Case study 5: KidZania: Spreading Fun Around the World

EPGP-303-13A-Group 10
Contributors:

EPGP-13A-007 ADITI VATSA

EPGP-13A-003 ABHIRAJ SINGH

EPGP-13A-019 ANKIT MITTAL

EPGP-13A-010 AKSHAY NANGIA

EPGP-13A-073 NITHUL K P NARAYANAN

 1. How is KidZania able to differentiate in the competitive entertainment market? What is unique about
KidZania’s offer?

KidZania is able to differentiate in the competitive market by the following factors:

● The unique park themes developed in terms of providing education and entertainment to children as well the
awareness of real aspects of the world was their unique selling point unlike the other theme parks which are solely
used for entertainment purpose. All the activities were based on five educational theme: traffic rules, citizenship,
environment, health, and community.
● The concept of alliance with different industry partners generated revenue for both the involved parties. The partners
promoted their brands, logo, products, design, activity, helped and trained the employees called Zupervisors in the
industry specific topics. Hence, better collaboration with external stakeholders.
● The feedback mechanism, Kidzurveys used to collect information which used to improve the overall park activities to
satisfy children and their parents. They involved children’s ideas, preferences, wishes, needs and considered them
to innovate their products and services.
● In order to monitor the news and trends about the park, KidZania continuously followed the industry trends and took
social image seriously.
● The Park also offered the loyalty program which encouraged the repeat visit of customers.
 1. How is KidZania able to differentiate in the competitive entertainment market? What is unique about
KidZania’s offer?

Uniqueness in KidZania’s Offer:

● Kidzania provided a large variety of different trades and professions which the children could practice such as baker,
photographer, messenger, archeologist, builder, painter, surgeon, actor, cook, etc. in each park which inculcated values
and respect for various professions from the world among children.
● Kidzania focussed more towards the educational content, empowerment of kids thereby instilling values in children.
● The KidZania’s own economy was unique and fundamental concept which gave the children a basic understanding
about economics and value of work.
● The kids were rewarded in park’s own currency KidZos, which they used for multiple activities in the park like renting a
Mercedes-Benz at go-karting, a slice of pizza at the pizza-making activity, hence learning finance management.
● The CongreZz, a committee of around 20 children in each park helped them to understand the behavior and pattern of
children’s lives, their hobbies, interests and social life which was then reflected in their offerings and services.
● They celebrated different seasonal festivals such as Children’s Day, Halloween, Christmas and, regional activities as
per the place hence valuing one’s culture and community using different themes at the parks.
● Children were surrounded and guided by Zupervisors thereby ensuring safety of the kids.
2. Who are KidZania’s stakeholders? What do they contribute to the experience and what do they receive in
return?

The various stakeholders of Kidzania are as follows:

● Children were the key stakeholders for KidZania as they were the end customer who would experience the whole
Edutainment system. They contributed by being the revenue generator, marketer (word of mouth publicity) and by
being the future consumers of industry partners. In return, they got education (Role play, Cognitive development &
creative development), experience & entertainment.
● Parents were the important stakeholder as well as they were the ones who decided if there kids should get the
KidZania experience and ultimately paid for the experience. They also contributed by being Marketer (Word of
mouth publicity). In return, they were able to get an alternative education experience for their children which also
kept the kids entertained, thus allowing parents to focus on other important activities like shopping, buying groceries
or simply finding some free time.
● Schools were one of the main source of customers and revenue generation for KidZania. They used this platform to
understand the latest preferences and needs. In return KidZania enabled schools/ teachers to enable practical
reinforcement of what was taught in class. It enabled them to create a fun learning experience for the students.
2. Who are KidZania’s stakeholders? What do they contribute to the experience and what do they receive in
2. Who are KidZania’s stakeholders? What do they contribute to the experience and what do they receive in return?
return?

● Shopping Malls were able to contribute by establishing spaces for new audience who were unaware of KidZania
experience. In return, they received footfall, a new revenue segment and also an amenity for their customers (parents) to
leave their kids and go for a tranquil shopping experience.
● Industry partners were able to contribute by providing sponsorship to setup booths and technical know- how of
profession. In return, they received marketing opportunity (Parents), a new communication channel for next generation
consumers and Brand value.
● Government also played a vital role. Partnering with the government guaranteed visits by schools and the support of
government agencies, which would oversee KidZania’s basic activities: university, hospital, police, and firemen. In return it
attracts foreign investment and contributes to the overall growth of the country.
● Kidzania’s Employees/staffs contributed by helping the company grow and provide services to the consumers. They are
the human face of capital. In return they get job security, perks and other related benefits.
● Franchisees contribute by investmenting and enabling the brand reach different areas and locations. In return they get
revenues from the customers and license to trade and operate.
3. Is KidZania’s current strategy sustainable in the long term given the competitive landscape?

KidZania’s business model was a revolution in the entertainment industry. It was initiated with learning spaces and multiple
entertainment through providing children with opportunity to grow their capacity and creative potential for playing and
imagination. The key issue was the need to keep their concept fresh as a long-term strategy and be known as the global
brand.

Yes, the current strategy is sustainable to some extent due to the increasing demand for the outdoor experiences and
the distinctiveness of the Kidzania’s economy however internet usage penetration also needs to be considered for the long
run growth and competitive advantage. They should keep evolving and looking for new ways to offer their services hence
innovation. At the same time, keeping up with the technological trends, filing IP for their unique ideas and products is
another way to protect their identity and brand. The managers should change and update the content every now and then
in order to stay relevant to kids demands. Internationalization should help KidZania in the incorporation of changes to fit in
new markets.
 KIDZANIA’S VRIN ANALYSIS FOR CURRENT STRATEGY

Resource/Capability Valuable Rare Inimitable Non substitutable Implications

Sponsorship/Industry Partners YES NO NO YES Temporary competitive advantage

Franchisees YES NO NO NO Competitive parity

Location in cities and malls YES NO NO NO Competitive parity

Experience in this industry YES YES YES YES Sustainable competitive advantage

Market research methods NO NO NO YES Competitive parity

Staff (Zupervisors) YES YES NO NO Temporary competitive advantage

Innovation and creativity YES NO NO YES Temporary competitive advantage

Quality of edu-entertainment content YES NO NO YES Temporary competitive advantage

Incorporating current trends YES NO NO NO Competitive parity

Creating a safe education place YES NO NO NO Competitive parity

Engaging schools and teacher YES NO NO NO Competitive parity

Incorporating local traditions and

culture YES YES YES YES Sustainable competitive advantage
 4. If you were Xavier Lopez Ancona, 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 cons 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).

ANSOFF MATRIX

NEW MARKET DEVELOPMENT DIVERSIFICATION

Opening New Parks Developing Media content based on
Kidzania Characters
MARKETS

MARKET PENETRATION PRODUCT DEVELOPMENT

EXISTING
Developing a different type of Indoor Expanding into the Digital World
Park

EXISTING PRODUCTS & SERVICES NEW

 Market Development: Opening New Parks

PROS
● Kidzania can expand and explore new and smaller
cities with no or very less competition
● Better marketing for the industry partners, since they
know their business model well already
● Increase in market share and customers
CONS
● Competition from local parks
● Need to keep up with changing technologies &
innovation
● Keeping the business concept fresh
● Long competition time for new parks

Diversification: Developing media content based on KidZania characters

PROS CONS
● Achieve a higher reach and target a larger market
● your own IP ● High Capital investment
● longevity of their own themes and products, will be ● Currently lack the skills to expand in this field
able to monetize them ● No resources
● Will be able to cater the kid’s changing preferences ● high risk
● Achieve a stronger brand presence ● Shift of focus and change in priorities
 Product Development: Expanding into the digital world

PROS
● Keep tab on the online community and data
monetization consumer behaviour/insights availability
● Expanding into new markets
● Good brand recall & connections beyond the physical
boundary of the parks and strengthened relationships
with children after their physical experience
CONS
● High churn rate
● Reduction in importance for the physical park
● less threat to entry and increased imitability
● Parents don’t want their kids to be glued to
electronic devices/gadgets
● Mode of payment becomes a challenge for kids,

Market Penetration: Developing a different type of indoor park

PROS CONS
● Low cost to entry due to the past experience
● Different experience for customers due to new ● Due to lesser large markets, they need to explore
formats small parks
● Lower risk ● Decreased repeat visitors
● Parents will have more time for themselves ● convincing industry partners to invest time and
● Increased footfall in the malls & localization money,
● support from government-more business (guaranteed ● Difficult to hunt new franchises
visits) ● Increased need of permits for construction,
operations, resource hunting.

Going by the Pros and Cons, it is more beneficial to go for Market Penetration by “developing a different type of indoor park”.