Outback Steakhouse has always had a formula for success. From its tiny beginnings in 1987, to

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Shyamal Patel

October 13, 2005

MGTG 200

Professor Goldberg

Thursday 5:20

Outback Steakhouse Case

  1. What are the standout business and economic characteristics of the restaurant industry?
  • Restaurant-industry sales are forecast to advance 4.5% in 2003 and equal 4% of the U.S. gross domestic product.
  • The overall economic impact of the restaurant industry is expected to exceed $1 trillion in 2003, including sales in related industries such as agriculture, transportation and manufacturing.
  • Food and Drink revenues were estimated at $426 billion.
  • More than seven out of 10 eating-and-drinking places are single-unit (independent) operations.
  • The restaurant industry employs an estimated 11.7 million people, making it the nation's largest employer outside of government.
  • The restaurant industry provides work for more than 9 percent of those employed in the United States.
  • Restaurant industry employment was expected to reach 13.3 million by 2012.
  • Eating-and-drinking places employ more minority managers than any other industry.
  • Two-thirds of supervisors in 2000 were woman, 16% were African-American, and 13% were Hispanics
  • A typical household spent $2,116 on food away from home.
  • The largest spenders in the industry had a household income of over $70,000 ages between 45-54 and children over 18.
  1. What are the key success factors in the casual dining portion of the restaurant industry?

Casual dining has become the biggest trend in the restaurant industry. Customers no longer visit restaurants just to eat. They want to invest in time shares of virtual vacation; they long for a place to rest and eat without worry. Restaurants that provide an express holiday from everyday commotion have become the meeting place for families, couples, business meetings and parties. The idea is simple: offer quality food, an entertaining atmosphere, and an escape from the outer world. Fitting your restaurant to your customer's life-styles is the key to casual dining success.

Today's restaurant patrons expect great food and top quality service from the restaurants they visit. In addition to this, they long for an experience, a type of transportation from the hustle and bustle of the real world. At the end of the night, the check should be the souvenir of an exciting excursion. In America's fast paced society, people treasure quality time with family and friends as priceless. Offering the public a dining experience ensures success. This depends on all aspects of the restaurant: food, environment, service, and entertainment.

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  1. Do a SWOT analysis of Outback.  What does it suggest?

One of the company’s strengths is its unconventional management strategy—one that is virtually unheard-of in the restaurant industry.  First, the restaurants are open for dinner only, providing short working hours for all employees.  Servers receive better tips at dinner than they would serving lunch, and the single-shift days keep hourly employees from competing for more favorable shifts.

Additionally, general managers work only five days each week.  The shorter hours ensure employees, particularly managers, are able to have a normal home life, thereby avoiding burnout.  Second, high food ...

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