Strengths and Weaknesses
To gain a competitive advantage, the profit rate of a corporation has to be higher than for the average of the industry. The profit rate is the difference between the value the customers attach to the product and the costs of producing it. It is determined through the performance of the different value creation functions.
-high quality of ingredients
-40% of total costs are food costs
-Outback has won several awards, good PR
-Corporate identity through a common theme of all restaurants
-High value for money leads to a good image of the company
-good relationships to the suppliers
-best qualified, trained and highly motivated employees
-management experience in the restaurant business
-no middle management , decentralised lean management
-franchisees live in their area
-location strategy: niche
-high stock price allows further expansion
Generally the efficiency of the production is neglected but as Outback embarks on a differentiation and niche strategy that doesn't affect its competitiveness.
All other building blocks of competitive advantages are addressed, its products are of excellent quality, its products as well as the management system and the organisational structure are innovative and its customer responsiveness is outstanding.
Opportunities and Threats
The strategic position of Outback is mainly determined through companies that are in the same strategic group: moderate price and high quality dinners. The opportunities and threats are mainly the same for that strategic group, the entry into another group might be desirable and would result in a diversification strategy.
According to Porter's Five Forces Model, the restaurant industry is highly competitive. The rivalry among established companies is very high as Outback operates on the one hand in the highly fragmented...