S.W.O.T Analysis and PESTLE Analysis of KidZania Manila An Undergraduate Business Analysis Presented to Professor Roland Blasco SAN BEDA COLLEGE - ALABANG Muntinlupa City In Partial Fulfillment Of the Requirements for the Course Subject BAC106RZ- BUSINESS POLICY AND STRATEGY Presented by Elyza Nicole Agarap Lorenzo Cipres Quendrick Keith Surban February 01,2018 MISION “To feature the very best educational entertainment experience in role-playing for our visitors and deliver the most effective interactive medium of communication for our industry partners while promoting the most recreational and supportive development environment for the future generation” VISION “Our vision is to ignite the hearts and minds of kids everywhere by empowering them to make the world a better place.” COMPANY BACKGROUND WHAT IS IT? KidZania Manila is the first Edutainment [Educational Entertainment] amusement theme park in the Philippines. It is one of the projec ts of one of the newest ventures of ABS-CBN Corporation—the Play Innovations Inc., which was formed in 2012 strategically located in Park Triangle North in Taguig City. KidZania is one of the most inventive, most awarded and fastest-growing kid’s educational entertainment concepts. KidZania Manila operates like a real city that is built to the scale of children, complete with paved roads and vehicles, buildings and establishments, a functioning economy and its own currency. This amusement park is designed for childr en aged 4 to 14, housing more than 55 establishments most of which are sponsored by real brands (Like BPI, Mcdonalds, Goldilocks, Jollibee, National Bookstore, Cebu Pacific, etc) with over 70 role play activities. A place where children have the opportunity to play the different kinds of jobs in the Philippine industry. WHY DID THEY BUILD THE BUSINESS? Kids are most receptive when they are having fun. Play is a child’s way of engaging and making sense of the world. KidZania has taken the timeless and universal form of play - roleplaying and built a functioning city around it. By blending reality with entertainment, KidZania provides an authentic and powerful developmental experience, preparing kids to understand and manage their world. Through adult professions and hands-on exposure to the working world, kids learn about the fundamentals of financial literacy and how society functions. They learn the value of independence, empowerment, and leadership and become aware of the benefits of involvement in their communities. By offering a powerful developmental experience in which reality and entertainment intersect, KidZania empowers children life skills that help them understand and manage the world they are growing into. A. SWOT ANALYSIS STRENGTHS WEAKNESSES 1. Pioneer in the Philippine industry 1. Stagnant marketing efforts INTERNAL ENVIRONMENT 2. Unique educational service 2. Limited co-brands and partners 3. Wide variety of services and activities 3. Negative Working Capital for customers 4. Shortage in manpower 4. Fun, safe and realistic facility 5. Parents/Elders are left behind with the 5. Partnered with well-known brands experience 6. Promotes business and ethical values 6. Has a small competitive facility size 7. Publicly accessible 7. Brand reputation is still adequately low 8. Technologically advanced 9. Massive profit margin increases 10. Quality materials and customer support OPPORTUNITIES THREATS 1. Extinguishment of the “School 1. More companies are entering the Fieldtrip ban” by CHED family entertainment industries 2. Increase in buying consumption 2. Other businesses that may serve as a power of customers due to the substitute for entertainment such as EXTERNAL ENVIRONMENT reformed income tax rates theaters, malls and the like that provide 3. New technological innovations and low cost but with equal satisfaction advancements available in the 3. Tax reform for acceleration and Philippine industry inclusion might affect raw material 4. Boom of social media and other costs internet-based marketing 4. Close pricing gap between competitors 5. Growing economy of the Philippines 5. Increasing innovation levels of other 6. Wide availability of expanding theme parks in the Philippines facilities and operations 6. Abrupt changes in customer 7. Larger demographic markets in the preferences and taste business 8. New service platforms and innovations that can be added to the business STRENGTHS 1. Pioneer in the Philippine industry – first in the amusement theme park industry offering “Edutainment” 2. Unique educational service- only business that offers an amusement theme park emphasizing on role plays and activities promoting education, experience and entertainment 3. Wide variety of services and activities for customers- offers about 70 unique role-playing activities 4. Fun, safe and realistic facility – they offer an establishment that has an authentic business atmosphere fit for children where security of customers is the first priority of the business 5. Partnered with well-known brands- the company is supported by leading brands in the various industries in the Philippines 6. Promotes business and ethical values – children are guided to become individuals with the morality of that imposed in the business world while the essence of fun is not disregarded 7. Publicly accessible- it is in Taguig where most mass transportation is widely available 8. Technologically advanced- services offer the most recent and updated machineries and equipment to be used in their service to the customers 9. Massive revenue increase – revenues keeps rising as a newly-typed business in the Philippines 10. Quality materials and customer support- the business is backed up with the most reliable and top of the line business materials (ingredients, utensils, arts and crafts material, etc.) supported by highly trained employees with competency and ethical aptitude. WEAKNESSES 1. Stagnant marketing – low efforts in marketing platforms and strategies 2. Limited co-brands and partners – they only offer one company’s brand per role-play activity. For example, they only pair off with Air Asia as their airline co-brand and have no alternative brand within this sector (airlines) to accommodate and further broaden the variety of the services provided. 3. Negative Working Capital- the current liabilities of the company exceed the current assets of the business indicating risks in the liquidity condition of the company 4. Shortage in manpower – each activity is handled by only 2-3 employees while providing learning experience to 1 batch composing of 6-8 children, thus lessens the opportunity of some children to be attended and guided. 5. Parents/Elders are left behind with the experience – parents role in the facility is to superve their children and cannot personally experience the service that KidZania is offering 6. Has a small competitive facility size- compared to other theme parks, the facility only operates in a building-format environment OPPORTUNITIES 1. Extinguishment of the “School Fieldtrip ban”- this will help the company attract more schools and universities to try their service and develop the concept of “edutainment” in the Filipino educational system. 2. Increase in buying consumption power of customers due to the reformed income tax rates. 3. New technological modernizations and advancements available in the Philippine industry- there are now more sophisticated and entertaining means of introducing education to the children this days. 4. Boom of social media and other internet-based marketing- KidZania may use the internet to further expand their reputation in the different areas of the Philippines. 5. Growing economy of the Philippines. 6. Wide availability of expanding facilities and operations- opportunity of a growing facility may help the company meet the demands of the market, in terms of number of customers 7. Larger demographic markets in the business- this include markets that KidZania is not targeting like customers with ages 16 to 18. 8. New service platforms and innovations that can be added to the business – consists of introducing services not only that caters for the children but also for there parents as they serve as chaperone. THREATS 1. More companies are entering the family entertainment industries 2. Other businesses that may serve as a substitute for entertainment such as theaters, malls and the like that provide low cost but with equal satisfaction 3. Tax reform for acceleration and inclusion might affect raw material costs- due to the increase in oil excise tax, sweetened beverage tax, etc. 4. Close pricing gap between competitors – theme park prices have a close approximate related to the prices of their services 5. Increasing innovation levels of other theme parks in the Philippines – nowadays, ocean park, Philippine national museum, Star city and Enchanted Kingdom has been mustering up new and unique platforms that differentiates their businesses 6. Abrupt changes in customer preferences and taste- more and more customers can be persuaded easily by slight changes in the business environment or other factors such as location, transportation, additional costs, etc. B. PESTLE ANALYSIS Newly imposed tax rates will likely render the price of transportation and other input goods P higher. KidZania Manila will incur larger costs and may pass it to their consumers by increasing ticket prices after considering price sensitivity. End of Contractualization which would ramp up the personnel costs for the company because medical insurance and benefits for each worker will be mandatory. Legislation that exponentially lowers the paid-up capital requirements for foreign corporations, thus, more competitors can eat up the market share of KidZania Manila Political Proposed “Build Build Build” project by the incumbent president improves accessibility and improvement of quality of living may be a great catalyst for KidZania Manila. Robust 6.6-7% Philippine economy growth rate, KidZania Manila is poised to enjoy economic E stability and scratch off macro-factors on its company risks. Increase in employment rate will be solved by the insufficiency of personnel of the company. Healthy economic backdrop can substantially influence tourist visits and drive off sales Arrival of Train Law would bolster disposable income of family households and thus, potential customers will drastically increase as more families will be able to afford KidZania services. Low inflation rates coupled by stable interest rates suggest low volatility for the input prices Economical which will give room for expansion because borrowing money will just require acceptable interest rates. S Social & Cultural T KidZania can heavily capitalize on the rapid changes in technology The rise of artificial intelligence will be a convenient tool for the company in the performance of its services. (Ex. Robots and machines can assist on teaching and interacting with the kids.) Automation can substitute some clerical operations of the company bringing down costs Technological especially after the end of contractualization Growing internet reach may allow larger advertisement to reach for the company, the Filipinos from the rural areas can be cognizant of the existence of the kid-sized city L Legal E Environment REFERENCES: Abadilla, Doris Dumlao (January 2018) “2018 GDP growth seen at 7-7.5%, PSEi at 9,400”. Retrieved from http://business.inquirer.net/243532/2018-gdp-growth-seen-7-7-5-psei-9400 ABS-CBN news (December 14,2017) “'Build, Build, Build' program seen to drive 2018 GDP growth: economist” Retrieved from http://news.abs-cbn.com/business/12/14/17/build-build-build-program-seen-to-drive- 2018-gdp-growth-economist Advisorgate.com (nn) “KidZania - SWOT analysis. Strength, Weaknesses, Opportunities, Threats”. Retrieved from http://swot.advisorgate.com/swot-k/21675-swot-analysis-kid zani a.html Banko Sentral ng Pilipinass (nn) “Inflation Rates” Retrieved from http://ww w.bsp.gov.ph/s tatistics/s pei_new/ta b34_inf.htm Jaymalin, Mayen (December 29,2016) “New DOLE policy bans ‘endo’ “ Retrieved from http://www.ph ilstar.com/hea dlines/2016/12/29/1657748/new-dole-policy-bans-endo Lee, Ken (nn) “Mock proposal for a new campaign idea”. Retrieved from http://ca rgocollective.com/leeken/KidZania Patajo-Kapunan, Lorna (January 14,2018) “Estate-tax changes under TRAIN law” Retrieved from https://busines smirror.com.ph/estate-tax-changes-under-train-law/ Reuter Staff (November 9,2017) “Rise of the machines: Philippine outsourcing industry braces for AI” Retrieved from https://www.reuters.com/article/us-philippines-economy-outsourcing/rise-of-the-machines-philippine- outsourcing-industry-braces-for-ai-idUSKBN1D90BH Wong, Alicia (March 2012) “Marketing Project:KidZania” Retrieved from https://prezi .com/3f8cvee2gvda/xxx2/