Hard Rock Café Location Strategy

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     2. Economic indicators: - Changes in foreign currencies - Inflation rates - Unemployment rates     2. Hotels - Current number of hotels in market area - Age of existing hotels in market area - Occupancy rate of current hotels, as well seasonality of occupancy - Rates of new hotel construction (could indicates per year during last ten years)       - What type of government system is in place - Nationalization of major industries - Reduction of foreign interest in local business ventures         - Liquidity of real estate - Current vacancy rates/occupancy rates - Number of real estate properties owned by global companies - Real estate turnover rates (how often are properties sold and converted to new business venture) - Cost of buying versus leasing commercial real estate

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# Location decisions for Hard Rock Café begin with a global view which involves analyzing a country, then a region within the country and then finally a city location (Amer, 1999). Specifically within this assessment, it consists of studying and evaluating political risks, currency risks, social norms, social costs, local business practices and whether the brand will fit the market or not. The company must insure that the market will provide large enough long term populations with high enough levels of disposable income and tourism rates (Amer, 1999). Identifying the right location can have significant impact on the profitability of the Hard Rock Café. The company must place serious effort into the city selection as they must be able to anticipate what cities will be able to offer the long term profitability needed. This anticipation involves understanding what long term direction the city is moving in, and recognizing whether a Hard Rock within this city will have the necessary long term relevance in the market. This is important as typically Hard Rock is required to sign long term leases that can range anywhere to 5 to 15 years (and at times even longer) (Amer, 1999). After a location is selected the company must conduct a break even analysis regarding the cost of purchasing and construction of a new site or the remodeling of an existing location (Amer, 1999). The break even analysis is conducted the company then determines what the

fixed and variable costs would be to determine if they break even analysis is attainable (Amer, 1999). If the site meets the long term strategies for the company and fits within the break even analysis, they then begin construction. * & ' 
   
 
  # When Hard Rock does not have extensive experience within a particular market it prefers to franchise a café. Establishing franchises assists the company as these local partners (franchise owners) have the relationships and experience within the market. It would be assumed that the other advantage within franchising is that it greatly reduces the amount of time that it takes for the company to actually enter into these markets, as the local franchisees have the connections and experience for market entrance into the specified area. Lastly, with franchising, the franchisee¶s profitability is directly impacted by the success of the café, and subsequently, this should naturally increase their personal investment in making the café a success. References Amer, B. (2004). ÿ



   
. Retrieved from http://myomlab.mathxl.com/info/MediaPopup.aspx?origin=1&disciplineGroup=7&type= Video&loc=mediaphbp@bp_akamai/heizer/videos.php%3Ftitle%3DProduct%20Design %20at%20Regal%20Marine%26clip%3Dpandc/heizer/Regal_Prod_Design.flv&width=8 50&height=680&autoh=yes¢erwin=yes Heizer, J., & Render, B. (2011). 


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