Situation Analysis:

El Dorado Parks has stood for a place where families could come together for a day and
forget about their worries. We soared in the post-war baby boom period, wherein the choice
to open in secondary urban markets provided us with various cost benefits. We began with
smaller parks and investments but today we have 19 seasonal and year-round amusement
parks

I am aware of the changing times and in the past two decades, our profits have remained slim.
Our labour costs as well as our insurance costs have increased exponentially. The past two
years particularly have been tough for El Dorado. The Operation Up-Market proposition,
from what I have garnered through our offsite meeting is aiming at turning that around
through its preferential services for the affluent customer segment. Though, there are certain
nuances to the customer experience that also need to be weighed in. 

For customers, many of which are average spending families, would not want to shell out the
extra bucks to gain access to the no-line experience, and subjecting them to longer wait-time
can be harmful. On the other hand, we have also improved revenues by upgrading souvenir
shops for the affluent segments. Though the crux of the matter is, we need to be mindful of
not creating any differences that would affect the experience that families come to have at El
Dorado.

At the end of the day, we need to increase the spending per customer that has been stalled at
$35, but this also needs to be done carefully. We still want El Dorado to be a place where all
families have a wonderful time.

After careful consideration and evaluation against the criteria, I have come up with the
following recommendation. We would have to further review the situation and make further
adjustments if any.

Problem Statement:

To decide upon the most suitable strategy to enhance El-Dorado Parks’s revenue and
performance

Options:
1. Launch Operation-Up Market’s preferred guest card
2. Continue upgrading Park’s infrastructure for the affluent segment
3. Conjunction of Operation Up-Market as well as up-gradation for Average spend
segment

Criteria :
1. Average Customer Expenditure
2. Customer value
3. Sustainability of Performance
4. Company’s cultural identity
Evaluation:

Option 1: Launch Operation-Up Market’s preferred guest card

1. Average Customer Spend- It would increase revenue for the company in the
upcoming seasons but the long-run viability of the program of generating profits by
offering value only to the mass affluent segment could possibly cannibalize the
revenues that come from our other segments.

2. Customer Value- In light of on-ground feedback from Park manager, preferential

treatment for the elite will likely result in a negative experience for the customers who
cannot shell out extra money, and create a likely scenario for differences among both
segments.

3. Sustainability- The cost-benefit analysis in this option indicates that it would benefit
the company and increase the average customer spend in the short run, though it
brings the long-run sustainability under question as it creates value for one segment..

4. Company’s cultural identity- The rise in differences would most likely result in an
identity that our company doesn't stand for. It should still be a place where every
family can forget their worries.

Essentially, this option though shows promise in the short run, adds value to one particular
segment and not all the families that visit El-Dorado parks. We are still a place that believes
in creating joy for every family.

Option 2: Continue upgrading Park’s infrastructure for the affluent segment

1. Average Customer Spend- The upgradation of 20% of souvenir shops to gift

boutiques as well the introduction of seated dining has helped in budging the spend,
but the impact on the already slim profit margins is unclear.

2. Customer Value- The upgradation aims at capturing the affluent segment with high-
priced merchandise and upscale restaurants. This falls short of creating value for other
customer segments.

3. Sustainability- The increasing upgradation would require significant expenditure,

and while we are already facing a cash crunch since the last two years, simultaneously
no exponential jump in revenue through alternative strategies, would increase the
working capital required. This would not prove to be sustainable in the short run as
well as in the long run.

4. Company’s cultural identity- The company’s cultural identity isn’t affected as much
till the upgradation is within certain limits, but as the percentage starts increasing, it
could indicate that we care more for the affluent segment and would shift focus from
our core cultural values.

This option falls short on improving profits in the long run as a significant capex would be
required and with a tight cash position, this would not prove to be sustainable.
Option 3: Conjunction of Operation Up-Market as well as up-gradation for Average spend
segment.

1. Average Customer Spend- The preferred guest card will increase the average
customer spend among segments that value time and the simultaneous upgradation for
the average spend segment would create returning customers, and increase the spend
in this segment.

2. Customer Value: The customer value increases for both the segments who value
time and money which eventually improves experience at the theme park.

3. Sustainability- Since this option encompasses multifaceted values for all segments, it
improves revenue and performance both, and proves to be a sustainable decision in
the long run.

4. Company’s cultural identity- The roots still being intact, wherein innovation fuels
income and value addition is there for different customer segments, it showcases the
theme parks as a place for all families and not emphasise on preferential treatment for
any one segment.

In conclusion, this proves to be the best option available when evaluated against all criteria. It
not just drives revenue but also improves customer experience.

Recommendation:

After a thorough analysis, I recommend the third option, i.e. Conjunction of Operation Up-
Market as well as up-gradation for Average spend segment. This creates value for different
customer segments and helps us in avoiding increase in prices all across the board.