Case Study Outback Steakhouse

Context
In order to better understand the context in which Outback Steakhouse emerged, we have to take into consideration the US economic situation in the beginning of 90s of the last century. That was the period when employees’ “American dream” of working for one company whole life smashed to pieces. Massive layoffs and new temporary jobs became the everyday life for millions of Americans, who had more and more difficulties to keep up with their previous eating habits and required more personal time sacrifice. Women in particular increased the participation in the labor market and overall working hours dramatically increased, which together with long hours and longer daily commuting time, left less time then before for a proper home made meal,

The key issue is whether the resources and capabilities that made Outback Steakhouse so successful in the US market would be the key success factor for their possible extension on the international market or they would need (if they can) to reinvent, rebuild their competences to address the challenge of going internationally. The major question is whether Outback Steakhouse can replicate some of its competences that are specific to their environment in national US market to other countries. Also the question is whether it’s managerial structure can be replicated in other

Threat of substitutes is moderate since there is a market of take-home meals which pushes toward more influence, but the other substitute like home-made meals is diminishing due to the factors explained in context and in a way offsets the possibility of take-home substitutes for restaurants. Threat of Entry is relatively weak since the industry is at maturity and incentives for newcomers are less attractive than in some other industries. For the Supplier power, in general it is moderate although the level on entrants is small. However for Outback, who is building long-term relations with suppliers it might not be that relevant. Regarding the last fifth force, buyers power it is relatively strong since byers have enough choice on the market which is almost saturated, which implies low cost for switching between substitutes. All that being said, Outback depends a lot on the American way of life and it is not sure whether they can find “American” suburb in other countries where they might chose to start international expansion. Also their concept of generous portion might not be well accepted. Not to speak about cultural and social factors and other problems listed on the last page of the case that Outback Steakhouse would face in its international expansion. The proposal itself, made by Hugh Connerty to go through franchising from the economical point