Case Study 1

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IIT Kanpur *

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Nov 24, 2024

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Case Study 1: Alton Towers Read the case study below and answer the questions that follow. Alton Towers was voted the UK’s number one theme park again this year. It is located in the heart of England in Staffordshire, where there is easy access from both the M1 and M6, although access through the village of Alton towards the site is difficult. The roads are narrow and there are twisting bends, which coaches find difficult to manoeuvre round. The site evolved from being a traditional English garden attraction in the 1950s to an exciting leisure park after a company decision was made in the 1980s to convert the gardens to an American-style theme park. The aim was to attract more visitors. The idea was a success and over the years the park has been constantly updated with increasingly bigger and more exciting rides and spectacular attractions. Alton Towers set out to be the market leader from the beginning. It boasts the best attractions in the UK. It was the first to have the largest flume in the world in 1982. The company was taken over by the Tussauds Group in 1990. Changes were made to existing attractions and layout of the park. Other changes included a short walk towards Thunder Valley, leading to the Haunted House. In 1994 the most spectacular ride ever seen in the UK was introduced. This was Nemesis – an inverted roller coaster. The thrilling suspended ride – Oblivion – was opened in 1998. This is a vertical drop roller coaster. The latest addition to the park in 2000 is the Hex – the legend of the Towers. This is a disorientating ‘haunted’ swing. These ‘white-knuckle’ rides are now located in the X-Sector. In 1996 a £10m themed hotel on the outskirts of the park was opened. Participants in the Haunted House and X-Sector rides are photographed as they take part. These photographs are ready for viewing and purchasing at the end of the rides. There is an admission charge to the park, but once inside the park all the rides and attractions are free. Ticket prices are differentiated and include Peak and Off-Peak, Day Tickets, Family Tickets and Season Tickets.

Visitors to the park can choose to eat at a variety of restaurants dotted all over the park. Each ride has its own souvenir shop attached and there are also gift shops where Alton Towers merchandise can be purchased at prices to suit all pockets. Alton Towers is open every day to visitors from around 24 March until 31 October each year. Every year 2.7 million visitors visit the park. The volume of visitors in the summer means that long queues can form, although a ticket reservation process is in operation for the most popular rides. Alton Towers is not seeking to increase the number of visitors passing through the gates, but to encourage people to spend more on food and merchandise and to come back again. Alton Towers: questions , Each Answer should have 100-150 words. 1. (a) Alton Towers set out to be the ‘market leader’. Explain what this means This means that Alton Towers is the most preferred destination by the customers across the globe. There may be some other places or options that people may have opted to go to but majority have decided to visit the Alton Towers. It also indicates that the services offered by the Alton Towers are at the top quality which keep attracting visitors to the Towers. Finally, it means also that the Towers have managed to maintain its customer satisfaction and therefore these customers will keep coming back to the towers. It means one thing that, the towers satisfied their customers better than any other competitor would do both in price and services offered. (b) What evidence is given in the case study to suggest Alton Towers is achieving its objective of being market leader?

First Alton Towers have been adding new and exciting rides over time. This means that the firm has been keeping updated with the current trends in the industry. For most of the successful companies, they must leverage on information in the market. Secondly, Alton Towers have differentiated prices which means that the customers can meet the cost of which each of them will be comfortable with. Differentiating of prices or products will drive the success of the any firm in the world. Finally, the firm has restaurants and souvenir shops within the site. This will make sure that the customers who receive all the necessary facilities it needs. 2. (a) State two advantages Alton Towers gained by being part of the Tussaud’s group? The Tussaud’s group has managed to make some of the expansive changes on the park. This means that the Alton Towers will therefore make to continue with its mission of becoming a market leader through expansion strategies. Secondly, the firm has made to add more attraction sites. This will ensure that the firm will also attract more customers to the towers and remain on course to continue the desired success. The also will benefit from better management since there will be more input of ideas from other experienced management from firm. Finally, with the availability of capital then the firm can offer better services to its customers. (b) Name one other Tussaud’s attraction The thrilling suspended ride Oblivion that was opened in 1998 which is a vertical drop roller coaster. This is just one of the major expansive and major changes the company has added. It creates a diversity of the attractions that are available in the firm and therefore it will keep the firm in its course of remaining dominant in the market. Such invention is one of the best moves that the world leading companies will lead against their competitors. Addition of new options will not limit the customer on the services that are will ensure that the satisfaction of the customers will be maintained.

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3. Explain how Alton Towers kept ahead of the competition in the years from 1982 until present. One of the approach Alton Towers remains dominant is due to the additions of new attractive features in the site. This will increase the number of the customers who visit the site. Secondly, the Towers have also managed to expand its operations by increasing the space. This improve the quality of the services as it will reduce congestion of people. Thirdly, the Tussaud have managed to repair some of the areas in the Towers which will enable the place to look more attractive. Finally, the Towers have differentiated its prices in order to suit all pockets among its customers thus none of the customers will be left out. 4. Explain the benefits to Alton Towers of having restaurants and souvenir shops dotted around the site? The first benefit is that the customers will not be locked up in long queues which would proof to be very hectic for the customers. Secondly, it increases the quality of the services that are offered to the customers within the Towers. This will remain one of the major technique to maintain the happiness of the customers. When the customer is happy then he will be happy and secondly he will convince some his colleagues to visit the place. The Towers will also manage to sell more and make more profits from the merchandise because of the availability of the services when they are on demand. 5. Why does Alton Towers use differentiated prices for their admission tickets? The first thing is to ensure that all groups who will be visiting the Towers will be accommodated and meet the cost of the services that are offered by the firm. Secondly, this is one of the generic cost strategies that most of today’s companies are using in order to remain dominant in the market. Customers vary in preferences and in meeting the costs that are offered by firms across the globe. Therefore, accommodating the customers of all classes is a competitive advantage. Finally, some of the services are overpriced so as to limit the number of the people who will afford them thus keeps overcrowding in some of the areas.

6. Explain how Alton Towers can use field research and desk research to find out if they are achieving their objectives. The firm can sent some its agents or the marketing and branding team to move across the world seeking on more information on the demands of the customers. Secondly, these agents can also find out from their competitors on the new demands in the market integrate them in their firm. The firm can also collect the information from the visiting customers who are willing to explain their expectation of the firm. This will provide the firm a chance to include their views in designing the new proposed services on the firm. Finally, research will ensure that the firm is keeping up with the current information in the market. 7. Lately there has been a lot of adverse publicity in the press concerning accidents on ‘white-knuckle’ rides on the Pleasure Beach, Blackpool. Do you think this adverse publicity could have an effect on Alton Towers Theme Park? Explain your answer To some extent, this will affect the reputation of the firm. However, it doesn’t end there. The approach of the firm’s response to the allegations will be the determining factor of how the customers across the globe will view the firm. The management has to come out clear about the situation and how the firm is assuring their customers that its customers that the event was an unfortunate and that the management will work on the situation in future such events will not arise. The world has witnessed many incidents and accidents but in the long run the response of the management will change the whole thing. Therefore, the effects of the adverse publicity will depend on the response of the Alton Towers management. 8. Give two examples of how Alton Towers can promote itself as a safe park to visit Participating in corporate social responsibility like offering scholarships to the native students. This will enable the firm to receive recognition from across the globe and therefore, it will market itself internationally. Most of the large companies have realized the importance of participating in the corporate social responsibility. Another way is by partnering with international firms which will enable the firm to expand its operations to other regions across the world. The world business strategy will ensure that the operations provide a platform of its

expansion and in the long run the business can reach to its customers who are scattered across the world. 9. State one advantage for Alton Towers of selling tickets on the internet Large customer base: Selling in the internet is an opportunity of the firm meeting large customer base across the globe. Customers are `all the world and therefore selling online will expose the firm’s services the entire population in the world. Such population will only mean that the firm will be benefiting from the large number of people who are willing to purchase their tickets. The firm will also be able to sell the seasonal tickets within the specified periods and the customers will be able to know the several categories in which they can purchase thereof. The current business world has been reduced to a global village thanks to the innovation and the connectivity of internet. 10. Give one advantage for customers of purchasing tickets on the internet Reduces time wasted in queuing for purchasing the tickets at the entrance of when purchasing the tickets. This will therefore increase the satisfaction of the customers and customer retention will be high. Customers who come with their ticket will also give them a chance of having the time well spent as there are no more procedure to be followed in the acquisition of the tickets. In such, it will maintain the quality of the services of the offered to the customers. In the manual purchase of tickets, there is so much time that is wasted in the long queues that are witnessed on the daily basis.

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References Kwoka, J. E. "Large firm dominance and price-cost margins in manufacturing industries." Southern Econ J (1977) vol. 44, pp. 183–9. Brown, Donald M., and Frederick R. Warren-Boulton, Testing the Structure- Competition Relationship on Cross-Sectional Firm Data, EAG 88-6, May 11, 1988. Warren-Boulton, Frederick R. (1990). "Implications of U.S. Experience with Horizontal Mergers and Takeovers for Canadian Competition Policy". in Mathewson, G. Franklin et al. (eds.)

Case Study 1

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