Question

1. What variables need to be considered in developing a list of Black Angus Steakhouse operates 46 states of the United States. The company opened its first restau- rant in Washington State in 1964. Currently, each restaurant serves an average of 3,000 guests each week. Black Angus oper- 2. From the list of top "candidates" what data should you collect restaurants in six western potential countries on each market? ates under the mission: To provide patrons with top quality, complete steak din- ners at an affordable price, served in a warm, comfortable atmosphere with friendly service. (www.blackangus.com) 3. What market entry strategy would you suggest? 4. What are some of the internal and external challenges Black Angus may face in moving from a domestic business to a global business? Through market research, the marketing department has determined that a significant business segment comes from Asian visitors to the United States. The CEO has directed the What country would you propose as having the #1 potential? Why? 5 marketing department to investigate and propose possible options for expansion into Asia.

Answer 1

Introduction

Micro-economic strategies are extremely important for companies that aim to go global. In the current case study, like many other cases, countries tend to expand their base into areas where they find better customers once that they start growing in size.

Over a period of time, domestic markets stagnated for most countries and the effects of global trade were such that companies tended to expand their base over other areas.

This resulted in better profits and overall lower costs for the enterprise. In the case as listed above, the company realized the fact, that most of its trade comes from Asian ethnic race and therefore can look to expand in these areas so as to enable itself on earning more revenue this is a correct strategy to approach since the population expansion in Asian countries can make a solid ground for the company to invest its funds into respectively.

Case Specifics:-

1) What variables need to be considered while developing a list of potential countries?

For variables to be considered, it is important to evaluate the per capita income of the nation to evaluate whether or not the country can afford proper dining routines and cultures. Further economic trends will indicate the average meat consumption of the area which are key determinants to develop a list of potential countries the company can consider.

Thus, the income factor and the consumption factor are two of the biggest variables to be considered while developing a list of potential countries which the company can choose from respectively.

2) From the list of top candidates, what data should you collect on each market?

Once major countries have been classified on the basis of their per capita net income, and overall pattern of consumption other details such as effects of marketing, and seasonal variations can be considered while evaluating the nature of the market type.

Some markets tend to be consistent in their demand and should be preferred over those that tend to have higher consumption in specific time periods.

For example Bangladesh as an Asian country sees equitable demand in prime season of Ramzan of steak and may have a higher average consumption but at the same time its overall consumption is much lesser in other months.

Also, correlation should be established between income and consumption to derive a probable list of those countries where people who consume are actually interested in buying the product in restaurants of Black Angus since quality is something which is only possible with higher overall prices of the product.

3) What strategy would you suggest?

In most Asian countries, franchising is the ideal strategy for business owners looking to invest in the sector. It enables people with local knowledge to collaborate with the company and implement plans that both can earn their share of profits.

The company should have a similar strategy,

4) What internal and External Challenges will the organization face?

Internal Challenges:-

As an American company with little knowledge of the overall business and regulations in the foreign country the following are the internal challenge which the company may face.

• The course of the future is more comparable in the United States than the Asian counterparts which are mostly in the developing phase. How the internal staff, and investors will react to the decision is something which the company will have to actively deal with

• Financial Management is one other aspect which would require the company to be extremely careful. It could easily end up in overspending money feeling that the exchange rate is to protect. Previously we have seen companies as big as General Motors (Automobile Sector) failing in Asia because of overspending.

• Customer Service again is one segment in which the company would require active attention to. This happens since the company currently has an American approach at dealing with things which may not be possible with Asian counterparts

External Changes are as Follows:-

• Competition is the prime external challenge which the company is likely to face, since in Asian countries alternatives are easily available at half the cost.

• Government regulation is another key sector which will affect business for example in countries such as India beef regulation is present in most states which prevents cow slaughter this could be a probable discouragement for the company to invest in the sector.

• In some areas, social norms are such that people want to cook their own beef than have it in restaurants. This factor is more prominent in Muslim Countries which are in abundance in Southern Asia.

5) What Country would you say has number one potential and why?

In my opinion the number one country which the company can choose given today’s scenarios is that of Singapore. The country has a higher per capita income than most other countries and would easily adopt the company via franchising mode. Further similar strategies can be used by the company for marketing since it sees high consumption of beef all across the year and is ranked well within the top 50 consumers of beef and is the largest consumer in terms of high per capita income countries in Asia.

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