Ask Operation Management Expert

You are the vice president of operations at Exquisite Entertainment, an entertainment company that owns and operates 19 seasonal and year-round amusement parks (Worlds of Play) located throughout the U.S. You are responsible for providing overall direction and guidance with regard to the operational activities of the organization. What''s the current situation? The company''s amusement parks have always been popular, but recently they haven''t been very profitable. Operating costs have been rising, and every dollar of extra revenue has been hard won. At the company''s annual management offsite meeting held that morning at Worlds of Play-Seattle, Alex Harrington, a business strategy consultant from Ernst & Young LLP, unveiled "Operation Upmarket," a business strategy proposal aimed at addressing the issue of profitability for Worlds of Play. This plan proposed that Worlds of Play offer its customers the option of a "preferred guest" card. Cardholders would pay more, but they would get first crack at the rides and would get seated immediately at any of the park''s restaurants. According to Alex, the plan would help Worlds of Play finances because it would target the "mass affluents"--wealthy but time-pressed people who might visit the park more often and spend more time while there, were it not for long lines at the rides. You think back to that morning's meeting. You respect Alex's plan, but what about the initiatives you had implemented to tap into that same segment? In fact, you have already had some successes. Roughly 20% of Worlds of Play souvenir shops have been upgraded to gift boutiques with more appealing displays and higher-priced merchandise, and some snack concessions have been converted to seated dining. The most upscale of the restaurants are already earning almost double the profit per square foot of the other food-service facilities. Alex had done an impressive amount of work developing the idea, commissioning surveys and focus groups, and getting finance to run the numbers. Her presentation had been persuasive, you admit. Her tactic had been to get people arguing the details--should the pass cost $20 more than general admission or $30 more?--while ignoring the question of whether it was a good idea at all. At first, this approach seemed to be working. But Grace Jones, Exquisite Entertainment's vice president of human resources said, "Clearly, there's revenue to be gained from offering these differentiated service levels. But it just doesn't seem like us. The founder of Worlds of Play created a place where families could come together for a day to forget about their cares." Alex said, "Our history is great, but if things don't turn around fast, we are going to be history. The company has to make changes quickly to avoid cash-crunch-driven bankruptcy or a hostile takeover." It was no secret to anyone in the meeting that theme parks have only three ways to bring in more revenue: (1) increase visits per customer, (2) increase average spending per visit, or (3) attract new customers. Alex argued that the guest card would address the last two items by attracting a different type of customer--time-starved, high-income professionals and their families--who might otherwise avoid the whole experience. Adam Goodwin, the VP of marketing said, "It strikes me as a very shortsighted strategy. I mean, sure we could make a lot of money on those cards in the first couple of seasons. But just think about what it does to the overall customer experience. The average Joe with his wife and three kids is not going to shell out for five upgrades. So they are going to be sweating through even longer lines and just steaming when they see some yuppie waltz ahead of them. I don't even think it's a great experience for the preferred guests. Who wants to feel all the anger directed at them? The key to this business is that the customers feel good while they are here. A couple of ugly glances, a nasty remark, and the day is spoiled for everybody. Neither side's coming back." "I should have explained," Alex said. "We would definitely separate the lines so the preferred cardholders wouldn't be in people's faces and we'd limit the percentage of special tickets issued on any given day. But I don't think you are giving your customers enough credit. People have a lot more awareness and appreciation of the fact that time is money. This program lets them choose which they want to save." What are you supposed to do? You have been charged by CEO Len Becker to summarize the merits of the option presented at the meeting in his absence. Craft the body of a document for Mr. Becker. Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English.

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M91874042

Have any Question?


Related Questions in Operation Management

Conflictdefine functional versus dysfunctional conflict in

Conflict Define functional versus dysfunctional conflict in a work group and explain how you can increase functional conflict and decrease dysfunctional conflict. Develop a response that includes examples and evidence to ...

For this assignment you will need to find 2 articles in

For this assignment, you will need to find 2 articles in business that can help describe what are IT strategic initiative being undertaken by an organization are like. Choose a different organization for each of the arti ...

Coping with problems joe is a little nervous he has just

Coping With Problems Joe is a little nervous. He has just been transferred from another plant to take over a production line. Production is down and there is a serious problem with absenteeism. To make matters worse, the ...

Over 30 years ago michael porter identified a holistic

Over 30 years ago Michael Porter identified a holistic approach to understanding how competitive forces shape strategy. He posited that the only way to truly insulate an organization from underlying economic volatility i ...

You are the contracting officer for an air-to-ground

You are the contracting officer for an air-to-ground missile development program. A contract for pre-production models of the missile was awarded by your predecessor and the contractor is behind schedule. In a program me ...

The ikea case provides an excellent opportunity to apply

The IKEA case provides an excellent opportunity to apply strategic management concepts to a large privately-held company that is expanding into India. IKEA is a Netherlands-based Swedish company with a presence in 44 cou ...

Can you answer for me the following questions about social

Can you answer for me the following questions about social loafing and the three main causes of free-riding. 1. Give a description of the phenomenon of social loafing. 2. Give a description of the phenomenon of free-ridi ...

1 analyzing the bridgestonefirestone and ford motor company

1. Analyzing the Bridgestone/Firestone and Ford motor company, is it sufficient to use the ISO/QS 9000 standards as the main basis of vendor/product selection? 2. What position to these cars company ( 1. Volkswagen, 2. F ...

Research the effect of primary and secondary seat belt laws

Research the effect of primary and secondary seat belt laws on the occurrence of motor-vehicle injuries and fatalities. Explain how epidemiologic studies influenced the development of current seat belt laws. Describe how ...

Please provide a brief paragrap of the key takaways from

Please provide a brief paragrap of the key takaways from each of the following topics: Designing Clear Visuals in business reports Designing Successful Documents and Websites Writing Winning Proposals

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As