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 modes for entry into a new market – Export Entry Mode, Contractual Entry Mode, and Investment Entry Mode. Since the market entry mode for international expansion of restaurant business is not conducive for entry by export mode, Ruth’s Chris international expansion was limited to transferring of knowledge and enterprise to local resources. In other words, Ruth’s Chris entry strategy into any foreign market has to be the Contractual Entry Mode, where franchising to local entrepreneurs made most sense. Also, the current franchises in Taiwan and Mexico are doing well, proven the Contractual Entry Mode as the correct one. Company-owned restaurants might be explored at a later date, but for the initial entry into Japan, Ruth’s Chris should be the exclusive mode. Which will be the next viable international market? The basic selection criteria consisted of the following ...