The “Outback Goes International” case focuses on a highly successful player in the intensely competitive casual dining segment of the food service industry. This case profiles the company in early 1995 as the company was preparing to extend its operation
...es the company’s history and winning strategy. The founders each had over 20 years of experience in the industry prior to Outback. Their personal commitment to entrepreneurship was reflected in the company’s opportunities for ownership at three levels: franchise or joint venture arrangements at the multi-store level, a creative and unique ownership plan for the individual restaurant general managers, and an employee ownership stock plan. The company’s strategy included other dimensions unusual for the industry. Perhaps foremost among these was the opportunity for restaurant managers to own part of the restaurant, participate in yearly profits at the unit level, and have opportunity for significant gain from the buyout arrangement at the end of a five-year contract. Outback also emphasized employee productivity and well-being. In addition, the company aimed at long-standing and mutually benefical relationships with their suppliers. Other aspects of the company’s strategy included an innovative menu that featured high-quality beef steaks, a dinner-only format in a casual Australian theme restaurant, a “B location with a A demographics” location selection, and a moderate pricing structure which provided high value for the customer. The company’s growth capital came in three waves: a) friends and family as limited partners, b) venture capital, and c) three successful public stock offerings. The results of the strategy were evidenced in the revenue per dollar of investment at the restaurant level, the low management turnover within a usually high turnover industry, and the return for founders and shareholders alike. Thus far, Outback has made no mistakes. In late 1994 the company began to confront the potential for U.S. market saturation within a five to six year time frame. To propel growth the company had entered into a joint venture with an Italian casual dining chain and planned to add additional themes in the fut...