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Posted on April 27th, 2014, by

the company faces the problem of the negative international business environment, such as the global financial crisis, restrictive economic policies concerning certain business activities, such as casino business. Moreover, Hard Rock Café faces the problem of cultural differences as the company expands its business internationally. As Hard Rock Café attempts to open its outlets in new countries, the company faces the problem of the adaptation of local employees to the organizational culture, while the management style of the company has to match traditions of employees and the management style, which employees are accustomed to.

Therefore, the company should use its strengths and opportunities to enter the market of Brazil and India successfully. To make the decision, the company can use the factors affecting foreign market entry mode decision and entry mode selection as well as entry mode grid. In this regard, it is possible to recommend the company to focus on the development of its business internationally. Hard Rock Café raises the problem of the introduction of the strategy that meets the local specificities and environment. At this point, the company should primarily focus on the attractiveness of the market and the relative competitive strength of the company. The following table 1 and table 2 reveal the market attractiveness and the relative competitive strength of the company in Brazil:

Table 1 Market Attractiveness of Brazil

1 very poor 2 poor 3 medium 4 good 5 very good % weight factor Result (grading + weight)
Market size v 15% 3 + 15%
Market growth v 15% 4 + 15%
Buying structure v 10% 4 + 10%
Prices v 10% 3 + 10%
Buying power v 15% 4 + 15%
Market access v 10% 4 + 10%
Competitive intensity v 10% 3 + 10%
Political/economic risks v 15% 5 + 15%
Total 100 3.8 + 100%

 

Table 2 Relative competitive strength of Hard Rock Café in Brazil

1 very poor 2 poor 3 medium 4 good 5 very good % weight factor Result (grading + weight)
Products fit to market demand v 15% 4 + 15%
Prices and conditions v 15% 3 + 15%
Market presence v 20% 3 + 20%
Communication v 10% 4 + 15%
Obtainable market v 15% 5 + 15%
Financial results v 10% 5 + 10%
Marketing v 15% 5 + 15%
Total 100 4 + 100%

 

In such a way, the Hard Rock Café should focus on the development of its business in Brazil but the company should pay a particular attention to the stable financial performance and marketing which are based on the product quality and its meeting existing demand in the market. The company can count on low political, economic and other risks in Brazil but has to pay a particular attention to the pricing strategy and competitive intensity (Cooke, Mills, and Kelley 2005). In fact, the company should come prepared to confront the competition in Brazil and overcome the resistance of companies operating in this country in the hotel and casino industry.

Similarly, the company has good opportunities for entering Indian market and benefiting from launching its business in this country. The table 3 and table 4 reveal the market attractiveness of India and relative competitive strengths of Hard Rock Café in India:

Table 3 Market Attractiveness of India

1 very poor 2 poor 3 medium 4 good 5 very good % weight factor Result (grading + weight)
Market size v 15% 3 + 15%
Market growth v 15% 4 + 15%
Buying structure v 10% 4 + 10%
Prices v 10% 3 + 10%
Buying power v 15% 5 + 15%
Market access v 10% 5 + 10%
Competitive intensity v 10% 4 + 10%
Political/economic risks v 15% 4 + 15%
Total 100 4 + 100%

 

Table 4 Relative Competitive Strength of Hard Rock Café in India

1 very poor 2 poor 3 medium 4 good 5 very good % weight factor Result (grading + weight)
Products fit to market demand v 15% 4 + 15%
Prices and conditions v 15% 3 + 15%
Market presence v 20% 4 + 20%
Communication v 10% 3 + 10%
Obtainable market v 15% 4 + 15%
Financial results v 10% 5 + 10%
Marketing v 15% 5 + 15%
Total 100 4 + 100%

 

In such a way, the company should focus on the elaboration of effective pricing policies and communication because the company may face problems with these issues. At the same time, the company can count on positive financial results and marketing because the market is accessible and the buying power is relatively high due to the steady growing economy and due to the large number of tourists. Therefore, the company can succeed while entering Indian market.

In fact, both Brazil and India are attractive for Hard Rock Café and the company can focus on the development of its chain of hotels and casinos and restaurants in Brazil and India respectively. As the company develops its own chain, Hard Rock Café can transfer its employees to its outlets in Brazil and India. Transferred employees can train local employees and steadily the company can replace transferred employees by local employees that will allow the company to save costs and to maintain successful marketing performance.

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