The Hard Rock Cafe (HRC) was established on June 14, 1971 in London by two American businessmen who love Rock music are Isaac Tigrett and Peter Morton. Hard Rock began its global expansion in 1982, when Tigrett and Morton agreed to develop the Hard Rock cafes in their different parts of the world. They opened the Hard Rock Cafe in locations as diverse as Los Angeles, San Francisco, Chicago and Houston. In 1990, The Rank Group, Plc., a London-based leisure company, acquired and continued expansion of this concept in their geographic territory. In March 2007, Seminole Tribe of Florida buying Hard Rock International, Inc. and other relevant units from the Rank Group and owner of the Hard Rock Cafe until now.
Nowaday, with over 170 locations in over 51 countries worldwide, including 133 cafes and 15 hotels / casinos, Hard Rock has become a truly global phenomenon. Starting from London, England, to New York, Los Angeles, Paris and Tokyo, and still is now Hard Rock Cafe has extended to remote locales such as Kuala Lumpur and Ho Chi Minh … Currently, the Hard Rock Cafe activities in the areas of business such as casual dining in restaurants, casinos and hotels.
This report will critically evaluate the operations management strategy of Hard Rock Cafe and the operations management challenges and opportunities for Hard Rock when considering an expansion of its business into Hanoi.
II. Valuate the operations management strategy of Hard Rock Café.
As professor C.Markides of London Business School says, ” The trick is not to play the game better than competition, but to develop and play an altogether different game”. With strategic differentiation, managers of Hard Rock Cafe make effective decisions in 10 areas of operation management – these are the 10 Strategic Operations Management Decisions. In this section, report will analyze the evaluate the operations management strategy of Hard Rock Cafe as described in the attached case materials
1. Design of goods and services
TrÆ°á»›c háº¿t, các nhà quáº£n lý táº¡i Hard Rock Café luôn luôn ghi nhá»› ráº±ng các sáº£n pháº©m mà há» Ä‘ang cung cáº¥p cho khách hàng không chá»‰ là bá»¯a Äƒn, thá»©c uá»‘ng hoáº·c Ä‘á»“ lÆ°u niá»‡m maf còn là intangibly kinh nghiá»‡m Ä‘áºy Ä‘á» cá»a Rock & Roll.
Các khoáº£n thu cá»a Hard Rock Cafe có khoáº£ng 40% tá»« bán hàng và pháºn còn láº¡i tá»« dining menus, Ä‘á»“ uá»‘ng, khách sáº¡n và sòng báº¡c và tá»• chá»©c các buá»•i hòa nháº¡c rock. Trong thá»±c táº¿, táº¥t cáº£ các Ä‘óng góp vào nhá»¯ng gì mà khách hàng cáº£m nháºn Ä‘Æ°á»£c là “Rock & Roll kinh nghiá»‡m” khi há» sá» dá»¥ng dá»‹ch vá»¥ cá»a Hard Rock Cafe. Sau Ä‘ây, chúng ta có thá»ƒ tháº¥y nhá»¯ng sáº£n pháº©m và dá»‹ch vá»¥ Ä‘á»u Ä‘Æ°á»£c thiáº¿t káº¿ và thiáº¿t káº¿ táº¡i các Ä‘á»‹a Ä‘iá»ƒm khác nhau.
(First, the managers at Hard Rock Caffe always understood that the product that they offer to customers are not only meals, drinks or souvenirs, but also intangibly full experience of Rock & Roll .
About 40% revenue of Hard Rock Cafe from selling merchandise and the rest from the dining menus, drinks, hotels and casinos and organized rock concert. In fact, all contribute to what customers perceive as “Rock & Roll experience” when they use the services of the Hard Rock Cafe. We can see the products and services are tailored and designed in different locations.)
a. Meals and drinks
Hard Rock Cafe building the system traditional menus beside the menu changes regularly depending on the time and place.
With traditional menus, Hard Rock Cafe was almost able to meet the expectations of traditional customers, although they may visit any HCR different in different countries, they also can be used Hard Rock Cafe ‘s familiar dishes. In fact, a Hard Rock Cafe’s customer said that he has visited Hard Rock Cafe in Japan many times during his bussiness trip because it is the only place he can get Mexican food in Tokyo.
Some other menu dishes and beverages regular change depending on the locations and different times through sales analysis and culture in each country, region different. For example, the Hard Rock Cafe in England, though there are still steaks and hamburgers, but the menu substitute beef by lobster and fish because the British are still concerns about mad cow disease.
Because 70% Hard Rock’s guest are tourist, so Hard Rock Cafe has designed a rich system of goods in each region, different country. Hard Rock Cafe ‘s items often rich in variety and unique. Besides, Hard Rock Cafe has developed clubs, forums for members worldwide to discuss trade and other unique goods that they collected from Hard Rock Cafe.
In addition, Hard Rock Cafe also has other services such as hotels, casinos, concerts… Hard Rock Cafe slogan “Love all – Serve all” so regardless of age, sex, rich or poor, class when come to Hard Rock Cafe, all people always feel welcome and service with attitude enthusiasm
2. Quáº£n lý cháº¥t lÆ°á»£ng
Quality is one of the most important factors in all industries and it is not an exception for Hard Rock CafeThey do not even mention the quality in their mottos because for the fact that they see it as the core value of the brand. Quality management is an important factor relate to the success of the Hard Rock Cafe. “Be careful and don’t make a mistake in the first place. If a mistake does occur, correct it before it reaches the customer.”, that is principle each employee has to remember in their initial training.
HCR implement service tenet of “double checking” to minimize errors. In order to implement this service tenet, Hard Rock Cafe Orlando hires 02 extra staff. One to check the quality of food being put into cooking, one to check and compare the order to the servings before before bringing it to the customer. Besides Hard Rock Cafe also careful in selecting suppliers, even they give quality policies with standard indicators that suppliers must meet .
3. Process and capacity design
During 40 years of continuous development, Hard Rock Cafe has developed from a pub just to become a global chain of more than 100,000 meals served each day. Hard Rock Cafe has continued to modify and optimize their process and design capacity. In fact, Hard Rock Cafe was praised in the application of technologies in operation management and their strategic decisions.
4. Local selection.
As we know, 70% of Hard Rock Cafe ‘s guest are tourists, have found it expanding to “destination” cities. Although this strategy has achieved success in the past decades, but the recent economic crisis actually had a negative impact to tourism industry. Therefore, new options of Hard Rock Cafe is locate long-term lease in other cities such as Nottingham, Manchester or Birmingham is not the peak tourist city. This is a wise strategic decision of the Hard Rock Cafe because in conditions of global economic crisis, tourism industry is affected. The strategy above will help Hard Rock Cafe reduce dependency on tourism, and maintain revenue while the tourist industry in crisis.
5. Layout design
Hard Rock Cafe has different designs in different countries, cities and regions. For example, Hard Rock Cafe in Chicago is decorated by a very big electric guitar standing in front of the buiding and most of the chairs are located in a large room while Hard Rock Cafe in Prague, The Czech Republic is decorated by a Hard Rock guitar in the font of a ball. Hard Rock Cafe do not show the same module design of Hard Rock Cafe in every place. Layout design of Hard Rock Cafe flexibly changed based on scale and culture of different regions but basic features of Hard Rock were maintained. It is carefully considered that whether they should hire café shop in a long time, build a new shop or just set up or repair, and how to make it become perfect and efficient.
6. Human resources and job design
Hard Rock Cafe built a specific and unique business culture.
All the employees of Hard Rock Cafe are required to have not only working skills but also the passion of rock music; in addition, their characteristics must be suitable for their work. Hard Rock Cafe implemented a training process permitting an employee to work in different positions, which means that one person can be a server, retailer or even a kitchen coverer.
Hard Rock has policies to encourage internal as well as loyalty of employees, make every condition for employees to be able to develop and become fond of in a long time in every different position. “60% managers of Hard Rock Cafe are promoted from hourly employee ranks”, the above interesting information is a motivation helping not only long-time employess but also hourly employees, part-time employees strive to work with the spirit of passion, creativeness and dedication for their better futures when they become fond of Hard Rock Cafe.
7. Supply-chain management
Hard Rock Cafe has always set the standard for the supplier to ensure the best food sources.
In 2003, HR has implemented supply chain improvement, which helps Hard Rock reduce 44% of store space in North America, 20% of operational costs , improve 22% of service levels, optimized transport cost, distribution network, contract terms and the protection responsibility, improve operational efficiency.
Hard Rock Cafe arranges Stores according to advanced methods, such as Just-in-Time inventory control. The goods are arranged conveniently for getting out to use. Souvenir store with about 6000 pieces of rock ‘n’ roll memorabilia is checked periodically and refreshed in the cycle of 5-7 years.
The good management of supply-chain helps Hard Rock to keep a safe and effective inventory. Food sources for food processing in Hard Rock Cafe are ensured to be fresh, clean and on time.
Hard Rock Cafe applies short-term and long-term forecast to schedule their services. All the computers of Hard Rock Cafe use a common database. This helps system managers define daily sales revenue in each given time in each store of Hard Rock to quickly introduce timely and effective plan for each different store of HARD ROCK CAFE.
Besides, Hard Rock Cafe has also implemented long-term forecast, factors affecting revenue such as seasons, holidays, economic forecast. This helps HARD ROCK CAFE introduce long-term plans.
HARD ROCK CAFE has always conducted periodical surveys to have suitable adjustments. Controlling and maintaining of quality are the keys for Hard Rock’s success. All equipments in kitchens, bars, restaurants or retail shops are often maintained.
Besides, Hard Rock Cafecreated its own website: www.hardrock.com and maintain a weekly cable television program on VH-1. This contributed to develop and maintain HARD ROCK CAFE brand worldwide.
Assessment 2: In light of the above, discuss the operations management challenges and opportunities for Hard Rock when considering an expansion of its business into Hanoi.
Hard Rock Café Ä‘ã Ä‘áº¿n Viá»‡t Nam nhÆ°ng chá»‰ á»Ÿ thành phá»‘ Há»“ Chí Minh. Khi má»Ÿ rá»™ng kinh doanh vào Hà Ná»™i, Hard Rock cáºn pháº£i nghÄ© vá» nhá»¯ng Ä‘iá»u kiá»‡n sau Ä‘ây:
First, Hanoi in particular and Vietnam in general has proportion of young population, they are very sensitive and quick to receive new ones. At Ha Noi, there are a lot of young people love Rock but there is not any a unique and professional cafe-style rock as HARD ROCK CAFE. So the presence of HARD ROCK CAFE in Hanoi will occupy the attention and love of rock fans, this is a source of potential customers and loyal if HARD ROCK CAFE knows how to exploit.
Second, Ha Noi is the capital, the largest economic center in northern of Vietnam. Resident of North and South Vietnam often crowd to Ha Noi with many different reasons: for their business, work, studying … So, if HARD ROCK CAFE is successful at Ha Noi, it would be a solid foundation to expand their business into neighboring provinces and other big cities in Vietnam.
With cultural characteristics unique, HARD ROCK CAFE is one of the first foreigner cafe-style in Vietnam, it will create attraction for everyone who want to enjoy coffee with the new style, the most the young. Besides, HARD ROCK CAFE will have a customers is the European, American …, who has been familiar with the style cafe of HARD ROCK CAFE, is working long term in Ha Noi.
In addition, young and cheap labor is an important advantage. In Ha Noi, HARD ROCK CAFE can recruit young and enthusiastic labor cheaply than other countries. Besides, Vietnam is considered one of the political regime most stable, this brings peace of mind for the managers of HARD ROCK CAFE when they expand its business into Hanoi. The Government of Vietnam has established a system of open-door policy, encouraging foreign investors to invest and develop Vietnam’s economy, create jobs for local people.
However, besides the opportunity, Hard Rock Cafehas to face many challenges when considering an expansion of its business into Hanoi.
First, it is the social risks. People in Hanoi have a habit of enjoying their own coffee. They like to sit in a cafe-street (on sidewalk) with a cup of coffee is cheap, processed according to traditional methods and quick, read newspapers or watch the people passing by, rather than sitting closed room luxury..
Second, not many people spend almost 100,000 VND – a relatively high price compared with the income of people in here – for a cup of Hard Rock coffee, so HARD ROCK CAFE should survey the indicators of living standards of people in Ha Noi to offer reasonable prices . In addition, local people were familiar with the taste of the familiar brand of coffee that they used in a long time as Trung Nguyen, Tay Nguyen, G7 … and will take a long time to accept the new taste from the HARD ROCK CAFE.
Third, models cafe with live music are increasingly popular in Hanoi and its price is different from lower to higher levels with their own style. Rock is a genre not much popularity in Hanoi in particular and Vietnam in general. Most people who love rock are under 30 years old, that is also a challenge for the HARD ROCK CAFE.
Fourth, information systems business in the Viet Nam market will bring limited to the Hard Rock difficulty if they want to research and forecasting for the business. Unlike developed countries, Vietnam unfinished business information systems, so it is a challenge for the researchers of the HARD ROCK CAFE in the process of data collection or market survey and that will affect the strategy and plan of Hard Rock.
Addition, human resources is a challenge for HARD ROCK CAFE. HN have cheap labor market, young, however locals are not familiar with the working style is intense, yet professional and understand the business culture of Hard Rock. So after recruitment, HARD ROCK CAFE probably need to spend more time training before they can do.
In summary, all above factors create not only difficulties but also the opportunity to open prospects for Hard Rock to determine the appropriate plan when considering a business expansion in Hanoi. It’s always a concern for all operations managers to make the right decisions, not only for Hard Rock Cafe.