in the market. The factor is core competency because it helps the company differentiate itself from other competitors give the business its uniqueness. The high-quality products give Ruth’s Chris Steak an opportunity to dominate the market since they are able to maintain loyal customers and increase their market share. The factor is a sustainable competitive advantage because it is difficult to duplicate the product’s quality especially when focusing on the fact that the restaurant has operated since the year 1965 and the product quality still remains unique is clear indicator that it would be very difficult for the competitors to surpass.

The firm is also interested in venturing into developing countries with an aim of increasing the profits and customer levels. The international cooperative strategy refers to when a company works with other organizations in other nations while having a common objective. Therefore, Ruth’s Chris can utilize benefits from these alliances such as using the distribution channels and an access to the markets already established by the franchises. The company has chosen the right business and corporate level which only need to be optimized. With regards to the organizational structure, Ruth’s Chris Steak House needs to maintain a divisional structure where leadership is organized around the products and the subsidiaries. Therefore, every different business unit ”restaurant” is operated as a separate organization. However, all the business units share a lot of similarities in products as well as management styles.

Question 3

Ruth’s Chris organization mostly applies franchise business model (Afuah 24). The business should target the large international market and consider offering customer friendly prices that will attract large customers. The company uses the market development where it has developed many similar restaurants in its current markets. The company continues to offer franchises in its international markets such as Canada, Hong Kong and Mexico. The restaurant can utilize the global localization where the business ensures that the menu in the different areas serve the needs of the local people. Therefore, in addition to the traditional menu, the company should add various local meals in the different regions to appeal for a sense of belonging and customer loyalty.

The Porter’s diamond of national advantage features four critical aspects namely; firm strategy, factor conditions, demand conditions and also the supporting industries. The UAE is one of the possible countries where Ruth’s Chris Steak can venture into this market because it’s attractive. Restaurants can be established in Dubai. Dubai has free zones which mean that there are supporting industries which can promote the company. The UAE has skilled expatriates which can offer labor in the restaurants (Albers 601). The country is also technologically advanced with the right infrastructure ensuring that supplies and products can be distributed in a timely manner. In terms of demand, the people living in Dubai have a higher per capita income which means they have a higher proportion of disposable income. The nature of the population is that they prefer to dine out as opposed to having meals at home as witnessed mostly in Europe. There is local rivalry but Ruth’s Chris Steak can be able to overcome this by replicating its strategies which have worked in the US.

Another destination would be Japan. The country has skilled labor because its citizens have high education standards and the technology is also advanced. The challenge would be in terms of the demand conditions, noting that the food industry is very popular and advanced in Japan; therefore, Ruth’s Chris would face a lot of competition especially from the local restaurants. In terms of relating industries, Japan is very advanced in terms of innovation with various sectors such as the manufacturing recording great success. The infrastructure is also conducive for business. The expertise in manufacturing industries has given contributed to the growth of the disposable income. Ruth’s Chris would have to reconsider its focus on the high-end market only in this market. A mixture would be appropriate where the restaurant offers meals that are affordable by a wider proportion of the population.

Consumer animosity generally refers to the effects of anger and also negative attitudes towards different regions which can highly affect the business performance in international markets (Dobbs and Michael 42). If consumers choose not consumer the organization’s products or indicate non-satisfaction to their services they can highly affect their profit making. In terms of the relationship between the US and Japan, there has been a healthy relationship between the countries following the end of the World War II. The US is interested in cooperating with the country, a trend that has been witnessed since the 1990s. Research shows that here-quarters of Japanese population trust the US. Similarly, the US has good relations with the UAE which eliminates the animosity aspect (Michael 35).

Question 4

The dilemma is that by re-labeling the beef imports, the company is able to save time and expenses which is an added advantage. Through relabeling, the company will increase profits which, in turn, enable it to acquire options to expand globally. Though the move is profitable, it ruins the integrity of the companies services to its customer and if exposed can lead to a loss. Relabeling is therefore unethical and should be avoided (Wong et al 857).

John Hannah, on the other hand, would have agreed to the idea. To him, the denial to import US beef was a political variable and did not involve the people culturally. He hoped that with the time situation would change and under the right circumstances the political differences would come to an end allowing free trade to take place between the countries.

Ways to address unethical behavior in employees

Unethical behavior in the workplace can lead to vital consequences if unaddressed, which can lead to employees creating a toxic work environment if no action is taken. In order to address unethical behavior, companies should create a code of ethics which allows them to set a behavior tone that is to be maintained at the working place. In the code of ethics, the company should also establish a protocol to be followed in reporting unethical behavior which ensures that the issue is addressed and creates trust in the company to address the issues fairly. The company is also expected to review the code regularly and make updates where need be, and train its workers efficiently.

Question 5

Serving over 16,000 steaks per day globally, the company was growing alarmingly in 2006. Despite their efforts, during this period, the domestic economy was slowing down which was a great challenge. In order to maintain its leadership position in the industry, the by then, CEO Miller set a goal for the company to set up and run 200 restaurants in the coming decade, and ensure that it secured a total of $1 billion in sales. By 2006, the company had opened its 100th restaurant and sales, as well as profits, were on the rise. Revenue was already at $271.5 million, which was an increase compared to the previous years.

Reasons for pursuing an international strategic alliance

By forming a global alliance, the company will be able to gain insight into the knowledge of other companies as well as resources, allowing them to develop new products as well as approach and establish themselves in markets they could not have entered alone.

Joining the alliance also allows the company to enhance competitiveness and as well as ideas on how to overcome already existing competition.

The company also gets an added advantage of sharing risks as well as forming economies of scale.

Type of cooperative strategy recommended

The company should apply the complementary strategic alliance which allows the organizations involved to share their resources and capabilities in a complementary (Albers et al 600). The strategy enables the company to develop competitive advantages in the industry. The companies, however, may exhibit different learning rates and at times lack capabilities to leverage resources that are complementary. Risks in ending the alliance:

a. When companies join they share skill and know-how which is a great risk in that after the breakup not all members might be willing to keep this a secret despite the agreements signed.

b. At times one company benefits largely from the alliance compared to the other and after the breakup, this can lead to the creation of competition leading to the failure of the other.

Question 6

The company started off with a single unit in New Orleans, and over the years the company has continued to grow rapidly. The marketing managers have the obligation to ensure that the company can venture into new markets. The company can open different restaurants in the existing markets which would be a case of diversification where they can reach new customers. Even as Ruth’s Chris Steak restaurant ventures into expanding its brand into different companies, yet it is crucial that the company should not undermine the potential of the local market. Therefore, there is the need for further control in the existing markets to make sure that they also expand and that the company does not lose its dominance in these markets. The aspect of subsidiaries will be very crucial in the expansion, but the focus should be on ensuring that these restaurants still maintain the values, cultures, and quality witnessed in the Ruth’s Chris restaurants. The effect gives the brand more popularity and customer loyalty also increases significantly. Trust in the business also increases as consumers are sure that there will be no compromise in quality on the basis of making more profits.

Works Cited

Afuah, Allan. Business models: A strategic management approach. McGraw-Hill/Irwin, 2004.

Albers, Sascha, Franz Wohlgezogen, and Edward J. Zajac. ”Strategic alliance structures: An organization design perspective.” Journal of Management 42.3 (2016): 582-614.

E. Dobbs, Michael. ”Guidelines for applying Porter’s five forces framework: a set of industry analysis templates.” Competitiveness Review 24.1 (2014): 32-45.

Wang, Liang, Anoop Madhok, and Stan Xiao Li. ”Agglomeration and clustering over the industry life cycle: Toward a dynamic model of geographic concentration.” Strategic management journal 35.7 (2014): 995-1012.

Wheelen, Thomas L., et al. Strategic management and business policy. pearson, 2017.

Wong, Simon Chak-keung, and Jane Shiyin Li. ”Will hotel employees’ perception of unethical managerial behavior affect their job satisfaction? A study of Chinese hotel employees in China.” International Journal of Contemporary Hospitality Management 27.5 (2015): 853-877.