KidZania: Spreading Fun around the World Harvard Case Solution & Analysis

KidZania: Spreading Fun around the World Case Study Solution

Alternative to become a global brand:

Alternatives considered and analysed involves growth in the number of parks, new formats, interactive digital platform and developing content to extend the brand to other media. On the basis of the valuation of each alternative, NPV and IRR was calculated based on assumptions. These assumptions were made to identify the best suited alternative to be implemented in order to take KidZania at international level to make it a global brand.

Therefore, the valuation of each alternative as shown in Table 1 showed positive NPV in increased IRR percentages. In comparison to all alternatives and with advancement in technological use in forthcoming period, it is suggested that Alternative 3 –interactive digital platform should be implemented. As it gives highest value of NPV and IRR i.e. 562 and 325 percent as compared to other alternatives.

Initiatives to accelerate the growth and revenue:

Key factors to consider for improvement of the growth of corporation at top-line for the business is crafting and implementation of a strategy for sales optimization, efforts of customer services and marketing. These are basically known as the three basic pillars in the increased generation of revenues in the ecosystem of any business. The need of a business philosophy i.e. a customer centric focus on value deliverance of the potential consumers.Therefore, the ideal strategy for growth for optimization of marketing initiatives assists in exploring channels of sales through building lasting relationship with customers. These includes use of predictive analytics, keep adding to channels of sales and re-imagining marketing. (Anonymus, 2014)

Areas for improvement:

Focusing on the problems experienced by KidZania, there were some areas which requires improvement which includes devaluation of currency, marketing strategy and sales environment, providing reasons for stakeholder for continuous investment. Therefore, in order to address these issues, explanations are described below:

Get Pricing Right:

Elimination of leakage in executing current process of pricing in Mexico as per the devaluation of currency. Strengthening of process of pricing, incentives, leadership styles and systems can provide with a new approach for achievement of optimal pricing through strengthening the linkage between effective price and value. Simultaneously, the adoption of new structures of pricing will assist in managing the issue of currency devaluation.

Create a Productive Sales Environment

For improvement in the marketing, tracking, monitoring and management of sales team are important factors. Providing support to the sales with linked with their incentives affect the effective market of their product with their consumers as well as grabbing their interest. Implementation and evaluation of performance on the basis of cultures and standards with respect to the expectation of consumers.

Enhance Sales Effectiveness:

Expansion of cross- and up-selling services in order to increase penetration in international market through increase in the investment of stakeholders (share of spend) required for improving and innovating services and operations of the organization for its potential consumers. (Leijon, 2016)

CONCLUSION:

KidZania was initiated with learning spaces and multiple entertainment through providing children with opportunity to grow their capacity and creative potential for playing and imagination.The key issue was the need to keep their concept fresh as a long-term strategy and be known as the global brand. In comparison to all alternatives and with advancement in technological use in forthcoming period, it is suggested that Alternative 3 – interactive digital platform should be implemented. On the contrary, other areas which require improvement includes devaluation of currency, marketing strategy and sales environment, providing reasons for stakeholder for continuous investment.

 

Appendix A –SWOT Analysis

Strength Weakness
·         A reputed position supported by various brands.

·         Creation of educational theme parks

·         Concept of fun learning.

·         Variation in the number of activities for participation

·         No services for children with special needs

·         Migration of mass media to my media

·         Devaluation of currency

Opportunities Threats
·         Venture of KidZania in new mediums.

·         Increase in the reach and frequency of using brand name.

·         Providing stakeholders with reasons to invest

·         Integration of new approaches for marketing

·         Loyalty is required to be created for sustaining repetition

·         Possibility of incidents at the time of handling kids.

·         Rejection of audience by bringing change in the concept.

Appendix B – VRIO Analysis

ResourcesValuableRareImitationOrganization
SponsorshipYesNoYesYes
LocationYesNoYesYes
International ExperienceYesNoNoYes
Target MarketYesYesNoYes
Innovation and creativityYesYesYesYes
Service differentiationYesYesYesYes

Appendix C –Valuation of Alternatives

Alt. 1 Valuation012345
Investment-210
Revenues11531225130113811467
Revenue Growth6.2%6.2%6.2%6.2%6.2%
EBITDA251267284301320
Less: Dep and Ammortization1313141516
EBIT239254269286304
EBIT*(1-Tax)179190202215228
Add: D and A1313141516
Net Cash Flows-210192204216230244

 

Alt. 2 Valuation012345
Investment-53
Revenues288303318334350
Revenue Growth5%5%5%5%5%
EBITDA6366697376
Less: Dep and Ammortization33344
EBIT6063666973
EBIT*(1-Tax)4547495254
Add: D and A33344
Net Cash Flows-52.54850535558

 

Alt. 3 Valuation012345
Investment-45
Revenues5600840966111112781469
Revenue Growth15%15%15%15%15%
EBITDA183211242279320
Less: Dep and Ammortization911121416
EBIT174200230265304
EBIT*(1-Tax)130150173198228
Add: D and A911121416
Net Cash Flows-45140161185212244

 

Alt. 4 Valuation012345
Investment-45
Revenues5600840966111112781469
Revenue Growth15%15%15%15%15%
EBITDA183211242279320
Less: Dep and Ammortization911121416
EBIT174200230265304
EBIT*(1-Tax)130150173198228
Add: D and A911121416
Net Cash Flows-45140161185212244

 

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