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Posted on May 1st, 2014, by

1.1.  Analysis and evaluation of relevant external and internal factors

1.1.1.     Internal analysis

Without a doubt, Hard Rock Café has confident competitive strengths in comparison to its closest competitors, for instance, Planet Hollywood.  In accordance with the company’s statement: Hard Rock properties offer stylish and contemporary design, unparalleled service and the thread that unites them all music. Hard Rock’s current Hotel and Casino portfolio is located in the world’s most enviable resort destinations, as well as urban gateway cities. Hard Rock Hotels cater to the evolving and distinctive needs of today’s cosmopolitan, modern travelers, who seek a reprieve from traditional, predictable properties, whether for business or leisure travel. (HRC, Web)

Unfortunately, the US market faced decrease in the previous years, and it was a very negative influencing factor for Hard Rock Café business because this company used to make substantial investments into the development of the domestic market. As a result of negative domestic trends, some of the venues (for example, Hard Rock Park theme park in South Carolina) filed for bankruptcy and were closed because of a number of reasons such as to low sales. But despite the negative domestic trends, company’s performance on international markets has continued to improve. Therefore, taking into account the current market trends, company should focus on its international business opportunities, especially Asia and Pacific, and Latin America.

Hard Rock Café has a strong market penetration and development in the US, Europe and it has started to build the powerful expansion to other regions such as Asia and Latin America. One of the greatest options is the further market penetration in China because it has one of the largest consumer markets in the world and has the potential to grow even larger.

Among the strengths of Hard Rock Café following elements can be defined:

  • Profitability;
  • Recognizable brand image;
  • Customer’s loyalty to the brand;
  • Constant development and geographical expansion;
  • Smart services and products diversification;
  • Infrastructure;
  • Leading positions in the restaurant, hospitality and the entertainment industries;
  • Strong customer relationship management system which includes attention to every customer (staff ensures that the best experience is received by each guest of the venue)

In terms of Hard Rock Café s weaknesses, next elements can be named:

  • New product categories/businesses development risks;
  • Shipping can cause a financial losses in some cases;
  • Dependence on suppliers/delivery companies may cause problems with customer services.

The opportunities for Hard Rock Café include the following:

  • Further global expansion;
  • Development of web commerce on the domestic market.  According to the web commerce analysts, the increase of web commerce in US by 2015 will be huge and the raise will be approx. 43%.  The other forecast is that three-quarters of the web users will purchase the products online;
  • Joint ventures development, successful cooperation with partnering companies.

And finally, the threats for Hard Rock Café are:

  • Negative economic trends on domestic market;
  • Affordable take out options including various promotions: coupons, discounts, specials and happy hour that are marketed toward local citizens (Hard Rock Café considered the higher end take out option).
  • Managing company’s growth.  It’s rather a potential risk that may be caused by problems with new businesses, and investments into foreign markets. So far everything is good, and the major risks are avoided by the company’s management because of the use of franchising on the majority of international markets;
  • The next potential risk is changes of the local regulation, including the taxation;
  • Potential competitors with the similar market strategy entry and consequent difficulties in differentiating the brand from such new competitors;
  • Increasing transportation costs that may influence both costs products and tourism (as a result the number of tourists may decrease).

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