Copenhagen Business School Team Executive summary

Business in ZOOciety Building a 5-year plan for Copenhagen Zoo

Copenhagen Zoo, you find yourself facing competition from the increasing selection of entertainment activities in your geographical region, as well as high seasonality in visitors, and a low number of foreign guests. The question you need to ask yourself, before stating a new and realistic five-year plan, is:

How can you grow your annual visitor base to 1.6M by 2020, without compromising your core values and competencies, whilst retaining an 8% profit margin independently of government subsidies?

We believe that you can manage this, through a strategy that can be summarized in three words, namely: Engage, Expand and Escalate

Engage: We propose initiating the ZOOciety program, a program that will position you as a global frontrunner in animal research and natural preservation. This program shall be the platform and brand from which all your projects in preservation and research stem, but also a new membership concept, that will replace your current annual cards by 2016. The new structure is based on a value and content driven loyalty program, not a discount driven one. Customers become active partners in your work, and part of the membership fee goes directly to projects. This enhances the value proposition of your park, and makes it not only a recreational offering but also a flagship for sustainability and preservation.

Expand: We propose that you expand your current platform for funding of your projects, into involving crowd funding and an elaborated private funding program. This will generate large amounts of funding that can replace your current dependency on government subsidies, which can then completely be faced out by 2020.

Escalade: We propose that you escalade your marketing efforts within three areas: urban presence, online presence and international presence. This will build a larger customer base both domestically and with tourists. This will be done through a detailed marketing plan involving Internet, television and smartphone presences, as well as an increased urban presence.

If you can engage your members and visitors in both the projects and funding of Copenhagen Zoo, and escalade your marketing efforts to reach both domestically and with tourists, we believe you can reach a stable net margin of 7,8% and 1,56M visitors annually by 2020. Simone Amalie Ringmann Copenhagen Business School Benedikte Friis Mads Schou-Andreasen Strategy Proposal – Case Competition 2014 Johan Stubert

Situational Analysis Market Engage Expand Escalate Impact Conclusion 1 “The greatness of a nation and its moral progress can be judged by the way its animals are treated.” Mahatma Ghandi

Situational Analysis Market Engage Expand Escalate Impact Conclusion 2 Our proposal: Copenhagen Zoo’s 5-year business plan - and beyond

Key Question: How can Copenhagen Zoo grow annual visitors to a sustainable level without compromising quality and core values, while maintaining a healthy profit margin independent form subsidies?

ENGAGE EXPAND ESCALATE Visitors as members Funding activities and Marketing activities in of ZOOciety implement crowd order to attract funding international visitors

Answer: By Engaging our visitors in the ZOOciety organization, by Expanding the funding platform to increase private funding, and by Escalating marketing activities – Copenhagen Zoo can achieve a sustainable visitor base of 1.56m visitors annually as well as maintaining an 7.8% margin independent of government subsidies

Situational Analysis Market Engage Expand Escalate Impact Conclusion 3 Copenhagen Zoo has an unstable bottom line – this is unsustainable in the long run

Profits are fluctuating

Copenhagen Zoo’s profits over time!

DKK 12 10.4 DKK 10

DKK 8

DKK 6 4.8 4.7 DKK 4

DKK 2

DKK 0 Earnings in DKK million DKK million in Earnings 2007 2008 2009 2010 2011 2012 -DKK 2 -1.0 -0.7 -2.2 -DKK 4 Source: Company annual reports

Copenhagen Zoo needs to improve margins and stabilize earnings

Situational Analysis Market Engage Expand Escalate Impact Conclusion 4 Government subsidies will continue to decrease in the future – and annual card sales have dropped

Government subsidies are decreasing Annual card sales decreasing

Copenhagen Zoo’s government subsidies! Number of annual cards sold!

DKK 19.0m 120,000 115,000 DKK 18.5m CAGR 110,000 -4.0% DKK 18.0m 105,000 100,000 DKK 17.5m CAGR 95,000 DKK 17.0m -2.1% millions) millions) 90,000 85,000 DKK 16.5m Annual card sales 80,000 DKK 16.0m

Government subsidies (in DKK (in Governmentsubsidies 75,000 DKK 15.5m 70,000 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 Source: Company annual reports Source: Company annual reports

This situation creates a need for Copenhagen Zoo to act now

Situational Analysis Market Engage Expand Escalate Impact Conclusion 5 Our proposal: Engage – Expand - Escalate

Engage Expand Escalate This three-legged strategy will emphasize the science and conservation CIETY activities of Copenhagen Zoo, improve the funding platform, and increase the § Introduce § Develop § Escalate foreign and ZOOciety funding platform marketing domestic visitor concept § Implement activities and base. § Emphasize crowd funding presence in the scientific and as source for city conservation funds § Increase foreign activities visitor base

Situational Analysis Market Engage Expand Escalate Impact Conclusion 6 Engage Expand Escalate

Situational Analysis Market Engage Expand Escalate Impact Conclusion 7 Bridge the gap between Science, Business and Education through ZOOciety

Science

CIETY

Education Business

Situational Analysis Market Engage Expand Escalate Impact Conclusion 8 The CIETY project will have dual function purpose – platform for projects and membership concept

Platform for Membership science and natural concept preservation • Platform for scientific • Active involvement research • Sense of ownership • Platform for natural preservation projects • Content and value driven loyalty • Brand and focus of Zoo programme – the CORE • Retain members and obtain new visitors

Reposition Copenhagen Zoo into frontrunner in natural preservation and actively involve visitors in the vision and work

Situational Analysis Market Engage Expand Escalate Impact Conclusion 9 ZOOciety will still be an annual membership, but with added value

CIETY Same features as basic annual card

Added features as price contributes to ZOO projects

Events, speeches, movies, special openings and more included

Special quarterly newsletters with a positive, progress-focused perspecitve CIETY

Situational Analysis Market Engage Expand Escalate Impact Conclusion 10 Integrate the old architecture with new elements Align the look of the new and old enclosures

Situational Analysis Market Engage Expand Escalate Impact Conclusion 11 The CIETY project will be based in the Old Elephant House

A documentary cinema showing films about preservation projects (e.g. the South East Asia EAZA project)

Exhibition hall with an informing and educational perspective on the current projects (in-situ, ex-situ and EAZA)

Glass pavilion with room for events, crowdfunding office, ZOOciety shop and recreational areas

Situational Analysis Market Engage Expand Escalate Impact Conclusion 12 Engage Expand Escalate

Situational Analysis Market Engage Expand Escalate Impact Conclusion 13 Implement crowdfunding model to raise funds for specific Copenhagen Zoo projects

Crowdfunding has proven Over $2.7B raised in 2012 – $5.1B successful expected in 2013

$6.0

$5.0

$4.0

$3.0

$2.0

funding (in USD billions) USD billions) (in funding $1.0 Total amount raised fromcrowd amount Total $0.0 2010 2011 2012 2013 (forecast)

Source: MassSolution Crowdfunding Industry Report

Copenhagen Zoo has great potential to raise funds from crowdfunding

Situational Analysis Market Engage Expand Escalate Impact Conclusion 14 Crowdfunding on social media and website to create attention for projects

Chimpanzee preservation project in DR Congo Campaign Goal: 600.000 kr. 48% Funded Help Fund

New leopard enclosure Campaign Goal: 1.200.000 kr. 24% Funded Help Fund

Playground for the silk monkeys Campaign Goal: 350.000 kr. 83% Funded Help Fund

Situational Analysis Market Engage Expand Escalate Impact Conclusion 15 Engage visitors and enable them to actively take part in crowdfunding

1. Involves visitors

2. High interaction

3. Sense of ownership

Situational Analysis Market Engage Expand Escalate Impact Conclusion 16 Engage Expand Escalate

Situational Analysis Market Engage Expand Escalate Impact Conclusion 17 Increases of creative marketing efforts will increase visitor amount

You have strong presence offline…

Increase presence: Expand communication § online team: § internationally § employ additional staff HOW? § interactively § increase budget § special IT- development team

Situational Analysis Market Engage Expand Escalate Impact Conclusion 18 Involving visitors online enhances and improves the zoo-experience

Re-design and update website § modern design § update content

Zoo-app – interactivity § event calendar § treasure hunt § animal profiles § map § mobile payment system § pre-purchase tickets

Social media § Instagram § competitions – ex. “Zoofan” § social media marketing

Situational Analysis Market Engage Expand Escalate Impact Conclusion 19 Emphasizing international profiling and marketing will attract tourists

Vision Be part of Copenhagen’s top tourist attractions

Tourists 5-10% of total visitors

1,600,000 Expand tourist base 1,400,000 0,57% § international profiling 1,200,000 of all tourists in Denmark § website, signs etc. 1,000,000 § targeting tourist channels 800,000 § bundling with other attractions 600,000 § guide books § tourist office Annual Zoo-visitors Zoo-visitors Annual 400,000 § tourist websites 200,000

0 2013 Source: Company annual reports and case material The tourist segment is underutilized – focus should be increased

Situational Analysis Market Engage Expand Escalate Impact Conclusion 20 Interactive presence all over Copenhagen will attract visitors

“In-city-events” § children’s pony rides at Kongens Nytorv § themed pop-up street events

Ticket sales at Hovedbanegården

Direct buses from Central Copenhagen

“Zoo-trek” through Frederiksbergs Have

Situational Analysis Market Engage Expand Escalate Impact Conclusion 21 Beyond the 5-year plan

Situational Analysis Market Engage Expand Escalate Impact Conclusion 22 Tunneling Roskildevej through Frederiksberg hill “The Green Pearl” – A vision

Creating synergies between the two parks and the surroundings involving all stakeholders

Situational Analysis Market Engage Expand Escalate Impact Conclusion 23 Lobbying for the tunnel should be a vital part of your strategic focus from today

Situational Analysis Market Engage Expand Escalate Impact Conclusion 24 The tunnel will create the opportunity and platform on which Copenhagen Zoo will create sustainable growth

Integrated park Improves visitor experience

Parking lots 400 parking spots in an automated parking system as seen in other places in Copenhagen

Expand facilities on new the surface New facade and shop to increase customer spend per visit

Situational Analysis Market Engage Expand Escalate Impact Conclusion 25 Competitive position of Copenhagen Zoo

Interactive CPH DJURS ZOO Tivoli Experi menta rium

Lego Bakken land CPH ZOO

Planet arium

Louisi Runde Glypt ana Non- Tårn otek interactive

Amusement Educational

Situational Analysis Market Engage Expand Escalate Impact Conclusion 26 Implementation plan until 2020

2014 2015 2016 2017 2018 2019 2020

Search for Rebuilding the ZOOciety funding House

Create the ZOOciety House exhibition framework Engage Launching the ZOOciety Complete replacement of ZOOciety Festival annual card membership

Develop Implement crowdfunding crowdfunding Maintain crowdfunding platform platform platform Expand

Initiate and maintain all marketing efforts

Escalate Build Zoo- app

Lobbying for tunnel through Roskildevej Beyond

Situational Analysis Market Engage Expand Escalate Impact Conclusion 27 By 2020 Copenhagen Zoo will achieve a sustainable visitor base of 1.56m visitors and stable earnings

Annual visitors forecast Net margin forecast

1.60m 9.0% 8.0% 1.50m 7.0% 6.0% 1.40m 5.0% 4.0% 1.30m 3.0% 1.20m 2.0% 1.0% 1.10m 0.0% -1.0% 1.00m 2014 2015 2016 2017 2018 2019 2020 -2.0%

ü Have 1.56m visitors annually by 2020 ü Achieve 7.8% stable margin by 2020

Situational Analysis Market Engage Expand Escalate Impact Conclusion 28 Our proposal: Engage – Expand - Escalate

Engage

Engage visitors and community in 1 ZOOciety project

Expand Expand private funding through 22 crowd funding

Escalate Escalate marketing activites to attract

3 international segment

Situational Analysis Market Engage Expand Escalate Impact Conclusion 29 The Ask?

Q&A

30 Appendix

1. Private donor platform – Develop infrastructure 11. Increasing the spend per visitor can be done through a modernization of the 2. Crowd funding also very popular in Europe entrance 12. Financials – Forecast 2020 3. Government subsidy will disappear 13. Costs 4. The private contributions play an 14. Three key risks deserve important part of the WWF funding management’s attention system 15. Promote ZOOciety membership 5. Cost for advertising campaign for through festival ZOOciety festival 16. Successful crowdfunding campaigns 6. The value proposition of ZOOciety need clear rewards structure and strong 7. Project description of Old Elephant viral promotion House 17. ZOOciety will be priced similar to 8. Partners for the ZOOciety existing annual card solutions with an programme added premium ambassador option 9. Forecast of the Roskildevej tunnel 18. Dealing with seasonality 10. Frederiksberg municipality plan for

Roskildevej

31 Private donor platform – Develop infrastructure

Prioritize Pursue Position

Prioritize private fund Pursue project based Position Copenhagen Zoo raising – Develop the funding from both large stronger within the science - infrastructure – Make the private funds – as well as and conservation activities in current internal wish list larger contributions from order to provide stronger public – Integrate with individuals value proposition to private crowd funding Make it tangible. donors

32 Crowd funding also very popular in Europe

33 Government subsidy will disappear

Government subsidy entirely gone by 2020

20 18 16 14 12 10 Copenhagen Zoo 8 6 4 2 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Copenhagen needs to operate independently of subsidies by 2020

(Source Steffen Stræde, CEO of ZOO)

34 The private contributions play an important part of the WWF funding system

Globally private membership Private contributions to funding contributions make up 33% of revenue increased with 315.000kr

8000 Individual 4% 7000 Contributions 6% 6% 6000 Other Revenues 33% 7% 5000

Government 4000 Grants Private 3000 Constributions Foundations 18% to Funding 2000 WWF Network 26% 1000 Revenues 0 Non-Operating 2013 2014 Contributions

35 Cost for advertising campaign for ZOOciety festival

TV2 Package TV2 FRI Package TV2.dk Berlingske Media

• Week 36 – high • 75.000 for 300 • Week 36-37 • 158.000 kr for season spots • 980.000 views campaign • 925.000kr for 70 • Run in week 34-37 • 25.000kr for 2 • Reach of over spots • Target audience of weeks 1.000.000 users • Reach: active free-time and • Targeted online 200.000-2.000.000 outdoor reach appreciation

36 The value proposition of ZOOciety

CIETY

A sense of An active position in ownership and preserving wildlife involvement in the worldwide ZOO

Education in wildlife Exciting events and preservation and benefits for insights into members projects

37 Project description of Old Elephant House The ZOOciety house

Naturhistorisk Museum as inspiration for glass project on Elephant House

Sustainable materials like in the Norman Foster project

10,7% of funding for the new elephant house came from ZOO, 9,1% from loans, and 80,2% from foundations

Approx. 30M kr, from which 24M kr might be obtained from funds

Best Case Initial Outlay of 6 million DKK

38 Partners for the ZOOciety programme

39 Forecast of the Roskildevej tunnel

Parking lift Parking Roskildevej Parking lift

40 Traffic and Inquiry on technical Review sub- environment preliminary projects studies

41 Increasing the spend per visitor can be done through a modernization of the entrance

Strategically position shop

Promote Zoo items

42 Financials – Forecast 2020

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Tickets sold 495,000 550,000 520,000 546,000 573,300 601,965 614,004 626,284 638,810 Annual Cards sold 95,602 94,000 97,760 101,670 105,737 109,967 112,166 114,409 116,698 Total visitors 1.10m 1.44m 1.20m 1.28m 1.37m 1.47m 1.50m 1.53m 1.56m DKK Million 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Income Statement Direct income 96.4 104.7 105.7 115.1 112.7 117.9 123.3 129.0 131.6 134.3 136.9 The Zoo Business and Sponsor Club 3.3 2.8 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 Contribuon 43.2 35.8 34.3 30.9 27.8 25.0 26.3 27.6 28.9 30.4 31.9 Total Revenue 142.9 143.3 142.4 148.3 142.9 145.3 152.0 159.0 163.0 167.1 171.3 Staff expenses 83.7 70.8 70.7 72.1 73.6 75.0 76.5 78.1 79.6 81.2 82.8 Direct animal exspenses 4.7 4.9 5.4 5.5 5.6 5.7 5.8 6.0 6.1 6.2 6.3 Visitor-related exspenses 7.3 5.2 6.5 6.6 6.8 6.9 7.0 7.2 7.3 7.5 7.6 Construcon expenses 20.0 21.2 22.3 22.7 23.2 23.7 24.1 24.6 25.1 25.6 26.1 Maintenance, service 20.5 23.4 25.9 25.6 25.4 25.1 24.9 24.6 24.4 24.1 23.9 Other expenses 3.6 2.7 3.1 3.2 3.2 3.3 3.4 3.4 3.5 3.6 3.6 Investment 1.0 2.4 3.3 2.9 2.9 2.9 2.9 Total operang exspenses 139.8 128.2 133.9 135.8 138.8 142.1 145.1 146.8 148.9 151.1 153.3 Earnings before intrest and depreciaon 3.1 15.0 8.5 12.5 4.1 3.2 6.9 12.2 14.0 15.9 17.9 Depreciaon 1.9 2.3 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Earnings before intrest 1.2 12.7 6.0 10.0 1.6 0.7 4.4 9.7 11.5 13.4 15.4 Net interest 1.9 2.3 1.3 1.3 1.3 2.0 2.0 2.0 2.0 2.0 2.0 Earnings (0.7) 10.4 4.7 8.7 0.3 (1.3) 2.4 7.7 9.5 11.4 13.4

Margin 7.2% 3.3% 5.9% 0.2% -0.9% 1.6% 4.8% 5.9% 6.9% 7.8%

Assumpons Increase in ckets sold 7% Adult cket share 60% Maintenance cost decrease 1% Children ckets share 40% Funding growth (From 2016) 5% Overall cost growth 2% Growth last years (from 2018) 2% 43 Costs

Costs (DKK)

Incremental marketing costs 2014 2015 2016 2017 2018 2019 2020 Staff Communication 210,000 210,000 210,000 210,000 210,000 210,000 210,000

Online IT 350,000 131,250 87,500 87,500 87,500 87,500 87,500

International Advertising 37,500 37,500 37,500 37,500 37,500 37,500 37,500

Interactivity Pop-up street events 30,000 30,000 30,000 30,000 30,000 30,001 30,002 Ticket sales at Hovedbanegården 3,500 3,500 3,500 3,500 3,500 3,500 3,500 Direct buses from Nyhavn 374,400 374,400 374,400 374,400 374,400 374,400 374,400 Zoo-trek 10,000 10,000 10,000 10,000 10,000 10,001 10,002

ZOOciety festival TV-advertising 925,000 925,000 925,000 925,000 925,000 Online advertising 25,000 25,000 25,000 25,000 25,000

Old Elephant House Building expenses 1,605,000 1,605,000 Maintenance & service costs 1,230,000 1,220,000 1,205,000 1,195,000

Total 1,015,400 2,401,650 3,307,900 2,932,900 2,922,900 2,907,902 2,897,904

44 Costs graphical representation

Total costs for 5-year strategy will stabilize after rennovation of Old Elephant House

3,500,000 3,307,900

2,932,900 2,922,900 3,000,000

2,401,650 2,500,000

2,000,000

1,500,000 Cost(DKK) 1,015,400 1,000,000

500,000

0 2014 2015 2016 2017 2018

45 Three key risks deserve management’s attention

Threat level Risk Description Mitigation strategy

Failure to increase The attempt to implement crowd Focus more on larger private funding through crowd funding will fail and users will not funds and wealthy individuals Immediate action funding embrace the new funding method required

Maintain just the name as ZOOciety will not ZOOciety will fail and will not rebranded annual card and increase membership generate additional revenue. decrease investment and Immediate action rates required exposure.

Focus on other regions of International visitors The activities targeted towards Denmark – large potential to international visitors will not have the Seek to reduce will not increase desired effect increase visitor base from risk exposure there.

IMMEDIATE ACTION REQUIRED REDUCE, AS PRACTICAL MONITOR

46 Promote ZOOciety membership through festival

CIETY festival

• 2016 launch of the ZOOciety House “Old Elephant House” CIETY card • Yearly festival week 37 (September) ‘16 • Extensive programme for the week Name: • 15% entry discount for everyone • Potential for expansion with WWF partners

47 Successful crowdfunding campaigns need clear rewards structure and strong viral promotion.

Clear rewards structure:

• DKK 100: Acknowledgement of donation on donation wall • DKK 500: “I Helped Save Chimpanzees” t-shirt & acknowledgement • DKK 1000: 1 entry ticket to Zoo + “I Helped Save Chimpanzees” t- shirt & acknowledgment • DKK 5000: 1 year of ZOOciety membership – hand written thank you note and a mentioning in the annual report & invitation to donor recognition dinner

Strong funding campaigns:

• Be realistic in goals • Keep it very tangible and specific • Donation based crowdfunding which appeals to funders personal beliefs – e.g. conservation activities / improved living conditions in Zoo

48 ZOOciety will be priced similar to existing annual card solutions with an added premium ambassador option

CIETY

Pricing Benchmark WWF

Adults 480kr PandaClub 250kr

Students 290kr Membership 360kr

Seniors 350kr Seniors/student 240kr

Ambassador 1000kr Partner 600-1800kr

49 Dealing with seasonality

New indoor activities in ZOOciety house

ZOOciety Festival in low season

Increased opportunities with the Roskildevej project

50