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Case Study

on
Hard Rock Cafe’s Global Strategy
Chapter 2: The Global Environment and Operations Strategy
By: Rubin, Khate
Sarip, Hasnah
Singson, Christine
Sumagang, Alex
February 5, 2018

1. Identify the strategy changes that have taken place at Hard Rock Cafe since
its founding in 1971.
- From the opening of its first cafe in London in 1971, during the British rock
music explosion, Hard Rock has been serving food and rock music with the
equal enthusiasm. But along the way, Hard Rock started to fully gain
momentum to bring their concept of the “experience economy” to its
operation. Their 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
concept not duplicated anywhere else in the world, which differentiates them
from other theme restaurants. Also being a global brand who’s able to grow
from 1 London cafe to 157 facilities in 57 countries, Hard Rock elects to
franchise about half of its cafes in order to disperse, where social norms and
preferences led to some tweaking of menus for local tastes. 70% of the cafe’s
guests are also tourists (recent years have found it expanding to “destination”
cities), but due to economic fluctuation that hit the tourist business, Hard Rock
signed a long-term lease for new locations or cities that are not standard tourist
destinations. And at the same time, menus are being upgraded.

2. As Hard Rock Cafe has changed its strategy, how has its responses to some of
the 10 decisions of OM changed?
- Design of Good and Services. Hard Rock Café focuses on the good and
services that they offer to their customers by keeping an eye to the quality of
their brand. Depending on the region, the meal is different, as it has been
particularized for each location. They evaluate the local trends and adjust
according to local culture, in an area like London they may provide more fish
options than beef but in an American location they may serve more beef
options.
- Managing Quality. The entire evaluation of quality and quality control got
much more complex. Quality has always been of great importance to Hard Rock
Café its strategies focuses on the customer experience. Monitoring the quality
of the service it provides such as the menu and merchandise is the key to what
has kept the business sustainable and profitable.
- Process. The design of kitchen is tailored to best fit and the way of serving is
also modified. The kitchen process changed when Hard Rock went from
hamburgers to lobster, and additional changes were made as the firm moved
to retail merchandising.
- Location strategy. From a London Cafe, Hard Rock decided to expand to
tourist locations since 70% of their customers were tourists. They then started
taking into consideration the political factors and ended up choosing non-
tourist locations too.
- Layout Design. Hard Rock added retail stores and also added live music
facilities. The wall is being slapped with lots of memorabilia: guitars, drums,
shirts, pants, shoes, scarves, handwritten come from music band or legendary
musicians, such as Elvis and John Lennon.
- Human Resources. The range of talents needed keeps expanding; from cooks
of classic American fare and wait staff and bartenders, to merchandisers, to
cooks for a wider more expensive menu, to coordinators and performers for
the live music facilities. Hard Rock treats their employees very well as you need
individuality that not only good for business but also definitely 'rock'.
- Supply-Chain Management. Hard Rock has been explored new global
resources to achieve maximum profitable via supply chain. Hard Rock has
selected USCO logistics, a subsidiary of Kuehne & Nagel, to take over
distribution and replenishment of collectible and fashion merchandise for its
cafes, hotels, and casinos in North America.
- Inventory Management. Other than food, Hard Rock started selling unique
merchandise (each location). Hard Rock is great at managing their inventory
and changing products as needed per location. They continue to change their
menu to incorporate food and drink from around the world since their
customer base is almost completely tourists. They strive to keep the place
diverse so all customers can have a better dining experience.
- Intermediate and short-term scheduling. Hard Rock Café is using a lot of
forecasting techniques such as moving averages, weighted Moving Averages,
Exponential Smoothing and Regression Analysis that helps manager to see the
impact on demand of other menu items if the price of one item is changed.
Managers do the same analysis on menu placement, with the center section
driving higher sales volumes
- Maintenance. Hard Rock Cafe got the goal of maintenance when they succeed
to maintain the capability of the system over 52 countries and keeping a
system's equipment in working order in 163 cafes around the world.

3. Where does Hard Rock fit in the four international operations strategies
outlined in Figure 2.9? Explain your answer.
- Hard Rock may first look fit in the global operations strategy, operating in
different countries around the globe with centralized operating decisions but
with its decision of franchising about half of it’s cafe, it can be stated that Hard
Rock fits in the transnational operations strategy. Reaching 57 countries with
the uniform concept of experience differentiation, Hard Rock combined the
benefit of global strategy with the benefits of local responsiveness through
making some tweaking in menus to cater local taste suggested by social norms
and preferences of each country. In addition, the decision of exploring cities
not considered to “destination” places is one proof that Hard Rock recognise
that core competence does not only reside in the “home” country but
anywhere. However, with the concept of franchising elected, Hard Rock’s
international operations strategy may switch to multidomestic strategy in with
each franchise has the freedom of making operations decisions according to
factors affecting the business in each country.