Strategic Analysis of Outback Steakhouse

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Strategic Analysis of Outback Steakhouse

Outback steakhouse is an Australian themed American casual dining restaurant chains that offer a variety of chicken, ribs, pasta dishes, sea food and of course beef and steak which makes the large portion of the menu. The restaurants are based in Tampa and Florida and it has more than 1200 locations in more than 50s countries. The company was formed in 1988 by people who shared the same belief in hospitality, quality, fun, and sharing. The company is owned and operated by Bloomin Brands inc. along with other restaurants like Bonefish grill and Roy’s restaurants among others.

The strategy of outback steakhouse is to differentiate its restaurants through emphasis on high quality food and service, casual atmosphere, generous portions, and moderate prices.

Outback has several main competitors like Sizzler, Ponderosa, Golden corral, Western Sizzling, Bonanza and McDonalds among others. Due to its performance and market share the company enjoys up to 17% of market share, however direct competition is posing threat to the company.

The average outback customer is an older evening dinner individuals who substitutes in-house consumption for a red meat for a good restaurant steak. The customers are loyal to the restaurant are willing to wait for more than 2 hours for a table over the weekend to purchase meals. The social-cultural factors like differing dietary preferences and needs have made expansion challenging internationally by. Local rules, work practices, customs, and other factors also differ from place to place.

The company is customer oriented and offers his customers various gift cards that fit their different needs. The cards range from pre-made gift cards, corporate bulk purchases, celebration gift cards to design your own gift cards. There is an offer program that allows customers to get special treatment all year round and this can be applied for online. There is also an operation efficiency provided by well-designed easily accessible website with online ordering option. Through the website the customers are able to order for their meals online and have them delivered at their door steps and at their convenience. The outlets are in distributed across the nation making the products easily accessible to the customers CITATION Rob11 l 1033 (Robinson, 2011).

The restaurant uses different strategies in its sales; the company has two blimps, the Bloomin Onion I and Bloomin Onion II that are used for advertisement and observation. The company ran a media campaign for several years with an Australian-themed variation. Outback also offers wide range of food products ranging from beef products to fresh fish products.

As part of the business strategy, the organization intends to continue with expansion of restaurants. The development schedule needs construction of more than 30 new restaurants. The operation results of the company could be affected by shortages and interruption in supply chain and delivery of fresh food products. There are also many unforeseen risks as a result of many outsourced accounting processes. Public reactions to outbreaks and flu viruses could adversely affect the business CITATION Ede13 l 1033 (Eden, 2013).

As at December 31, 2011 the company owned and operated 669 restaurants and 106 were franchised across 49 states. Alcoholic beverages account for approximately 15% of the consolidated restaurant sales. As at December 2011 the company had a total of 85000 employees with 825 at corporate level. As at December 2011, the company had an outstanding debt of 1.0 billion. There was an increment of 5.9% in consolidated revenue collected and a total of 15 restaurants were opened and 11 closed. In the year ended December 2011, a total of 717 million dollars income was generated up from 114.8 million dollars in the previous year. There were sales increment of 7.0% up from 2.2% realized the previous year CITATION Sus11 l 1033 (Susskind, 2011).

Executive summary-steak house restaurant was first opened in 1988 in Tampa and Florida and the founders based their activities on best cost provide strategy and serving high quality range of food products especially steaks at affordable prices. It was considered the fastest growing restaurant chain in the first year of its operation with over 200 stores in 1995. The company has received many awards like the prestigious entrepreneur of the year award. The company is face d by critical strategic issues of continued growth and the company is in need of executing a balanced domestic and global expansion CITATION Fre10 l 1033 (Freeman, 2010).

Statement of the problem: outback steak house faces a problem of how to continue growing and has a large number of retained earnings and shareholders expecting stock dividends and explanations on the company’s progress. The company has a history of rapid continuous growth and growth strategy must be developed and communicated to the shareholders.

Causes of the problem: for a long period restaurants have not been viewed as a large growth industry. This has been contributed to by slower population growth and the rise in demand of prepared foods to relieve the working parents, changing taste as the population ages and the increasing domestic and international franchising and international expansion and growth of major fast food chains.

Decision criteria and Alternative Solutions: international franchising- this is a more proven expansion strategy both nationally and internationally. International franchising allows the company to easily control growth and customization of restaurants to the local market. Buy back domestic franchise – this method has been used by the company since 1992. The franchise stores only gives the company initial franchise fee. The company makes much more money from its owned stores than franchise CITATION Gom12 l 1033 (Gompers, 2012).

Reference

Gompers, P., Mugford, K., & Kim, J. D. (2012). Bain capital: Outback steakhouse. Harvard Business School Case study N2-212, 87.

Robinson, S. (2011). Inventing Australia for Americans: The rise of the Outback Steakhouse restaurant chain in the USA. The Journal of Popular Culture, 44(3), 545-562.

Susskind, A. M. (2011). How to Build Service Quality into Your Operation.

Berra, Y. (2011). MANAGING THE RISKS OF ENTREPRENEURIAL SUPPLY CHAINS. Creating Entrepreneurial Supply Chains: A Guide for Innovation and Growth, 143.

Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.

Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.

Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.