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Opm Chapter 2

Hard Rock Café has undergone several strategic changes over time, starting as a London café and evolving into a global brand known for its music-centric dining experiences and extensive memorabilia collections. It has adopted a multi-domestic strategy, using local models globally while maintaining consistency of the brand experience.

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Cakap Tangan
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12 views

Opm Chapter 2

Hard Rock Café has undergone several strategic changes over time, starting as a London café and evolving into a global brand known for its music-centric dining experiences and extensive memorabilia collections. It has adopted a multi-domestic strategy, using local models globally while maintaining consistency of the brand experience.

Uploaded by

Cakap Tangan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Wan Amila Syuhada Bt Wan Mat Zin

2020861856 BA242/3B

Identify the strategic changes that have taken place at Hard Rock Café.
Hard Rock Café is one of the most recognized brands globally. Since its founding in 1971, Hard Rock
Café has continuously upgraded itself to bring the brand to where it is now - adapting to the times and
changing when change demands. Hard Rock started as a London Café serving classic American food.
It became a “theme” chain selling memorabilia in tourist destinations. From there the company
adopted many more transformations including adding stores, upgrading its menu, moving to places
that are not typical tourist destination, and most effective of all, including live music and rock
concerts into the overall customer experience.
Hard Rock elevated dining to a whole new level by shifting to “experience” selling, a dining event
that includes a unique visual and sound experience not duplicated anywhere else in the world”. To
create this unique experience, Hard Rock invested millions in creating a visual and acoustic scenario
perfect for their guests. They also introduced into their ‘experience’ concept their own merchandise,
which is unique in each location and provides a huge income to the company.
Hard Rock is known for its extensive and museum-worthy memorabilia and merchandise. Today, its
memorabilia collection is estimated to be worth $40 Million. Each restaurant rotates the items to keep
the experience new. Thus, tracking these memorabilia is also another important consideration in their
operations. On the other hand, its merchandise accounts 48% of its sales. Hard Rock Café puts a high
premium on experience as evident in their new construction, leases, and remodelling investments.
Wan Amila Syuhada Bt Wan Mat Zin
2020861856 BA242/3B

Hard Rock Café fits in the multi-domestic strategy, which use domestic model globally. Identify and
explain global operation strategy option.
a. Multidomestic Strategy
A firm that use this strategy sacrifices efficiency in favour of emphasizing responsiveness to local
requirement within each of its market. For example, H.J. Heinz used this strategy for their product.
This strategy has an advantage in maximizing the competitive response for the local market.
Multidomestic strategy do not have cost advantage for a firm. The firm that usually used this strategy
was franchise, joint ventures, subsidiaries for example of the franchise is McDonald’s and Hard Rock
Café. For instance, McDonald is depending on the country and uses different strategies. For instance,
in France, where people do not like fast-food restaurants, McDonald´s created a sophisticated line of
restaurants; in India, where people cannot eat meat, they created a sort of veggie restaurants.

b. Global Strategy
This strategy is completely opposite with the multidomestic strategy because the firm that adapt this
strategy will sacrifices responsiveness to local requirements within each of its markets in favour of
emphasizing efficiency. Some of the product will have the minor modification but the global strategy
stresses the need in order to gain more by offering essentially the same product because this strategy
focus is cost reduction but has little to recommend. An example of a company that uses this strategy is
Microsoft, which centralises its process in the headquarters and the product is standardised in the
whole planet and the only thing they change is the language of their programs.

c. Transnational Strategy
This strategy combines the benefits of global-scales efficiencies with the benefits of local
responsiveness. The firm use this strategy to seeks a middle ground between multidomestic and global
strategy. An example of a transnational company is Nestlé, which is actually from Switzerland but
95% of their assets and 98% of their sales take part abroad, so the country identity of Nestlé is really
low and thus, it is a “world company”.
d. International Strategy
This strategy uses export and licenses to penetrate the global arena. This is because of least
advantages along with little local responsiveness as these companies sell the same product around the
countries. This strategy also has little cost advantage because they use their existing production
process. However, this strategy has the easiest one. The company that applied this strategy is Harley
Davidson which sells Made in America product to all over the world.

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