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ASSESSMENT 2: CASE STUDY

Hard Rock Café’s Global Strategy


(Operations Management – POM 602)

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Submitted By:
Rishab
AUD 9799
Enrollment ID: A41011918095
MBA Working Professional (2018-2020)
Amity University Dubai
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Hard Rock brings the concept of the "experience economy" to its cafe operation. The
strategy incorporates a unique "experience into its operations. This innovation is somewhat
akin to mass customization in manufacturing. At Hard Rock, the experience concept is to
provide not only a custom meal from the menu but a dining event that includes a unique
visual and sound experience not duplicated anywhere else in the world. This strategy is
succeeding.
Other theme restaurants have come and gone while Hard Rock continues to grow. As
Professor C. Mark ides of the London Business School says, "The trick is not to play the game
better that the competition, but to develop and play an altogether different game.”.
From the opening of its first café in London in 1971, during the British rock music explosion,
hard Rock Café has been serving food rock music with equal enthusiasm. Hard Rock Café
has about 40 US locations, about a dozen in Europe, and the remainder scattered
throughout the world, from Bangkok and Beijing to Beirut. New construction, leases, and
investment in remodeling are long term, so a global strategy means special consideration
of political risk, currency risk, and social norms in a context of a brand fit. Although Hard
Rock is one of the most recognized brands in the world, this does not mean its cafe is a
natural everywhere. Special consideration must be given to the supply chain for the
restaurant and its accompanying retail store. About 48% of a typical cafe's sales are from
merchandise.
The Hard Rock Cafe business model is well defined, but because of various risk factors and
differences in business practices and employment law, Hard Rock elects to franchise about
half of its cafes. Social norms and preferences often suggest some tweaking of menus for
local taste. For instance, Hard Rock focuses less on hamburgers and beef and more on fish
and lobsters in its British cafes.
Because 70% of Hard Rock's guests are tourists, recent years have found it expanding to
"destination" cities. While this has been a winning strategy for decades, allowing the firm
to grow from one London cafe to 145 facilities in 60 countries, it has made Hard Rock
susceptible to economic fluctuations that hit the tourist business hardest. So Hard Rock is
signing a long-term lease for a new location in Nottingham, England, to join recently opened
cafes in Manchester and Birmingham cities that are not standard tourist destinations. At
the same time, menus are being upgraded.
Hopefully, repeat business from locals in these cities will smooth demand and make Hard
Rock less dependent on tourists.

Discussion Questions:
Q: Identify the strategy changes that have taken place at Hard Rock Cafe since its
founding in 1971.
Hard Rock Cafe Inc. originally focused on operating casual dining restaurant chains locally.
Founded in London in 1971, the company established its brand through the themed restaurant
experience thus becoming a known name in the food service hospitality business delivering a
unique style of dining experience. Today, Hard Rock Cafe has broadened its operations in the
food service and hospitality sector. The company has also achieved global recognition having a
potential chain of restaurants, cafés and hotels around the world. Since the time of beginning
operations, the primary strategic change has been the global establishment of the brand thus
delivering a premium and customized dining experience to the customers around the globe.
Thus, this case of Hard Rock Cafe reveals insight into the significance of effective operations
management to alleviate the growth of business development and thus extend the reach of
business irrespective of existing competition.

Q: As Hard Rock Cafe has changed its strategy, how has its responses to some of the
10 decisions of Operations Management?
At Hard Rock Cafe, the following important decision-making ideas are enforced to ensure that
the brand, company reputation, and financial targets are met:

1. Service and Product Design: Both the service and product design have made it possible for
Hard Rock Café to maintain the brand image and ambience throughout the years. Such ambiance
and image represent the hard rock culture, thus targeting the customers with special emphasis
on the music combined with dining.
2. Quality Management: Hard Rock Cafe applies quality management by maintaining a specific
quality assessment role for the operations manager. The manager utilizes the firm’s quality
standards to determine loopholes in operations. Recommended changes are then applied
forward to ensure quality and conformity throughout business operations.
3. Process and Capacity Design: Hard Rock Cafe’s process and capacity design refers to internal
business processes and the target capacity of facilities. Internal business processes include food
preparation, order routing, reservations, and others. The target capacity of Hard Rock Cafe
facilities is based on the condition of the local markets. The company applies process and capacity
design decisions to maximize capacity utilization thus deliver better business revenues.
4. Location: A close look is given on market analysis while deriving location options for Hard Rock
Café around the globe. Industry statistics are used to determine if expanding the firm through
additional locations is feasible. The company’s executives and corresponding regional or local
operations management personnel evaluate market potential along with the potential of the
target location.
5. Layout Design: The Company decides regarding layout design by assessing the expected
response from customers and the nature of business operations in the facilities. For instance, the
layout designs of café’s are different from those of the company’s restaurants and hotels. In
addition, location specific layout designs makes sure to provide a unique experience to the
customers.
6. Job Design: Hard Rock Cafe’s job design decisions are executed with a thorough analysis of
employee expectations. Employee feedback process plays a crucial role in determining significant
business decisions. For example, jobs are designed based on company standards and the
sociocultural characteristics of the local labor market. Hard Rock Cafe’s operations management
is focused on optimizing workers’ person-job fit, while making it easy for employees to do their
jobs to maximize efficiency.
7. Supply Chain Management: Hard Rock Cafe’s supply chain management decisions are based
on market demand, variety of suppliers, and inventory management costs, among other related
factors. For example, the company determines target supply levels based on current inventory
conditions thus keeping a check on varying market conditions.
8. Inventory Management: In addition to traditional approaches, the use of advanced software
platforms makes it possible for the company to implement the inventory management decisions.
The strategic objective is to ensure that the inventory levels are adequate to maximize the
revenues and profits of the business.
9. Scheduling: Hard Rock Cafe makes decisions in scheduling by evaluating current operational
effectiveness. Authorities involved in operations management assess the business to assess the
bottlenecks in the operation process that are linked to scheduling. The schedules must satisfy
capacity requirements.
10. Maintenance: Maintenance decisions at Hard Rock Cafe are applied based on a comparative
evaluation of assets and the firm’s standards. Pre-determined standards and policies are
deployed to conduct asset maintenance with reference to the qualifications of maintenance
personnel or service providers.

Q: What factors are being considered to choose a global location?


True Competitive Cost Schemes:
The cost of operations in a foreign location depends on many aspects, not only the direct cost of
space and labor, but also indirect costs that affect the bottom line and level of productivity.
Government Regulations:
Enormous labour laws can prove to be a enormous burden even for small business operations.
MNC’s are used to having flexibility and freedom to make decisions to react to the market, such
as personnel adjustments, especially in the early stages of starting in a new location.
Psychographics:
The mind-set of targeted customers also plays an important role while making a location decision
for business set-ups.
Export processing zones
Setting up businesses in an export processing zone might work as a strategic step especially for
export purposes. This can help the businesses with lower transportation costs, faster custom
procedures and better distribution and reach to end customers.
Free trade zone
International free trade zones and trade fair centres are also good places to site business because
of wide accessibility thus creating a brand awareness among the targeted set of customers.

Q: How Hard Rock Café global strategy is different from Coca Cola global strategy?
Both Hard Rock Café and Coca Cola are two of the most diverse and established companies
around the globe. The business operations in these two companies vary based on the following
factors:

Quality Management: The process of new product development essentially involves putting
items on the menu which goes through necessary quality checks thus resulting in product
excellence.

Process Strategy: Hard Rock works to create products in an efficient manner, analysing them for
cost, quality, and labour requirements. The whole production process, from receiving
ingredients, storage, grilling, baking, and frying is designed to create a quality meal for the
customer.

Location Strategies: Hard Rock Cafe has always served largely to tourists in recent years with
more focus on setting up restaurants in destination cities.

On the other hand, Coca-Cola Company marketing strategy is based on 3 A’s that are Availability,
Affordability and Acceptability. The first ‘A’ is for availability of the product to the customers.
The second ‘A’ is for affordability is for pricing and the third ‘A’ is for acceptability in the mind of
consumer thus building a brand loyalty towards the product.

The worldwide interoperability among the products and services focus on indigenous profit with
pricing as a major factor to be considered. The marketing research, production and research are
done in diverse regions with globally recognized standards.
Being an established company since ages, Coca Cola mostly relies on multi-regional distribution
channels thus having supply chain partners around the globe to help achieve smoother operation
processes and faster response timings.

REFERENCES:
Pearsoncanada.ca. (2019). [online] Available at: http://www.pearsoncanada.ca/media/highered-
showcase/multi-product-showcase/showcase-websites-4q-2012/02_ch02_heiz.pdf [Accessed 29 May
2019].
Best Writing Service. (2019). [ANSWERED] Case Study: Hard Rock Café’s Global Strategy Read about
the Hard Rock Café’s - Best Writing Service. [online] Available at:
http://bestwritingservice.focusessays.org/writing/answered-case-study-hard-rock-cafes-global-
strategyread-about-the-hard-rock-cafes [Accessed 29 May 2019].
Panmore Institute. (2019). Hard Rock Cafe Inc. Operations Management & Productivity - Panmore Institute.
[online] Available at: http://panmore.com/hard-rock-cafe-operations-management-productivity [Accessed
30 May 2019].