Focus Case
To begin with, it is necessary to consider some criteria to choose proper market entry strategy. First of all, the Ruths Chris Steak House main objective is to obtain a “tremendous upside” by selecting an international opportunity and expectations for revenue growth.
Secondly, the company already has had an experience in foreign market involvement: restaurants in five countries including the US. Thereby, it has good foreign market involvement.
Another criterion is that the company has a skill of focusing on an unwavering commitment to customer satisfaction, and attitude towards international marketing of the company management such as companys franchisees which entered in into a 10-year franchise agreement, each of it granted the franchise territorial protection.
In addition the competitive advantage of the product is in the name “Ruths Chris” which is a unique story of Ruth Fertel.
And the last but not the least point is that financial resources of the company have crucial criteria. Thus, we consider that company can have at least 2 scenarios. In the first case, the Ruths Chris has limited resources, and in here we regard the company as SME.
In the second case, according to the article, after completing IPO the company has enough money to express its ideas and plans.
To sum up the foregoing, all these factors influence the entry method to the market.
Figure1. Advantages and disadvantages of the Market Entry Strategies
Entry Method
Exporting:
Indirect exporting
The simplest and cheapest method of market entry which is focused in selling product overseas by others.
A little control over the choice of markets and the strategies.
Direct exporting
A greater control of the selection of markets; improved feedback on the performance of individual products; and opportunity to build up expertise in international marketing.
The direct investment necessary is considerable because the whole of the marketing, distribution and other costs will now be paid by the company.
Piggybacking
It makes a particularly effective way for firms from developing countries to break into markets in developed countries.
Not in this case because of the company located in the US.
Licensing
Financial and management commitments can be kept low, the high cost of setting up a subsidiary useful therefore in dealing with difficult markets, where direct involvement would not be possible.
The licensor might not respond to changes in the market, or might not help to develop the market for the licensee; and most important the licensee may be either unwilling or unable to develop the market in the way that the licensor would wish.
Franchising