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1、CASE 18KidZania: SHAPING A STRATEGIC SERVICE VISION FOR THE FUTUREOVERVIEWLate in 2013, KidZanias management team under the leadership of its founder and CEO, Xavier Lopez Ancona, held its latest meeting at the companys Mexico City headquarters to discuss the possible roll-out to other locations of
2、new experiential learning concepts tested at its Cuicuilco kids edutainment park. The team had prepared itself over several months for what had become a complex discussion, based on 15 years of success developing and operating “parks“ where children could role-play adult activities, about the direct
3、ion the company should take. Having recently adopted experiential learning as its core strategy, the leadership team was challenged to understand what that meant in terms of priorities and tangible projects of the kind being brought to the company by potential partners as well as those tested at Cui
4、cuilco. With initial operating results from Cuicuilco in hand, Lopez team had evidence on which to base decisions about whether, where, and how experiential learning initiatives should be introduced elsewhere in the KidZania global network. Another important decision concerned the format for the fir
5、st KidZania location in the US. In addition, franchising opportunities continued to arise. The two latest proposals were from the Middle East and Europe.TEACHING OBJECTIVES To identify the main elements of the strategic service vision which have been keys for KidZanias success, allowing it to develo
6、p a new market in the childrens entertainment industry. To establish a framework for evaluating proposals for new business development. To identify the impacts and implications of different strategic growth alternatives under the umbrella of an experiential learning“ definition for the business adop
7、ted by KidZanias management.2015 President and Fellows of Harvard College.Emeritus Professor James L. Heskett; Professor Javier Reynoso (Chair, Service Management Research & Education Group, EGADE Business School, Tecnologico de Monterrey, Mexico); and Senior Researcher Karla Cabrera (Service Manage
8、ment Research & Education Group, EGADE Business School, Tecnologico de Monterrey, Mexico) prepared this case with the assistance of Cammie Dunaway (KidZania Global CMO and US President). It was reviewed and approved before publication by a company designate. Funding for the development of this case
9、was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. All dollar amounts referred to in the t
10、ext are in US dollars unless otherwise indicated.Activity:TaxOfficeDriving ResearchStreet LabSupermarketSpa forAdultsCriteria:Ratio of children/.17hour to footprintN.A.size (in sq. mtrs.) 2.0.38.44Brand quality of individual partnersPopularity (high Numbers best)Size of partners, annual contribution
11、 (high numbers best)Fit with conceptStaffing required per child (high numbers best)Uniformly high171121Good Good?23113GoodNAN.A.NAN.A.Possible Conclusions:The driving street is a must if space allows.The research lab is the most expendable of these activities.The spa for adults has to be evaluated b
12、y itself; it is impossible to compare it on the criteria shown. A decision will depend on the demand evidenced for the spa at existing facilities or through marketing research.Source: Casewriters.Exhibit TN-2 Comparison of Two Franchising OpportunitiesLocation:Criteria:Experience of franchisees?Gove
13、rnment connections?Importance of government connections?Likely speed with which the facility can be put into operationSize of marketPresence of competing activitiesLikelihood of repeat businessImportance of repeat business to financials Importance of repeat business to concept Fit with geographic cl
14、ustersGrowth potentialRevenue potentialEuropeExtensive?LowSlowerVery LargeManyLowerModerateHighLimitedModerate4XMiddle EastLimitedStrongHighFasterSmallFewHigh High High GoodHighXConclusion: The Middle Eastern operation would be a “big fish in a small pond with partners with limited relevant experien
15、ce but good government connections. By contrast, the European location would represent a z/small fish in a big pond“ with experienced partners and high revenue potential. On balance, it would seem that the European location should take precedence over the Middle Eastern if a choice has to be made. I
16、f the plan can accommodate both, there are reasons to support the development of both.Source: Casewriters.STUDY QUESTIONS1. Using service management best practices are criteria, which of the things KidZania is doing impressed you the most/the least, and why?2. What are the risks in this business? Ho
17、w does KidZanias management ameliorate them?3. What do you think are the main challenges and implications being faced regarding the changes in the service concept of KidZania, centered on experiential learning?4. Considering the experience gained from all their current parks as well as the external
18、forces including increasing competition, market regulations, diversity of potential new markets, and technology integration, what criteria should KidZanias management follow in selecting specific activities for its future cities“ to enhance experiential learning while remaining profitable?ANALYSIS1.
19、 Using service management best practices as criteria, which of the things KidZania is doing impressed you the most/the least, and why?Market segmentKidZania has accurately identified several different market segments and developed strategies and concepts to fulfil their needs.For young families: Kid
20、Zania includes facilities for parents and also covers parents5 main concerns such as security, entertainment and education for children. Children aged three to 16 looking for entertainment can roleplay different activities. Most of KidZanias programming is focused on kids from ages seven to 10 but a
21、lso includes activities for older kids. KidZania also features separate areas for toddlers, who are not yet ready for more serious role-play. Families are also provided the opportunity to organize private parties.For schools: They might be attracted by the highly educational nature of the concept.Fo
22、r companies: Companies can utilize KidZania for gatherings, product launches, or for special programs such as summer camps. Companies as industry partners can find in KidZania an innovative way to attract future customers while contributing to childrens education.Service ConceptKidZania was conceive
23、d as an edutainment concept (education and entertainment) that invites children to role-play adult activities in realistically themed environments, programmed to mimic real-life. Even though the role-play concept cannot be protected by patent or copyright, its very complexity, if executed well, will
24、 discourage many competitors. KidZania has been able to differentiate itself from the competition because of its strong focus on an educational component and higher quality standards. KidZanias service concept represents an innovative idea based on the combination of educational, fun and role-play c
25、omponents for children.In terms of results delivered to various target markets, KidZania provides an enjoyable experience combined with education fbr children; everything from education to productive baby-sitting fbr their children fbr parents; an enjoyable element of a program of education fbr scho
26、ols; a potentially attractive advertising and future customer “recruiting” vehicle fbr business partners; and an entertainment venue for companies as customers. In short, there are many market targets and results associated with this business. They represent both opportunities and potential for conf
27、usion in what is a very complex business strategy.OperationsEach KidZania is planned in a process that begins 12 months before the opening of a facility. All elements of the experience are defined. Activities, facilities, industry partners and staff are evaluated and selected following a combination
28、 of local and global criteria, as well as a storyline supported by thematic components. Technology is used as an enabler to assure security of all visitors and employees. Selecting, training, and retaining staff is one of the major concerns for KidZania. This has also led to the development of a Kid
29、Zania University to train local trainers with a focus on helping everyone understand the unique components of the KidZania brand experience as well as good customer service practices and operating procedures.The integration of industry partners has played a key role in KidZanias experience, providin
30、g financial leverage, brand power and realistic materials.Service DeliveryEven though each KidZania has local elements, a visitors experience is carefully designed and executed by staff in a way that all facilities in the world maintain the same quality standards. A KidZania customers satisfaction i
31、s constantly monitored, and changes are made to offer a differentiated experience in each visit. Zupervisors are committed to enhance childrens experiences and minimize factors that could reduce satisfaction, for example, waiting times.The loyalty program, BeKidZanian, allows the company to maintain
32、 a link with children and also offer benefits that extend the scope of KidZania beyond the boundaries of the parks themselves.2. What are the risks in this business? How does KidZania,s management ameliorate them?This is a complex business involving children. That simple statement suggests a number
33、of business risks involved here. Some can be addressed by careful management with a clear idea of the direction of the business. Others can be addressed by care in the delivery of the service, in particular the careful selection, training, and support of employees as well as intensive scrutiny of eq
34、uipment and supplies provided by partners for potential safety issues.Insurance is not an answer to operating risks. KidZania cannot afford bad publicity, whether or not incidents that occur at its facilities are insured or not. Parents, as customers, are unforgiving if their children do not have go
35、od experiences at KidZania. There is little room for error.This raises the question of whether or not franchising is appropriate for this business. While it provides financing and opportunities for rapid growth and shifts the risks as suggested above, if the name KidZania is on the sign, regardless
36、of where it is located in the world, the risk is that damage will be done to the brand if the concept is not delivered flawlessly.Whether owned or franchised, the KidZania park relies heavily on the quality of the people it hires. In particular, the KidZania management will have to screen the people
37、 they hire for their character, people skills, ability to teach, and patience in working with children.some of them have been modified to offer children a formative experience of the real-life job industry without losing the fun factor.Some of the more educational activities, for example, the Ecolog
38、ical House where children make environmentally friendly design decisions, may face a lack of interest by industry partners. In this vein, the challenge relies on maintaining the balance between the attractiveness of activities for all actors, including children and sponsors. It has resulted in the s
39、election of new types of partners such as governmental or non-for-profit organizations.Experiential learning activities represent a significant opportunity for the involvement of government agencies in establishments like the tax office, customs and the coin mint. This could be linked to the substan
40、tial support among members of the management group for including more government establishments as “partners”. One benefit of this initiative would be improved relationships with government agencies that could exercise control over KidZanias facilities in countries such as those represented in the f
41、ranchise proposals included in Exhibit 1() of the case.In order to make the activities more educational, higher investments are required (see Exhibit 6). Activities must be designed by a specialized team to assure that all experiential learning elements are correctly integrated. Additional support m
42、aterials and multimedia with facts and data must be designed and placed in facilities, and Zupervisors must be trained to include these components in the childrens experience. These activities also require a higher-quality labor force and technology investments, and in some cases, bigger facilities
43、such as those at Cuicuilco, representing a potential drag on the profitability of a facility.A basic question that can be posed to the class is how management can “sell” experiential learning perse to the public. It is a complex concept, and perhaps one best given another name in promoting KidZania
44、to the public and potential partners.4. Considering the experience gained from all their current parks as well as the external forces including increasing competition, market regulations, diversity of potential new markets, and technology integration, what criteria should KidZania,s management follo
45、w in selecting specific activities for its future “cities” to enhance experiential learning while remaining profitable?Criteria that students might suggest for introducing and expanding the inclusion of particular activities in a given KidZania park include such things as:(1) the fit of the activity
46、 with the experiential learning concept,(2) the attractiveness of the activity to children and their parents,(3) the complexity of staffing and operating the activity,(4) the capital investment required for the activity,(5) the revenue and profit per square foot associated with the activity, and(6)
47、the fit between the activity and the culture of the country in which the facility is to be located.Using these criteria and others shown in Exhibit 1, the driving street appears to be the most attractive of the proposed activities and the research lab” the least attractive. The proposed spa for adul
48、ts will have to be judged on a different set of criteria, with a heavy emphasis on requests from parents or marketing research carried out at existing facilities.Although KidZania has a proven process for the development of new cities, the focus on integrating experiential learning and external forces make the balance more difficult to maintain. Furthermore, considering the companys vision of becoming a leader in experiential learning content, it must also consider how the activities selected for future cities support