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Highlights

    Enhance your problem-solving skills with this medium-level practice case. This sample will familiarize you with question types and boost your readiness, preparing you for the interview process.

    Understanding the client’s goal

    Your client is the CEO of a company planning to launch a new water park in Dubai. Their main competitor in the market is Poseidon Water Park, an established player. The client aims to estimate the daily revenue generated by Poseidon Water Park to better assess the market potential and develop a strategic plan for their own entry.

    Description of the case situation

    Your client wants to estimate the revenue of an existing water park to better understand the market potential for their own planned entry. 

    Helpful hints:

    • As a competitor, we do not have access to Poseidon Water Park’s internal data
    • Use creative problem-solving to develop a logical framework to estimate daily revenue
    • Focus on a peak day, such as a Saturday in April with excellent weather

    Evaluation criteria:

    • Ability to identify the key question and pertinent information
    • Ability to structure a problem in a clear and effective manner
    • Ability to think creatively and use logical assumptions for estimations
    • Ability to verbally communicate problem structure in a succinct format

    Sample framework:

     

    1. Identifying key revenue drivers

    Understand the main revenue streams for the water park:

    • Entry tickets
    • Food and beverages
    • Merchandise

     

    2. Calculating total revenue

    • Estimating the number of visitors: Consider various methods to estimate visitor capacity, such as ride throughput analysis.
    • Calculating revenue from entry tickets: Use the estimated number of visitors and ticket prices to determine potential ticket revenue. Account for different visitor types (for example, adults and children) and special pricing, such as season passes.
    • Estimating revenue from secondary streams: Estimate additional revenue from food, beverages, and merchandise sales based on average spending per visitor and the likelihood of purchases.

     

    3. Providing strategic insights:

    Use the estimated revenue to provide recommendations on how the client can position their new water park in the Dubai market.

    Sample framework:

     

    1. Identifying key revenue drivers

    Understand the main revenue streams for the water park:

    • Entry tickets
    • Food and beverages
    • Merchandise

     

    2. Calculating total revenue

    • Estimating the number of visitors: Consider various methods to estimate visitor capacity, such as ride throughput analysis.
    • Calculating revenue from entry tickets: Use the estimated number of visitors and ticket prices to determine potential ticket revenue. Account for different visitor types (for example, adults and children) and special pricing, such as season passes.
    • Estimating revenue from secondary streams: Estimate additional revenue from food, beverages, and merchandise sales based on average spending per visitor and the likelihood of purchases.

     

    3. Providing strategic insights:

    Use the estimated revenue to provide recommendations on how the client can position their new water park in the Dubai market.

    Question 1: Estimating the number of visitors

    How would you estimate the number of visitors to Poseidon Water Park on a peak day?

    Helpful hints:

    • Consider the park’s operational details, such as the number of slides, ride throughput, and operating hours
    • Explore different methods to estimate the number of visitors based on these factors

    Key assumptions:

    • Each slide operates continuously without downtime
    • Visitors, on average, will ride two slides (this assumption can be adjusted for greater accuracy)
    • Capacity limitations from other attractions or services are not factored into this calculation – only the slides within the water park are considered

    Approach/Framework:

     

    1. Understand the water park’s operational details:

    • The park has four major slides
    • Each slide operates non-stop from 10am to 5pm (seven hours)
    • Each slide can accommodate 100 riders per hour on average

     

    2. Estimate maximum capacity per slide:

    • Operating hours: seven hours per day
    • Throughput per slide: 100 riders per hour
    • Total riders per slide per day = 7 hours * 100 riders/hour = 700 riders

     

    3. Calculate total visitor capacity:

    • With four slides, total daily capacity = 4 slides * 700 riders per slide = 2,800 riders

     

    4. Adjust for multiple rides per visitor:

    • Assume an average visitor rides two slides during their visit
    • Estimated total visitors = total rider capacity / average rides per visitor = 2,800 / 2 = 1,400 visitors

    Approach/Framework:

     

    1. Understand the water park’s operational details:

    • The park has four major slides
    • Each slide operates non-stop from 10am to 5pm (seven hours)
    • Each slide can accommodate 100 riders per hour on average

     

    2. Estimate maximum capacity per slide:

    • Operating hours: seven hours per day
    • Throughput per slide: 100 riders per hour
    • Total riders per slide per day = 7 hours * 100 riders/hour = 700 riders

     

    3. Calculate total visitor capacity:

    • With four slides, total daily capacity = 4 slides * 700 riders per slide = 2,800 riders

     

    4. Adjust for multiple rides per visitor:

    • Assume an average visitor rides two slides during their visit
    • Estimated total visitors = total rider capacity / average rides per visitor = 2,800 / 2 = 1,400 visitors

    Question 2: Estimating revenue from entry tickets

    With the estimated number of visitors, how would you calculate the daily revenue from entry tickets sales for Poseidon Water Park?

    Helpful hints:

    • Use the estimated number of visitors to determine ticket revenue
    • Account for different ticket types, such as adult, child, and season passes

    Evaluation criteria:

    • Ability to apply basic arithmetic to estimate revenue
    • Ability to make reasonable assumptions about distribution of ticket types

    Approach/Framework:

     

    Determine ticket prices and visitor distribution:

    • Day pass for visitors over 12 years old: AED 300
    • Day pass for visitors under 12 years old: AED 250
    • Assume 70% of visitors are over 12, and 30% are under 12

     

    Calculate daily ticket revenue:

    • Visitors over 12: 1,400 * 70% = 980 visitors
    • Visitors under 12: 1,400 * 30% = 420 visitors
    • Revenue from visitors over 12: 980 * AED 300 = AED 294,000
    • Revenue from visitors under 12: 420 * AED 250 = AED 105,000
    • Total ticket revenue = AED 294,000 + AED 105,000 = AED 399,000

    Approach/Framework:

     

    Determine ticket prices and visitor distribution:

    • Day pass for visitors over 12 years old: AED 300
    • Day pass for visitors under 12 years old: AED 250
    • Assume 70% of visitors are over 12, and 30% are under 12

     

    Calculate daily ticket revenue:

    • Visitors over 12: 1,400 * 70% = 980 visitors
    • Visitors under 12: 1,400 * 30% = 420 visitors
    • Revenue from visitors over 12: 980 * AED 300 = AED 294,000
    • Revenue from visitors under 12: 420 * AED 250 = AED 105,000
    • Total ticket revenue = AED 294,000 + AED 105,000 = AED 399,000

    Question 3: Estimating revenue from food, beverages, and merchandise

    How would you estimate the revenue from food, beverage, and merchandise sales?

    1. Average spend per visitor:
    • Assume average spending on food and beverages is AED 50 per visitor
    • Assume average spend on merchandise is AED 20 per visitor

     

    2. Likelihood of purchase:

    • Assume 80% of visitors purchase food and beverages
    • Assume 50% of visitors purchase merchandise

     

    3. Calculate revenue:

    • Food and beverage revenue: 1,400 visitors * AED 50 * 80% = AED 56,000
    • Merchandise revenue: 1,400 visitors * 20 AED * 50% = AED 14,000
    • Total food, beverages, and merchandise revenue: AED 56,000 + AED 14,000 = AED 70,000 

    1. Average spend per visitor:
    • Assume average spending on food and beverages is AED 50 per visitor
    • Assume average spend on merchandise is AED 20 per visitor

     

    2. Likelihood of purchase:

    • Assume 80% of visitors purchase food and beverages
    • Assume 50% of visitors purchase merchandise

     

    3. Calculate revenue:

    • Food and beverage revenue: 1,400 visitors * AED 50 * 80% = AED 56,000
    • Merchandise revenue: 1,400 visitors * 20 AED * 50% = AED 14,000
    • Total food, beverages, and merchandise revenue: AED 56,000 + AED 14,000 = AED 70,000 

    Question 4: Estimate daily revenue

    What is the estimated total daily revenue for Poseidon Water Park based on your calculations?

    Total daily revenue calculation:
    • Ticket revenue: AED 399,000
    • Food, beverages, and merchandise revenue: AED 70,000
    • Total daily revenue: AED 399,000 + AED 70,000 = AED 469,000

    Total daily revenue calculation:
    • Ticket revenue: AED 399,000
    • Food, beverages, and merchandise revenue: AED 70,000
    • Total daily revenue: AED 399,000 + AED 70,000 = AED 469,000

    Question 5: Provide a recommendation

    What strategic insights can you offer to the client planning to enter the Dubai water park market based on the estimated revenue?

    Helpful hints:

    • Take a moment to gather your thoughts and review your findings from each part of the case
    • Start with a clear answer and then follow with supporting details
    • Keep it concise (30-60 seconds)

    Evaluation criteria:

    • Ability to synthesize information from the entire case and highlight the most critical components
    • Ability to verbally communicate a concise recommendation in an effective, confident, and persuasive manner 

    To succeed in the competitive Dubai water park market, the client should focus on maximizing visitor numbers, boosting ancillary sales, and differentiating their offerings from Poseidon Water Park. Achieving a strategic balance between pricing, capacity management, and unique attractions will be key to gaining market share.

     

    1. Target high visitor capacity days:

    • Focus on attracting maximum visitors to optimize revenue
    • Implement pricing strategies that encourage full-day attendance, as visitors are less likely to arrive midday

     

    2. Enhance ancillary revenue streams:

    • Invest in high-margin food, beverage, and merchandise options to increase secondary revenue
    • Introduce themed experiences or exclusive merchandise to stand out from Poseidon Water Park

     

    3. Leverage cost and differentiation:

    • Use competitive pricing and promotional strategies to attract visitors while maintaining profitability
    • Emphasize unique features or experiences that Poseidon Water Park does not offer to draw in new visitors

    To succeed in the competitive Dubai water park market, the client should focus on maximizing visitor numbers, boosting ancillary sales, and differentiating their offerings from Poseidon Water Park. Achieving a strategic balance between pricing, capacity management, and unique attractions will be key to gaining market share.

     

    1. Target high visitor capacity days:

    • Focus on attracting maximum visitors to optimize revenue
    • Implement pricing strategies that encourage full-day attendance, as visitors are less likely to arrive midday

     

    2. Enhance ancillary revenue streams:

    • Invest in high-margin food, beverage, and merchandise options to increase secondary revenue
    • Introduce themed experiences or exclusive merchandise to stand out from Poseidon Water Park

     

    3. Leverage cost and differentiation:

    • Use competitive pricing and promotional strategies to attract visitors while maintaining profitability
    • Emphasize unique features or experiences that Poseidon Water Park does not offer to draw in new visitors