In today's economy, companies get weaker and the survival of fittest seems to be an appropriate term for the battle emerging in global business arena. Those who've managed to achieve high revenue and sustainability seem to have a defining feature. What makes a company successful today?
Winning in today's business world, to be a first person in industry you have to be innovative. Corporations must be able to look forward at the strategy and know how to bring products to market faster than other companies. Innovation is the key not only for the technology it is the key for the business strategies as well.
Companies are continually looking for new sources of innovation while knowing that ideas and innovation are the most valued currency in the new economy. Throughout the following paper, we will evaluate innovation strategy of one world's well known company Hard Rock Café and analyze how this innovative process was achieved and what possible improvements could be made. It is not a world's leader company actually, but it takes a quite good place in hotel, casino, and restaurants and stores industry.
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This assignment will describe the history of Hard Rock Café, how they were established who was the founders and etc.
The following assignment will also explain organizational changes, types of changes and innovations that Hard Rock Café started to implement.
The originally of the company began as an American ideal being sold to the british people. The first Hard Rock Café established and went to the public on June 14, 1971 in London, Engalnd. Founded by Peter Morgan and Isaac Tigrett - two enterprising and music loving Americans. Morton, the business-oriented student had a vast restaurant experience, while Tigrett owned a shop of used cars and his ventures helped to finance the start of the restaurant. The main idea of opening diner in London came from two noticeable dilemmas in London: the extreme separation of social classes and the interest of English people for American food culture. Starting from the six month lease from the landlord, two young men opened a small, American style café near Hyde Park
Hard Rock Café created a place where everyone was welcomed and served equally, no matter their social status, regardless of age, sex or class. By 1973, Hard Rock Café established a name of the most popular food and rock 'n' roll place in London.
The owners of the Hard Rock Café decided to spread their business in various part of the world. They agreed to develop their own business in different areas. For example, Morton opened Hard Rock Cafes in Los Angeles, San Francisco, Chicago and Huston and Tigrett opened in New York, Dallas, Boston, Washington, Paris and Berlin in 1982. The Brand features and strategies were same in every country.
Recently, there are more than 160 Hard Rock Cafes over 52 countries around the world. The Hard Rock Cafe business model is clear, but because of lots of risk factors and differences in business practices and employment law, Hard Rock Café chooses to franchise about half of its cafes. Franchised locations are more than 45 countries. Hard Rock Café offers hotels, casinos, live venues, theme parks, shops and restaurants to everyone who can digest their slice of good food and great music. In every year more than 30 million guests visit all over the world Hard Rock Cafés. Hard Rock Cafés guests include more than 70 % tourists that was the reason to expanding to 'destination' cities. It has been a winning strategy for decade.
Innovation is a new idea or way of doing something or new stuff that is made useful or improves something that already exists.
In terms of innovation, Hard Rock Café not only masters the technology to implement necessary changes, but also successfully conducts all the necessary steps to make transitions smooth. Starting out as simple diner it developed the business into large conglomerate of hotel and casino chains as well as the fashion brand and charity fundraiser.
As Professor C. Markides of the London Business School says, "The trick is not to play the game better than the competition, but to develop and play an altogether different game." At Hard Rock, the different game is the experience game. (Hard Rock Café's global strategy. http:// www.google.co.uk/search?hl=en&ei=Z690S6CBK4v60wTPjICwCQ& sa = X & oi = spell & resnum = 1 & ct= result&cd= 1&ved= 0CBcQBSgA&q= hardrock+cafe+innovation&spell= 1 )
Always on Time
Marked to Standard
Hard Rock Cafe is bringing the concept of the experience economy to its cafe operation. The strategy is to include a single experience into its operations. This innovation is something of the same kind to mass customization in manufacturing. At Hard Rock, the experience concept is to provide not only a custom meal from the menu, but a dining event that includes a unique visual and sound experience not duplicated anywhere in the world. This strategy is succeeding. There are lots of restaurants to come and gone while Hard Rock Café continues to grow.
Organizational change and Downsizing
Nowadays, organizations try to become more competitive in the world market. They are trying to improve their abilities, policies and strategies to achieve goals and objectives. This becomes one of the actual reasons for organizational change. Change is very important for every company.
There are three types of organizational changes:
Incremental change - this kind of change is using when companies trying to make small changes, for example, to improve existing system.
Strategic change - this kind of change occurs when some companies establish new systems.
Transformational change - the reorganization from one state to another, which means totally different. Almost change everything.
Hard Rock Café used strategic change that aims to establish new system. Few years ago company started using Micros systems. Micros Systems, Inc. is the world's leading enterprise applications developer serving the hospitality and specialty retail industries. Providing complete information management solutions, including software, hardware, enterprise systems integration, consulting and support, company distributes its products through subsidiaries, independent dealers/distributors, and company-owned sales and service offices around the world. http://www.micros.com/AboutUs/Company+Profile/
It specializes in information technology solutions by providing touch-screen computers used to ring up the transactions which is much more advanced system to its predecessors such as manual cash registers. After conducting the interview with the representative of the company, it came up that Micros is very efficient, it enables to increase speed of service, which is one of the key ingredients in hospitality business.
According to the FA of London branch of the company - Ann Iovidze - it's more secure to make credit card transactions on micros systems as well; it has a card swiping technology, which makes it almost impossible to accidentally double charge customers. ''For the financial department, its especially important to be sure in financial tools that company uses to conduct efficient and precise operations with money (cash or cards). Thus choosing the technology that would guarantee results was the key to proper fiscal management of company and Micros system enables us to do so.''
Micros system gives different types of report that enables the managers to run the business smoothly. Throughout the day managers can run financial reports, such as sales results and observe key performance indicators. These data makes it possible for the managers to control the sales and meet the targets.
Success in planned organizational change means creating a vision of the future organization and its culture. The values, beliefs, and attitudes of the To-Be organization must be clearly defined. The organizational change method chosen to bridge the gap must match the values of the desired culture, not the present one. (Field, House, 1995).
Some significant changes have occurred within the company after 2001 terrorist attacks in the USA. Being the US based business unit, the corporation faced dropdowns in profits therefore it had to overlook the marketing strategy of the brand - it has become more adhesive to the diverse cultures (like removing pork as food ingredient in the Muslim countries) where it had been operated before the attacks took place.
While implementing incremental changes one must be aware of the consequences that might occur when well known brand redevelops itself to adjust to different cultural and business environments.
Hard Rock Café used to be absolutely similar in every country, whether it was average European city or far eastern cultures like China or Japan. The brand would always sell American food and lifestyle. Although most of the consumers, who were buying that concept where Americans themselves. Most of Asian cultures were not very open-minded about the whole perception of Hard Rock Café.
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For past 10 years it became clear that popularity of American culture and lifestyle severally decreased. Company realized that they could readapt to different cultures by changing details of their product thus maintaining the overall image and qualities of brand.
The company began to adjust itself to new markets, for example: the menu changed accordingly to culture where brand was outsourced. The advertising images also were reconsidered. A little less American and a little more global has been put in company's overall image.
To create new products with company's logo on it and renew offered services to consumers is a good way to develop the business more and take full advantage of buyer's market.
In difficult economic situation, companies often face necessary and unwanted organizational changes such as downsizing. Downsizing refers to the permanent reduction of a company's workforce and is generally associated with corporate reorganization. It refers to reducing the overall size and operating costs of a company, mostly directly through a reduction in the total number of employees.
Cameron defines downsizing as appositive and purposive strategy: "a set of organizational activities undertaken on the part of management of an organization and designed to improve organizational efficiency, productivity and competitiveness" (Cameron 1994). Downsizing makes daily operations of a business more efficient. Downsizing is also commonly called: rightsizing and reengineering.
To learn more about organization changes and downsizing at Hard rock cafe, the interview was conducted with the retail supervisor. Katie Chikhradze has been with the company for more than two years and is personally involved in implementing organizational changing.
According to Miss Chikhradze, it's very important to establish ''less painful'' downsizing techniques and one of the ways to do so is by keeping high employee turnover and short term hiring contracts. ''Unfortunately today's economy doesn't allow us to keep high level of staff throughout the year, so we introduced the short-term contracts (that may only last from eight weeks to four months) and hire employees on these terms. It makes it really easy to implement downsizing or renew contracts accordingly.''
Such politics have been working well for company. Keeping the level of staff under control is one of the methods of organizational change. Downsizing appears to be an ongoing practice for the foreseeable future. Top managers with responsibility for making downsizing decisions face a dilemma. Failure to downsize may result in inefficiencies, while downsizing clearly has a number of potentially negative effects on individuals and communities. Finding the balance between these outcomes is the primary challenge facing these problems for organisations management.
Orientation on results
For most businesses it's rather important to focus on the main outcome. Hard rock café has assigned yearly budgets and financial goals and keeps track on those using high-tech information technologies such as Micros systems.
Exciting environment to visit
The image of the company serves to deliver certain lifestyle that attracts customers. Good food, music and friendly staff makes Hard Rock café place to visit by millions every year.
Quality of products and services
Starting out as American diner, over the past years Hard Rock has developed itself into competitive and prestigious restaurant chain as well as the fashion icon.
Efficiency is business maintained by adjusting the strategies to technological developments and social requirements. In case of Hard Rock café it's done by ongoing modernization of products and staff.
In this assignment different managerial tools used by Hard Rock Café to implement changes and developments have been discussed. In the first part the history and origin were analyzed. As the research shows, the company has been successful for over thirty years by maintaining high operational values and loyal customers.
It's very important to keep up with recent technological developments. Information technologies allow business to run smoothly and efficiently but it's very important to make right choice and introduce correct information technology in your business.
Hard Rock café currently uses technology developed by Micros and it appears to be effective choice as it help company to operate correctly and without problems.
In this assignment organizational changes and the subject of downsizing has also been addressed. Changes can be risky but important. Only with right strategies can change be successful and innovative. Hard rock café has good methods of implementing them such as keeping up with customer demands and the economy as well as business interests.