Ruth’s Chris: The high stakes of international expansion Essay Example

the firm will continuously pursue best opportunities across all markets. Firms also commit resources only gradually and thus have occasion to update their evaluation of different opportunities . Now that Ruth’s Chris must decide how to enter new international markets. “All of the means for supplying foreign markets may be subsumed in just two activities: (1) exporting to a foreign market (2) manufacturing in it .

Recommended Action The use of a test market will be used for future expansion. The benefits of using a test market will out way the costs. China will be the recommended test market. With 11 cities over 2 million in population, the world's fastest-growing economy is a high-rise elevator, and every restaurant chain wants to get in on the ground floor. In 2005, according to its National Bureau of Statistics , Chinese diners spent $110 billion on foodservice, up a dizzying 17. 7 percent in just one year. That number should explode by 2025; the urban upper middle class will total 520 million people.

Urban purchasing power will total $2. trillion. If the big cities were a separate nation, its economy would be the size of Japan's. Although locations are costly in Shanghai, Beijing and Hong Kong, 14 other cities report food service sales over $1 billion. Urban areas like Guangzhou and Shenzhen combine affordability with growth potential . I would recommend the Ruth’s Chris expand internationally with company owned restaurants first. The use of company owned restaurants will allow complete control in the new international market place and help ensure the success of the US based business plan in transferred to the international market place.

China offers unique challenges, especially for

small chains with limited resources. Before a company can sell franchises, it's required to operate two pilot stores for at least a year. Ethical and Social Responsibility The Chinese people are different. That is not to say that it easier or more difficult than, say, doing business US but it is different because you are dealing with people of an entirely different cultural or world view. Ruth’s Chris must postpone judgment and try to get behind the thinking. Chinese courts often meet with companies multiple times to bring a matter to a satisfactory conclusion.

Most disputes between corporations, including foreign companies, are resolved through informal consultation or mediation rather than litigation. Ruth’s Chris must be prepared to conduct business in a manor different for the way the do business in the US. The risk of doing business in a country different than our own is great but the reward of a successful transition in to the international market place is great and vast. Careful evaluation is necessary and changes must be made in order to expand further in to new and expanding international markets.