Hard Rock Cafe Analysis - Assignment Example

Hard Rock Café: Case Study Contents Contents 2 Identify the strengths, weaknesses, opportunities and threats that are relevant to HRC’s strategy. 4 During the period of continuous expansion over the past 30 years, how has HRC changed its strategy? How have its responses to some of the 10 main operations management decisions changed? 6 Reference List 14 How would you define HRC’s operations strategy? List at least three of its competitors. Hard Rock Cafe (HRC) foregrounds the concept called “experience economy” through its operation of cafes around the world. HRC`s operation strategy involves providing customers with a unique “experience” through incorporation of innovation in its operations. The innovation strategy of Hard Rock Cafe is similar to mass customization in context of manufacturing. At Hard Rock, the concept of unique experience primarily deals with offering a dining event in an unparallel ambience comprising diverse visuals and sound. Besides that, the Cafe also provides food items and beverages, which are difficult to imitate anywhere or by anyone in the world (Al-Harbi, 2001). This operation strategy of Hard Rock Cafe is successful in many countries around the globe, where it operates. Numerous restaurants and cafes have surfaced and faded away over time, but HRC has stayed and grown consistently. Hard Rock Cafe does not play the game of serving customers with a better experience than its competitors, instead it aims to develop and function in a different manner. Hard Rock Cafe established its first cafe at the heart of London in 1971, which was the period of British rock music explosion. Hard Rock Cafe, since then, has been continuously serving food, rock music and a unique experience with the steady enthusiasm. Hard Rock Cafe has the highest number of outlets in the U.S. locations, almost a dozen spread across Europe and the rest scattered in other world countries. The global operations strategy involves new construction and investment in leases or remodelling, which require long-term planning and vision, so special consideration has to be taken regarding political risk, economic risk, and social norms in context to Hard Rock Cafe’s brand fit (Archibald, 2003). Although Hard Rock Cafe is one of the most talked about and recognized brands, several strategies are developed to upkeep its image. A special consideration is given to supply chain for the restaurant and the accompanying retail store. About 48% of the revenue of HRC comes from sales of retail merchandise. The Hard Rock Cafe has a well-defined business model, which includes operating almost half of its cafes through franchisee model. The main reason to adopt such a model is presence of many risk factors and obvious differences in business practices and laws in different countries (Eriksson, 2013). Hard Rock cafe also adapts to local social norms and preferences by incorporating local tastes by way of tweaking the menus, thereby satisfying local markets. Since it has been found that 70% of Hard Rock’s customers are tourists, the Cafe has expanded to nearly all “destination” sites of the world. Although HRC has tasted success through this strategy, this has allowed the company to extend operations from one cafe in London to 110 cafes in 41 countries. This fact increases exposure of Hard Rock Cafe to the economic fluctuations of tourist business. Hard Rock Cafe is now opening cafes in non-destination cities and introducing new items on its menu in a bid to normalise demand and safeguard business operations from demand and economic fluctuations. Some of the competitors of Hard Rock Cafe are Landrys, Inc., Planet Hollywood International, Inc. and The Johnny Rockets Group, Inc. Identify the strengths, weaknesses, opportunities and threats that are relevant to HRC’s strategy. Strengths: Hard Rock Café has been in the café business for more than forty years, which in itself is one of the biggest accomplishments for the company and also its strength. It was initiated at London with two men at a single cafe. In these forty years, Hard Rock Cafe has become more or less a household brand name across the world. The Hard Rock Café, which started as a partnership, has transformed into a global corporation with 148 cafes in 47 countries and is still expanding. The Café has expanded its product base to include rock merchandise as well; merchandise is the major strength of the company, which has die-hard rock ‘n’ roll enthusiasts as loyal customers. They purchase rock ‘n’ roll souvenirs from the various outlets as well as collect pins that are different for every HRC outlet location around the world. The merchandise sales help in implementing expansion plans of the company and also create global brand recognition (Cooke-Davies, 2002). Existing sales and distribution networks of Hard Rock Café help to operate at a lower cost, than other cafes with a similar value proposition. Weakness: Hard Rock Cafe is basically located in destination locations across the globe as the organisation primarily targets tourists for its sales. Almost eighty percent of the sales revenue comes from tourists. So, the firm is highly dependent on tourism for earning higher sales and any fluctuations in the tourism sector adversely affect its bottom line. The Hard Rock Café is also concentrated in the United States and the U.K., so any problems that affect economy of these countries is likely to create havoc in the company`s finances and sales figures. The recent slump in the domestic US market has caused many HRC outlets to close (Ward and Chapman, 2003). HRC had to shutdown multiple American cafes because of low sales, but those in international locations have grown continuously.   Opportunities: Increasing international growth through joint ventures has led to high revenues for Hard Rock Cafe. In 2004, Hard Rock Café indulged in a joint venture with Sol Melia and opened the first Hard Rock Hotel. Hard Rock Café has joined hands with Loew’s Hotels to open hotels in Asia. Hence, there is ample opportunity for Hard Rock café to grow internationally and capture the hotel market through its powerful brand and loyal customer base.  Along with hotels, Hard Rock International is also expanding into other businesses in the hospitality sector such as, resorts and casinos (Hardrock, 2014).  Threats: The economic recession that had affected economies worldwide and the cafes that are more affordable than Hard Rock Café pose as threats to the company (Nah, Lau and Kuang, 2001). Due to rise in inflation and weak economy, buying power of the American dollar has greatly reduced. So, an average consumer presently seeks affordable ways to purchase prepared food. An average American individuals’ food budget mostly comprises purchasing prepared foods; so the domestic restaurant industry of the U.S., which includes casual dining restaurants, targets the same market segment. HRC is a high-end casual dining restaurant. The prices of Hard Rock Café are higher than that of other similar restaurants, which offer attractive discounts, specials, coupons and happy hours, targeted toward locals who are look for a bargain. Grocery stores worldwide are also offering large variety of prepared items for consumers who want to indulge in ready-made food items, thereby avoiding the trouble of cooking at home. The take-out and delivery business has also grown from before as well as cater to a large segment of customers who desire to purchase prepared food. With increasingly diversity of cuisines like, Hispanic, Halal, vegan, Japanese (sushi) and Mexican, which are available at affordable prices at take-out outlets, families are able to access greater variety of food items as well as restaurants. This is in turn leading to reduction in sales revenue of HRC, thereby proving to be a major threat for the firm.    During the period of continuous expansion over the past 30 years, how has HRC changed its strategy? How have its responses to some of the 10 main operations management decisions changed? While maintaining constant growth of the company, Hard Rock Cafe has over time improved its operations strategy to near perfection. It has changed its strategy several times in order to keep the company in line with changing consumer requirements and satisfaction levels leading to development of a loyal group of customers worldwide. The customer retention percentage of the company is among the best in the world (Hardrock, 2014). Hard Rock Cafe designs the menu for each of its locations based on local needs and tastes of the people. Hard Rock Cafe has a history of adapting to local cultures and traditions. All Hard Rock Cafes are so designed that they are able to provide visitors with a unique experience in terms of the location. The location selection of Hard Rock Cafes is very critical as the firm has generally and historically chosen tourist destinations for setting up its branches and so, sales have been greatly dependent on tourists. This has led to variation in revenue for the firm due to fluctuations in tourism sector. The company has now started opening Hard Rock Cafes in places, other than tourist locations, in order to overcome this heavy dependence on tourists for enhancing sales revenue. Earlier, the strategy of Hard Rock Cafe was to concentrate mainly upon the US market, but due to the economic recession and possible threat of saturation of the Cafe there, the company had initiated the strategy to expand in newer markets (Schindler and Eppler, 2003). In accordance to this strategy, the company is now opening stores through joint ventures and franchisees all around the world. The company has also improved its supply chain so as to avoid shortage of merchandise or other supplies in all locations of operation. The company has diversified in terms of locations as well as product lines. Presently, Hard Rock Cafe is not only a restaurant where people visit to dine, but is also a complete experience of dining and purchasing merchandise while listening to popular rock music. Hard Rock Cafe`s strategy is based on the fact that around the world, people are seeking a transnational and global experience. Traditionally around 80% of the company`s loyal customers are tourists. Hence, the expansion strategy of Hard Rock Café, which is to extend its frontiers to newer destination or locations, is in sync with efforts made towards increasing brand recognition and revenue. The opening of HRC outlets in non-destination locations has also been welcomed by loyal customer base of the company. Many of the guests collect pins from each Hard Rock Café that they visit, displaying them with pride. Along with expansion to newer locations, Hard Rock Cafe is also standardizing its products and services in an attempt to provide customers with uniform standards of food as well as an environment, unique to Hard Rock café, in certain famous and talked about tourist locations in the world. The company also strives to adapt to local tastes and cultures by adding local delicacies in their menu for providing a truly destination experience to the visitors. Hard Rock Cafe is also trying to implement a mass customization policy, where each café has certain unique features and sell products relevant to its location. This forms a loyal customer base for each outlet of the company. HRC also helps customers feel part of an exclusive group through initiatives like, loyalty cards, rewards for highest pin collectors and so on and so forth (Kerzner, 2001). The company tries to reduce the political risk and economic risk. It also conforms to social norms in order to improve and complement the new international strategy. According to these factors, the company does a continuous brand fitment analysis in every location of expansion across the world. The company has also reduced country-specific risk and global risk through the franchisee strategy (Winter, et al., 2006). Hard Rock Café has changed its music collection, which is played in each of its stores through constant updates in accordance with changing fashion and styles; this has been highly acclaimed by the loyal customers who continue to visit the Café. The Hard Rock Hotels also provide customers with an exotic combination of benefits and services, rendering each visit a unique one. Identify the critical path and its activities for Rockfest. How long does the project take? (Source: Author’s Creation) The critical path is highlighted in red. The minimum time required to complete the project “Rockfest” is 49 weeks. Identify five major challenges a project manager faces in events such as this one. Discuss how these challenges can be overcome. A project needs to be researched and properly planned in order to define its scope, objectives, budget and other significant elements, which are important for completion of any project. All such actions must be undertaken before the project commences. In case the necessary steps are not taken, the project manager will have to face possible risks during the project (Hill, 2004; Schindler and Eppler, 2003). Many other unexpected problems may arise leading to inconvenience for the project manager to continue with the project. In order to prevent such a situation, the project requires to be broken down into smaller modules, which can be tracked effectively and problems arising in a module can be resolved without affecting other modules (Mankins and Steele, 2005; White and Fortune, 2002). One of the problems adversely affecting the project is that of lacking motivation and interest among the team members in order to complete the project tasks and related activities. The team members, who may be highly competent and skilful, lack the morale or interest in the project (Henard and Szymanski, 2001). These team members need to be encouraged towards completing the project. Awarding rewards can be favourable for successful completion of assigned tasks, which can in turn motivate team members. Another problem that a project manager may face is that project tasks may be poorly done, demanding more time, labour and money for the purpose of conducting those all over again. This leads to the project getting delayed, loss of focus and overshooting of budget (Heathcote, 2013). Such may also occur due to inefficient budgeting and lack of clarity in defining and documenting goals. The inability of project manager to communicate project objectives and responsibilities is another major problem, as team members become unaware of the process to follow (Maylor, 2003). Absence of proper communication is another problem affecting a project manager, as team members may not necessarily be able to express problems and challenges that they face while performing activities and tasks of the project (Project Management Institute, 2013). Team members who are not adequately trained to work with Project Management System can be a big problem for project managers (Hauc and Kovac, 2000). The main solution to these issues is inclusion of team members who are adequately skilful and appropriately trained so as to meet challenges and complete tasks assigned to them in a project (Gardiner, 2005; Turner and Müller, 2003). The training of team members should be optimum and must be imparted immediately before the project implementation phase. The members who are trained tend to forget the lessons taught to them after a while. So, if the training is completed too early before commencement of the project, then it is not likely to serve desired purposes (Mendelow, 1991). Reference List Al-Harbi, K. M., 2001. Application of the AHP in project management. International journal of project management, 19(1), pp. 19-27. Archibald, R. D., 2003. State of the art of project management. Bogota, Columbia: Escuela Columbiana de Ingenieria. Cooke-Davies, T., 2002. The “real” success factors on projects. International journal of project management, 20(3), pp. 185-190. Eriksson, P. E., 2013. Exploration and exploitation in project-based organizations: Development and diffusion of knowledge at different organizational levels in construction companies. International Journal of Project Management, 31(3), pp. 333-341. Gardiner, P. D., 2005. Project management - a strategic planning approach. Basingstoke: Palgrave Macmillan. Hard Rock, 2014. Cafes Home. [online] Available at: < http://www.hardrock.com/cafes/ > [Accessed 23 May 2014]. Hauc, A. and Kovacˇ, J., 2000. Project management in strategy implementation-experiences in Slovenia. International Journal of Project Management, 18(1), pp. 61-67. Heathcote, J., 2013. The Little book of project management. Leeds: Leeds Metropolitan University. Henard, D. H. and Szymanski, D. M., 2001. Why some new products are more successful than others. Journal of marketing Research, 38(3), pp. 362-375. Hill, G. M., 2004. Evolving the project management office: a competency continuum. Information Systems Management, 21(4), pp. 45-51. Kerzner, H., 2001. Strategic planning for project management using a project management maturity model. New York: John Wiley & Sons, Inc. Mankins, M. and Steele, R., 2005. Turning great strategy into great performance. Harvard. Maylor, H., 2003. Project management. Essex: Pearson Education Limited. Mendelow, A., 1991. Stakeholder mapping. Cambridge, MA: Proceedings of the 2nd International Conference on Information Systems. Nah, F. F. H., Lau, J. L. S. and Kuang, J., 2001. Critical factors for successful implementation of enterprise systems. Business process management journal, 7(3), pp. 285-296. Project Management Institute, 2013. Project management body of knowledge. 5th ed. Peterborough Project Management Institute. Schindler, M. and Eppler, M. J., 2003. Harvesting project knowledge: a review of project learning methods and success factors. International Journal of Project Management, 21(3), pp. 219-228. Turner, J. R. and Müller, R., 2003. On the nature of the project as a temporary organization. International Journal of Project Management, 21(1), pp. 1-8. Ward, S. and Chapman, C., 2003. Transforming project risk management into project uncertainty management. International Journal of Project Management, 21(2), pp. 97-105. White, D. and Fortune, J., 2002. Current practice in project management—An empirical study. International journal of project management, 20(1), pp. 1-11. Winter, M., Smith, C., Morris, P. and Cicmil, S., 2006. Directions for future research in project management: the main findings of a UK government-funded research network. International journal of project management, 24(8), pp. 638-649. Read More