Hard Rock Cafe Analysis

Case Study Question 1

The Hard Rock Café possesses a number of competitive advantages, each of which are instrumental for the Hard Rock Café restaurant chain to attract customers and make profits. One of the most prominent of these competitive advantages is Hard Rock Café's extensive history (Wall et al 60). The advantage of having this history are two-fold. First, it allows older customer to appreciate the restaurant and attend it regularly to relive "the good old days" in a way that most other restaurants do not offer.

Secondly, the history of Hard Rock Café means that it will, by virtue of brand name alone, also attract younger customers who are eager to experience what is now a solidified piece of history, thanks to the numerous stars who have visited the original Hard Rock Café, each of which only increase the fame and potential for customers (Bryman 29).

An example of this can be observed in the recorded history of the Hard Rock Café in the case study, which states that many stars, such as Eric Clapton, donated their own memorabilia, such as guitars, to the Hard Rock Café, which had a directly proportional positive effect on profits (Worthen 2) . However, as explained in the case study, the fame and subsequent fortune that came about as a result of brand association with other classic rockers could not last, especially as what could be considered to be the golden era of rock and roll began to die out. This brings up another competitive advantage of the Hard Rock Café: an extreme potential for merchandising. While this might seem like an obvious advantage, given the extensive history of the Hard Rock Café explained earlier, there are a number of other factors that form a perfect storm, of sorts, which allow Hard Rock Café to make a great deal of profits from its merchandising ability alone.

The most prominent of these is the frequent point-of-sale opportunities that the Hard Rock Café has to sell various merchandise, such as T-shirts, bumper stickers, and other relatively low-cost items. For example, a customer who buys $20 worth of food might see a T-shirt of their favorite band with the Hard Rock Café logo printed on it, and purchase that T-shirt for another $20, doubling the profits of that transaction instantly.

As a part of their overall pricing and distribution strategy, merchandising for Hard Rock Café also receives a boost from their name brand alone. In fact, virtually any piece of memorabilia with the Hard Rock Café logo on it has the potential to sell great numbers simply because of its value as a conversation piece and souvenir: an advantage virtually no other restaurant may claim (Worthen 2-3).

These competitive advantages afforded by the Hard Rock Café are instrumental because they are largely unrelated to the actual primary business of the company, which is food service (Worthen 1). While the food at each Hard Rock Café might be great, or terrible, it is almost irrelevant because customers visit the restaurants for their nostalgic value and historical significance, not, per se, because of the food, although having great food is another obvious must for Hard Rock Café.

Case Study Question 2

Hard Rock Café experienced three primary problems upon being purchased by the Rank Group, each pertaining to one of the three levels of information processing in the MIS integrative framework. One of the three problems experienced by the Hard Rock Café after being purchased by the Rank Group in 1998 was an overall lack of unity and structure within the various information systems of Hard Rock Café (Worthen 2). This lack of unity comes about as a result of all information systems technology within the chain lacking communication with one another, which was, at one point in the 90's, a huge problem for the chain, according to the case study (Worthen 2). This corresponds to the information processing infrastructure portion of the MIS integrative framework. Another key problem of the organization was an overall lack of organization within the frameworks of its own financial system (Worthen 2). That is to say, there were three different groups within the management of Hard Rock Café, each with differing goals and interpretations of the final profit numbers, meaning that each financial report was essentially a confusing mess for those tasked with making sense of it all. This issue pertained directly to the Information Processing aspect of the framework, due to a general lack of financial control and decision-making ability. Lastly, there was a general resistance to change within the infrastructure of the Hard Rock Café itself, which was to be expected, given the scope and cost of the changes proposed after the Hard Rock Café was bought out. Nevertheless, this resistance to change posed a serious problem relating to the promotion strategy of the restaurants, which fail to grasp the importance of change, especially within the realm of information systems and, especially, business.

Case Study Question 3

The solution to the problem of a general lack of unity among the information systems of the Hard Rock Café was to create a sort of centralized "data warehouse" system. This system allows for common data for the chain, such as customer demographics and merchandise sales, to be grouped together, allowing management to observe strengths and weaknesses of the individual Hard Rock Café restaurants both one-by-one and as a whole (Worthen 2-3). The solutions to each of the Hard Rock Café's three problems came about as a direct result of successful utilization of the three key aspects of the integrated framework.

Strategic impact came about as a result of brand recognition and overall historical significance of Hard Rock Café, which then led to the next step:

Information Processing Impact. This was the step that directly preceded the advent of the data warehouses. Here, management utilized decision-making for information systems on a much more case-by-case basis, which turned out to be extremely inefficient, as there was too little communication between each individual restaurant (Worthen 3-4).

Information Processing Infrastructure was the final step in Hard Rock Café's ultimate goal to unify its own information processing systems. By utilizing the data warehouses, Hard Rock Café was able to satisfy the need for data and information, as well as keep the software and hardware aspects of the chain as efficient as possible, which then led to more efficient operation and, ultimately, more satisfied customers and more streamlined procedures (Worthen 3).

The solution to the problem of a lack of organization within the financial aspects of the company was solved via similar means. The new management of Hard Rock Café was able to implement a common ledger for all of the cafes across the globe, once again providing unity within the information systems of Hard Rock Café (Worthen 4). Although the measure cost the company about $5 million, it allowed the financial staff to be downsized down to 30, from 90, which represents a significant long-term investment on the part of the upper management of Hard Rock Café, but one that will, ultimately, pay off in the long run (Worthen 4). Lastly, the solution to the resistance to change within many of the employees and much of the infrastructure of Hard Rock Café may be remedied by rolling out these changes in a step-by-step process. A good way to roll out these changes is to utilize the MIS integrative framework.

Strategic Impact section:

Begin informing employees/lower management. Increase advertising, ensure quality food and merchandise for potential new influx of customer information Processing section: Slowly replace management as needed. Implement new, simplified cash-flow management systemInformation Processing section: Finalize integration of data warehouses to unify data, especially concerning terminology and policies. Integrating these changes as illustrated in the graph will allow each problem area of the restaurant chain to be addressed individually, easing the transformation process for all parties involved and ensuring that there will be no significant culture shock within either employees or customers.

Case Study Question 4

The information systems solutions outlined above have a number of beneficial effects that should strengthen the pre-existing competitive advantages of Hard Rock Café, as well as compliment the new business strategies of the company. To begin with, the advent of the new data warehouses will help to strengthen the Hard Rock Café's primary attribute: its brand name. This is because the organization within each individual outlet that the data warehouses brought about allowed each specific branch of the chain to know exactly what is and is not selling within each other branch. This means that, for example, a new Elvis Presley T-shirt might be selling extremely well, and, with the advent of the data warehouses, other branches may be notified of the exact quantity, selling methods, and price for the T-shirts so that they may emulate the success of each product in each store. The second information systems solution that will have a profound positive effect on the competitive advantages of Hard Rock Café is the streamlining of the financial system within the company. This overhauling of the once complicated and overly segmented financial system has a direct and observable effect on the merchandising aspects of the company in particular, for a few reasons.

The simplified financial system allows for a uniform analysis of profits and losses, meaning that cherry-picking successful products and strategies is much easier for the company. Simplifying and unifying the financial system means there is less strain on the company in analyzing potentially conflicting financial reports, meaning more time and money may be focused on the most profitable aspect of the company: merchandising. The new financial system also allows for a two-thirds reduction in the workforce in that department, meaning that, theoretically, Hard Rock Café could allocate the funds to pay those employees to other, more necessary parts of the company, such as middle management, if necessary.

The fact of the matter is that improving the financial infrastructure of the company has a number of indirect benefits that all lead back to the primary competitive advantages of the company, especially the merchandising advantages. For example, having a common ledger for all accounting purposes allowed for a much more unified and simplistic approach to accounting, leading to greater profits and ultimately more efficient operation. Finally, a gradual implementation of the information systems policies will help appeal to the old-style competitive advantage of Hard Rock Café by allowing for plenty of time to "baby step" the way to the proposed changes, so that the customers, especially those who are especially fond of Hard Rock Café in its current state, will not be shocked by the changes they observe within the restaurant chains.

Conclusion

The Hard Rock Café has undergone a large number of renovations in the past, but the buyout by the Rank Group represented perhaps one of the largest renovations the restaurant chain had ever seen. The basic concept that both old and new management kept to heart is that the Hard Rock Café is not simply a fast food chain, but a means to an end, and that end is to sell merchandise, which accounts for about half of the entire profits of the fast food chain (Worthen 3). With that in mind, upper management was able to utilize information systems renovations to completely overhaul most other aspects of the restaurant chain to great effect, helping to demonstrate the impact that an efficient and centralized information system can be when allowed to be used to the fullest of its ability. Information systems are a crucial part of business, even those that rely on ties to the past, and the recent success of the Hard Rock Café demonstrates this.

Works Cited

Bryman, Alan. "The Disneyization of Society." The Sociological Review, vol. 47, no.1, 1999, pp. 25-47.

Wall, Eileen A., and Leonard L. Berry. "The Combined Effects of the Physical Environment and Employee Behavior on Customer Perception of Restaurant Service Quality." Cornell Hotel and Restaurant Administration Quarterly, vol. 48, no.1, 2007, pp. 59-69

Worthen, Ben. "Rock in a Hard Place." CIO vol. 24, no.1, 2013, pp. 1-6.