LOCATION STRATEGY CASE STUDY

Natalia Muvdi, Mariana Buitrago, Valentina Mora, Sergio Lopez y Samuel Muvdi
Gestión de Operaciones, Universidad de la Sabana, Chía, Cundinamarca
10 de Septiembre de 2021

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

such as population (A1), hotels (B2), or restaurants/nightclubs (D), and provide three

subcategories that should be evaluated. (See item C1 (airport) for a guide).

Demographics:

• Gender & Age: Hard Rock has a strong market segment focus, in which it attracts

many people of different ages, but in terms of gender it attracts more men than

women.

• Population: When it is in density and the location has been studied it means that

the probability of obtaining customers is better.

Economical:

• Unemployment: When there is unemployment in the city, for example at Hard

Rock, there is more likelihood of employees to work for a salary.

• Gross Domestic Product: That is, making a large investment in the city.

• Inflation: Prices increase so it can be a bit complicated for customers.

Political:

• New or repaired legislation

• New government laws

Market

• New products and listing prices

 • Available rents and sales of the estates.

2. Which is the highest rated of the four European cities under consideration, using the

table above?

EUROPEAN CITY UNDER Importance

of this Rates of Importance
Factor CONSIDERATION
factor at
A B C D the time A B C D
A.
70 70 60 90 20% 14 14 12 18
Demographics
B. Visitor
80 60 90 75 20% 16 12 18 15
market
C.
100 50 75 90 20% 20 10 15 18
Transportation
D.
Restaurants/ 80 90 65 65 10% 8 9 6.5 6.5
nightclubs
E. Low
90 60 50 70 10% 9 6 5 7
political risk
F. Real estate
65 75 85 70 10% 6.5 7.5 8.5 7
market
G.
Comparable
70 60 65 80 10% 7 6 6.5 8
market
analysis
Total 100% 80.5 64.5 71.5 79.5

After relating each factor of each city with its importance rate, different numbers are obtained

that, when added by city, yield the city with the highest number is the one that will be chosen

for the next location, this case will be city A since it obtained 80.5, the highest among the

cities.

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

They put that serious effort into its location analysis because it’s a long-term decision that is

rarely taken and once a location is determined the resources and cost issues are difficult to

change. It also affects fixed and variable costs; they are key factors that helps the profit of
any company by increasing or decreasing it. It also affects many upcoming decisions like

relationship with suppliers, the conditions in which the company is going to work under,

types of employees that the location is going to provide for the company, between others.

4. Under what conditions do you think Hard Rock prefers to franchise a cafe?

When there are multiple risk factors and differences in social norms, preferences, business

practices, and employment law. Hard Rock Cafe, you have the flexibility to shape and mold

your own Café to suit local market conditions. Thus, generating rapid expansion without a

huge capital outlay.