Hard Rock cafe, founded in 1971, applies the concept of "experience economy" to its global business, with a focus on custom meals, rock music, and targeting tourists. However, the economic crisis prompted Hard Rock to broaden its customer base by targeting local customers. In April 2002, Hard Rock Cafe Nottingham opened, highlighting the city's growing importance as an entertainment area. However, to the surprise of many, Hard Rock Cafe Nottingham closed in November 2007, along with cafes in Birmingham and Leeds, England. While no official explanation was given by Hard Rock's management, it is speculated that the closures may be due to the cafes in non-tourism cities not aligning with the global strategy of becoming a "prime entertainment area".
When the global economy recovers from crisis, Hard Rock will have more incentives to strictly pursue the successful "Experience ec
...onomy" that allowed the company to expand from 1 cafe to hundreds in 57 countries worldwide. Another reason could be that the profits of the Nottingham, Leeds, and Birmingham cafes did not meet expectations. Additionally, there may be plans to open another Hard Rock cafe/bar in a nearby area. Regardless of the cause, the closure of these cafes reflects a form of disappointment.
In brief, Hard Rock Cafe's global strategy is effective in stable economic conditions but struggles during economic fluctuations. The impact of an economic crisis affects all businesses, but Hard Rock is particularly affected. The opening and closing of Hard Rock cafes in certain unconventional tourist destinations in the UK has highlighted a weakness in the strategy. This weakness can be attributed to problems in long-term forecasting and location selection in operations management. Although Hard Rock ha
expanded its business to include bars, casinos, and hotels, this document focuses on the original core business of cafes. One key aspect of the Hard Rock Cafe's strategy is its front office operations. The main products offered by the cafe are classic American food and drinks, accompanied by merchandising items such as Rock t-shirts, bags, guitars, and pins. The services provided include personalized meal service and live music concerts with a unique visual sound experience. All of these offerings take place in a spacious venue with several hundred seats, a stage, and a shopping area where customers can purchase Hard Rock gifts. These aspects of the strategy create differentiation in the market.
The food, drinks, and services of Hard Rock Cafe must always come together because they all create a special atmosphere for customers. People come to Hard Rock not only for the meal but also to enjoy the music and experience the ambiance there. Customers can have that feeling at the first look of the cafe's layout design from outside in. The combination of black color tone, lighting, and rock-style decoration at all cafes of Hard Rock allows customers to recognize its brand. The kitchen, bar, stage... are arranged in an appropriate order so that wait-persons can serve customers conveniently, and customers can view the stage clearly.
Hard Rock Cafe prioritizes flexibility and quality over speed, price, and dependability, according to the five performance objectives[3]. The cafe customizes its menu to cater to local tastes, demonstrating its flexibility and respect for the traditions and culture of the locals. This can also be seen in the layout design of their cafes.
Another example of flexibility
in catering to local preferences is KFC. When entering the Vietnam market, KFC includes traditional Vietnamese food such as cooked rice and soup, alongside their signature chicken dishes.
KFC needs to find a spacious venue to accommodate all customers as they are required to sit at tables and eat, unlike in England where customers can stand or lean on bar chairs and place their chicken on a table bar. Another issue arises if Hard Rock decides to customize or enhance the menu to suit local preferences: who will cook the new traditional dishes and how? Should Hard Rock hire new cooks or allow the current chef time to research and experiment with these new dishes? However, having a large capacity will be pointless if more than half of the hundred seats remain empty.
The issue of higher initial investment in labor and facilities such as chairs, tables, and decorations is a problem. These resources are not fully utilized in terms of productivity. Additionally, the selection of a central location is a challenge for both sides. While central spaces can be expensive, if the location is not fully and efficiently used for service, it results in wastage. Hard Rock Cafe excels not only in product differentiation, services, layout design, and capacity but also in their efficient management of human resources, scheduling, and supply chain. Applicants undergo careful selection and training before formally joining the company.
They all must enjoy and together bring a fun, healthy, nurturing environment into Hard Rock Cafe culture. The unique culture and work environment contribute to the low turnover of hourly people (Heizer ; Render, 2010). This human resources strategy not only creates work motivation
for staffs but also secures human resources. The only drawback is that Hard Rock trainers must spend more time interviewing and training new staff compared to training activities at other cafes. Scheduling and forecasting are made more scientific with the help of software and computer systems.
However, it seems that long-range forecasting for setting capacity plans and intermediate-term forecasting for locking contracts with suppliers are insufficient for Hard Rock. As a multinational corporation, Hard Rock needs to consider and forecast global factors such as foreign exchange rates in the mid-range and fashion trends in the long-range in order to better prepare for merchandising gifts at Hard Rock Cafe. In terms of the fluctuation of foreign exchange rates, Hard Rock may need to reassess the supply chain for certain products. As for merchandising gifts, instead of currently importing them from China, Hard Rock might consider purchasing them from local manufacturers to mitigate exchange rate risks.
In conclusion, Hard Rock Cafe has expanded its business into hotel and casino operations, which may not be well-received by its existing customers. They may not be enthusiastic about this new direction as it deviates from the traditional cafe experience they associate with Hard Rock. Particularly, music lovers who seek out the unique atmosphere and sound of Hard Rock may feel displeased with this mixture of different offerings. It is also possible that someone who only knows about Hard Rock as a casino may form a negative impression and overlook the cafe aspect of its brand. While the addition of a casino and hotel can potentially boost the promotion and advertisement of the cafe, there is also the possibility that it could have
an adverse effect on its overall image.
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