TLDR A mid-size amusement park faced declining visitor numbers and rising operational costs due to competition and inefficiencies, necessitating a strategic overhaul to improve visitor experience and operational efficiency. The park successfully increased attendance by 15% and reduced costs by 10% through technology upgrades and process improvements, highlighting the importance of aligning resources with strategic objectives for better financial performance.
TABLE OF CONTENTS
1. Background 2. Environmental Analysis 3. Internal Assessment 4. Strategic Initiatives 5. Value Based Management Implementation KPIs 6. Stakeholder Management 7. Value Based Management Deliverables 8. Value Based Management Best Practices 9. Modernizing Attractions 10. Sustainability Initiatives 11. Operational Efficiency Programs 12. Customer Experience Enhancement 13. Value-Based Management Implementation 14. Digital Marketing Campaign 15. Additional Resources 16. Key Findings and Results
Consider this scenario: A mid-size amusement park in North America is facing a strategic challenge with value-based management due to increased operational costs and declining visitor numbers.
Externally, the park is contending with a 20% drop in visitors over the past year due to heightened competition and changing consumer preferences. Internally, inefficiencies in operations and outdated attractions have led to a 15% increase in operational costs. The primary strategic objective is to enhance visitor experience and operational efficiency to boost attendance and profitability.
The amusement park is a mid-size entertainment venue in North America grappling with strategic challenges in value-based management. Visitor numbers have dropped 20% over the past year due to stiff competition and evolving consumer preferences. Internal inefficiencies and obsolete attractions have increased operational costs by 15%. The primary objective is to revitalize visitor experience and improve operational efficiency.
Environmental Analysis
The amusement park industry is experiencing significant shifts driven by changing consumer preferences and technological advancements. The competitive landscape is becoming increasingly crowded with new entrants and diversified entertainment options.
We begin our analysis by examining the primary forces driving the industry:
- Internal Rivalry: The threat of internal rivalry is high, with numerous established parks and entertainment options vying for consumer attention.
- Supplier Power: Supplier power is moderate, as there are several suppliers of amusement park equipment and services, but switching costs can be high.
- Buyer Power: Buyer power is increasing, as consumers have more entertainment choices and are demanding better value for their money.
- Threat of New Entrants: The threat of new entrants is moderate, given the significant capital investment required but the high potential for returns.
- Threat of Substitutes: The threat of substitutes is high, with alternative entertainment options such as virtual reality experiences and online gaming.
Emergent trends in the industry include a shift towards immersive and tech-driven experiences and a growing emphasis on sustainability. Key industry changes:
- Increase in Demand for Tech-Driven Experiences: Opportunity to invest in cutting-edge attractions, though risk of high initial costs.
- Rising Consumer Expectations: Opportunity to enhance customer service and experience, risk of higher operational costs.
- Focus on Sustainability: Opportunity to appeal to eco-conscious visitors, risk of additional regulatory compliance costs.
PESTLE analysis reveals that political stability and economic growth offer opportunities for expansion, while technological advancements provide avenues for innovation. However, social trends towards sustainable and health-conscious lifestyles and evolving legal regulations pose risks that need to be managed effectively.
For a deeper analysis, take a look at these Environmental Analysis best practices:
Internal Assessment
The amusement park boasts strong brand recognition and experienced management but faces challenges in operational efficiency and outdated attractions.
The 4DX Analysis identifies goals related to operational efficiency, employee engagement, customer satisfaction, and financial performance. The organization struggles with maintaining high employee engagement and consistent customer satisfaction, impacting financial performance. Implementing structured processes and accountability measures could address these issues.
The Digital Transformation Analysis reveals a lag in adopting new technologies critical for modernizing attractions and enhancing the visitor experience. Investing in digital platforms and tech-driven attractions can create significant value but requires substantial investment in technology infrastructure and skilled personnel.
The Distinctive Capabilities Analysis highlights the park's strengths in brand recognition and customer loyalty. However, weaknesses in innovation and operational efficiency hinder growth. Leveraging brand loyalty while modernizing attractions can enhance competitiveness and profitability.
Strategic Initiatives
Based on the industry analysis and internal capability assessment, the leadership team has outlined strategic initiatives over the next 24 months to drive growth and profitability.
- Modernizing Attractions: Introducing new, tech-driven rides and immersive experiences to attract visitors. The strategy aims to increase attendance by 15%. Value creation stems from enhanced visitor satisfaction and repeat business. Requires investment in technology and skilled personnel.
- Sustainability Initiatives: Implementing eco-friendly practices and promoting sustainability to appeal to environmentally conscious visitors. Aims to enhance brand image and attract a new customer segment. Value creation through brand differentiation. Requires investment in sustainable technologies and staff training.
- Operational Efficiency Programs: Streamlining operations to reduce costs by 10%. Value creation through cost savings and improved profitability. Requires process optimization and staff training.
- Customer Experience Enhancement: Improving customer service and amenities to boost satisfaction scores by 20%. Value creation through increased visitor loyalty and spend. Requires investment in staff training and customer service technologies.
- Value-Based Management Implementation: Adopting value-based management practices to align all initiatives with financial and strategic goals. Value creation through better alignment of resources and strategic objectives. Requires investment in management training and performance measurement systems.
- Digital Marketing Campaign: Launching targeted digital marketing to increase visitor numbers by 10%. Value creation through increased awareness and attendance. Requires investment in digital platforms and marketing expertise.
Value Based Management Implementation KPIs
KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.
Efficiency is doing better what is already being done.
- Visitor Attendance: Tracks effectiveness of marketing and attraction modernization. Crucial for assessing the impact of strategic initiatives.
- Customer Satisfaction Score: Measures success in enhancing visitor experience. Ensures alignment with customer expectations.
- Operational Cost Reduction: Monitors efficiency improvements. Key for maintaining profitability.
- Revenue Growth: Indicates overall financial health and success of strategic initiatives.
- Sustainability Metrics: Tracks progress in eco-friendly practices. Important for brand image and regulatory compliance.
Insights from these KPIs will guide future strategic decisions and adjustments. Continuous monitoring will ensure alignment with strategic goals and market conditions.
For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.
Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard
Stakeholder Management
Success of the strategic initiatives hinges on the involvement and support of both internal and external stakeholders, including frontline staff, technology partners, and marketing teams.
- Employees: Frontline staff and management are crucial for implementing operational changes and enhancing customer experience.
- Technology Partners: Essential for providing and maintaining new attractions and digital solutions.
- Marketing Team: Responsible for executing the digital marketing campaign and promoting new attractions.
- Visitors: Provide feedback critical for continuous improvement and validation of new initiatives.
- Investors: Provide necessary financial backing for technology and marketing investments.
| Stakeholder Groups | R | A | C | I |
|---|---|---|---|---|
| Employees | ⬤ | |||
| Technology Partners | ⬤ | ⬤ | ||
| Marketing Team | ⬤ | ⬤ | ||
| Visitors | ⬤ | |||
| Investors | ⬤ |
We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.
Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management
Value Based Management Deliverables
These are a selection of deliverables across all the strategic initiatives.
- Transformation Strategy Plan (PPT)
- Operational Efficiency Roadmap (PPT)
- Digital Marketing Framework (PPT)
- Financial Impact Model (Excel)
- Sustainability Initiatives Report (PPT)
Explore more Value Based Management deliverables
Value Based Management Best Practices
To improve the effectiveness of implementation, we can leverage best practice documents in Value Based Management. These resources below were developed by management consulting firms and Value Based Management subject matter experts.
Modernizing Attractions
The implementation team leveraged several established business frameworks to guide the modernization of attractions, including the Value Chain Analysis and the Innovation Value Chain. The Value Chain Analysis provided a comprehensive view of the park's internal activities and identified areas where value could be added or costs could be reduced. This was particularly useful for pinpointing inefficiencies in the current attraction offerings and areas for technological upgrades. The team followed this process:
- Mapped out all primary and support activities related to the park's attractions.
- Identified key areas where technological enhancements could add value, such as ride maintenance and customer interaction points.
- Analyzed cost structures and identified opportunities for cost reduction through technology integration.
The Innovation Value Chain framework was also deployed to ensure a systematic approach to innovation. This framework helped the team understand the end-to-end process of innovation, from idea generation to commercialization. The team followed this process:
- Conducted brainstorming sessions and workshops to generate innovative ideas for new attractions.
- Screened and selected the most promising ideas based on feasibility and potential impact.
- Developed prototypes and pilot programs to test the new attractions before full-scale implementation.
The implementation of these frameworks led to the introduction of several new, tech-driven rides and immersive experiences, resulting in a 15% increase in visitor attendance and improved operational efficiency.
Sustainability Initiatives
The implementation team utilized the Triple Bottom Line (TBL) and the Green Supply Chain Management (GSCM) frameworks to guide the sustainability initiatives. The TBL framework emphasized the importance of balancing social, environmental, and financial performance. This was particularly useful for ensuring that the park's sustainability efforts were comprehensive and aligned with broader corporate objectives. The team followed this process:
- Assessed the current social, environmental, and financial impact of park operations.
- Developed sustainability goals that balanced these three dimensions.
- Implemented initiatives such as waste reduction programs and energy-efficient technologies.
The GSCM framework was used to optimize the supply chain for sustainability. This framework helped the team identify opportunities to reduce the environmental impact of sourcing, production, and distribution activities. The team followed this process:
- Mapped the entire supply chain to identify key environmental impact areas.
- Collaborated with suppliers to adopt sustainable practices and materials.
- Implemented green logistics solutions to reduce carbon footprint.
These frameworks resulted in reduced operational costs, enhanced brand image, and attracted a new segment of eco-conscious visitors.
Operational Efficiency Programs
The implementation team employed Lean Six Sigma and Total Quality Management (TQM) frameworks to enhance operational efficiency. Lean Six Sigma was instrumental in identifying and eliminating waste, thereby improving process efficiency and reducing costs. The team followed this process:
- Conducted a value stream mapping to identify waste in operational processes.
- Implemented Kaizen events to engage employees in continuous improvement activities.
- Used DMAIC (Define, Measure, Analyze, Improve, Control) methodology to systematically address inefficiencies.
The TQM framework focused on embedding a culture of quality throughout the organization. This framework was useful for ensuring that operational improvements were sustainable and aligned with customer expectations. The team followed this process:
- Established quality circles to involve employees in quality improvement initiatives.
- Implemented customer feedback loops to continuously monitor and improve service quality.
- Conducted regular training sessions to instill a culture of quality and excellence.
These frameworks led to a 10% reduction in operational costs and significantly improved customer satisfaction scores.
Customer Experience Enhancement
The implementation team utilized the Customer Journey Mapping and Net Promoter Score (NPS) frameworks to enhance customer experience. Customer Journey Mapping provided a detailed view of the customer experience from initial contact to post-visit interactions. This was particularly useful for identifying pain points and opportunities for improvement. The team followed this process:
- Mapped the entire customer journey to identify critical touchpoints.
- Conducted surveys and interviews to gather customer feedback at each touchpoint.
- Developed and implemented targeted improvements to enhance the overall experience.
The NPS framework was used to measure customer loyalty and satisfaction. This framework helped the team track the impact of customer experience initiatives and identify areas for further improvement. The team followed this process:
- Conducted NPS surveys to gauge customer satisfaction and loyalty.
- Analyzed NPS data to identify trends and areas for improvement.
- Implemented changes based on NPS feedback to enhance customer satisfaction.
These frameworks resulted in a 20% increase in customer satisfaction scores and higher visitor retention rates.
Value-Based Management Implementation
The implementation team employed the Economic Value Added (EVA) and Activity-Based Costing (ABC) frameworks to implement value-based management practices. EVA provided a clear measure of financial performance by focusing on the value created above the cost of capital. This framework was useful for aligning strategic initiatives with financial goals. The team followed this process:
- Calculated the EVA for each strategic initiative to assess financial performance.
- Set performance targets based on EVA to ensure value creation.
- Monitored and adjusted initiatives to optimize EVA.
The ABC framework was used to allocate costs accurately to different activities and initiatives. This framework helped the team identify high-cost areas and opportunities for cost reduction. The team followed this process:
- Identified and categorized all activities related to strategic initiatives.
- Allocated costs to each activity based on resource usage.
- Analyzed cost data to identify areas for improvement and cost reduction.
These frameworks resulted in better alignment of resources with strategic objectives, leading to improved financial performance and more effective resource allocation.
Digital Marketing Campaign
The implementation team leveraged the AIDA (Attention, Interest, Desire, Action) and Customer Lifetime Value (CLV) frameworks to guide the digital marketing campaign. The AIDA framework provided a structured approach to capturing and converting customer interest into action. This framework was useful for developing targeted marketing messages and campaigns. The team followed this process:
- Developed marketing messages designed to capture attention and generate interest.
- Created digital content to build desire and encourage action.
- Launched targeted campaigns across various digital channels to drive conversions.
The CLV framework was used to measure the long-term value of customers acquired through the campaign. This framework helped the team assess the effectiveness of marketing efforts and optimize resource allocation. The team followed this process:
- Calculated the CLV for different customer segments.
- Analyzed the return on investment for marketing campaigns based on CLV.
- Adjusted marketing strategies to maximize CLV and overall profitability.
These frameworks led to a 10% increase in visitor numbers and improved the overall return on investment for marketing efforts.
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Key Findings and Results
Here is a summary of the key results of this case study:
- Increased visitor attendance by 15% through the introduction of new, tech-driven rides and immersive experiences.
- Reduced operational costs by 10% via Lean Six Sigma and Total Quality Management initiatives.
- Enhanced customer satisfaction scores by 20% through targeted improvements identified via Customer Journey Mapping and NPS surveys.
- Achieved a 10% increase in visitor numbers through a targeted digital marketing campaign.
- Improved brand image and attracted eco-conscious visitors by implementing sustainability initiatives using the TBL and GSCM frameworks.
- Aligned resources with strategic objectives, resulting in better financial performance through the use of EVA and ABC frameworks.
The overall results of the initiative demonstrate significant progress towards the strategic objectives of enhancing visitor experience and operational efficiency. The 15% increase in visitor attendance and 20% boost in customer satisfaction scores highlight the success of modernizing attractions and improving customer service. Additionally, the 10% reduction in operational costs underscores the effectiveness of Lean Six Sigma and TQM frameworks. However, the initiative faced challenges, such as the high initial investment required for new technologies and sustainability practices, which strained financial resources. The digital marketing campaign, while successful in increasing visitor numbers, could have been more cost-effective with better targeting and segmentation. Alternative strategies, such as phased investment in technology and a more data-driven marketing approach, could have mitigated these challenges and enhanced outcomes.
For next steps, it is recommended to continue monitoring and optimizing the implemented initiatives to ensure sustained improvements. Focus on further refining the digital marketing strategy to enhance cost-effectiveness and ROI. Additionally, explore phased investments in technology to manage financial strain while continuing to modernize attractions. Strengthen employee engagement and training programs to maintain high levels of customer service and operational efficiency. Finally, leverage the insights gained from sustainability initiatives to further differentiate the brand and attract new visitor segments.
Source: Transformation Strategy for Mid-Size Amusement Park in North America, Flevy Management Insights, 2024
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