Kidzania Case Study
Kidzania Case Study
Kidzania Case Study
Group 16
The major stake holders as given in exhibit 3 are Coca Cola, Nestle, Unilever,
PepsiCo, Honda, Sony, P&G, Hyundai, DHL, McDonalds, Dominos, Yakult, Air Asia,
Danone and Cadbury. All activities carried out are sponsored by these leading
businesses in their sector. These industry partners provided the concept with realism,
bringing in their logos and products, designing their activity conjointly with educators,
and training their staff in their industry specific topics. For instance, at a scaled down
assembly line kids learned the process of making and bottling Coca Cola. Industry
partners were essential for economic viability of business. They contributed 40-50
percent of initial investment and pay a yearly maintenance fee which represents about
30 percent of parks annual revenue. Children were allowed to store their money in a
bank account sponsored by BBVA Bancomer and they were allowed to products such
as renting a Mercedes-Benz or Renault at go kart track or a slice of pizza at Domino’s
sponsored pizza making activity. The industry partners actually found a new
communication channel to aim at the next generation of consumers. They could bring
their products and services to children and their families in an interactive, non-intrusive
way. They saw KidZania as a unique marketing opportunity with an experiential factor
to it. Industry partners were allowed to make activities specific to their industry and
hence help them market their products. Hence, this way the industry partners receive
brand recognition by an efficient means of reaching their brand to the masses.
3. Is KidZania’s current strategy sustainable in the long term given the competitive
landscape?
Many of the industry leading theme parks such as Disney world, six flags or Sea world
were associated with an outdoor experience far away from the city, weather dependant
and highly seasonal. Therefore, theme and amusement park operators considered indoor
parks as a great opportunity to attract visitors throughout the year. The concept of
accommodation, recreation and entertainment seemed to be undergoing a merger.
KidZania competed directly with the local parks. Direct competition was growing
quickly in all corners of the world. LEGOLAND
Discovery Centre’s (LDC), an indoor Edu-entertainment chain aimed at children ages
3–12, inaugurated two parks per year on average in the past few years. The LDC parks
had certain similarities with KidZania, particularly the size and some activities;
however, they were not a direct copy and they did not have their own economy or
industry partners. In Beijing, China, on the other hand, Bayou World and EE City were
very similar to KidZania. Within these replicas – at the scale of a real city, with traffic
lights, banks, and theatres – children could play grown-ups while developing dozens of
trades. Work was paid with a pretend currency that could be used in the park’s store.
As in KidZania, activities were sponsored by businesses. Baby Boss City in Taipei,
Taiwan, established in 2008, was a park similar to KidZania, where children played
being fire-fighters, astronauts, magicians, archaeologists or bankers, followed by a
wage that could be used to purchase presents. The Lebanese company, KidzMondo,
began operations at the beginning of 2010 in Beirut, with the support of renowned
industry partners like Ford, Pepsi and Colgate. Diversity, the Latin American copy of
KidZania, opened its doors in Bogotá, Colombia in 2006. In 2010, they inaugurated
two more parks in Colombia (Medellin and Barranquilla), and in 2011 they began their
international expansion through a franchise model.
According to the company’s estimates it was very difficult to think about co-existence
of two parks in the same city. With the current estimates of growth in the number of
amusement parks and its competition, it is difficult for KidZania to sustain in the long
term. Since KidZania directly compared with the local parks and rely on local residents,
which estimates to attract 250-1 million visitors on an average per year (Exhibit-8),
competitive parks in the same region can drastically split and down size the number of
visitors. As per Exhibit 9, an average 14-year-old used to spend 3.3 hours of screen
time in 1995 while now they spent 8.6 hours of screen time. This shows a whopping
260% increase in their screen time and this could also imply their outdoor activities
could be cut by at least half their earlier time. Attracting the youngsters to physically
being at the park is the biggest challenge faced by KidZania. Also, as per Exhibit 5, the
competitor Parks admission per day is in par or lowers than that of KidZania. Hence
the competitive advantage is also at risk at present for KidZania. Hence the current
competitive landscape does not support the present strategies of KidZania in the long
run and it calls for a revamp in strategy in accordance with the likes of present
generation children.
4. If you were Xavier Lopez Alcona, which one out of the four alternatives namely
opening more parks, developing a different type of indoor park, expanding into the
digital world, and developing media content based on KidZania characters would you
recommend to the board of directors to position, consolidate and differentiate the
brand? Discuss the pros and cos of each of these four options to help you arrive at a
decision. (Hint: Use Ansoff Matrix to assess and discuss the four growth options).
Pros:
1.North America has bigger cities and hence a larger population around 800,000 to Million
children
2. 15 American cities spend around billion hours and nearly $2.8 billion in several forms of
entertainment. -
3. KidZania has managerial and operational capability to develop 6 to 8 parks a year.
4. Efforts to open a large park is marginally higher than those needed to open a small park.
Cons:
1. Difficult to coexist two parks in same city
2. For those who do not know KidZania, the first contact with any other park would seem
similar to KidZania.
3. Competitors provide services at cheaper price but compromise on the educational
content, which is a factor that tends to be overseen.
4. Current trend is digital and they have to find ways to keep children out of devices.
Cons:
1. Given the smaller size, it was unclear if a small park would attain enough repeat visits
to be successful.
2. In large markets such as China, where quality of experience offered by the competitors
is low, convincing families to pay for and industry partners to invest in a better park
becomes more difficult.
Cons:
1. Large investment required.
2. It is illegal in most markets to digitally advertise directly to children
3. Parents don’t want children to spend more time online
Ansoff Matrix:-
Existing NEW
Existing