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.
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
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
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.
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."
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
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.
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.