Evaluation For Operations Management Of Hard Rock Cafe Marketing Essay

Evaluation For Operations way Of unuttered tilt coffee shop Marketing Essay sound flutter is one of the most glob tout ensemble(prenominal)y trademarks in the world with 40 years history . At the beginning, it was a s mall caf regain in London. What have made strong arguing to be success, and their business cover all the world compriseing of 169 venues in to a greater extent than 50 countries. profound argument has become a truly phenomenon. We could evaluate how demanding inclination Cafe achieved that phenomenon in m any points of view .One of these is carrying into action focusing strategy of straining controversy .Now we study and try the strategy to manage its operation.1. Location selectionWith the first place in London, weighty Rock magnifys its cafes to major(ip) big destination cities on the world where there ar great population and phaeton. Mr Oliver Munday, Hard Rocks wrong president is heavily looking into global expansion in Europe, Latin Ameri su ffer and Asia He verbalise that Weve got to look at political risk, currency, and social norm-how does our brand fit into the country i. Therefore, the new choice for Hard Rock Cafe is to locate in new(prenominal) cities, they focus on the tremendous resurgence of the interchange of the city where nightlife is concentrated like Bang Coc, Ho chi Minh. which atomic number 18 not burster phaeton cities in order to less depend on such a fragile business.For the good face to be chose, securities industriousnesss research is deeply perspectiveed and analyzed base on Hard Rocks Standard market fib. The compendium is based on these following fundamental elements including demographics, visitant market trend, transportations, restaurants and nightclubs, risk of politics, real nation market and comparable market, t. This serious quantitative market research supports Hard Rock Cafe to pull in secure finiss for its business. Moreover, the success of every cafe in each location is as well contri saveing the useful teaching for Hard Rock caf to expand these other one and also to meliorate their efficiency of the whole irons success.Hard Rock now aims to the area of Europe, Latin America and Asia. Not all cities selected Hard Rock caf operated by itself but choose to franchise because of risks, economic challenges such as culture, inflation, exchange rate, may tinge its operating. Hard Rock chose to expand its chain to 2 big and busy cities (Bogota and Moscow) in nightlife , but they had two franchise to local partners there. Other Hard Rock Cafes in other place like Honolulu, Dubai .. leave behind be opening soon.2. Goods and returns contriveWith the name of Hard Rock Caf we can image the a typical their service with an electronic guitar and a simple logo, Hard Rock Cafe impress all peck entering its places the purlieu full of rock music which We cant see in any other kind of Caf or pubs and bars. Hard Rock Cafe not all officiates its clients food, rock passion but also the special type of enjoying .. Environment is also very typical way of Hard Rock Caf. It is easy to recognize from its outside or inside even other advertising that make its client remember Hard rock caf.Food and swallowing do not mean that they are not taken into consideration, courses in Hard Rocks menu are modified, upgraded and concentrated to fit client where it located For example, Thai Snack Combo is added into Hard Rock Cafe Bangkok.Regardless of age, class or gender, Hard Rock Cafe slogan Love all Serve all has been going to inaugurationher with its using throughout the years. All people putting their steps into Hard Rocks door feel that they are everlastingly welcome by an enthusiastic attitude, good smell of service. 3. QualityAs other business, Hard Rock cafs quality is one of the most important grammatical constituent during their operating. Keeping food, drinking and service quality ( employees behavior ) as well as music, environm ent is carried out regularly and it is required to get the full(prenominal)est judicial decision from clients. Improving quality at the cafe is always ensured and achieved their quality in the high gearest scale basing on the customer evaluation.Besides that, Hard Rock Cafe always update by time the music as well as change menus, environment, layouts, memorabilia, services and strategy to improve quality and adapt with the strike as its clients responses. 4. Process and capacity design. Hard Rock is a very big chain of cafes which provides 100,000 meals per day only(prenominal) strikering within the U.S. (3, vitamin D at Orlandos Universal Studios), therefore it has to consider very carefully and carry out effectively. Non-current summation is always well managed and renewed. sweat, stuffs, inventory, other current as go by, memorial are all elements related, which are described with more details in the following decisions. It depends on the location and culture where Ha rd Rock caf is located, but the design of capacity and its process must follow standards of Hard Rock caf.5. Layout designLayout is the most key factor to make decisions in the long operation of Hard Rock caf. It depends on the scales which follow the market demand or the social norms in different areas. Caf module is differently designed in each city, such as Hard Rock Cafe in Las Vegas is decorated by a huge, outstanding guitar in front of the building and most of the seats are organized in a large piazza for outside view while the cafe in Ho Chi Minh is designed according to a little eastern style with ceiling lights and chairs. Hard Rock caf design is considered whether they must lease in a long term, the structure of construction should be set up or remodeled for its operation swimmingly and efficiently. Its places do not doom the same module design of Hard Rock Cafs chain. 6. humane picks and job designGood human re commencement strategies are expensive, difficult to ach ieve, and hard to sustain, like other umteen organizations, Hard Rock caf concentrate to build the human resource strategy. The purpose of human resource is that how employees contribute to firm and set up a reasonable quality of work life. Service industry is a industry employing around 75% of the people in the U.S, and Hard Rock have had huge network which creates a lot of jobs for people in the area it stands. All staff of Hard Rock Cafe must be required to have not only job skills, job definition but also passion of rock music as well as to engage their personalities. sooner working for Hard Rock Cafe, they are trained by Hard Rock caf and received a Hard Rock value card. Hard Rock employees pass on be proud to joint in a unique working environment and culture which appreciates the substantial diversity and individuality, personal and professional manner. Hard Rock has their promotion policies as well to encourage their employees loyalty, 60% managers of Hard Rock Cafe are p romoted from their worker. Managers performance is evaluated by a target, and they will receive bonus when exceeding the target. It encourages all managers of Hard Rock Cafe to become better not only depend on the available info, but also they have to forecast other impacts and effects on sales then set up these countermeasure to improve or prevent for their operating .All of above human resource policy always helps Hard Rock take a competitive advantage, increase more revenues and saving costs for their success. 7. Supply-chain managementOutsourcing is a creative management strategy that is prevalent method that a big-scale caller, like Hard Rock, using for its supply-chain management to improve efficiency working such as capital, inventory management and operating margins. Qualified suppliers or vendors are chosen and controlled to ensure enough, fresh and quality meals. Risk of outsourcing is considered carefully for Hard Rock caf operationHard Rock caf also manage the supply- chain risk by Hard Rock caf is reducing environment ( political) risk by franchising and licensing, rather than owning, when the political barriers seem significantiiHard Rock caf in 2003 had the fortunate engagement of Avicon architects of the new supply chain and provided expertise in logistics for Hard Rock. 8. InventoryAll company must establish system for managing inventory. Costs and expenditure can be substantial to store and get inventory. The way to manage inventory by ABC analysis, record accuracy make Just-in-Time inventory control, can save costs and let products and services to customers more quickly. The best management of supply-chain support Hard Rock to keep a honest and effective inventory. Foods and drinking need to be fresh and provided on time. excessively Hard Rock caf manage inventory base on the market demand to avoid long-term stock. A huge valued memorabilia are controlled by locations and catalogues and are renewed every few years. 9. planTypes of sch eduling decisions depend on type of company and its operating. Hard Rock Cafe applies shot-term forecasting scheduling to their services. It can be based on the real day-after-day activities and entropy from whole restaurants in right on Hard Rock chain. Every manager of each cafe set up its database to prepare the daily forecast which is recorded daily working. Next other factors, like upcoming events, major conventions, concerts, etc. are referred to. And then hourly sales are examined and Hard Rock is possible to calculate the time for rush or low hours in order to allocate suitable jobs for all employees..This way of above managing schedule support Hard Rock Cafe managers Who can predict the volume of people, theirs feeling may get in and enjoy in its restaurants and prepare a right human, foods and services to serve Hard Rocks people with the way, Just-In-Time to save the costs.10. MaintenanceMaintenance is the way to keep quality that is the key to success in all industry sectors. Hard Rock Caf use preventive maintenance for inspection and serving to keep their facilities in good condition. They also ad verticaled its menus and music time by time, it depend on locations, basing on the survey done. All kitchens, bar, restaurants or other equipments are maintained regularly under supervising.In order to modulate the brand name, Hard Rock Cafe creates its own website www.hardrock.com and maintain a cable television syllabus weekly on VH-1.Task 2 In the 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 Cafe just established in Ho Chi Minh city. When expanding business into Hanoi, Hard Rock needs to survey the Hanoi market.Hard Rocks Standard market report following conditionsA- DemographicsAs Hard Rocks focus, Hanoi is the city center and have the nightlife with more small artificial satellite cities to be built around like Ha Dong, Trung hoa Nhan chinh, Bac Thang long. get is over 6,000,000 people (See table 2 below) with rapid urbanization , so tendency of population will surely increase in tight future. Hard Rock may have is more and more people (Foreigner and Vietnamese) in Hanoi bed Rock Roll music in Hanoi. And Hanoi is a choosier market for all cultural activities than Ho Chi Minh, it has quite loyal audiences if Hard Rock caf can convince them by the unique culture, fire activities. Moreover, the cheap labor is an important advantage that affects to its cost and particular the companys human resources strategy (See table1 below). Beside that the economic ability finger of Hanoi and Hanoi area is attractive for all business sector(See table 1 below)Table 1 (Economic index of Hanoi)Content200920102011 ( forecast)GDP per capita (UD$)171019002120GDP growth rate (%)6.70%11%11.50%CPI8.22%9.56%10% exchange rate (VND/US$)175001950021000 denotation VnEconomic-December 2010iiiB-Visitor market and market trendH anoi have Tourists and business visitor growth rate increase with 20,5% for opposeder ( 1.227 million people) and 10% for Vietnamese(7.392 million people) in the year 2010. Total revenue in tourist industry increased 26.9% in Hanoi -Report of Hanoi general statistic offices data December 2010(See table 2 below)Table 2 ( people and tourist of HanoiContent200920102011 ( forecast)Population (1000)648066176750Population growth rate (%)2%2.10%2%TouristForeigner (1000)108012271472Foreigner growth rate(%)11%20.50%20%Local tourist (1000)672073928130Local tourist growth rate (%)5%10%10%Source Report of Hanoi general statistic offices data December 2010.ivAs above data, Hanoi market of population and visitors is potential market for all kind of business, especially for service industryC-TransportationBecause Both population and tourist/ visitor have been increasing, so the trend of infrastructure suck as Hotel, Convention center, Entertainment service place .. to be increased . Transportat ion is concentrated priority, Phase two of Noibai airport is going to start within 2011 with ODA fund from Japan. Four lines subway are studying to build soon and some tie have been built crossing Red river. Also Hanoi have expanded the wide of many road and built the new road with high standard from Northern part to southern part, from eastern part to western part, they try to connecting center Hanoi to the rest of Hanoi by road, subway, railD-Restaurants and nightclubs right field location is a very important element for Hard Rock cafe to be self-made in Hanoi, where is the most tourist to stay and also there are many restaurants and nightclubs located, that is HoanKiem district in the center Hanoi which is called tourist town. But the lease cost for a centre position is in addition high and most of them are dominated by both foreign and local cafe brands, consist of Highland, Trung Nguyen with trademark G7.. There are also many potential competitors such as Coffee bonce and o ther foreign brands who really want to enter Hanoi markets as well like Gloria Jeans Coffee, etc.E-Political riskBesides, Vietnam is evaluated one of the most stably politic regimes. This situation allows Hard Rock caf to feel safe to invest the business in Hanoi. Vietnam government established a system of open policies, encouraging foreign investors to invest by foreign country investment law, develop Vietnam country and create jobs for local people.However, many environment challenges that Hard Rock Cafe has to consider before entering in Hanoi. Hanoian has the way to drink coffee and enjoy it in differently way. Almost them like to sit in a street-cafe with a cheap cup of coffee, making cafe by the traditional and simple method, talk each other, call for newspapers and look people passing by. There are not many people to spend high equipment casualty ( around VND 80,000,000 )on drinking a cup of coffee that Hard Rock may serve that average price for its items. One thing, the lo cal peoples judge of coffee and foods in is different. They are drinking stronger taste than the other countries. Robusta coffee in Viet Nam is more popular than Arabica. The type of cafe with live-music is more and more popular in Hanoi and its price is various from low-end to high-end level. With Hard Rocks price set (Hard Rock Ho Chi Minh), it can not only aim to rich people but also change clients capitulum or their consumption behavior.Local labor will be a issue that Hard Rock need to care about . The labor cost is cheap, but the tendency of labor cost is increasing year by year and local people are not familiar with the high international working intensiveness, style of unique business of Hard Rock cafe and they may not satiate with standard required. Hard Rock caf must train them and change their thinking, all labor need to be trained regularly and intensively. Furthermore, the Vietnamese is too modest, so they may not feel confident to show their thinking, personality a s expected by Hard Rock Caf.F-Real estate marketThe real estate market is rapidly increasing in recent years in whole country , peculiarly in Hanoi and Hochiminh City, the tendency of market is also increasing of capital investment, sector investment , source investment as well as management investment. The real estate price is too high where is good location (See table 3 below)Table 3 (Rental fee of office and shopping mall of Hanoi)Content200920102011 ( forecast)Rental fee ( $/m2/month)Office ($/m2/month)35.73435Office growth rate (%)-6%-5%3%Shopping mall ($/m2/month)40.142.245Shopping mall growth rate(%)-13%5%7%Source CB Richarsd Ellis Viet Nam -December -2010vThese entropy of the market brings development to Hard Rock if managers want to study and set up its business in Hanoi. They must have a comparable market analysis carefully then making their decision whether Hard Rock caf expand its business in Hanoi or not. Vietnam has not developed the information system and its info rmation is some time not unclear, so it is difficult for researchers to collect exactly data for studying all business.In summary, all above information which mention in this topic is only for us to have a look of Hanoi market, that is surely a potential market for doing business, but it is not sure for Hard Rock caf or other business to be successful when they set up business in Hanoi.So Hard rock need to analyse many factors and index such as breakeven point, IRR,RCE,ROCEinflation, exchange rate, GDP, GDP growth rate.. before they make final decision for expand their business in HanoiIn this topic we only concentrate to analyse the breakeven point and we read that all data collect from all sources to be acceptedAssumption that We will set up Har rock caf in Hanoi with capacity as follow-Area 400 m2, Labor 16 persons ( 2 shift/day), zeal investment 200,000 USD, design and reconstruction100,000USD, training cost 30,000USD and other 16,500 USD, other figure refer Table 1,2,3 abo ve.Option 1Option 2DefinitionDescriptionExplanationChange rental feeChange cost/unit5042.2351.51.251Area (400 m2)400Labor ( 2 shift)/day total 16 persons, 8persons/shiftNon-current assetDesign and construction ( 400m2)250$/m2100,000100,000100,000100,000100,000100,000Total Facility (USD)Full set200,000200,000200,000200,000200,000200,000Training (USD)Full course30,00030,00030,00030,00030,00030,000Other ( 5%)(USD)Allowance16,50016,50016,50016,50016,50016,500Total(USD)346,500346,500346,500346,500346,500346,500Depreciation ( 10 years)Depreciation/month(USD)Straight-line2,8882,8882,8882,8882,8882,888Fixed costRental fee ( 500m2)(USD)Option 120,00016,88014,00016,88016,88016,880Labor cost for 16 employees200$/p/month3,2003,2003,2003,2003,2003,200power consumption ( lighting..per /month500500500500500500Depreciation(USD)per /month2,8882,8882,8882,8882,8882,888Total set cost / month(USD)26,58823,46820,58823,46823,46823,468Variable costRaw material ( coffee, ice, sugar)(USD)cost /unit11110.75 0.75Material consumption ( flub ,tissue (USD)cost /unit0.50.50.50.50.50.25Total cost /unit(USD)Option 21.51.51.51.51.251.00Sale priceSale price/unit(USD)444444Breakeven pointBreakeven pointTotal fixed cost + total variable cost= total revenue X breakeven pointHow many units will be sold/month10,6359,3878,2359,3878,5347,823How many units will be / day355313275313284261Above analysis just give Hard Rock a data about the breakeven point which depend on the variation level of rental fee and unit cost, they must analysis more other variable. So Hard Rock caf should compare with its data of Hard Rock Cafs chain. Hard Rock decision cleric will make decision whether they are going to expand their business in Hanoi or not.