Hard Rock Cafe is one of the famous brands around the globe, it has a very high rate of brand recognition worldwide, at 92% is one of the highest in the world (Jay Heizer – Barry Render ) because of the strategic management of their activities. In this paper, I am arguing some of the 10 strategic decisions that Hard Rock Cafe has gotten right to make it become one of the most successful companies in the service industry.
Hard Rock Cafe has wide product categories such as cafe, hotel, casino, live music venue and Rock Fest concert. This sets Hard Rock firmly in the service industry. Especially , the products of Hard Rock Cafe is a combination of an American-style restaurant with live music space Rock ‘n’ Roll with the concept of living museum of rock music(Jay Heizer – Barry Render ). A cafe with a “difference” is the Rock Collection including costumes, musical instruments, the music manuscripts, music, souvenirs of a series of famous names autograph Jimi Hendrix, John Lennon.. and later, Eric Clapton, Madonna and numerous other names, making the “living museum” Hard Rock has been updated and attractive . The rock fan and adherents of music is hard to resist the enthusiasm feeling when touching memorabilia of the famous singer in the world famous .” Hard rock cafe will showcase a collection of unique music, including musical instruments and costumes of the legendary artist and contemporary Rock’n’Roll favorite worldwide. Designers own Hard Rock Museum, Giovanni Taliaferro, will personally design the exhibition as well as memorabilia to choose and respect the beauty of the Hard Rock restaurant in Saigon. You can own eyes, hands touching the clothes of Rob Stewart, the group’s forum Scorpion, worn by Madonna or Elvis Presley, performed by Shakira dress” (Hard rock café Hochiminh city). In Hard Rock Cafe ,Customers enjoy the favorite food in American style with the highest quality from the menu of Hard Rock, such as bread Burger Hard Rock’s Legendary, the barbecue Smokehouse, etc … Besides being the unique drinks won many awards from the Hurricanes and Margaritas to non-alcoholic drinks are favorites such as the Alternative Rock category. All are served in souvenir glasses of Hard Rock Café. Cocktails and dishes here are unique animals on the walls of the century (Hard Rock,2010).Hard Rock Cafe do menu changes, adjusted for each region, this is necessary as eating habits of each location there is a difference, for example in Islamic countries, menu should not contain with food source pork origin, and beef origin in Hindu countries like India . Caring Kids customers , Hard Rock Cafe has special menu for this age from Cheeseburger, beverages to Hot dog “Kids are an important part of our fan base and we want to ensure that their Hard Rock experiences are memorable -from the food and drinks, to the memorabilia on our walls, to teaching them about saving the planet,” says Sean Dee, Vice President and Chief Marketing Officer, Hard Rock International. “It is important to educate children, not only about the history of music, but also about the environment and how they can help make the world a safer, healthier place.”(Hard rock kids menu). To have a exciting musical space, Hard Rock is using top rock bands “topped” in local and other famous guests. “In terms of attracting local audiences, we will promote both local and international acts, and really draw them in.” Indeed, with a mission to “spread the spirit of rock n’ roll by delivering authentic experiences that rock,”, (THE WORD Magazine, 2009). The Name of Hard Rock Attracts international talent of the bands that will come from Britain, America, Europe, Australia and Asia. Besides, the use of famous singers and bands of local as well as a method PR and entice customers.
Hard Rock Cafe design products closer with consumer trends overcoming the boundaries of products by industry and type. So a Hard Rock Cafe is a mixture of experience, style, entertainment factor, awareness of the share, is ultimately stored memories . To create an unforgettable impression for customers, which is the method to boost sale and service , Hard Rock Cafe use their own special style, arranging the facilities like restaurant, bar, a stage following science and style of hard rock , The systems of lighting, sound, screens, contemporary music and circulation plans are designed to show memorabilia and expose merchandise to customers . Retail shops – Rock Shop, integrated into rest . Hard Rock Cafe is owner’s vast collection which includes more than 1000 rock and roll memorabilia , valued at $ 40 million US dollars (Jay Heizer – Barry Render ). This collection is changed exhibits around the world in its cafe to make atmosphere in Hard Rock always new – fresh.
The total quality is very important to support the goods and services of Hard Rock. It pays a lot of attention on researches the foods and applying the research to operation. The Surveys about quality of product are running continuously to find out what ,where, how the errors occurring then after Hard Rock Cafe could correct. Hard Rock conducts the analysis, review, test of products’ menus ( Foods, musicâ€¦) via POS (Jay Heizer – Barry Render ) to adjust and modify the menus from classic American according to each locality, seasonalityâ€¦ with the aim to manage the high quality with high acceptability . All products are very detailed and clear format for creating a set of common factor show in anywhere that Hard Rock locate, along with certain content of local factors by considered in harmony . Beside, friendly staff, comfortable (free dress style) and in the spirit of “love all, serve all”, plus exciting musical space rock band “topped” rocker and local guests that make Hard Rock Cafe is place for everyone to enjoy. The customers also are a member of the overall hard rock, creating a style for Hard Rock.
As well as all other economic sectors, Hard Rock Cafe will also need a appropriated location for activities but with a special interest choices than ever .Location has to be chosen carefully as it could make or break the business strategies so it is a major long time decision .So ,Responsible people will design checklist to get the mark from categories ( that might include subcategories) in the global view then . The most important items of the elements of the tourism market, growth, population age and gender, income, education habits, preferences, infrastructure, service, practices, and particularly, the real estate market, the stability of policies and political , competitiveness on the field activities of the business very considered and carefully evaluated(Jay Heizer – Barry Render) . August 2007, I had the first chance to HRC in Bali – Indonesia. Located in the heart of the tourist island, visitors easily recognize the HRC at first sight and as an intangible appeal that most of them, want to explore HRC. From 19 o’clock , it is too early for a relaxing and fun evening , each line of people, mainly tourists crammed to the HRC . OH.. it is good business. With 70% guests of HRC are tourists (Jay Heizer – Barry Render ),this evidenced the strategic calculations of the HRC on the location, where tourists, people will not really hesitated to spend for their trip, the major source of income for all services associated with tourism including HRC . This strategy have been shown since 1988 when Hard Rock Cafe moved its World Headquarter to Orlando, Florida in 1988 which is a example ,Orlando is a major tourist destination of US ,Over 48 million visitors came to the Orlando region in 2004(Orlando,2010). On the other hand, HRC is also susceptible during the world economic conditions decline, tourism was severely affected. So ,the locations strategy must also change in order to the business gradually less dependent on tourists. The factors such as demographic, political risk real estate market â€¦of place become very important in the development and evaluation of business scenarios. When studying about the field of population, the percentage of young professional people with high incomes are set into the view. They are people who have needs for entertainment, like spending and self assertion . The stability and transparency of the real estate market must be taken into account when deciding to buy or lease a business location. Besides a locations to put the cafe as well as carefully elements to consider, which is convenient for travel as well as shopping and entertainment areas, office and hotel should be considered. HRC in Singapore is an example, with the stability and high transparency in areas such as politics, finance, real estate market, with convenient transportation , Singapore is also a tourist center and shopping region.
Human Resource is always a complicated aspects for every organizations . In Hard Rock Cafe Human Resource management plays very important role , Hard Rock Cafe considers employees to be the central to conduct training. All employees are trained in the first two days , to help employees improve personally and professionally. The trainings continue in Hard Rock Cafe at anytime and anywhere. Hard Rock Cafe builds the culture of firm via Hard rock value. Motivate by outstanding pay and benefit , beside also promote competent employees to higher position . Hard Rock Cafe always is looking for employees who like to server , to be passionate about music and conveying the Hard Rock Cafe experience to customers.
Conclusion: The above are my assessments of some of the strategies of HRC, which may have a few points that may be not describe all the deep strategies of the HRC, but in general they can clarify the truly phenomenon of HRC, that was only a small pub in London the year 1971 , till today , it has over 169 venues in more than 51 countries around the world, including 133 cafes and 15 Hotels/Casinos. (Hard Rock , 2010)
Task 2: In the light of the above, discuss the operations management challenges and opportunities for HRC when considering an expansion of its business into Hanoi.
From the evaluation opinions above, I try to discuss the opportunities and challenges in the review to open the business of Hard Rock Cafe in Hanoi, Vietnam.
-Franchise : As the strategy of Hard Rock Cafe is franchise to reduce the risk factors and differences in business operations and employment law in local .The franchise would be carried out for HRC in Hanoi. Hard Rock Cafe Hanoi becomes a part of the most famous successful internationally brands in the world. The primary advantage is those the Hard Rock Cafe Hanoi inherited the entire development process, training process, adverting & marketing. Hard Rock Cafe Hanoi has the right to be leased the famous memorabilia from HRC, are maintaining business standards at all times, assigned operating supervisor, audit schedule, and annual operational reviews(Hard Rock,2010). Hard Rock ‘s latest technology in operational such as analysis, forecast and synthesis of information relevant to the job also applied for Hard Rock Cafe Hanoi .I make sure, Hard Rock has no rival in the world because no models are exactly it. If broken down by segment restaurant food, they also like the restaurant in the hotel. But this restaurant does not have characteristics like Hard Rock. All are to express the Soul of the Hard Rock at Hard Rock Cafe Hanoi.
-Human resource: The Source of cheap labor with the characteristics of hard working , smart and dexterity . Hard Rock Cafe Hanoi would have part time staff from huge of student from the university in Hanoi. Students have certain knowledge about music and foreign languages and especially, they willing to do the part time job in special place like HR.
– Bright economic situation: Inflation in 2010 is estimated about 10% (ADB-Vietnam, 2010), as too much of money supply in 2009, the devaluation of VND, and the expected increase in economic activity global commodities prices in 2010. In the case of monetary policy and tight fiscal year, inflation could fall to around 8% in 2011.
– Population: Hanoi ranks second among the country’s most populous cities with 6.5 million people(Hanoi,2009) with Median age about 27.4 years and Age structure 15-64 years: 68.3% (CIA fact book/Vietnam , 2010). Hanoi is a center of culture, politics, economics, home to many Head offices, many Universities and is an important tourist destination in Vietnam. Those are a very important point because the young population , concentrated in the capital, is an advantage to enhance business of Hard Rock Cafe Hanoi.
– Growth: Hanoi determines to achieve seven-fold increase in per capita income in the next 20 years from US $1,700 in 2009 to US $12,000 in 2030 (Hanoi, 2010). And in 2010, the capital city’s GDP growth is estimated at 11 percent and per capita income is around US $1900 (Vietnam ,2010) pulsing with the recovering Remittances inflows, in 2010 is expected to reach $ 8 billion, up 25.6% over 2009 ,according to statistics from the State Bank ( SBV,2010), FDI inflows into Vietnam will recover, due to global financial conditions improveâ€¦.So, Private consumption growth is predict to get support from now to future. Hard Rock Cafe is the restaurant food model high-class entertainment, not to appear as a new market early, but when the market had changed so much better, income and needs of Vietnam people now have another. They accept new and higher requirements for quality.
High investment: The franchisee has to invest an estimated capital of about from 3 to 5 million U.S. dollar, amount of foreign currency is not small in fluctuations of exchange rate as the present. From Nov. 2009 to Aug. 2010 the Vietnam dong (VND)was devalued three times, total of about 11% against the US dollar (ADB-Vietnam, 2010). VND devaluation would make the dollar appreciate, causing the price of input materials to rise, increasing production costs and selling prices. .Fluctuated exchange rate is not as important as the difference between actual (21.500 vnd/1usd ) and prescribed(195.00 vnd/1usd).Enterprises who buy dollar should pay for the difference is about 200 points, the difference in treatment is difficult to be accepted by tax authorities. Company need methods to solved this problem by using of foreign exchange trading methods (Spot, forward, option) to rationalize the cost.
– Rising interest rates : Commercial banks pushed lending rates above 15% sometimes to 17% ,when State Bank of Vietnam removed interest cap on medium and long term loans in Feb 2010 (ADB-Vietnam, 2010) . In the short term, The consumption and domestic production tend to be decreased, but the question is how long? Therefore, it affects the work of the Hard Rock Cafe Hanoi
– Real estate market :Vietnam’s real estate market would maintain strong growth and prices would continue rising as the housing needs of the people are increasing, growth is still increasing (Vietnam real estate prices,2010). Hanoi real estate market is the most complicated city, carries more risk and opportunities. With prices so high, the purchase of a place is not possible with Hard Rock Cafe Hanoi. Therefore, selecting a suitable place to lease for Cafe is a relatively difficult problem. For long term of business ,The place should be located near major luxury hotels ,where have many tourists , near downtown, where has many buildings, offices, be convenient for travel, with available widely car parking. In the condition of retail space market is forecasted to grow in coming years, The high-class retail space rents are generally around $100-150 per square meter depending on locations and the retail space rents for grade B will be about $50-80 per sqm depending on locations (Hanoi’s retail space market to grow) so Cafe has to spend a relatively large amount of rent. Although per capita increase recent years, but generally not high. there are not too many people with high incomes to be able to be serviced by the Cafe . Therefore, the size of cafe must be considered but still there is space for next expanding step in the future
Current, Pico Mall ( Pico,2010) and Royal City (Royal City,2010 ) are the ideal location where can be considered for selection the most notable because of their location close to the downtown .
-Tourist : Tourism is expected to increase because the World economic situation of the industrial economy improves. It roses by about 35% to 3.4 million in Jan – Aug from year earlier (ADB-Vietnam, 2010). In normal conditions, foreigner tourist to Vietnam around 4 m, it is still very low when compared to other countries in Asian such as Malaysia – 20 million, Thailand- 14 million, Singapore – 7 million in annual ( UNWTO, 2009).Because 70% of hard rock’s guests are tourists(Jay Heizer – Barry Render ),more caution should be paid and when number of visitors, who like to return, is declining.
– Competition: Hard Rock is an expensive brand, with luxury segment, it would not have potential competitors in Hanoi? Attracting customers from the current market is difficult job. Local customers are using services such as the familiar chain of Highland, Trung Nguyen Cafe to enjoy the traditional tastes of Vietnam. Lessons from the Highland is useful for business. Highland is now having the chain of Cafe shops in beautiful positions in Hanoi and major cities with the objective of serving mass. But apparently, only those with middle income and above can step into Highland. Cuisine of Hanoi also has the style to be care. While most people enjoy a beer with Hanoi ordinary restaurant chain, the class is the middle income range enjoyed Legend Beer with German style , Hoavien with Czech style. This place attracts a huge number of people at festivals and sporting events like football,Aiad, Olympic â€¦ the guests also enjoy the typical food with special beer , music show ,sporting events that are reported directly.(Legend- Hoavien ,2010).