Outback Steakhouse

Chris Sullivan, Bob Basham, and Tim Gannon of Outback Steakhouse were definitely entrepreneurs. When Chris and Bob worked for Brinker International, they had a big dream to start their own venture business. They were all ambitious about their future enterprise and hopes for a big success. Basically, building and operating a dinner house had higher cost than a fast food restaurant. Restaurant operations were a highly labor-intensive business. And restaurant business was a most regulated industry regarding such issues as hygiene, fire safety, and the consumption of alcoholic beverages. Furthermore, many people predicted that Outback couldn't survive for a long time because there were many imitators in that business. They had a high degree of uncertainty as to their success; nevertheless, they tried to build steakhouses in that environment. They had adventurous spirits and courage.

Before they started off the business in the restaurant industry, consumption of red meats was decreasing because of health concern. But they carefully observed the market and talked to people in the industry, and they noticed that people still liked to go to a steak house in spite of their health concerns. People liked to eat out and for a good steak for sure. They believed in human behavior, not market research. They persisted in initiating the steak house business.

Outback Steakhouse has achieved large-scale success, and their dream came true. The three founders are winners in the competitive industries. They must have worked hard to improve their company, been risk takers for overcoming their uncertain environment, and made big efforts for getting the success they achieved. Outback Steakhouse is a good model for us to understand what entrepreneurship is, and points to strong management skills as a source of their success.

Corporate Strategy

Chris, Bob, and Tim opened their first two restaurants in Tampa, Florida, in 1987. They have competed in the dinner house category of the casual dining segment. At that time, dinner house chains had higher sales than fast food chains. However, statistically, 75 % of casual dining restaurants failed within the first year, so they needed to have careful plans such as capitalization, location, food quality, and government regulations. Under these circumstances, they tried to attract consumers with quality steaks that had affordable prices. The steak was