Critical evaluation of the business plan legoland

1. 1. The executive summary
The analysisof aimsand objectiveswasdone,SMARTobjectivesandappropriateaimsbasedonthe
mission statementswere proposed, andthe analysisof competitorswasdone afterwards,withthe main
emphasis onLegoland.PESTLEanalysisgave aclearpicture of business environmentinUKfor
establishingKidzaniafranchise,whilestudyinthe fieldof marketingmix proposedinthe businessplan
resultedinseveral suggestionforimprovement.The analysisof USPconcludes thatestablishment
Kidzaniafranchise canbe successful venture,if properly managed.
2. Introduction
The purpose of thisreport isthe analysisof the businessprojectis acritical evaluationof the initial
BusinessPlanfromseveral aspects,suchasaims and objectivesof business,analysisof business
environment(includingthe competitoranalysis,andanalysisof marketingmix,inadditiontostudyof
the Unique sellingproposition.The suggestionsforthe improvementof the initial businessplanwillbe
alsopresentedfurther.
3. Aims and ObjectivesofBusiness
BBC (2012) definesbusinessaimasthe “goal thata businesswantstoachieve”,andobjective as
“measurable targetof howto achieve abusinessaim”.Of course,itshouldbe basedonthe mission
statement,asOldhamSix FormCollege (2005) suggests.AccordingtoSmith(2011), there are two
KidZania’smissionstatements,whichare to“provide the bestfamilyedutainmentthroughfun,realistic
role-playingactivities",andto“constitute aneffective interactive publicitymediumforourpartners,
firmlycommittedtothe enhancementof ourcommunity”.Basedonthese twostatements,the aimsof
beatingcompetitorsandboostingmarketshare,enhancingbrandvalue,improvingthe customers’
experience andprofitmaximisationare suggested. The firstobjectiveistohave 600, 800 and 950
thousand visitorsinfirst,secondandthirdyearrespectively,thusgeneratingmore than£45.35 million
of total profitandreachingthe break-evenpointinthe fifth yearof the businesslaunch.Other
objectivesincludeenteringtop500 UK brandslist,andmaintaining80% “satisfied”rate accordingtothe
owncustomersatisfactionsurveynext five years.Allthe objectivesare consideredtobe SMART, so
they are Specific,Measurable,Achievable,RealisticandTime bound,accordingtoThe Times100 (2012).
4. The businessenvironment(competitoranalyses)
The main competitors,althoughnotfullydirect,are AltonTowers,DraytonManors,Legoland,
Thorpe Park and Chessingtontheme parks,asshownbyThemeParks-UK(2012),however,onlythe last
three can be consideredascompetitors,becauseof theirlocationnearthe possible place of Kidzania.
The main competitor,asitwas mentionedinthe BusinessPlan,isLEGOLAND,takingintoaccountthe
size andamountof activitiesprovidedbyLEGO(2012).
Takingintoaccount the fact from BusinessPlanthatLEGOLANDisthe maincompetitorfor
Kidzania’s,the competitoranalysisusingthe analysisof LEGOLAND'sobjectives,assumption, strategy
and capabilitiesisdone,asNetMBA (2010) suggests.
MerlinEntertainmentsGroup,the ownerof LEGOLAND,notes(2008) theirmainobjectives,
whichare furtherdevelopmentof ourexistingattractionsites,developingourtheme parksinto

2. destinationresorts,financial performance improvement,andaggressive growthstrategiesusingall the
possibilities,includingstrategicacquisition,if appropriate.
While takingintoconsiderationthe assumptionsbasedonthe factsabout Merlin
Entertainments, itcanbe concludedthatthe entrance of Kidzaniaintothe UK marketwill be followedby
the MerlinEntertainments'attemptstoimprove anddevelopedthe existingLEGOLANDattractionto
provide the same servicesof experiencingreal worldjobsforkids,usingtheirstrategyof heavy
promotional campaignandconsiderablyfundedinvestmentsintothese improvements.Incase if
Kidzaniawill be stillsuccessful inthe UKmarket,theywill trytoacquire Kidzaniausingall the
possibilities.
At the endof 2010, MerlinEntertainmentsGrouphad74 attractionsin17 countriesandhuge
experience inprovidingleisure experience fortheirvisitors,inadditiontothe huge financial,real estate,
humanand technological resourcesandcapabilities(MerlinEntertainmentsGroup,2011). Because of
the competitor'sconsiderable resourcesandcapabilitiesandtakingintoaccountthe possible strategyof
competingwithKidzania,itissuggestedtouse veryaggressive,thoughefficientpromotioncampaign
that will highlightthe uniquepropositionandexperience proposedbyKidzania,inadditiontothe
service qualityhigherthanproposedbyLEGOLANDandother theme park.Concerningthe defensive
actions,the solidpartnershiprelationsshouldbe establishedandmosteffective type of ownership
shouldbe selectedinordertopreventunfriendlytakeover.
There wasno macro-level analysisof businessenvironmentinthe BusinessPlan,becauseof the
size restrictions,inspiteof itsimportance inthe decisionmakingprocessregardingbusinessstartup.
Therefore thisanalysiswasdone. Consideringthe macro-levelof trendanalysis,OxfordUniversityPress
(2007) putsforwardfor considerationthe PESTELmethodof examiningmacroenvironmentalfactors in
UK, describingitasthe analysisof Political,Economic,Social,Technological,Environmental andLegal
Factors.
Political Factors
The tax policyisconsideredtobe lessburdensome thaninmanyEU countries,inadditionto
trade and environmental law(AdamandBrowne,2011; BIS,2012). The political stabilityishigh;there is
lowprobabilityof political crisisandsocial unrestinsuredbyhighlevel of democracy(EIU,2010, 2012).
Economic Factors
Economicgrowthis predictedtobe 2% in2012, while the inflationisgoingtorise insignificantly
(Inman,2011). The interestrate will keeprecordlow untilMay2012, andwill increase onlyinOctober
2014, meaningthatfinancingusing£25 millionfrom the bankasa loanwithan interestof 5.3%, as
writteninthe businessplan,isrealistic,andthe interestrate canbe evenlower(Rowley,2011; Oxlade,
2012). This ismoney(2011) noteshighprobabilityof furtherweakeningof poundmeaningthathigher
amountof foreigntouristscanbe attractedto Kidzania,butthisalsomeanshighercostsof imported
equipment.
Technological factors
MerlinEntertainmentsGroup(2011) notesthat theyspendconsiderable amountof moneyand
resourcesonR&D activity,meaningthatthere will be highpressureonKidzaniafromthisarea.Barnes
(2008) suggeststhatincreasingsophisticationandimprovementof videogamescanbe consideredasa
real threatto amusementparks.However,recentdevelopmentsinthe arrayof technologies,suchas3-

3. D and hologramscan be a good opportunitiesforprovidingbetterexperience byamusementparks,he
adds.The recenttechnologiescanbe alsoimplementedbyKidzaniainUKto attract more customers,so
technological factors are notonlythreatbut alsoopportunityforKidzania.
Environmental factors
The range of environmentalfactorssuchas level of pollutionandclimate change significantly
affectstourismsector,andthisisalso importantof Kidzania,withthe considerable amountof profitsare
expectedtocome fromforeigntourists;howeverthere isnowaysof preventingthese risks(Fáilte
Ireland,2007). But, the increasingenvironmental awarenessof the customers(kids'parents)shouldbe
takenintoaccount; one example ishealthandenvironmentalsafetyof the materialsof the equipment
used.
Legal Factors
While itisrecognizedthatthe range of regulations,includingconsumerlaw,employmentlaw,as
well asthe healthandsafetylawaffectsthe businessoperating,UKisconsideredasone of the most
attractive countriesinthe worldfromthese positions(Morrison,2012; The WorldBank, 2012). But,
special attentionshouldbe paidtothe healthandsafetyregulations,since the audience of the service
are kidsunder12.
5. The marketing area
Analysisof MarketingMix,definedbyQuickMBA (2010) as the combinationof product,price,
place and promotion,isalsoanimportantpart of the analysisof businessplan.
While the "product"part wasclearlydefinedinthe USPpart of the businessprojectandprice
for the ticketswere alsowell-developed,the businessplanlackedthe descriptionof purchasingand
installingvariousequipment,aswell asconstructionandrepairingworksinthe purchasedarea,in
additiontothe processof trainingstaff inaccordance withfranchise contractrequiredforconcise
formulationof the productpartof marketingmix.
The price part alsolackedat leastthe superficial descriptionof price-settingpolicy(which
shouldinclude the demonstrationof Legoland,Thorpe ParkandChessingtonthemeparks'pricingpolicy
plusthe analysisof the costsincurredby servicingeachcustomer).
Promotionpart shouldbe alsoalteredandformulatedmore precisely,withthe emphasis,
besidesunderground,billboards,andflyers,on internetandsocial networkmarketing, includingthe
focuson the foreignvisitors.Asitwasmentionedbefore,withoutheavyandefficientmarketing
campaign,thisbusinessplanandfurtheractionsare underthe threatof commercial impracticabilityand
financial insolvency,resultedfrompoorsalesandactionsof the competitors.
Place factorswere consideredonlyinone dimension.LocatingKidzaniaatVictoriaStreetmeans
unique positioninginplace factor,apartfrom other,butalsomeanshighoriginal costs.To add,"place"
part of marketingmix should alsoreflectinthe businessplaninthe policyof sellingticket,which should
be aimedat convenientand effective systemof sellingthrough bothinternetandinthe Kidzaniaitself
rightbefore the start of action.
5.1.Unique sellingproposition

4. The businessplanof KidzaniafranchiseinLondonhasthe ideaof Unique sellingproposition,
whichwouldbe offeredasthe prospectservice.Indeed,the Kidzania'sfranchiseprovidestrulyunique
service andUSP,defined byThe Economist(2009) as “the qualitiesthatare unique toa particular
productor service andthatdifferentiate itinawaywhichwill make customerspurchase itratherthan
itsrivals”.
The story “WannadoCity”,whichwas usingthe same propositionandstrategyandclosingafter
several years due tofinancial problemssuggeststhat,despiteof the threatfromUK competitorsof
proposingthe same product(allowingkidstoworkas inadultjobs and earnmoneyinthe formof
playing) cannotbringthe successwithoutpropermanagingbytop-managersof the companyandvision
of XavierLópezAncona,ownerof the company,andwithoutthe accuratelyformulatedmarketingmix
valuable andviable inthe particularenvironmentof UKmarket(Bandell,2010;Satchel,2010; Smith,
2011).
6. Conclusion
The report preparationwasveryuseful formycomprehensionof some of the businessanalysisideas,
such as PESTEL and 4Ps analysis.However,due tothe limitations, the analysisof businessplanwasnot
comprehensive andwasconcernedwithonlyfew areasforconsideration.
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