Harvard Case - Yunnan Tourism Co., Ltd: Developing Garden Expo '99 Site into a First-Class Urban Eco-Cultural Complex
"Yunnan Tourism Co., Ltd: Developing Garden Expo '99 Site into a First-Class Urban Eco-Cultural Complex" Harvard business case study is written by Russell Arthur Smith, Beng Geok Wee, Wei Chen. It deals with the challenges in the field of Strategy. The case study is 13 page(s) long and it was first published on : Sep 8, 2014
At Fern Fort University, we recommend Yunnan Tourism Co., Ltd. (YTC) adopt a multi-pronged strategy to transform the Garden Expo '99 site into a thriving, first-class urban eco-cultural complex. This strategy leverages innovation, strategic alliances, and digital transformation to create a sustainable competitive advantage in the rapidly evolving tourism landscape.
2. Background
This case study explores the challenges faced by YTC in capitalizing on the Garden Expo '99 site. The company seeks to convert the post-expo site into a profitable and sustainable attraction, attracting both domestic and international tourists. The site boasts unique natural beauty and cultural heritage, but YTC needs to overcome significant hurdles, including limited resources, competition from established tourist destinations, and the need to balance economic growth with environmental sustainability.
The main protagonists of the case are:
- Yunnan Tourism Co., Ltd. (YTC): The state-owned enterprise responsible for developing and managing the Garden Expo '99 site.
- The Yunnan Provincial Government: Provides support and guidance to YTC, with a focus on promoting tourism and economic development.
- Local communities: Play a crucial role in the success of the project, as their involvement is critical for maintaining cultural authenticity and environmental sustainability.
- Tourists: The target audience for the eco-cultural complex, seeking unique experiences, cultural immersion, and environmental awareness.
3. Analysis of the Case Study
To analyze the situation, we apply several frameworks:
SWOT Analysis:
- Strengths: Unique natural beauty, cultural heritage, government support, potential for attracting international tourists.
- Weaknesses: Limited resources, lack of experience in managing large-scale tourist attractions, potential for environmental degradation.
- Opportunities: Growing demand for eco-tourism, increasing disposable income in China, potential for partnerships with international tourism companies.
- Threats: Competition from established tourist destinations, environmental concerns, potential for political instability.
Porter's Five Forces:
- Threat of New Entrants: Moderate, as the development of similar eco-cultural complexes requires significant investment and expertise.
- Bargaining Power of Buyers: Moderate, as tourists have a wide range of choices, but the unique offerings of the site can attract a specific niche market.
- Bargaining Power of Suppliers: Low, as YTC has access to a variety of suppliers for construction, maintenance, and other services.
- Threat of Substitute Products: Moderate, as tourists can choose alternative destinations or activities.
- Competitive Rivalry: Moderate, as the site faces competition from established tourist destinations within Yunnan and beyond.
Value Chain Analysis:
- Primary Activities:
- Inbound Logistics: Managing the flow of resources and materials for construction and maintenance.
- Operations: Developing and maintaining the eco-cultural complex, including infrastructure, attractions, and services.
- Outbound Logistics: Managing visitor flow, transportation, and information dissemination.
- Marketing & Sales: Promoting the site to target audiences, including domestic and international tourists.
- Service: Providing a high-quality visitor experience, including accommodation, dining, and cultural activities.
- Support Activities:
- Procurement: Sourcing materials and services for construction, maintenance, and operations.
- Human Resource Management: Recruiting, training, and retaining skilled staff.
- Technology Development: Implementing innovative technologies to enhance visitor experience and manage operations.
- Infrastructure: Developing and maintaining necessary infrastructure, including transportation, communication, and energy systems.
- Primary Activities:
Business Model Innovation: YTC can explore new business models to enhance value creation and attract investors. This could include:
- Public-Private Partnerships (PPPs): Partnering with private companies to share the financial burden and leverage their expertise in tourism development.
- Subscription-based services: Offering annual memberships to access exclusive events, discounts, and experiences.
- Experiential tourism: Developing immersive and interactive experiences that cater to specific interests, such as nature photography, cultural workshops, or adventure activities.
4. Recommendations
YTC should implement the following recommendations to transform the Garden Expo '99 site into a first-class urban eco-cultural complex:
1. Develop a Comprehensive Strategic Plan:
- Strategic Planning: YTC needs a detailed strategic plan outlining its vision, mission, objectives, and strategies for the development and management of the site. This plan should include clear timelines, budgets, and performance metrics.
- Market Segmentation: YTC should identify and target specific market segments based on their interests, demographics, and travel preferences. This will allow for tailored marketing campaigns and targeted product offerings.
- Blue Ocean Strategy: YTC should explore blue ocean strategies to differentiate itself from competitors and create new markets. This could involve developing unique experiences, focusing on sustainability, or offering niche services.
- Disruptive Innovation: YTC should consider disruptive innovation by introducing new technologies and business models that challenge existing industry norms. This could involve leveraging AI and machine learning for personalized visitor experiences, developing mobile applications for interactive tours, or creating virtual reality experiences.
2. Embrace Environmental Sustainability:
- Environmental Sustainability: YTC should prioritize environmental sustainability by adopting green building practices, implementing energy-efficient technologies, and promoting responsible tourism practices.
- Corporate Social Responsibility (CSR): YTC should integrate CSR into its operations by supporting local communities, protecting biodiversity, and reducing its environmental footprint.
- Stakeholder Engagement: YTC should actively engage with stakeholders, including local communities, environmental groups, and government agencies, to ensure the project's sustainability and social impact.
3. Leverage Technology and Analytics:
- Digital Transformation: YTC should embrace digital transformation to enhance visitor experience, optimize operations, and improve decision-making.
- Information Systems: YTC should invest in robust information systems to collect and analyze data on visitor behavior, preferences, and feedback. This data can be used to personalize experiences, optimize pricing strategies, and improve marketing campaigns.
- Internet of Things (IoT): YTC can leverage IoT technologies to create smart environments, track visitor movement, monitor environmental conditions, and automate operations.
4. Foster Strategic Alliances:
- Strategic Alliances: YTC should forge strategic alliances with international tourism companies, cultural institutions, and technology providers to leverage their expertise and resources.
- Joint Ventures: YTC can explore joint ventures with private companies to develop specific attractions, services, or infrastructure.
- Outsourcing: YTC can outsource certain functions, such as marketing, customer service, or technology development, to specialized companies.
5. Strengthen Brand Management:
- Brand Management: YTC should develop a strong brand identity that reflects the unique offerings of the site, its commitment to sustainability, and its cultural heritage.
- Marketing Strategy: YTC should implement a comprehensive marketing strategy that includes digital marketing, social media campaigns, public relations, and influencer marketing.
- Product Differentiation: YTC should differentiate its offerings by creating unique experiences, showcasing local culture, and promoting sustainable practices.
6. Enhance Organizational Culture:
- Organizational Culture: YTC should foster a culture of innovation, collaboration, and customer-centricity to attract and retain talent.
- Leadership Development: YTC should invest in leadership development programs to equip its managers with the skills and knowledge to lead the transformation process.
- Change Management: YTC should implement effective change management strategies to ensure smooth transition and minimize resistance to change.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Mission: The recommendations align with YTC's core competencies in tourism development and its mission to promote sustainable tourism and cultural preservation.
- External Customers and Internal Clients: The recommendations focus on creating a compelling visitor experience, attracting international tourists, and fostering a positive work environment for employees.
- Competitors: The recommendations aim to differentiate YTC from competitors by leveraging its unique offerings, embracing sustainability, and adopting innovative technologies.
- Attractiveness: The recommendations are expected to generate significant economic benefits, enhance YTC's brand image, and contribute to the sustainable development of the region.
6. Conclusion
By implementing these recommendations, YTC can transform the Garden Expo '99 site into a thriving, first-class urban eco-cultural complex. This will not only generate significant economic benefits for the company and the region but also contribute to the preservation of Yunnan's unique cultural heritage and the promotion of sustainable tourism practices.
7. Discussion
Other alternatives not selected include:
- Developing a purely commercial attraction: This approach could lead to environmental degradation and cultural homogenization, potentially harming YTC's brand image and long-term sustainability.
- Focusing solely on domestic tourism: This approach would limit YTC's growth potential and miss out on the opportunities presented by the global tourism market.
The key assumptions underlying these recommendations include:
- Government support: The Yunnan Provincial Government will continue to provide financial and policy support for the project.
- Market demand: There is sufficient demand for eco-cultural tourism experiences, especially among international tourists.
- Technological advancements: Technological advancements will continue to provide opportunities for innovation and improvement in the tourism sector.
8. Next Steps
YTC should implement the following steps to bring these recommendations to life:
- Develop a detailed strategic plan: Within 6 months, YTC should develop a comprehensive strategic plan outlining its vision, mission, objectives, and strategies for the development and management of the site.
- Establish partnerships: Within 12 months, YTC should establish strategic alliances with international tourism companies, cultural institutions, and technology providers.
- Implement digital transformation: Within 18 months, YTC should implement digital transformation initiatives to enhance visitor experience, optimize operations, and improve decision-making.
- Launch marketing campaigns: Within 24 months, YTC should launch targeted marketing campaigns to attract domestic and international tourists.
By following these steps, YTC can successfully transform the Garden Expo '99 site into a thriving, first-class urban eco-cultural complex, contributing to the economic development of Yunnan while preserving its unique cultural heritage and promoting sustainable tourism practices.
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Case Description
In 1999, the International Horticultural Exposition was held in Kunming, capital of Yunnan Province in China. Recognised as an international exposition by the Bureau International des Expositions (BIE), the event was organised by the International Association of Horticultural Producers (AIPH), based in Paris, France. It was the first international mega-exposition hosted in China, and had strong support from Kunming's local government agencies. The six-month long exposition (Expo Garden) attracted more than 9 million visitors from around the world with a daily average of 49,000 park visitors and hitting a peak of more than 110,000 visitors in a single day. After the exhibition ended, Kunming government decided to continue to keep the venue open as a tourist destination, and major transformations were made to Expo Garden's management structure and business operations. A decade later, Expo Garden had lost its position as a prime tourist destination in Yunnan, as other destinations such as Dali, Shangri-la and Lijiang became the top tourist draws. During this time, domestic tourists emerged as the main engine of growth in Yunnan's tourism industry. In 2012, the group that owned and managed Expo Gardens, Yunnan Tourism Co. Ltd, a state-owned company listed in the Shenzhen stock exchange, needed a turnaround strategy to enhance the attractiveness of Expo Garden, its major asset. The aim was to: transform Expo Garden into a major player in Yunnan Province's tourism industry; and to boost Expo Garden's income growth substantially and improve the financial performance of the company.
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