Kidzania: Spreading FunAround the World Case Study Analysis

Introduction

Kidzania is a renowned international chain of indoor family entertainment parks in the world and was founded by Xavier Lopez Ancona in the year 1997 in the city of Mexico. The business model of Kidzania comprised of providing safe educational place to children, collaborating with schools and teachers in order to ensure maximum learning of children, collaboration with industry partners to find new communication channels to target next generation consumers and improve the customers’ experience. In addition, the business believed in continuous innovation, maximizing consumer experience by introducing new activities in its business according to the changing customer needs and preferences.

The business offered more than 200 activities in its theme parks along with seasonal activities based on the cultural environment of its parks in multiple countries and cities and the business was highly diversified. In addition, in order to ensure the maximum customer satisfaction, the business had offered loyalty programs to increase visits of repeated customers. In order to expand into new cities and countries, the business had adopted franchising model so that the business could protect its revenues and profits from the risk of devaluation of different currency.

Problem Statement

The business faced increased domestic and international competition due to changing customer preferences, fluctuations in the entertainment industry trends as a result of growing demand of theme parks and increasing customer’s interest in customization and content due to high internet penetration and use of smart devices. In addition, the business suffered significant decline in revenue as result of devaluation of local currency against the U.S dollars. In order to protect, itself from increased competition and maintain its recognition as a key player in the worldwide entertainment industry, the business proposed four strategies, but was concerned which of the strategic option would provide high value to the firm and aligns with its business model and core values.

Internal Analysis

In order to analyze the internal environment of the business, SWOT framework and VRIO strategic tool have been used:

SWOT Framework:

Strengths:

  1. The business has a huge geographical reach, customer base and maintains a strong brand identity.
  2. The business’s emphasis on continuousproduct innovation, enabling the business to maintaininga strong market position and to improve its customer satisfaction.
  3. The company had been quite successful in achieving parent’s preference and was highly trusted due to its business model of providing safe education and learning environment to children by collaborating with schools, industry networks and teachers.
  4. Kidzania parks are highly preferred by children, as it offers 200 plus activities, 90 different trades and professionals to be performed by each child and other benefits, such as: loyalty programs.

Weaknesses:

  1. The business has experienced lack of financial and technical resources, which has limited its ability to grow its business domestically and internationally.
  2. Kidzania is facing increasing devaluation of Mexican Peso, which has resulted in declining of the financial performance.

The business has lack of experience and knowledge of operating in theme and amusement park in industry, which has restricted its diversification in the highly demanded and profitable theme park industry……………………….

 

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