MODULE ASSIGNMENT COVERSHEET
PART 1
MODULE CODE
MBA 401
Student Name: Student Number: Module Tutor: Peter Sorensen Module Title / Assignment Number: MBA 401 Operations Management Date Due / Submission Date: Extension Date (including authorising signature): Word Count (excludes references): 2,927 The submission of this assignment is a statement that it is compliant with the Universitys assessment regulations, and that it does not infringe the Universitys research ethics principles. You are responsible for ensuring that the assignment is submitted in its entirety, and are advised to number pages in the format Page x of y (e.g. Page 3 of 12). PART 2 For completion by the Module Tutor: Ensure provisional mark is recorded on both copies. Keep blue copy. Return assignment and white copy to student. Feedback with reference to assessment criteria and suggestions for improvement.
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The Hard Rock Caf: successfulness, new opportunities and challenges
University of Gloucestershire
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The Hard Rock Caf: successfulness, new opportunities and challenges Hard Rock Caf is a success story in operation management. From its very first London pub in 1971, after 39 years of existence Hard Rock caf continued expanding and succeeding in many different countries. This paper will discuss how the 10 decisions of the Operation management were made on Hard Rock Caf as well as operation management challenges and opportunities confronting Hard Rock Caf when considering an expansion of its business in Hanoi. 1. Critically evaluate the operations management strategy of Hard Rock Caf as described in
the attached case materials. With the mission: To spread the spirit of Rock n Roll by delivering an exceptional entertainment and dining experience. We are committed to being an important, contributing member of our community and offering the Hard Rock family a fun, healthy, and nurturing work environment while ensuring our long-term success. Nash, Sh. (December 14th, 2009). Hard Rock caf has won continued success since it was founded in June 14, 1971 when the rock music was explosive in England. Hard Rock Caf has uniqueness and more importantly it has launched an excellent strategy in operation management. Experience strategy has helped Hard rock caf grow from its first Caf to 129 world wide locations. Bellow is the discussion on some out of 10 decisions of operation management run on Hard Rock Caf. Taking the success of the Hard Rock Caf into consideration means considering its service quality and product design. The Caf offers a range of services from cafes, live music, Rock concerts to hotels and casinos. They serve customer by modifying the menu from classic American burgers and chicken wings- to include higher-end items such as stuff veal chops and lobster tail (Heizer & Render, 2010). And of course, its quality must be the top charts. They always usually change their menu based on the frequent customer survey and localized food taste. Surveys are done on a regular basis to evaluate quality of food and service at the caf. Scores are rated on a 1 to 7 scale. And if the score is not a 7, the food or service is a failure (Heizer & Render, 2010). Hard Rock not simply offers meals and drink, it provides a
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The Hard Rock Caf: successfulness, new opportunities and challenges unique different experience in each location. Experiences are not exclusive about entertainment; company stage an experience whenever they engage customers in a personal and memorable way (Pine II& Gilmore, 1998). Surely, the key has driven Hard Rock Caf to success is to build a standard of quality and keep its product and services meet the standard. One factor that brings success to Hard Rock Caf is Human resource strategy. Based on their specific services, from the recruitment Hard Rock Caf looks for people who are passionate with music, like to serve people and have ability to tell story. Hard Rock builds on a hiring criterion of bright, positive attitude, self-motivated individuals with an employee bill of rights and substantial employee power (Heizer & Render, 2010). These people will surely inspire customer and make them happy. Hard Rock Caf also created a great working environment with people who have the same interest but different personality. Besides, training plan is also a very good strategy at Hard Rock. The companys training is very specific, with job-oriented interactive CDs covering kitchen, retail, and front of the house service. (Heizer & Render, 2010). Through the training, employees improve themselves both personally and professionally. Staffs are highly motivated because they can see their opportunities in Hard Rock even they are from a low level as 60% of the managers here are promoted from part time staff. Such strategies have revealed that the Cafe really cares about their employees and their employees do not only come for money but also to obtain job satisfaction. Because location is such a significant cost and revenue driver, location often has the power to make (or break) a companys business strategy (Heizer & Render, 2010). Therefore, Hard Rock Caf has been spending much time and great efforts to analyse location whenever they want to open a new Caf. Focusing on tourists and people who love music therefore demographics, visitor market, transportation, restaurants/night clubs and political risk are emphasized factors for researching to make sure that Hard Rock Caf is located in a convenient place for their potential customers. The analysis also helps them have a long term investment in each Hard Rock caf. Every opened caf is a result of an extremely careful decision after investigating the target markets, the proper places and considering the future success in a long period of time. Therefore, location contributes a crucial role in expanding Hard Rock Caf popularity to world-wide nowadays.
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The Hard Rock Caf: successfulness, new opportunities and challenges
The layout is also another important decision that management has to make, and they did really well. The kitchen is set up to be not just only a normal kitchen but also a comfortable working space for all the staff. The kitchen flows are designed in order to make sure that the chief, waiters and waitresses have enough space to do their work. The bar and restaurant are designed to bring the highest income for Hard Rock Caf. The installation of lighting, sound, screens, music and circulation paths is in order to praise memorabilia and as a result, customers are convinced to buy souvenirs naturally. In fact, the retail shops produce about half the companys profit and they are always displayed at eye-catching areas such as within the restaurant space, flow and work stations. Its obviously that scheduling is one of the most important decisions at Hard Rock Caf. Mr. Ken Hoffman, Hard Rocks General manager takes scheduling very serious. There are some factors that affect sales that Ken Hoffman cares when he makes schedule. The number of occupied rooms in nearby hotels is important because not all guests will have dinner in the Hotels. They will look for dinning spots and of course Hard Rock caf will be their destination because of it uniqueness and well-known. The next factor that they consider is how many events will occur in the area. The third one is they examine the sales at the same day of previous year. Another factor that Hard Rock Caf takes into account is the entre sales data, each entre is present 1 customer. With the result of the forecast, Hard Rock Cafe estimates the number of guest will come and they can have an appropriate plan on staffing and menu. There is a fact that inventory management is a different side of Hard Rock cafe. It is not too much when saying that the collection of rock and memorabilia is a trademark that makes Hard Rock cafe widespread everywhere around the world. Customers come to Hard Rock Cafe not only for the meals they serve there but also for the items of their favourite artists that they can find on the cafe walls. These items; including autographed guitars, outfits from world tours and rare photographs; are collected and taken care by a special group in Orlando. They manage every single item with every single history, know exactly which item is being exhibit in which cafe on which wall through an inventory system using advantaged technology. A life circle of the exhibition of an
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The Hard Rock Caf: successfulness, new opportunities and challenges item is around 5 to 7 years. After these years, the item is brought back to Orlando and renovated while another item is being replace it on the wall 2. In light of the above, discuss the operations management challenges and opportunities for
Hard Rock when considering an expansion of its business. Hard Rock Caf has launched the first restaurant in Ho Chi Minh City through franchise license bought by Viet Thai International Company (VTI). This restaurant chain has been successful since 1971 in over 129 worldwide locations. It seems that after a year of launching, Hard Rock Caf Vietnam (HRCVN) has been in the right track to the success. VIT (HRCFVN franchisee) also has a long term vision to expand the chain in Vietnam. Director of VIT announced on the launching day that his company would have at least two more Hard Rock Caf in Vietnam by 2012, one in Hanoi and another one in Dang Nang city (Rock Passion, 2010). In order to evaluate if HRCFVN will be a successful model in Hanoi, following discussion is intended to examine opportunities and challenges for HRCFVN based on its key decisions concerning operation managements. Products & Services Design: As franchise, HRCFVN has been benefited from Hard Rock Caf international in providing the best quality of goods and services for its customers. Hard Rock Caf Ho Chi Minh City can serve more than 500 customers at the same time, as a result, if Hard Rock Caf expands its business in Hanoi, this scale would be considered to apply. This would be a good starting point to serve big events and parties as not many restaurants in Hanoi are large enough. Based on menu of Hard Rock Caf Ho Chi Minh, they are offering a very diversified and good menu from drinks to meals and even a special menu for kids. This is only one thing that would be a challenge for drinks and meals menu is that the Northern foods are quite different with the South. The restaurant needs to do researches to make food and drinks suitable for the Northern peoples taste. Besides, a series of rock t-shirts and pins collections are also offering at Rock Shop. This is unique selling point which is no single restaurant in Hanoi can offer. This would offer Rock lovers
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The Hard Rock Caf: successfulness, new opportunities and challenges opportunities to own a rock t-shirts. As Hard Rock caf is changing its strategy to respond to operation management, they believe that they dont sell meals or drinks, Hard Rock Cafe offers a unique different experience (Hard Rock Caf Mission). At HRCF Ho Chi Minh, they are offering Rock n Roll memorabilia with hundreds of pieces of guitar, dress of Rock n Roll legends such as John Lennon, Jimi Hendrix, Pantera, Kiss, Van Halen, Motorhead, Pearl Jam, Eagles, Scorpions, Jon Bon Jovi, Steven Tyler, Chuck Berry, Elvis Presley. By offering these items in Hanoi, it would be another key point to pull customers coming to the restaurant. Regarding service design, as Jay and Barry comment that designing services is challenging because they often have unique characteristics and in reality. Seeing service quality point only, there is a big gap if compare Ho Chi Minh City and Hanoi. Service quality in Ho Chi Minh City is always evaluated much better than Hanoi. It would be a challenging point for Hard Rock when they expand to this location. However, Hard Rock Caf is well known for flexibility with the product, design and so many other aspects of their restaurants based on the local market they enter into. It means that they try to present themselves from customizing things to the likes of their local customers. They empower the local franchisee to create their own unique Hard Rock Cafe that delivers unique guest experience. There is no doubt that they would respect the tradition and culture of the locals and design your restaurant settings with that view in the mind. That would be a key to the success when they do business in Hanoi. Quality Management: As franchisee, HRCFVN will be provided, guided and trained international management standard which Hard Rock Caf follows worldwide with almost 40 years of experience. The local owner VIT will have many opportunities to learn how to manage Hard Rock Caf in Ho Chi Minh and then apply key learning strategies for location in Hanoi. In addition, VIT is also a big name in food and beverage industry in Vietnam. They are owning and operating High Land Coffee brand which has more than 60 high class coffee chains nationwide with more than ten years of experience. They also have a high qualified management team who would be a good source for the business expansion. Location: It is clear that Vietnam in general and Hanoi in particular are a safe place to invest with high stable political conditions. Moreover, Vietnam is the second fastest-growing
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The Hard Rock Caf: successfulness, new opportunities and challenges economy in Asia - Pacific with the 13th largest population in the world. The capital of Vietnam is a good location to invest as the income of people is increasing quickly. As a result, customers would welcome a high-end restaurant with different selling points as Hard Rock Caf even they have to pay more. Besides, Vietnamese society is more open with Western life style, thus in terms of social norm, it is not hard for customers to experience a new style in town. There is another key point that needs clarifying that any restaurant must pay much consideration location of restaurant. Location is sometimes considered counting up to 80 percent of successful opportunity in restaurant business. In fact that Hanoi is now hard to find a good location for Hard Rock as good and convenient venues have been already occupied by other competitors. Though the current owner, Hard Rock caf Vietnam is quite successful in finding perfect location for their High Land Coffee chain, but to open a Hard Rock caf would be definitely harder because they need a much larger-space location than a coffee shop. Supply Chain Management: It is not difficult to find a qualified supplier who can provide fresh, quality materials and products to the restaurant. Metro supermarket (a giant wholesales supermarket from Germany) has at least two distribution centres in Hanoi which are current main suppliers for five-star hotels and restaurants in the city. In addition, there are ten smaller suppliers who can meet whatever Hard Cafes demands. The distance from Metro and other suppliers to the downtown of Hanoi is around 15km, 40 minutes for trucks or vans reaching any place in the city to provide foods and drinks on time. There is a tougher task which would be the memorabilia among locations to change the experience every time a guest visits. This is a key point in supply chain to create the best circulation items among its members. Human Resources: It is a strong point if Hard Rock Caf expands its business to Hanoi. As one of the best high end coffee chains, VIT has a large number of qualified employees who are ready to start these project as key members. In reality, VIT has several other restaurant projects and they have successfully used their current human sources to solve one of the most difficult tasks in any business ventures people question. Regarding recruitment of employees who are passionate about music, love to serve and convey the experience to customers, it is not a big challenge as Hanoi labour force are young and well educated. The recruitment can target to hundred of thousand students who are learning at ten of colleges and universities in Hanoi. These
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The Hard Rock Caf: successfulness, new opportunities and challenges targeted employees are passionate to Rock n Roll life style and would be the best front liners to spread the spirit of this concept to local customers. As an international restaurant chain, Hard Rock will provide professional training courses for local employees with international standards which will be opportunity point for Hard Cafe in Hanoi to have better employee team with international standard. Inventory Management: There is no big challenge for inventory of Hard Caf as key supplier can be reached by in 40 minutes by vans and there are many alternative suppliers who ready provide and meet all demands. Thus, inventory should limit to minimize volume except special food and raw materials which take time to import. Memorabilia are more challenge for Hard Rock inventory as its thousands pieces will be circulated among 160 locations around the worlds. However, it seems that this work has been well organized by Hard Rock Caf International with $40 million valued memorabilia are catalogued, each piece is known where to be (Gusa and Inci, 2008) Scheduling: Based on the current business model of Hard Rock Caf in Ho Chi Minh City, full service is offered for all events. Catering, entertainment, and event merchandise can be customized to complement every event (Hard Rock Caf Ho Chi Minh, n.d.). If this scale is applied to Hanoi location, this restaurant can be seen as a medium and large size in the city. All community events in the area will be targeted. With the unique and different point of sales, it is potential that Hard Rock Caf would be a favourite venue for events related to young customers. However, there is only a challenge can be seen that the restaurant will not be an attractive place for tourists, especially for those who come from Western countries. The reason can be explained that if you travel to the U.S, it would be good to explore Hard Rock Cafs Rock n Roll experience right in the home land of this music. However, this purpose will less attractive when the restaurant is locating in an Oriental country like Vietnam. It is also a challenging point that Hard Rock Caf will take longer time to reach ROI (Return on Investment) points than Hard Rock Caf in Ho Chi Minh City because; outside dining culture is more popular in Ho Chi Minh city. People are inclined to afford to eat out regardless of locations in Vietnam, particularly during the weekend. Second, Hard Rock Caf needs to invest a
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The Hard Rock Caf: successfulness, new opportunities and challenges large amount of capital to reach premium standard as requested by Franchiser. However, expanding business in Hanoi is seen as a right direction and it should take action as soon as possible as they have successfully taken the first step in the main market of Vietnam.
References
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The Hard Rock Caf: successfulness, new opportunities and challenges
Jay Heizer and Barry Render, Principles of Operations Management, Pearson, Global Edition, Eight Edition, 2010 B,Joseph Pine II& Jame H. Gilmore, Welcome to the experience economy. Harvard Business Review, 1998 Gusa Ylmaz and nci Aksoy, Operations Management in Hard Rock Caf, 2008 Nash Sherchan. 7 keys why Hard Rock Caf is successful even in a competitive global market. What can your restaurant learn?, Marketing restaurant online, December 14th, 2009 Retrieved from http://www.marketingrestaurantonline.com/2009/12/14/7-key-reasons-whyhard-rock-cafe-is-successful-even-in-a-competitive-global-market/ Rock Caf Ho Chi Minh, Booking Information Retrieved from http://www.hardrockcafe.vn/venueinfo.php Rock Passion, 2010 Retrieved from http://rockpassion.vn/news/hard-rock-cafe-tung-bung-khai-truong.html
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