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Case Study Week 1

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Hard Rock Café Case Study
GSCM-206 Managing Supply Operations

1.
Identify the strategy changes that have taken place at Hard Rock Café since its founding in 1971.
Hard Rock Café is a globally recognized brand. Since its founding in 1971, Hard Rock Café has made continuous improvements and upgrades to bring the brand to where it is today, changing with the times and markets. Hard Rock started as a London Café serving classic “American” food and eventually became a “theme” restaurant chain selling memorabilia and souvenirs in tourist destinations. From there the company transformed by adding stores, upgrading menus, moving to places that were not, at the time, tourist destinations, and most effective of all, they began playing live music and hosting rock concerts, adding to the overall customer experience.
Hard Rock changed dining by making it an “experience”, an event that includes a unique experience not duplicated anywhere else. To create this unique experience, Hard Rock has invested millions of dollars into creating an acoustic and visual scenario for their customers. They also introduced into their “experience” concept their own brand merchandise, souvenirs and products, which is unique to each location which in turn provides a greater income to the company.
Hard Rock is known for its museum-worthy, and quite extensive amount of Rock N’ Roll memorabilia and merchandise. Today, its memorabilia collection is estimated to be worth approximately $40 Million, with each restaurant rotating its collectables to keep a consistently fresh experience for guests. Thus, tracking these tokens of Rock N Roll history and experience is very important in their operations, though their own brand merchandise accounts for 48% of the company’s sales. Hard Rock Café puts a high value on experience which is very apparent in their new construction, leases and remodeling investments.

2. As Hard Rock Café has changed its strategy, how has its responses to some of the 10 decisions of OM changed? * Design of goods and services * Hard Rock Café decided to put more value on local taste, hence their customized menus. “For instance, Hard Rock focuses less on hamburgers and beef and more on fish and lobster in its British cafes.” Each meal goes through design, then testing and evaluation to ensure they deliver a distinct Hard Rock experience. “As an average customer only visits Hard Rock Café once a year, the quality must be exceptional every time.” * In addition, satisfaction and quality surveys are completed regularly to monitor and enhance customer experiences at the restaurant. Hard Rock Café makes dinner an experience, the total experience is its edge over would-be competitors. * Managing Quality * “Each item on Hard Rock’s menu must receive a seven out of seven on quality surveys otherwise it is a failure.” A strict quality standard such as this requires them to fully review their menus and conduct research to guarantee their customers a world class experience with the high quality meals the café is known for.

* Location Strategy * “70% of the Café’s customers are tourists. Thus, decline in tourism has an adverse effect on its business.” This negative impact however created a positive opportunity for Hard Rock to develop in non-standard tourist destinations to enable and drive growth, even in a time of economic uncertainty. “Repeat business from locals will make them less dependent on tourists” and establish a new market altogether. * Layout Strategy * Hard Rock Café maintains attractive aesthetics within their restaurants fit to local taste. Lighting, sound and music, among other things, are important considerations in their layout and decorative decisions. Having no cafes alike creates its experience differentiation strategy. Operations managers effectively layout their kitchens to ensure they are “serving hot food hot and cold food, cold. Additionally, the restaurant and bar layout are customized to guide the circulation of customers to memorabilia and merchandise.” Their objective being, to persuade customers to buy souvenirs and create an overall positive brand experience that makes visitors want to return. * HR and Job Design * Employees are the foundation of Hard Rock’s success. The Café prides itself in having effective and applicable training for all employees. Their belief being, to always keep employees motivated and well-supported ensuring that they can deliver good service with a smile. Its employees must adhere to Hard Rock’s core values, which you may expect to be, a passion for music and service. * Each location, layout, inventory management and capacity plan, among others things, all aid in making the working environment favorable and even enjoyable for their employees.

* Inventory * The Hard Rock Café’s collection of Rock N Roll memorabilia plays a very crucial role in delivering the “experience” customers are looking for. They have approximately 60,000 pieces in their collection. To maintain their $40 million inventory of memorabilia, the company uses an extensive and detailed cataloging and traceability system. Since the memorabilia within the restaurants is replaced and swapped between locations every five to seven years, knowing what is in the collection and where each item is located is critical in preserving the extensive collection. * Scheduling * Scheduling at the Hard Rock Cafe is also very important. With 23 departments and over 600 people on the payroll in the Orlando location alone, there are many factors have to be taken into consideration. Sales, community events, tourist seasons and trends are tracked so an accurate sales forecast can be made to schedule staff efficiently to provide exceptional, timely service and maximize their annual revenue.

3. Where does Hard Rock fit in the four international operations strategies outlined in Figure 2.9? Explain your answer.
Hard Rock Café fits in the Multi-domestic operations strategy.
With this strategy, Hard Rock achieves maximum local responsiveness, this is acheived by customizing both their product offering and marketing strategy to match different national conditions. They realize that the industry is not, one size fits all.
Their signature burger may be modified according to the taste of the area of each restaurant. Each location is unique; with its design and menu dependent on the culture and preferences of its market.

Only 50% of Hard Rock’s cafes, around the world are franchises. This limits risk factors and differences in business practices and employment law. Local partners however are also encouraged to engage their customers in a unique dining experience, one that is distinct and cannot be duplicated anywhere else. Hard Rock has sustained its brand from initially branching out with a global strategy to adapting into a multi-domestic strategy.…...

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