Comparison of Operations between Hard-Rock Café and Starbucks Café

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Operation Management 1.0 Comparison of Operations between Hard-Rock Café and Starbucks Café Hard Rock Input-Hard Rock Café’s input includes a combination numerous things that makes up its business, such as decoration, menu, as well as artworks and instruments, which together make up the memorabilia.

Process-The company relies on ‘existing domestic model globally’. Additionally, it uses franchises in other locations for purposes of producing more customized experience for its customers. The franchising is also settled upon owing to other risk factors, existing different laws on employment for different countries, as well as the varied businesses practices adopted by different countries.

Output-Hard-Rock Café’s main output includes dining events that uniquely incorporate sound experience. Merchandise with the Hard Rock brand, such as clothing and footwear, are also produced and sold.

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Starbucks Café Input2.0 Operation Strategies of the Hard-Rock Café The main change of strategy that has been witnessed at Hard Rock since 1971 when it was founded is the brand’s globalization. When it started, Hard Rock was mainly a British café that targeted the local British market. Presently, however, Hard Rock has transformed into a global brand that mainly operates restaurants and hotels.

There has also been a change of offer for the company. Originally, Hard Rock only offered meals to its customers but today it also involves in offering experiences. A wide range of music experience is offered in all Hard Rock restaurants and hotels which make the company to be considered as the Rock & Roll’s distinctive seal.

SWOT Analysis of Hard Rock Café’s Competitive Advantage Strength The Hard Rock is more than forty years old in business, underlining its strength and accomplishment over these years. The experience garnered is enormous, enabling the company to grow into a worldwide corporation that only started as a partnership The merchandise sold by HRC form the company’s life blood. The die-hard rock ‘n’ roll following purchases branded souvenirs and also collect pins from every café they visit. The amounts recovered from sale of merchandise have enhanced the expansion efforts as well as assisted in global brand recognition.

Weakness

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Despite the effort to globalize HRC, the company still remains heavily invested within the American market. In particular, there are at least 54 cafes in the US alone. This implies that it has not managed to fairly distribute its risk across other global markets.

The South Carolina HRC theme park opened its doors in April 2008 but was closed after only 5 months of operations after it filed for bankruptcy. The Hard Rock brand suffered damaged reputation with the failed venture costing it about $400 million.

The company has also been forced on various occasions to close down its nonperforming cafes based in America. This has mainly been as a result of low unattractive sales posted by these cafes. Its international cafes meanwhile have continued to register rapid growth.

Opportunities The HRC is recording rapid international growth as well as rapidly engaging in joint ventures. The joint venture with Sol Melia in 2004 enhanced the establishment of the first Hard Rock Hotel in Spain while a joint cooperation with Loew’s Hotels has supported in the establishment of three Hard Rock Hotels in the South East Asian region. These developments are enabling HRC to increase annual profits.

The joint ventures that HRC has established with other hotels and restaurants has enabled the company to venture resorts and casinos, which are altogether new business areas that the company did not focus on initially.

Threats The American recession that began in mid 2007 together with the take out options that are more affordable have continuously become business threats to HRC. The relative failure by the American dollar to improve in its value as was the case a few years ago have caused the often busy American consumers to look for alternative ways of buying affordable prepared food.

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Estimated 48% of the food budgets by Americans are spent on prepared foods. This is very good for domestic restaurant industry which also involves casual dining restaurants.

However, the HRC, despite being in the same range of casual dining, its focus is mainly on the higher end. As a result, different casual dining spots are beating HRC in its pricing as they offer discounts, coupons, as well as happy and special hour which are marketed with the target being on locals searching for a bargain.

The food options available at Hard Rock hotels and restaurants are quite limited. The Company mainly provides Chinese food and pizza, locking out families with different tastes for different foods.

Competition is growing especially as a result of entry into the market of Hispanic, Japanese, Mexican, and Halal take-out spots which are comparatively affordable. Grocery stores equally compete with HRC by preparing a wide range of prepared items for customers intending to buy a meal rather than doing the cooking by themselves.

Three Forecasting Applications at HRC Long Term Forecasting HRC uses this type of forecasting application to determine its growth capacity for each of the company’s stores in terms of the sales.

Intermediate Forecasting This is used to create contracts, mainly with the suppliers, for the sourcing of raw materials like leather which in turn is used in the manufacture of Hard Rock branded leather coats. This basically helps the company in its negotiations with food product suppliers.

Short-term Forecasting

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HRC also forecasts sales for the individual store to enable appropriate scheduling for food and labor. Sales forecast for the short-term time frame are calculated for each month using established sites.

Other areas where Forecasting Models could be used by HRC Human Resource This will help the company to determine whether its employees are good enough in terms of their performances, or whether more efficiency could be achieved through pursuing other alternatives. This will particularly be important for the medium term.

New Food Product and the Resultant Impact A model used for this purpose will be significant for long term strategic planning. It will particularly help the company in determining whether the new food products will be accepted in the market by customers.

Expansion through establishment of new branches A model in this area will be used for both long term and strategic planning. This will focus on determining the viability of a market prior to the company committing its resources in the investment.

The Point of Sale and its role in forecasting at HRC The POS system is used in collecting almost every consumer’s diary data for every single café. The resultant information is conspicuously large, given Hard Rock café’s popularity and the extent of its existent in the market. Additionally, the huge information obtained implies additional benefits particularly if the managers are capable of using it in a way that will benefit the company. A combination of such transactional figures together, in addition to other data from

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the previous years’ sales, tourist information, and local events may be useful to the head managers of the company to determine well in advance what the actual benefits of each café are.

There is need to accurate the point of sale system so as to identify and evaluate errors whenever they occur. Failure on the part of the POS system to work efficiently might result in the company having issues, such as orders-back, instead of gains. Equally, those who analyze the system and its results need to be knowledgeable enough to be able to use them. It is important to point out that a POS system, however best it could be operating, may not be useful on its own.

Justification of using Weighting System to Evaluate Manager’s Annual Bonuses