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2. Economic indicators:
- Changes in foreign currencies
- Inflation rates
- Unemployment rates
 
 
2. Hotels
- Current number of hotels in market area
- Age of existing hotels in market area
- Occupancy rate of current hotels, as well seasonality of occupancy
- Rates of new hotel construction (could indicates per year during last ten years)
    

- What type of government system is in place
- Nationalization of major industries
- Reduction of foreign interest in local business ventures
   
  

- Liquidity of real estate
- Current vacancy rates/occupancy rates
- Number of real estate properties owned by global companies
- Real estate turnover rates (how often are properties sold and converted to new
business venture)
- Cost of buying versus leasing commercial real estate
 $

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Answer: Country A has the highest rating.

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(Heizer & Render, 2011, p. 338)

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Location decisions for Hard Rock Café begin with a global view which involves
analyzing a country, then a region within the country and then finally a city location (Amer,
1999). Specifically within this assessment, it consists of studying and evaluating political
risks, currency risks, social norms, social costs, local business practices and whether the
brand will fit the market or not. The company must insure that the market will provide large
enough long term populations with high enough levels of disposable income and tourism
rates (Amer, 1999). Identifying the right location can have significant impact on the
profitability of the Hard Rock Café. The company must place serious effort into the city
selection as they must be able to anticipate what cities will be able to offer the long term
profitability needed. This anticipation involves understanding what long term direction the
city is moving in, and recognizing whether a Hard Rock within this city will have the
necessary long term relevance in the market. This is important as typically Hard Rock is
required to sign long term leases that can range anywhere to 5 to 15 years (and at times even
longer) (Amer, 1999).
After a location is selected the company must conduct a break even analysis regarding the
cost of purchasing and construction of a new site or the remodeling of an existing location
(Amer, 1999). The break even analysis is conducted the company then determines what the
 fixed and variable costs would be to determine if they break even analysis is attainable
(Amer, 1999). If the site meets the long term strategies for the company and fits within the
break even analysis, they then begin construction.

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When Hard Rock does not have extensive experience within a particular market it prefers
to franchise a café. Establishing franchises assists the company as these local partners
(franchise owners) have the relationships and experience within the market. It would be
assumed that the other advantage within franchising is that it greatly reduces the amount of
time that it takes for the company to actually enter into these markets, as the local franchisees
have the connections and experience for market entrance into the specified area. Lastly, with
franchising, the franchisee¶s profitability is directly impacted by the success of the café, and
subsequently, this should naturally increase their personal investment in making the café a
success.

References

Amer, B. (2004). ÿ





 
. Retrieved from
http://myomlab.mathxl.com/info/MediaPopup.aspx?origin=1&disciplineGroup=7&type=
Video&loc=mediaphbp@bp_akamai/heizer/videos.php%3Ftitle%3DProduct%20Design
%20at%20Regal%20Marine%26clip%3Dpandc/heizer/Regal_Prod_Design.flv&width=8
50&height=680&autoh=yes&centerwin=yes

Heizer, J., & Render, B. (2011). 


 Upper Saddle River, NJ: Prentice Hall.