Business Aspects Project #12 Case Korkeasaari
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Aalto University ELEC-E8002 Project work course Year 2017 Business aspects Project #12 Case Korkeasaari Date: 10.3.2017 Lappi Janne Poranen Mikko Syvänne Laura Kärnä Ville Rosenström Miro Page 1 of 11 Information page Students Janne Lappi Mikko Poranen Laura Syvänne Ville Kärnä Miro Rosenström Project manager Janne Lappi Official Instructor Jaakko Ketomäki Other advisors Jari Viinanen Petteri Huuska Marjo Priha Starting date 13.2.2017 Approval The Instructor has accepted the final version of this document Date: 10.3.2017 Page 2 of 11 Summary Our project plays a small but important part of the fight against the climate change. This project will help Korkeasaari to become carbon neutral. Our part of the final product is a report that Korkeasaari Zoo will use when they select new environmentally friendly actions. Korkeasaari will benefit from our report not only by decreasing their energy bill, but further improving their public image. Nowadays visitors and customers are paying attention to how environmentally responsible their service providers are. There is a clear correlation between consumer decision and green image of target product. In this case the product is Korkeasaari visitor experience. Thus, when Korkeasaari updates its infrastructure to carbon neutral and promotes it to Zoo visitors, it should increase their number of visitors. So far we have gathered a great amount of information from Korkeasaari. The target is to understand thoroughly the current situation. This means we need to know every appliance that consumes energy and how much energy it consumes. After that we can make smart decisions where changes should be done. This project which is producing a report for Korkeasaari doesn’t have any competitors. Thus, in this document we take our client’s perspective. We discuss the competitors of Korkeasaari and how our product will help their market situation. Page 3 of 11 1) Business idea City of Helsinki has a mission to be carbon neutral in 2050[1]. Korkeasaari Zoo – owned by city of Helsinki – has announced special interest in green values. Thus, it is ideal that they will act as a forerunner in a race towards carbon neutrality. In short, our business idea is to increase the amount of visitors at Korkeasaari Zoo by promoting its green values and progress towards carbon neutral zoo. There are already a half a million visitors in Korkeasaari Zoo every year. Hence Korkeasaari has a lot of visibility and a great chance to be the trailblazer and advisor when Helsinki is reaching towards carbon neutrality. The Zoo would set an example and educate visitors and corporations to act in an environmentally friendly manner. The end customers of our solution are the (potential) visitors of Korkeasaari. As it is shown in chapter 3, a “green image” is often beneficial in business nowadays. Of course, when Korkeasaari lowers its energy consumption it will also save money in its electricity and heating bill. However, the more significant benefit of carbon neutrality is the promotional value of such an achievement and the growing interest in sustainable way of life. Our aim is to make more and more customers interested in visiting the carbon neutral zoo. They do not any more need to feel guilty about spending their day on an attraction which might operate in an unsustainable way. As the sustainability of Korkeasaari shall be well known, Helsinki might even see an increase in the amount of tourists. The competitive advantage of our product is its uniqueness, because no other tourist attraction in Northern Europe can boast about being carbon neutral. Customers looking for a sustainable zoo won’t find any other place in the vicinity. Also no other attraction in Finland can boast about being carbon neutral. Most of the attractions do not even have any plans related to decreasing their carbon footprint. Revenue logic of our product is kept very simple: Revenues come from visitors of Korkeasaari Zoo. Page 4 of 11 2) Product/service During this course, we produce a written report which provides Korkeasaari with technical solutions to get closer to carbon neutrality, the high-level goal of Helsinki city. Thus, our part of the final product is to provide Helsinki city with a high-quality report which they can benefit from when adapting Korkeasaari zoo towards carbon neutrality. The report consists of four main parts: 1. A literature review over means to reduce waste of electricity 2. Select suitable technologies and equipment to be adapted to Korkeasaari 3. Estimate of the impact of the actions on business 4. Plan on the communication strategy of the energy saving actions Therefore, making our product will require intense processing of all the input we received, selecting technologies that Korkeasaari can apply to their Zoo and contacting professionals who can offer services for the technologies we selected. We need special skills, for instance calculating carbon footprint, indoor and outdoor lighting, demand response and building energy efficiency. With the help of professionals of multiple fields, we try to ensure that our product meets the demands of customers. Not only is the technical side important, but also the communication, i.e. how the carbon neutrality is expressed to the general public. With the help of our work, Korkeasaari should be able to commercialize their sustainable zoo as a product which attracts customers, both tourists and locals. While implementing new technologies in the zoo causes costs, reduced waste of energy brings savings on annual energy expenses. It is essential to estimate the overall economic influence. However, this economic effect can mainly be considered as a byproduct. The target is to make more and more customers interested in visiting the carbon neutral zoo which is our product. As our business idea is to increase the amount of visitors at Korkeasaari Zoo by promoting its green values and progress towards carbon neutral zoo, the final product of this project is the carbon neutrality of Korkeasaari Zoo. Our report can be considered as a part of this final product. Page 5 of 11 3) Market situation and competitors analysis Our project work has no direct competitors. Competitors analysis is made based on how carbon neutrality affects Korkeasaari zoo and the number of its customers. Korkeasaari is the only zoo in Finland. In addition smaller animal parks and domestic animal parks exist in Finland. Local families with kids and school groups are remarkable visitors. Korkeasaari is centrally located in Helsinki which makes it a popular tourist attraction. About half a million customers visit Korkeasaari annually. The most significant competitors are other free time resorts in Helsinki like Linnanmäki. They have the same customer base as Korkeasaari. Korkeasaari is an easy-to-visit place for locals but coming from a distance is more challenging. Travelling time may be quite long, especially for families with young kids. Residents outside the Helsinki metropolitan area may prefer visiting other places than Korkeasaari. They may choose other animal parks which are nearer to home and when they come to Helsinki they usually prefer same attractions than tourists. From this point of view for example Suomenlinna and Helsinki Cathedral are the most significant competitors. From business aspects point of view the main goal of our project work is to increase attractiveness of Korkeasaari and on the side attractiveness of Helsinki city. The purpose of carbon neutrality is to affect the image of Korkeasaari and increase the number of customers. At the same time, the purpose is to create the impression of eco-friendly Helsinki city. The goal is to enhance the attractiveness of Helsinki city among tourists. Based on a few surveys it can be said that green values affect attractiveness and business in a positive way. All surveys follow the same trend. Green values are increasing. For example, based on a Finnish survey, 19.1 % said that ecology of travel destination influence to their choices. Eco-friendly travelling and green tourism is continued to trend. [2] Another survey about eco-friendly products follows the same trend. People were questioned: “How likely are you to buy a product that is better for the environment than another product that is slightly cheaper?” Among this survey 35 % of respondent were willing to choose more environmentally friendly products. According to this research, the higher prices of eco-products are not an issue to 1 in 3 consumer. [3] A survey about domestic products by PTT found that 78 % of respondents have positive attitude towards domestic and eco-friendly products, but higher prices limits the purchase. The biggest part of consumers prefer products with lower price. They may choose an eco-product if it is not more expensive than an ordinary one. 33 % of people are willing to choose an ecological product even with a higher price. [4] The result is similar as in the previous survey. According to a research by the Natural Marketing Institute (NMI), 58 % buy products and services Page 6 of 11 more likely if they know that the company behind the product has green values. [5] Based on these surveys being carbon neutral and “green” is expected to affect positively the image of Korkeasaari and Helsinki city. It will increase the number of visitors if the green values are marketed effectively. Let's take another point of view. Awareness about environmental issues have been increasing. How about if any actions towards carbon neutrality would not have been done? One main task of zoos globally is to help and increase the awareness of the endangered species. Being more environmentally friendly will decrease negative impact to Earth and its nature. Without any actions Korkeasaari might lose its credibility over time and thus suffer from a lack of visitors.