Ocean World Water Park

Welcome to

Group 4: Debasri, Deepak and Dhiren

The city of Bhubaneswar

• Nikhil on a very fine day was evaluating the profits of the Ocean World Water Park on 1 June 2012

• It was had been adopted by him since July 2011 located at Bhubaneswar

• He would decide whether to continue the promotional activities or whether selling off the project would be a better option

• Nikhil had acquired OWWP after utilizing the major part of his financial assets and incurring a lot of debt

• He needed to infuse an additional 10 million Indian Rupees (INR) to further modify up the place

• He had an offer to sell his property for 70 million Rupees. However he was not in favour of it. Had a deadline till 5 June 2012 to take a decision

Facts of the case

• In January 2008- Nikhil and Avik decided to leave their jobs and become entrepreneurs

• In March 2008- bought a rubber plantation in a patch of 60 acres at Dhenkanal district in the state of Odisha

• In 2009- they had a first transaction with Mr Mohapatra

On a typical weekend during the summer vacation in 2007. Nikhil visted the place.

• He then later owned this place- 10 acres of land. The water park was on six acres and there was four acres of free land available.

• Nikhil and Avik took INR 70 million as a loan and used INR 10 million from their own funds.

• The name remained ‘‘OWWP’’ and in the letterhead it was referred as ‘‘OWWP’’. The logo also remained the same

.

History

3 Entrepreneurs from Bhubaneshwar

• Mr P.K. Mohanty

• Mr R.N. Rath

• Mr K. SinghDeo

All three acquired ten acres of land that was to be developed gradually.

The park had:

• four rides;

• one wave;

• one rain maker;

• kid’s pool called kid’s splash; and

• restaurant (not full-fledged).

Initial Startup

• Park was never managed professionally

• USA based promoters could not involve themselves personally

• Manager lacked techno-managerial skills

• Publicity was almost zero and the footfall was purely driven

by word of mouth

• Operations lacked proper accounting; hence pilferages and

siphoning of money were common

Initial drawbacks

Problem Statement

• Ineffective Management

• Ineffective Financial accounting

• Continuous Losses

Marketing Strategy

First Mover Strategy:

As it was started by three most successful

partner of USA, within this field of

entertainment of water amusement park there

is no such kind of player who is doing the

similar business.

As per Potter’s Five Force model

Solutions Identified by Nikhil and Avik

• Timing of Water Park (10 am to 5 pm)

• Hired Professional staffs for consultation

For changing architecture

For accounting

For marketing cosultation

• Organizing corporate event

• Future plan about alcoholic beverages from 7

to 12 pm

Marketing Metrics to measure the

performances

• Total Visits

• New Sessions/New Visitors

• Customer Retention Rate

• Customer Value

• Cost Per Lead

• Projected Return on Investment

0

500

1000

1500

2000

2500

3000

3500

4000

No. of visitors increased after take over

No. of visitors

-400000

-200000

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

Profit and loss tax and depreciation

Profit/loss

• Performance from June 2011 to ‘12

• Cumulated P&L 1,34,05,033

• Expected Earnings were 30,00,000

• Planned expenses

• Renovation work 1,00,00,000

• Operating cost 4,50,000

• Option 1. Mortgage the land (elsewhere) and take a loan from HUDCO at 14% interest. Other banks were giving a loan for seven years whereas HUDCO loan was for 15 years with fixed rates, and hence charging an additional 2%. The loan repayment was going to be part principal and part interest for eight months (peak season) and only interest for four months (lean period of commercial activities, i.e. winter).

What are the options?

Entering into real estate?

• Option 2. Set a contract with a builder for the four acres to construct residential duplex apartments. Approximately 16 duplex houses could be set up with each having a market price of INR 12.5 million. Five duplex could be retained by Nikhil and partners in return for the plot.

Locational situation

Placed in the interior.

Road is far.

Sparsely populated.

Pros and cons

• Value of property increases roughly 30% p.a.

• Target customer for villas will be HNIs. Makes little sense to have a noisy amusement park next to the window.

• Basic amenities and connectivity is a challenge

• Not much support infra in the vicinity

• Unsold inventory will become a burden

• Rather build accommodations keeping destination tourism in mind. Leverage internet

Dealing with mafia

• Option 3. From private placement. Though this option was easiest of all, it involved high risk as the privately placed money market is dominated by the mafia. Nikhil and partners would not likely to go for this option, if they had any choice.

Corruption and bribery are a concern.

Dealing with the mafia will have its own set of

problems apart from dealing with just the

government authorities.

Since both the entrepreneurs are wary of

getting the mafia involved, they should stick

to their gut instincts and try their best to stay

out of trouble.

How about staying put?

• Online presence is important. Most of the youth are connected all the time and most of their decisions are based online reviews ratings.

• Improve customer experience through better ambiance and professional staff.

• Tie up with travel writers and bloggers

• RJ Karan of Big FM suggested ways to use radio with better content creation.

• Host cultural, college and city events.