To: Bipul Chakraborty
From: Sajal Nazir, Consultant
Re: Tata Steel Zoological Park Problem Statement: This report will assist Bipul Chakraborty, the new Director of the Tata Steel Zoological Park, in determining how the triple bottom-line framework can be incorporated into the business model; where the zoo can become a profitable and self-sufficient business venture, while also meeting its conservational, environmental and social objectives. Key Issues: The zoo is facing a profitability concern where the revenue generated by visitors is only able to cover around 60 percent of overall expenses. Furthermore, when inflation is added to this important challenge, it subsequently leads to Chakraborty’s inability to invest in long-term conservational goals, INR 56.5 million worth of renovations required by CZA’s new rules and regulations, and the zoo’s “most valuable resource” – its employees. Other key issues to consider would be the opportunity cost of the land, possible over-exploitation of the zoo’s resources, and protests by social/political activists regarding commercial activities. Recommendations: The following recommendations offer implementable solutions to the key issues raised previously: 1) Extend hours to operation from 8:00AM to 7:00PM (April to September) and from 8:00AM to 6:00PM (October to March). 2) Offer specific ticket fares for adults and children: INR 15 and INR 10. Then increase them in 10-20% intervals every year. 3) Invest in an audio-visual show about conservation. 4) Do not use the land for other commercial purposes (i.e. reinstating boat races). 5) Invest in optimal marketing and publicity for the zoo. 6) Implement an employee recognition initiative to reward performance. 7) On a long-term horizon, invest the net profits into the CZA-required renovations. Rationale: Tata Steel established the Tata Steel Zoological Park to protect animals, and to educate and entertain the local Jamshedpur community. If the current loss-making situation continues, the zoo will be unable to meet those objectives and therefore, would have to be shut down. The 7 recommendations ensure that this is avoided. The financial performance of the zoo can be improved by extending hours to operations by taking into account the sunrise and sunset times of Jamsehdpur. If the zoo was to extend hours from 8:00AM to 7:00PM (April to September), as daylight ends closer to 7:00PM, and from 8:00AM to 6:00PM for the rest of the year, more people will want to visit the zoo during weekdays after office and school hours, and in the relatively cooler-evenings during the hot and humid months. (Time and Date, 2016). Furthermore, assuming that the zoo currently uses a standard ticket fare of INR 7.10, it is advised that Chakraborty charges INR 15 and INR 10 for adults and children respectively. As Jamshedpur is one of the top 10 prosperous cities in India, has a middle-class to upper-middle-class population, which …show more content…
There are limited promotion opportunities, but if the zoo was to perform well in regards to the triple bottom-line and grow in size and scope, there will be more upper-level job opportunities available in the future. Lastly, when all these recommendations are implemented and a 15-year forecasted P&L statement is generated (exhibit 4), the zoo will be able to generate an average profit margin of 38.89% per year. And accordingly, as exhibit 5 reports, Chakraborty will be able to break-even on the required investment in 9 years-time. a Please refer to exhibit 4 for a financial forecast
From: Sajal Nazir, Consultant
Re: Tata Steel Zoological Park Problem Statement: This report will assist Bipul Chakraborty, the new Director of the Tata Steel Zoological Park, in determining how the triple bottom-line framework can be incorporated into the business model; where the zoo can become a profitable and self-sufficient business venture, while also meeting its conservational, environmental and social objectives. Key Issues: The zoo is facing a profitability concern where the revenue generated by visitors is only able to cover around 60 percent of overall expenses. Furthermore, when inflation is added to this important challenge, it subsequently leads to Chakraborty’s inability to invest in long-term conservational goals, INR 56.5 million worth of renovations required by CZA’s new rules and regulations, and the zoo’s “most valuable resource” – its employees. Other key issues to consider would be the opportunity cost of the land, possible over-exploitation of the zoo’s resources, and protests by social/political activists regarding commercial activities. Recommendations: The following recommendations offer implementable solutions to the key issues raised previously: 1) Extend hours to operation from 8:00AM to 7:00PM (April to September) and from 8:00AM to 6:00PM (October to March). 2) Offer specific ticket fares for adults and children: INR 15 and INR 10. Then increase them in 10-20% intervals every year. 3) Invest in an audio-visual show about conservation. 4) Do not use the land for other commercial purposes (i.e. reinstating boat races). 5) Invest in optimal marketing and publicity for the zoo. 6) Implement an employee recognition initiative to reward performance. 7) On a long-term horizon, invest the net profits into the CZA-required renovations. Rationale: Tata Steel established the Tata Steel Zoological Park to protect animals, and to educate and entertain the local Jamshedpur community. If the current loss-making situation continues, the zoo will be unable to meet those objectives and therefore, would have to be shut down. The 7 recommendations ensure that this is avoided. The financial performance of the zoo can be improved by extending hours to operations by taking into account the sunrise and sunset times of Jamsehdpur. If the zoo was to extend hours from 8:00AM to 7:00PM (April to September), as daylight ends closer to 7:00PM, and from 8:00AM to 6:00PM for the rest of the year, more people will want to visit the zoo during weekdays after office and school hours, and in the relatively cooler-evenings during the hot and humid months. (Time and Date, 2016). Furthermore, assuming that the zoo currently uses a standard ticket fare of INR 7.10, it is advised that Chakraborty charges INR 15 and INR 10 for adults and children respectively. As Jamshedpur is one of the top 10 prosperous cities in India, has a middle-class to upper-middle-class population, which …show more content…
There are limited promotion opportunities, but if the zoo was to perform well in regards to the triple bottom-line and grow in size and scope, there will be more upper-level job opportunities available in the future. Lastly, when all these recommendations are implemented and a 15-year forecasted P&L statement is generated (exhibit 4), the zoo will be able to generate an average profit margin of 38.89% per year. And accordingly, as exhibit 5 reports, Chakraborty will be able to break-even on the required investment in 9 years-time. a Please refer to exhibit 4 for a financial forecast