Case Study: Where to Place the Hard Rock Café

Question 1

The four subcategories that should be evaluated according to Munday’s Standard Market Research Checklist include population, tourists, economic indicators and hotels. When checking out the economic indicators of the area, it is important to consider the income levels of the people living in the area, Gross Domestic Product growth rate and lastly the political, social and inflation conditions that prevail in the area. Tourist indicators include determining the number of tourist attraction sites in the area, common places that tourists prefer spending time and the standard number of tourists or business people that visit the area. Population checklist includes the number of people that can be considered as prospective clients, presence of a culture that would easily adopt the Hard Rock theme and the age and gender demographics of the residents (Couto, 2012). Hard Rock is also keen on determining the number and quality of hotels in the locality and the average charges per person in the present hotels.

Question 2

Location has always been an important factor for consideration in all businesses and success of Hard Rock is dependent on location which also includes the neighboring places. In order to ensure that the company makes both long term and short term beneficial decisions, hard Rock is always keen on location analysis (Couto, 2012). The company also aims at choosing places that will not make it close its braches unnecessarily due to poor sales. Hard Rock is aware that profits and sales of a company are heavily dependent on location and this is the reason as to why the company ensures that it conducts intensive research on the country’s political state, social norms, currency risk and the status of the cities that it wishes to invest in before considering it as a perfect location (Couto, 2012). Hard rock also considers the suitability of its brand in a new market, social costs and the way business is conducted especially when they are thinking of investing in a new country.  In most cases, the company signs long term contracts that are around 10 to 15 years or more therefore they ensure that they are completely familiar with conditions of the area. Additionally, the company makes an analysis of the possible changes that may occur in future and identify other variable and fixed costs in order ensure that they are able to acquire a breakeven point.

Question 3

There are certain times when franchise with the local businesses is beneficial to the company while sometimes it is not. Some of the reasons that may influence a company to consider a franchise include limited funds for investing in new markets, market uncertainty, investing in countries that do not allow direct foreign investment, unfamiliarity with the area, and avoiding spending on advertising.  For instance, a franchise in Moscow is ideal since Russia’s political system is unstable and the business culture in the country differs from that of the US (Couto, 2012). Through a franchise in Moscow city, Hard Rock is able to own a restaurant that cater for the needs of the local population as well as, tourists and business people that tour the area. In order to save money and easily penetrate in a new market, there are times when Hard Rock Café goes for a franchise. A franchise is also beneficial to hard rock since it is not mandatory for them to rebrand the company and since it is a popular brand, it is easy for people to recognize it.

References

Couto Capítulo 8 Where to Place the Hard Rock Cafe. YouTube. Retrieved 24 January 2018, from https://www.youtube.com/watch?v=n5UWLMSxRH0, J. (2012).