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Question 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. (Seeitem C1(airport) for a guide.)
1. Population of area:
a) Gender & Age distribution: Hard Rock café usually attracts certain ages (young and
middle ages) more than other ages, and attract men more than women.
b) Population density: when it is high in the location being studied, that means the
probability of getting more and more customers is better and vice versa.
c) Population growth rate: when it is high, that means the probability of getting more
and more customers is better and vice versa.
2. Economic indicators:
E.Political risk
1. New legislations.
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2. Expropriation of assets by the government.
3. Acts of war, and military coups.
Question 2: Which is the highest rated of the four European cities under consideration,
using the table above?
B. Visitor market 80 60 90 75 20 16 12 18 15
C.Transportation 100 50 75 90 20 20 10 15 18
1- We weight each factor by its importance at this time for each city under consideration.
For instance: the Demographics factor in city A is 70, the importance of this factor at
this time is 20%, therefore the weighted factor is 70*20%= 14.
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2- We sum all the weighted factors for each city, and the city with the highest score is the
one we choose for our next location.
Applying these steps in this example had resulted in choosing city A to be the place of our
next café, after being the highest rated city (80.5) among the four European cities under
consideration.
Question 3: Why does Hard Rock put such serious effort into its locationanalysis?
Answer:
Choosing the location of where to place the next Hard Rock café is a very
important decision that requires (before selecting) a lot of locations analysis for several
critical reasons. First of all it is a long term decision that is made relatively infrequently, and
once committed to a certain location, many resources and cost issues are difficult to change.
It also has a significant impact on fixed and variable costs which are key factors in increasing
or decreasing the profit of any company or firm.
It is also important because it determines many specifications that shape the way the
company operates and affects many upcoming decisions suchas:
Types of customers that the company is going to try to attract which is also
related to the types of market researches, marketing strategies, and marketing
plans.
The conditions of legal, political, and economical environment that the company
is going to work under.
Question 4: Under what conditions do you think Hard Rock prefers to franchise a cafe?
Answer:
When there are various risk factors and differences in social norms, preferences,
business practices and employment law. (As a Hard Rock Cafe franchisee you have
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the flexibility to shape and mould your own Cafe to suit local market conditions. Go
after the business you want.)