This paper provides a sophisticated overview of a successful franchise development as well as the factors that influence their work efficiency. The study focuses on the firm that overtakes Hard Rock Hotel brand.
The franchise development includes some distinct stages. First, it is crucial to determine the indivisible inputs that are provided by the owner of a firm. The indivisibility implies that a particular input can not be estimated below a fixed price (Economies of scale and scope, 2008). The business conception of the Hard Rock Hotel is based on the appliance of a particular interior, which incorporates musical instruments and the sound imitation services. Thus, the indivisible inputs are comprised of the setting elements as well as the installation of a specific sound system that follows the system of the original project.
The Characteristics of Perfectly Competitive Firms
The competitive qualities of a business are predetermined since the time of its development. A successful franchise usually matches the needs and requirements of the target auditorium as well as follows the pattern of an original establishment or service. Finally, it is crucial for any firm owner to ensure that the business conception is in some way better and more elaborate than the ones of the rival companies.
The perfectly successful companies share the distinct characteristics. First, they are based on highly efficient communication system (Chiou, Hsieh, & Yang, 2004). It mainly applies to the issue of franchise marketing. Second, a competitive firm uses valuable, high-quality materials and resources, which elaborates the performance results and attracts customers (Newbert, 2008). Third, an excellent company work principles dwell on the constructive innovation in the world of information technology since the modern world of convergent high-tech regularly updates the work standards (Rivard, Raymond, & Verreault, 2006).
The Hard Rock Hotel franchise complies with three basic notions of competitiveness. Thus, the management of the enterprise establishes a strong foundation of customers supports as well as advertising politics, which uplifts the principles of communication efficiency. Besides, the hotel administration uses exclusively original resources such as brand furniture models, and identical service functions since it replicates the genuine atmosphere of the successful firm. Finally, the hotel is supplied with the newly-developed connection tools that maintain a contact between a client and a receptionist as well as other essential services.
The Review of Fundamental Economic Profits
Every competitive firm that pursues some consistent long-term improvement objectives has to develop an economic profit planning. Some experts state that such accounts are extremely efficient if they are based on organizational, financial, and recompense factors (Hogan & Lewis, 2005).
The reviewed hotel management elaborates a particular economic profit formula that is comprised of individual elements. Thus, in a long run, the enterprise follows a standard, according to which a gross profit percentage does not get lower than 30 % (Huebsch, 2011). Moreover, the hotel service industry is based on a unique code of revenue sources that underline the economic profit of the company. Since the business conception of the Hard Rock Hotel implies a notion of music, the management of the franchise offers not only the basic services such as feeding, lodging, technical support maintenance but it is also connected to a huge concert hall and a karaoke bar. Therefore, the franchise uses the methods of efficient marketing by both keeping to an authentic idea of a music hotel and establishing its standards of functioning.
References
Chiou, J., Hsieh, C., & Yang, C. (2004). The effect of franchisors communication service assistance, and competitive advantage on franchisees’ intentions to remain in the franchise system. Journal of Small Business Management, 42(1), 19-36.
Economies of scale and scope. (2008). Web.
Hogan, C., & Lewis, C. (2005). Long-run investment decisions, operating performance, and shareholder value creation of firms adopting compensation plans based on economic profits. Journal of Economic and Quantitative Analysis, 40(4), 721-745.
Huebsch, R. (2011). Gross margin of hotels. Chron. Web.
Newbert, S. (2008). Value, rareness, competitive advantage, and performance: A conceptual level empirical investigation of the resource-based view of the firm. Strategic Management Journal, 29(7), 745-768.
Rivard, S., Raymond, L., & Verreault, D. (2006). Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance. Elsevier, 15(1), 29-50.