Operations Management Strategy Of Hard Rock Cafe Commerce Essay Example

offering quality and distinctive food options. The atmosphere at HRC is filled with music memorabilia, large video screens, and engaging staff who can share stories. According to a study by Heizer & Render (2010), any rating below 7 out of 7 for food and service is considered a failure at HRC, indicating that the cafe consistently exceeds expectations in terms of quality.

Additionally, as a global symbol of rock 'n' roll culture, Hard Rock Cafe plays an important role in preserving significant artifacts within the music industry. Their collection includes classic guitars, other instruments, posters, costumes, lyrics sheets, photographs etc., creating a "living museum" atmosphere within the restaurant.The adjustment of menus to cater to local tastes not only enhances the dining experience but also attracts tourists from around the world. The use of boxing in merchandise packaging serves as a tangible reminder of the product and its logo, reducing perceived risk and increasing repeat purchases. HRC strategically displays its logos on city center commercial buildings, such as Kumho Plaza in HCM City, to enhance prestige and public visibility. In today's rapidly evolving economy where job changes are common, Fishman highlights the importance of talent and emphasizes that human resources play a crucial role as an enterprise's most valuable asset that can make a difference. HRC has successfully utilized their human resource management strategy in recruitment, training and development, and compensation to gain competitive advantages. The use of websites and homepages for recruitment purposes has significantly increased. HRC can take advantage of this trend by using internet recruiting on their corporate website www.hardrock.com which provides various information about the company including its history and human resource details.

An advertisement on the homepage states "This place is radical...Why? Because you can be who you are - because who you are defines you...This isn't just a job;"HRC's mission is to encourage potential candidates to embrace their true selves within the company, making it a way of life. They have achieved workforce diversity in terms of age and cultural background as part of their corporate growth strategy. This diversity contributes to increased productivity, a competitive advantage, and a wider pool of job applicants while also shaping the unique culture of HRC. The service staff at HRC plays a crucial role in representing the brand and impacting customer loyalty directly. Therefore, recruiting the right individuals for these positions is essential. Jim Collins challenges the notion that "people are your most important asset," instead emphasizing the importance of having the right people. Most of HRC's staff consists of front-line employees who anticipate and meet customer needs, personalize service delivery, and build strong relationships with customers to foster loyalty. When selecting staff members at HRC, critical job analysis skills such as passion for music, storytelling ability, positive attitude, and brightness are carefully considered. Once recruited, HRC prioritizes training and development programs to enhance employee competence and organizational performance significantly.New hires at HRC undergo an orientation program that includes a two-day training course to learn about job responsibilities, company history, policies and rules, compensation and benefits, corporate culture change management, and socialization. The unique and innovative pre-opening training at HRC covers various areas such as CD coverage in the kitchen, research, and customer service (Heizer & Render, 2010). This approach helps new employees acquire knowledge and promotes a culture

of learning. In addition to ongoing employee training opportunities for all staff members, there is also a 12-week corporate manager training program focused on improving interpersonal skills, technical skills, product knowledge, service understanding, personality traits awareness and professionalism. Through this comprehensive training program,HRC ensures that its employees are highly skilled experts with a passion for music. Career advancement opportunities through internal promotions are abundant at HRC with 60% of managers being promoted from hourly positions. Furthermore,HRC empowers its staff by granting them rights and significant authority which fosters self-motivation among employees leading to effective decision-making and generation of innovative ideas. This empowerment strategy plays a crucial role in differentiating HRC in the competitive business environment where unpredictability is commonHRC prioritizes employee empowerment, motivation, and autonomy to drive effective performance and generate innovative ideas. This allows staff members to find solutions without supervisor permission, resulting in efficient customization of service delivery and increased customer satisfaction. Compensation is crucial for HRC's successful workforce management as it fosters a sense of belonging and recognizes employees' contribution as a source of fresh ideas. The company demonstrates its commitment to employee satisfaction through comprehensive compensation packages that promote equality between part-time and full-time employees. Moreover, HRC encourages volunteer work to strengthen community connections and values the work environment as an integral part of the overall rewards system. (Heizer & Render, 2010, p.445)The working environment at HRC is characterized by flexibility in scheduling, which has been successfully implemented by HR General Manager Ken Hoffman (Heizer & Render, 2010, p.647). This approach not only allows employees to have more time for their families and communities but also provides opportunities for continuing education

for part-time workers like students. The overall happiness and gratitude of employees contribute to employee satisfaction, low turnover, and increased productivity at HRC. The distinct culture at HRC creates an enjoyable, healthy, and supportive environment that encourages acceptance of diversity and individuality, thereby significantly contributing to high employee commitment. Additionally, HRC utilizes a "ranking" system based on seniority to provide feedback to employees, highlighting their significance while reducing turnover and increasing productivity.
In terms of location decision-making, HRC follows a multi-domestic strategy that decentralizes operational decisions to each country. This enables the company to better respond to its tourist customers in specific regions. Through franchising, HRC has expanded globally in major cities across Europe, Latin America, and Asia without requiring extensive capital investment. Franchising aligns well with HRC's growth-oriented strategy as it ensures customer focus and maintains high service quality.HRC in Hanoi faces various challenges and opportunities in its operation management. One opportunity is that by offering long-term contracts to franchisees, HRC can achieve greater scale and establish a more recognizable brand name. According to Lovelock & Wirtz (2004, p.194), franchising allows HRC to decrease costs, manage political and cultural differences, and benefit from local knowledge. However, challenges may arise such as giving up control of the delivery system or disputes with franchisees seeking independence without HRC's support.

Moreover, the decision on location for Hanoi is influenced by external factors including politics, economics, social-cultural norms, technology trends, legal requirements, and environmental considerations. The site must be centrally located due to its large population, dynamic economy, various sports and festival events, hotels and entertainment options,and convenient transportation. This attracts a significant number of tourists (Heizer & Render 2010).

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conclusion,HRC has gained global recognition as one of the most renowned brands.It has achieved numerous successes like high customer satisfaction rates, low turnover rates,and a unique culture.However,it also faces risks such as contract disruptions with franchisees,difficulties in presenting product warranties,and accurately predicting real customer demands.To create a business plan for Hanoi, Hard Rock Cafe (HRC) needs to evaluate the opportunities and challenges it will encounter in its operations. The PEST analysis is considered the most effective approach for this assessment, as it examines the political, economic, social, and technological factors of the external environment (Harrison, 2009, p.14).

In Vietnam, there is currently political stability maintained by the Vietnam Communist Party. Additionally, the government actively promotes foreign investment within the domestic market. The country's economy has been steadily recovering with remarkable achievements. From January to September 2010, there was a 6.52% increase in GDP compared to the same period in 2009. During this timeframe, particularly within tourism and service sector industries, there was significant growth with a 25.4% increase in retail sales of consumer goods and services. Furthermore, tourism revenue experienced a rise of 37.4%, while international visitors increased by 34.2% during the first nine months of 2010.

However, Vietnam does face challenges such as inflation and high interest rates that contribute to an escalation in material prices.
The text discusses Hard Rock Cafe's plans to expand globally by entering Hanoi. It emphasizes the importance of conducting a PEST analysis to identify opportunities and challenges. The text highlights Vietnam's political stability under the control of the Vietnam Communist Party, which promotes foreign investment. It also mentions that Vietnam's economy has been steadily recovering with impressive achievements, particularly in the

service sector, specifically tourism.

However, Vietnam faces obstacles such as inflation and high interest rates leading to increased material prices. The General Statistic Office (GSO) reported an 8.64% increase in the average Consumer Price Index (CPI) from January to September 2010 compared to the same period in 2009. This rise presents a significant challenge for HRC and negatively impacts many companies due to increased competition.

Currently, HRC faces strong competition from two main rivals: My Way and Highlands. My Way is known for its high-class and luxurious brand with five strategically located stores in beautiful areas of Hanoi. What sets My Way apart is its modern European interior design, impressive lighting system, and top Vietnamese designers' facilities. Additionally, My Way offers a wide selection of quality groceries, soft drinks, and an impressive collection of 100 different types of beer from around the world.Highlands Coffee offers customers a trendy and delightful coffee experience, blending modernity with traditional Eastern and Western styles to create a unique atmosphere. The cafe culture, quality service, and diverse product offerings allow customers to immerse themselves in a dynamic and culturally rich environment. When considering social factors, it is important to note that the population rates have undergone significant changes. In 2010, the estimated population was 86.97 million; however, a majority of high-earning individuals are concentrated in larger cities like Hanoi and Ho Chi Minh City. Research shows that approximately 77% of individuals aged 15 or older were actively participating in the workforce in April 2010. Education plays a crucial role in Vietnam's development, with an increasing number of Vietnamese individuals pursuing higher education. During the 2010-2011 school year alone, there were 1,589,000 students

who passed entrance exams for all three levels – representing a 7.2% increase from the previous year – indicating a larger pool of skilled employees for companies in the future. Additionally, employees' standard of living has improved as wages increased from a minimum of 650,000 dongs per month to 730,000 dong per month.Alongside the growth of the economy, consumer brand awareness has increased. Furthermore, young people's lifestyles have changed as they now prefer spending leisure time at cafes or seeking unique experiences rather than common ones. This shift is supported by a rise in part-time job opportunities for students. Technology also plays a critical role in this sector, with the availability of Internet leading to the establishment of numerous Wi-Fi cafes and online recruitment becoming popular for finding candidates.

Considering HRC's expansion into Hanoi and conducting a PEST analysis to analyze its external environment reveals various operational opportunities and challenges. In Hanoi, there are opportunities for differentiation from local competitors like My Way and Highlands Coffee by providing customers with a "differentiated experience." Additionally, HRC can take advantage of changing music preferences among young people to attract more customers. Moreover, HRC distinguishes itself by offering a unique local menu that combines Vietnamese and American cuisines.

Regarding human resources, the Vietnamese social-cultural background is appealing for implementing HRC's human resource strategy. The large population and rich labor force provide a vast pool of applicants and diverse employees in terms of age, geography, and social position.Moreover, the trend towards higher education has opened up opportunities for HRC to hire highly skilled employees. The popularity of internet recruitment also helps in reducing human resource costs and expanding the pool of

potential candidates. In terms of location, the political stability in Hanoi provides favorable conditions for HRC to implement its franchising strategy in the city. Additionally, Hanoi is a renowned tourist destination with a significant annual increase in international and regional tourists, particularly during festivals and sports events. Particularly, the city center of Hanoi is an ideal spot for HRC to establish a new coffee shop due to multiple reasons. During holidays and festivals, young individuals often gather in Hanoi Centre. As a start-up company based in Hanoi, HRC faces various challenges and threats. The consideration of a reliable transportation system is one crucial factor essential for future growth at HRC. Employment and educational opportunities are among the main attractions in Hanoi Centre; however, factors like high inflation and interest rates pose threats as they lead to increased production costs for materials such as coffee and agricultural products. Consequently, it becomes difficult for HRC to compete with established coffee chains like My Way and Highlands Coffee.Intense competition within the industry presents challenges for recruitment, employee commitment, and high turnover rates in HRC. Additionally, new employment laws have an impact on compensation policies, including minimum wage requirements. Careful analysis of location is crucial due to difficulties arising from the presence of restaurants and nightclubs as well as high real estate prices. Moreover, traffic congestion in Hanoi city significantly affects customers' perception negatively.

Furthermore, HRC aims to become a successful cafe by implementing Andrew Harrison's (2009) multi-domestic strategy that acts as a cultural bridge between different global cultures. Location decisions for HRC are greatly influenced by competitors' distribution networks.

Various references were consulted for this information, including works by Christopher

Lovelock and Jochen Wirtz (2004), Gerry Johnson, Kevan Scholes, and Richard Whittington (2010), Jay Heizer and Barry Render (2010), Jim Collins (1999), Seeker, Perreault, McCarthy, and McGuiggan (2006), R. Wayne Monday et al. (2002), Thomas L. Wheelen and J. David Hunger (2004). The General Statistic Officer's report from 2010 was accessed via the website http://www.gso.gov.vn/ using the hypertext transfer protocol on October 1st of that year.