Outback Steakhouse, Inc., headquartered in Tampa, Florida, was founded in 1988 and completed its initial public offering in June 1991. Outback Steakhouse, Inc. is a company of restaurants that owns and operates Outback Steakhouse units throughout the United States as well as Carrabba’s Italian Grills and Lee Roy Selmon’s restaurants. The company also operates through joint venture agreements and existing franchise agreements for additional Outback restaurants (including international locations), Carrabba’s Italian Grills, and Fleming’s Prime Steakhouse & Wine Bar. Outback Steakhouse, Inc. has a joint venture development relationship with Roy Yamaguchi, the chef and creator of Roy’s restaurants, located in the United States and Japan.

Outback Steakhouse is an Australian steakhouse concept open for dinner only. Although beef and steak items make up a good portion of the menu, the concept offers a variety of chicken, ribs, seafood, and pasta dishes. The company’s strategy is to differentiate its restaurant by emphasizing consistently high-quality food and service, generous portions at moderate prices, and a casual atmosphere suggestive of the Australian outback.

Outback Steakhouse has enjoyed considerable success over the years, as evidenced by its sales figures in the table below. Since 1994, sales have grown from $549 million to over $2.4 billion by the year 2002.

As you can see, the restaurant chain opened its first international unit in 1996. All of the international units are either franchises or joint ventures.
Initially, the units were company-owned, but over time, the number of franchises and joint ventures has increased from 21 units in 1994 to 172 units in 2002.

The information in the tables pertains to the Outback Steakhouses only, not the other brands that are part of Outback Steakhouse, Inc. It is interesting to see the evolution of the brand over time. Since the initial public offering in 1991, the brand has increased its number of franchised operations both in the United States and abroad. Sales have increased every year regardless of the economy or events such as the September 11 terrorist attacks.

Case Study Questions and Issues

a. What stage of the product life cycle is the Outback Steakhouse brand in as of 2002?

b. What strategies would you suggest for the managers of the Outback Steakhouse brand?

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Annual Sales ($000,000) 1994 1995 1996 1997 1998 1999 2000 2001 2002 COMPANY- $516 $716 $892 $1,045 $1,227 $1,492 $1,698 $1,848 $1,978 OWNED FRANCHISED 33 82 124 181 247 267 318 358 377 INTERNATIONAL 0 0 1 20 48 60 75 81 88 TOTAL $549 $798 $1,017 $1,246 $1,522 $1,819 $2,091 $2,287 $2,443