Where to Place Hard Rock’s Next Where to Place Hard Rock’s Next Café?Café?

Presented by:Presented by:

AbdirahmanAbdirahman

Mihliev AzizMihliev Aziz

M HasanM Hasan

Syis SamsulbahriSyis Samsulbahri

Yakubov SokhibYakubov Sokhib

Video ShowVideo Show

Background:Background:- Hard Rock Cafe is a chain of Hard Rock Cafe is a chain of

casual dining restaurants, which casual dining restaurants, which was founded inwas founded in June 14, June 14, 1971 1971, in , in London, London, by Isaac Tigrett and by Isaac Tigrett and Peter Morton.Peter Morton.

- TThe experience concept is to he experience concept is to provide a unique visual and provide a unique visual and sound experiencesound experience..

- Big investment in memorabilia.Big investment in memorabilia.

MissionMissionTo spread the spirit of rock ‘n To spread the spirit of rock ‘n

roll by creating authentic roll by creating authentic experiences that rock. experiences that rock.

MottosMottosLove All – Serve AllLove All – Serve All

All is oneAll is oneSave the PlanetSave the Planet

Take Time to Be Kind Take Time to Be Kind

Benefit to Society

Mission

Factors affecting MissionFactors affecting Mission

Questions Questions

1. From Munday’s standard market report 1. From Munday’s standard market report checklist, select any other four categories, and checklist, select any other four categories, and

provide three subcategories that should be provide three subcategories that should be evaluated. evaluated.

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

1. Population of area:1. Population of area:

- Gender & Age distribution- Gender & Age distribution

- Population density- Population density

- flow of traffic within location- flow of traffic within location

2. Economic indicators:2. Economic indicators:

- - Identification of the activities in the Identification of the activities in the areaarea

- Unemployment rate- Unemployment rate

- Inflation rate- Inflation rate

(Political risk)(Political risk)

3. 3. - Acts of war, and military coups- Acts of war, and military coups

- New legislations- New legislations

- Expropriation of assets by the - Expropriation of assets by the governmentgovernment

(Real estate market)(Real estate market)

4. 4. - Number of real estates’ available for - Number of real estates’ available for rent & rent & sales sales

- Real estate’s values- Real estate’s values

- Listing prices- Listing prices

2. Which is the highest 2. Which is the highest rated of the four rated of the four European cities under European cities under consideration, using consideration, using the table in the case?the table in the case?

Factors

European cities under consideration Importance of

this factor at this time

%

Factors weighted by its importance for each European city under

consideration

A B C D A B C D

A. Demographics 70 70 60 90 20 14 14 12 18

B. Visitor market 80 60 90 75 20 16 12 18 15

C. Transportation 100 50 75 90 20 20 10 15 18

D. Restaurants/ nightclubs 80 90 65 65 10 8 9 6.5 6.5

E. low political risk 90 60 50 70 10 9 6 5 7

F. Real estate market 65 75 85 70 10 6.5 7.5 8.5 7

G. Comparable market analysis 70 60 65 80 10 7 6 6.5 8

100 80.5 64.5 71.5 79.5

3. Why does Hard Rock put such 3. Why does Hard Rock put such effort into its location analysis?effort into its location analysis?

Choosing the location requires a lot of Choosing the location requires a lot of locations analysis for reasons: locations analysis for reasons: it is a long term decision, many it is a long term decision, many resources and cost issues are difficult to resources and cost issues are difficult to changechangeit determines and affects many it determines and affects many upcoming decisions such as:upcoming decisions such as:

- The relationship with suppliers- The relationship with suppliers

- Types of employees - Types of employees

- Types of customers - Types of customers

- The conditions of legal, political, - The conditions of legal, political, and economical and economical environment environment

Major components of volume and Major components of volume and revenuerevenue

for the service firm:for the service firm:Purchasing power of the customer-Purchasing power of the customer-driving areadriving areaService and image compatibility with Service and image compatibility with demographics of the customer-driving demographics of the customer-driving areaareaCompetition in the areaCompetition in the areaQuality of the competitionQuality of the competitionPhysical qualities of facilities and Physical qualities of facilities and neighboring businesses neighboring businesses

4: Under what conditions do you 4: Under what conditions do you think Hard Rock prefers to think Hard Rock prefers to

franchise a cafe?franchise a cafe?

ControlsControls Low capital expenditureLow capital expenditure Self-motivated operators Self-motivated operators

(franchisees)(franchisees) Payroll taxesPayroll taxes No direct liability for franchisee’s No direct liability for franchisee’s

actionsactions Quick market accessQuick market access Minimize the riskMinimize the risk

Offer better employment Offer better employment opportunitiesopportunities

Reduce costs (labor, taxes, tariffs, Reduce costs (labor, taxes, tariffs, etc.)etc.)

Thank youThank you

Q & AQ & A