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Global Operations Strategy Of Hard Rock Cafe Tourism Essay

2905 words (12 pages) Essay in Tourism

5/12/16 Tourism Reference this

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Among the four global operations strategy, Hard Rock Café falls under a multidomestic strategy as all of its restaurants share the same type of themes while still maintaining certain differences towards different locations. All restaurants of this brand adopts the mission of promoting rock spirit, combining a café environment with live music and rock ‘n’ roll memorabilia museum. They are operated under united management styles and processes which favor flexibility, emphasize the “Hard Rock values” and apply precise administration with close planning and forecasting. However, Hard Rock Café makes careful response to the differences in culture and interest in each specific location. For example, an average menu from Hard Rock Café includes classic American food like burgers and chicken meat or lobster, however their restaurant in Hawaii locations also specialize in fresh fish with delicious meals like fish tacos or ahi tuna sandwich. Hard Rock Café’s retail shops provide location-specific merchandise that cannot be purchased at anywhere else, not even online. In London, fans can acquire t-shirts with the name “London” printed on them while in Prague, Czech Republic, limited-edition Prague signature pins with exclusive design quality are sold.

In order to success with this global operation strategy, Hard Rock Café has made good response to the ten operation management decisions.

First, their design of goods and services has brought their restaurants a unique, charming appearance that differentiates them well with other brands. Hard Rock Café introduces the concept of “experience” to its operations. As customers dine at a Hard Rock Café’s restaurant, what they can gain is not only a custom meal from the menu but also an unforgettable event with unique visual pleasure from various rock memorabilia and exciting sound experience from a variety of music activities. This kind of design has brought Hard Rock Café a sharp edge to its competitiveness as “there’s nothing like an originator” (Hard Rock’s marketing director, Steve Glum, 2003). Other brands may find aspiration in its special concept; however it has something that cannot be easily copied, music and its $30 million-worth of historically priceless rock paraphernalia (Matt Haig, 2004, p. 233). Their retail merchandises, which take up to 48% of their sales, also carry heavy rock characteristics like Hard Rock Monopoly, Hard Rock Calendar, guitar case and other rock items.

To follow the “experience concept”, Hard Rock Café doesn’t focus its quality managing effort on only some dishes or services but the ‘experience’ that its customers get as a whole. Food quality is important, but more important is the quality of visuality and auditory. Hard Rock Cafe attaches much importance to customers’ opinions in valuating quality as in their “experience concept”, maximum value is what perceived by the customers. Hard Rock gives out surveys on a regular basis with the scores rating from 1 to 7, and to maintain the restaurants’ reputation of high quality, if the score is not 7, the service is considered a failure (Jay Heizer & Barry Render, p. 56).

About process and capacity design, Hard Rock Café provides continuing training to its staff so that they remain highly competent, skillful and passionate about the main theme rock ‘n’ roll. The restaurants are decorated by buying and displaying musical objects which are sometimes expensive and require much effort in preservation. Hard Rock also holds music events in which the number of fans participating may exceed 100,000 people.

The locations of Hard Rock’s restaurants are carefully chosen. According to Oliver Munday, Hard Rock’s vice president, they have to “look at political risk, currency and social norms”… In general, most of these restaurants are located where tourism is developed and in places where each restaurant itself has a great rate of exposure. For example, the Hard Rock Café in Atlanta separates from major hotels and downtown attractions like Georgia Aquarium, Centennial Olympic Park… for only a small walking distance. This location can be called a ‘gold position’ as tourists can easily find and choose Hard Rock Café as their dining destination easily without much effort. Another example, Hard Rock’s newest restaurant in Japan is open at Universal CityWalk Osaka. These entertainment and retail districts are a part of the huge Universal Studios Japan theme park, a famous tourism destination that had welcomed 11 million visitors in its first year of operation and thus become one of the most successful theme parks in history (“Universal Studios Japan Welcomes 11 Millionth Visitor”, PR Newswire, 2002). The restaurant is also situated in a “gold position”, at the Konohana park site, only 10 minutes by rail away from JR Osaka station. Thanks to this location, hungry tourists getting out of the station will be eager to stop at Hard Rock Café for a little exciting ‘experience’ before continuing on their tours.

The layouts of Hard Rock’s restaurants cannot be found anywhere else in the world. Each colorful layout is like a museum of musical history in the shell of a restaurant. The walls of the restaurants are decorated with memorabilia. Here and there, large television screens bombard the senses of guests with scenes from rock videos. There is quite a lot of space as a Hard Rock restaurant is usually large enough to hold a great number of seats and support live concerts and shows. All of these create a unique Hard Rock atmosphere that no other restaurant can possess. Not only that there are some differences between each location. In Florida, the lavish exterior features an old car driven through the building and the decorations make one think of an ancient ruin. In Prague, a 5-meter crystal guitar is hanging down from the ceiling, creating a rock ‘n’ roll atmosphere attractive to all rock fans. These differences in design allow Hard Rock’s customers to have truly unique visual experience as they visit its restaurants at many locations around the world.

Up to 2010, Hard Rock’s staff has reached 20,000 employees (http://www.hardrock.com). These employees play an indispensable part in keeping the ‘experience economy’ concept alive. Hard Rock’s restaurants have beautiful layouts, exciting music and unique memorabilia; however, what has truly close the bridge between these lifeless items and the customers is the staff’s passionate attitude. Hard Rock’s employees are not only skillful in their jobs but also quite knowledgeable about rock ‘n’ roll. In Hard Rock Café, waiters and waitress pride themselves on being able to recognize every piece of musical paraphernalia, and the staff will enthusiastically engage in conversations with the guests to introduce the objects to them or encourage them to go around and find out the excitement by themselves. In order to ensure their staff to meet the above standard, Hard Rock Café pays much attention to their human resource strategy. They have created a dynamic working culture that gives much ground to personal development and individuality. Beside incentives like high pay rates and promotion opportunities, Hard Rock gives its staff continuing specific training and encourages them to be positive and self-motivated around the core ‘Hard Rock Value’.

To minimize the input cost and to ensure the fresh state of its ingredients, Hard Rock Café takes advantages of local supply whenever it can. For example, the restaurant in Honolulu purchases fresh fish from the fish auction near Honolulu Harbor. This action allows the restaurant to have a fresh, always available food source, and also help them to serve their special dish: fresh catch of the day (http://www.hawaiimagazine.com).

Hard Rock Café’s inventory consists of over 60,000 unique objects that once belonged to famous rock legends like Elvis Presley, Jimi Hendrix, James Brown etc… They range from lyric sheets and gold discs to even worn clothes and guitars. Packed with these items, each restaurant becomes a ‘living museum’ of rock ‘n’ roll history. In Hard Rock Café’s restaurants, there are also many large flat screen televisions continuously play rock videos and concert footages. This type of inventory becomes one of the brand’s strength. They’ve got “something people can connect to, music and memorabilia” (Hard Rock’s marketing director, Steve Glum, 2003).

As Hard Rock Café constantly grows all over the world with numerous rock concerts and events, its schedules are tightly managed both in long term and short term, large scale and individual scale. For a large event, a plan is made several months before the event day. The closer it gets to the event day, the tighter the schedule is managed. For example, the scheduling for the Rockfest event is done within a tight 9-month horizon, where it is updated monthly in the first 3 months, weekly in the next 6 months and twice a week in the last month (Jay Heizer & Barry Render, p. 128). In order to pull off such a tight schedule, Hard Rock Café’s managers must have good project management skills and good supportive software. The schedule of a staff is more flexible. Since 70% of its guests are tourists (Jay Heizer & Barry Render, p. 82), Hard Rock Café must have flexible schedules in their restaurant to answer the demands of tourism. For example, in Orlando, a famous tourist location, café staff has schedule of 15-minute intervals to adapt to the seasonal and daily changes of this tourist environment (Jay Heizer & Barry Render, p. 56).

The special rock-theme of Hard Rock Café requires it to make huge maintenance efforts. The collection of musical items are shared and rotated among restaurants from time to time (Matt Haig, 2004, p. 233). This type of maintenance is quite costly as moving these priceless musical items require not only transportation fee but also special protection and preservation. However, in doing so, the visual experience of a returning customer can remain unique as there are always new pieces of memorabilia to display.

As of 2010, Hard Rock Café has already opened a restaurant in Vietnam. This restaurant located at 39 Le Duan street, District 1,  Ho Chi Minh City. Hard Rock Café still doesn’t have any restaurant in Hanoi though. The opening of such restaurant will create both operations management opportunities and challenges for Hard Rock.

In general view, Hanoi is a potential market in Vietnam. Even though she doesn’t have as many entertainment site as Ho Chi Minh City, her cultural buildings, beautiful parks and traditional festivals can usually attract quite a few tourists. According to the statistics of Vietnam General Statistics Office, in the first 8 month of 2010, Hanoi has received about 6 625 000 tourism visits and expected to have a population of over 6 610 000 people. With these statistics, Hanoi will be a good choice for Hard Rock Café to open a new restaurant here.

The first challenge Hard Rock Café will meet in opening a new restaurant in Hanoi might be how to find a good location. There may be many cultural sightseeing places all over the old city; however, both tourism activities and local entertainment activities are busiest in Hoan Kiem district, especially around Hoan Kiem Lake and the old quarters. This district has seen the appearance of many large restaurant brands. KFC has a restaurant at the most beautiful position available, beside Hoan Kiem Lake. BBQ has found a good location in the busy Trang Tien Street. Lotteria has a so-so but still good enough location right on the side of Hanoi Train Station. With Hard Rock Café’s tradition of placing its restaurants in tourist locations with high exposure rate, the ‘gold position’ is undoubtedly here. It will not be easy to find a place large enough to hold a Hard Rock restaurant here though, as this area has a high density of buildings where all business are packed together in a small space. A lot negotiation will have to be made and quite a large amount of money will have to be invested as the price of land in this area is unfortunately highest in the country. There is of course the option of renting a large part or event a whole floor in a building like Highland Café has done with Hanoi tower. However, with its ‘noisy’ characteristic of rock music culture, this will not be very realistic. Choosing a location in more remote areas of Hanoi will be easier, but the forfeit of tourism attraction must be made up with lots of advertisement and promotion methods.

For a Hard Rock Café in Hanoi, there won’t be the need to put too much effort in creating a specialized menu. Hard Rock’s menu is often heavily affected by the local ingredients. Hanoi doesn’t really have any special ingredients while her inhabitants are eager to have Western food as a change, and so its menu can safely stay with its traditional dishes of burgers and chickens. Local supply is plentiful with cheap prices because Hanoi has many satellite towns and provinces as her source of supply for chicken, pork and beef meats. However, this OM opportunity also comes with a challenge. The above source of supply may be cheap and easy to access, but it is also notorious for bad food hygiene and safety. Even though Hanoi government has issued a lot of food safety standards, administration and inspection activities are weak, which results in ingredients with bad quality floating on the market. In order to protect its high quality standards, Hard Rock Café will have to explore the local environment to search for trustable suppliers for long-term partnership.

Vietnam’s strength in attracting investment also lies in cheap labor forces. In Hanoi, Hard Rock Café can find all kinds of labor with all kinds of education background. There are people with only high school education level eager to find jobs. There are also university students seeking for part time jobs to earn some money to support their own studying and living. This kind of labor force is cheap and easy to replace. These employees usually don’t have much need and can agree easily to low incentives. As a side aspect, a little bonus may be enough to boost their morale hugely. Because of this, Hard Rock Café will not have a hard time in hiring staff and maintaining them. However, the true hardship in human resource management is how to keep this type of staff true to the “Hard Rock Café value”. In Vietnam, the education style is quite different from that of Eastern countries. Vietnamese students are taught in a passive environment where individuality doesn’t have much important while the collective consciousness is highly encouraged. And in Hanoi, this passive characteristic is still very heavy. People in Ho Chi Minh City tend to be more dynamic and flexible with more open-minded thinking method. But because of its delicate but slow culture, Hanoi’s townsmen tend to be more passive and rigid with more close-minded thinking method. The concept of “self-motivated”, “individualistic” and “creative” attitude may be quite unfamiliar to the employees that Hard Rock Café can hire in Hanoi. As a consequence, even though the cost of labor may be low, the cost of training will be relatively high.

In Hanoi, the maintenance efforts should not be only for Hard Rock’s special collections of musical items but also for the staff itself. To maintain a high quality standard, the staff must also be ‘maintained’ carefully. The quality of a Vietnamese staff in the restaurant field tends to deteriorate slowly if the managers don’t pay enough attention. One of the most important reasons is that except cooks, not many people will consider a position in a restaurant to be the solid foundation of their careers. The case of Mega Star can be taken to view this matter more clearly. Even though Mega Star is a cinema brand, its cinema groups often come with large fast food stalls, and Hard Rock may as well pull one or two lessons from this brand in dealing with a Vietnamese staff. In their first months of operations, Mega Star quickly won over the heart of their customers with five-star services. Their employees were highly professional with positive attitudes, always ready to answer every question from customers. However as time go by, because of many reasons, the lack of adequate continuously training, the low incentives, the insufficient number of staff, the come-and-go nature of the labor force,… the quality of their staff falls, and in my opinion, falls terribly. Just a little surfing around the internet, we can find quite a lot of complaints from Mega Star customers. Many people, including me myself, miss the old days when we were greeted with smiles from the first steps into the cinema group and not being driven crazy with the attitude “I-don’t-know-but-somebody-may-know” almost every time we sought for help. In Hard Rock Café’s case, Hard Rock places a great deal of importance in their human resource strategy and their employees also play an indispensable role in applying the ‘experience economy’ concept in reality. Extra efforts like more training, better bonus… will not be unnecessary in order to maintain the high quality of the staff.

In fact, according to the official website of Hard Rock Café, beside the restaurant in Ho Chi Minh City another Vietnam-based restaurant is planned to open in 2011 in Hanoi. I’m looking forward to this new opening and can’t wait to see how much successful will Hard Rock Café be in Hanoi.

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