Galaxy Science Center Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Galaxy Science Center Case Study Analysis

Analyzing the Admission Price for the First Year of Operations:

Galaxy science Center would generated the revenue through the selling of the admission tickets. At the request of the municipality, the company would allow to the senior citizens and the preschool children to take the admission free of charge in the first year. Against this the municipality provide compensation to the company in term of granting a onetime subsidiary of 1,000,000 in the first year of operation. According to the market survey, it is revealed that the 20 percent of the admission would be senior citizen and preschool students while the rest of the 80 percent would be the other adults and students. Furthermore, it is also revealed that the price of the admission ticket would up to 6.50. If the admission volume would be 500000, 1000000 and 1500000 then the operation cost of the company would be 6080000, 6390000 and 6700000 respectively.

In order to analyze the admission price for the first year of operations for the adults the expected number of admissions are calculated by multiplying the number of admission to the probability of admission. By adding all the expected number of admissions we will the amount of 1190000 that represents that the expected number of admission would be occur in the firstyear of operation including adults and preschool children. According to this, the operating cost is lie under the average range of 6545000 that would responsible to the 80 percent of admissions. The municipality provide the compensation to the company of 100000 in the first year operation then the total operation cost that the company would have to cover is 5545000. By taking the 80% of the expected number of admission we get the number of student that would take part in the exhibition and that are 952000. By dividing the average operating cost from the number of operation we get the ticket price per head from adult in order to enter in to the exhibition and that is 5.82. See appendix-3.

Question #4:

Admission Pricing Policy for Second and Subsequent Years:

After the first year of operation, the government would not provide funding to the company. In order to support its day to day operations the company has to raise its revenues. In response to this, the company has to decide that whether it charge the discount fees to the senior citizens and preschool children in order to cover its operational expense or to allow them to enter in to the exhibition for free of charge.

The first option that is available to the company is that the companywould allow the preschool children and senior citizens to enter into the exhibition for free of charge and in order to raise its revenuers to cover the operational cost is that the company would promote the company throughthe advertising. The additional cost that will require for the promotion and advertising would be 200000. In response to the advertising the company would able to increase in total number of admissions by 10 percent. In this way the total number of admission would be 1309000 that includes the preschool children and senior citizen. By taking the 80 percentof the total admissions, the expected numberof admission except the preschool children and the senior citizen would be 1047000. The operating cost would be 6745000 because the government is not providing the funds in the second year. The minimum cost that the company would charge in order to cover its day to day operations without the government support would be 6.4 per head.

Another available option for the company is that the company would charge a discount price from the senior citizens and the preschool children. The operating cost of the company would be 6545000. It is assumed that the company would charge 6 per head other than senior citizens and preschool children. In this way the expected revenue would be 5712000. The further required revenuer in order to reach the breakeven would be 833000. As the 20 percent admission are come from the senior citizens and the preschool children so by multiplying the total expected numberofadmissions by 20 percent we get the number of admission from senior citizens and the preschool children that are 238000. By diving the break even revenue from expected admission, the discount price for the senior citizens and the preschool children would be 3.5. ‘

The third alternative that available is that the company would enforce the government to continue support. The company enforce the government that would continue the support to the company so that the company would enable to provide the senior citizens and the preschool children for free of charge, it would allow them to take more interest in the science project. This will improve the trend of research in the city that not only improve the reputation of the company as well as improve the reputation of the city. See appendix-4

Question #5

Pricing Policy:

As the Galaxy Science Centre (GSC) is a not for profit organization, a pricing policy with significant margins or mark ups cannot be employed therefore, a diversified pricing strategy i.e. different strategies for different customers with different preferences and income level is advised to be employed. The diversified product strategy will include differentiate pricing and pick a plan tactics.

The differential pricing strategy will ensure that the business’s objective to serve customers with low income is achieved. In this strategy, a value based price will be set i.e. back door discounts will be provided to price sensitive customers. Moreover, the differential pricing strategy will be implemented by offering discounts to the customers via coupons or during off peak times.

Moreover, the diversified strategy will also involve bundle pricing strategy i.e. gifts relating to three or four categories will be offered in a bundle at reduced prices. On the other hand, in order to increase customer relationship and the profits of the organization, museum membership vouchers will be offered in multiple price range to facilitate customers with different income levels.

Conclusion

Galaxy science center is a non-profit organization, whichhas been facing some issues soon after it started the operations. The above in depth analysis provide the solution to the company to maintain its reputable position in the market as well as to reach at the breakeven point in first second and the subsequent years. Furthermore, on the basis of above analysis and recommendation, the implementation plan has been made, which is shown through the Gantt chartprovided in the appendix-5

Appendices

Appendix-1: Amortization Table

Loan Amortization Table
Years	Beginning balance	Installment	Interest Payment	Principal Payment	ending Value
1	20500	5547	2255	3292	17208
2	17208	5547	1893	3654	13555
3	13555	5547	1491	4056	9499
4	9499	5547	1045	4502	4997
5	4997	5547	550	4997	0