Facts of the Case: Outback is one of the biggest successes in corporate America. Despite Wall Street predictions of a downturn in Outback's stock they have continued to improve. Outback's three founders started the business predicting success to allow them more personal time. In 1988 the firm produced $2.7 million from two restaurants. By the end of 1994 they had $549 million in sales from 200 stores. The three founders all brought restaurant experience with them into the company. Chris Sulivan started out as a busboy. Bob Basham began as a dishwasher, and Tim Gannon was a chef's assistant. All together their experience totaled 60 years in casual dining. After graduating college in the early 70's Chris and Bob entered the executive role working at Bennigan's. After that their first joint venture was a franchise of 17 Chili's restaurants. In 1987 they decided to pursue their dream. Chris brought his strategic sense, Bob his strong skill in operations and real estate, and Tim his menu experience. They did their own research and decided to focus on steak, even with health concerns about red meat, and to fill the niche between high-priced and budget steakhouses. They sold their Chili's franchises to fund outback and did not take cash salaries for the first two years of operation. They took the company public in 1991 and the stock sold at a premium despite a general aversion to restaurant stock by most investors. Outback really focuses on customer satisfaction. Employees typically wait on no more than three tables at a time allowing closer customer attention. They also focus on quality from suppliers. Their food costs are among the highest in the industry but the quality that price tag brings helps them exceed customer expectation along with their focus on good food flavor. Outback sticks long term with its suppliers. When they find something they like they stick with them and develop a good relationship.
