Case Study

Case Study: Where to Place the Hard Rock Café (pp.351–352 and Pearson Video Library)

Case Study Questions

1. From Munday’s Standard Market Research checklist, select any other four categories, such as population (A1), hotels (B2), or restaurants/nightclub (D), and provide three subcategories that should be evaluated. (See item C1 [airport] for a guide.)
2. Why does Hard Rock put such serious effort into its location analysis?
3. Under what conditions do you think Hard Rock prefers to franchise a café?

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Each Case Study paper is to consist of the following components:

1. Title page and two written pages with no more than 500 words.
2. Answers to individual questions (as assigned)
   Each assignment will have specific questions you need to address. You should create a sub-headed section for each one.
3. References/Appendix (if required)
   These are not research papers per se, so you may not have the need to cite outside sources. If you do, however, they should be identified on a proper reference page. Similarly, if you are required to do calculations and choose to perform them on a separate page, you should include them in an appendix.

Weekly Case Paper Grading Rubric
Category	Points	Weighting	Description
Content	24	80%	Required questions are answered in an accurate and appropriate manner. Adequate support is given for recommendations. Calculations (where required) are performed correctly
Grammar and Spelling	3	10%	Paper is well written and reflects college level writing. Rules of grammar, usage, and punctuation are followed and spelling is correct. Sentences are written in a complete, concise manner, and sentence transitions maintain the flow of thought throughout the paper.
Formatting and APA Usage	3	10%	Paper includes the components required for the assignment: title page, answers to questions, references or appendix (where appropriate). APA format is followed throughout the paper.
Total	30	100%	 

Where to Place the Hard Rock Cafe

Some people would say that Oliver Munday, Hard Rock’s vice president for cafe development, has the best job in the world. Travel the world to pick a country for Hard Rock’s next cafe, select a city, and find the ideal site. It’s true that selecting a site involves lots of incognito walking around, visiting nice restaurants, and drinking in bars. But that is not where Mr. Munday’s work begins, nor where it ends. At the front end, selecting the country and city first involves a great deal of research. At the back end, Munday not only picks the final site and negotiates the deal but then works with architects and planners and stays with the project through the opening and first year’s sales.

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Munday is currently looking heavily into global expansion in Europe, Latin America, and Asia. “We’ve got to look at political risk, currency, and social norms—how does our brand fit into the country,” he says. Once the country is selected, Munday focuses on the region and city. His research checklist is extensive, as seen in the accompanying table.

Hard Rock’s Standard Market Report (for offshore sites)

A.   Demographics (local, city, region, SMSA), with trend analysis

1.   Population of area

2.   Economic indicators

B.   Visitor market, with trend analysis

1.   Tourists/business visitors

2.   Hotels

3.   Convention center

4.   Entertainment

5.   Sports

6.   Retail

C.   Transportation

1.   Airport

2.   Rail

3.   Road

4.   Sea/river

Subcategories Included:

1. Age of airport
2. No. of passengers
3. Airlines
4. Direct flights
5. hubs

D.   Restaurants and nightclubs (a selection in key target market areas)

E.   Political risk

F.   Real estate market

G.  Hard Rock Cafe comparable market analysis

Site location now tends to focus on the tremendous resurgence of “city centers,” where nightlife tends to concentrate. That’s what Munday selected in Moscow and Bogota, although in both locations he chose to find a local partner and franchise the operation. In these two political environments, “Hard Rock wouldn’t dream of operating by ourselves,” says Munday. The location decision also is at least a 10- to 15-year commitment by Hard Rock, which employs tools such as locational cost-volume analysis to help decide whether to purchase land and build, or to remodel an existing facility.

Currently, Munday is considering four European cities for Hard Rock’s next expansion. Although he could not provide the names, for competitive reasons, the following is known:

 	European City Under Consideration				Importance of This Factor at This Time
Factor	A	B	C	D
Demographics	70	70	60	90	20
Visitor Market	80	60	90	75	20
Transportation	100	50	75	90	20
Restaurants/nightclubs	80	90	65	65	10
Low political risk	90	60	50	70	10
Real estate market	65	75	85	70	10
Comparable market analysis	70	60	65	80	10

Discussion Questions

1.   From Munday’s Standard Market Report checklist, select any other four categories, such as population (A1), hotels (B2), or restaurants/nightclubs (D), and provide three subcategories that should be evaluated. (See item C1 [airport] for a guide.)

2.   Why does Hard Rock put such serious effort into its location analysis?

3.   Under what conditions do you think Hard Rock prefers to franchise a cafe?

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