Ruth Chris Analysis

Assignment: Ruth’s Chris Analysis                        Student: Alejandro Galan

Class: Business in the global environment                Professor: Dr. Greg Turkanik

For the study of this case, we were given a number of variables that the management team had consider before making the decision to expand its business internationally. But not all the variable have the same impact before making the final decision, this is the order that I consider to be more important for the analysis of the case:

• Beef-eaters: This category should be the most relevant one since, Rut’s Chris is a stake house, even though there are some fish items on the menu, the primary customers of this fine restaurant are beef-eaters. Expanding into a country that does not consume beef would be a huge mistake.
• Legal to import U.S beef: Ruth’s Chris is very proud in the fact that they only serve USDA prime beef, and its customers know it, and they are willing to pay a little bit more for the high quality of the meet. If Ruth’s Chris did not have this criteria as one of the most important ones, they would be going against their culture and values, and this would hurt their image internationally and nationally.
•  Affinity for U.S brands: The name Ruth’s Chris, is easily associated with an American brand, and there are some countries that will not seen with good eyes the expansion of an American brand into their markets. Ruth’s Chris would have a very hard time getting customers into its restaurants just because customers do not like American brands

The management team did a very good job selecting variables that will affect the final decision, but there are some other variables that they should take under consideration before expanding to other countries such as, business practices or foreign investment taxation.

• Business practices: We know that American brands are accepted in China, McDonalds and Burger king are present in that market, and they are both profitable. But they learn the hard way, both companies underestimate the power of “guanxi” which translate to relationships, but in the business world it means connections to do business. If an American company does not have “guanxi” with a Chinese company or powerful person, they will never be able to do profitable business in China.
• Foreign investment taxation: Some countries have especial taxes for foreign investors to try to protect the local economy. If the taxation is very high that could be very important factor.

The three top international markets that I would suggest are Spain, France and Italy

They have a consumption of beef per capita of 118.6, 101.1 and 90.4 respectively very close values of those of the U.S. It is completely legal and standardized the process of importing USDA prime beef to Europe. The affinity to U.S brands is more than proved with the existence of McDonalds, Burger King, Taco Bell, Subway etc. There is also no special taxation for foreign investors and you do not need any kind of special networking or “guanxi” to open your business in Europe.