Name of the Case: HONG KONG CONVENTION AND EXHIBITION CENTRE
1. Who is involved?
Hong Kong Convention & Exhibition Centre (HKCEC), The Hong Kong Coliseum (main competitor), JP Production, EI Engineering, concert promoters.
2. What is the issue and/or problem?
HKCEC wants to find an alternative use for its Hall 3 in order to increase revenues during the slow, off-season months of December, January, February, July, and August. The issue is the HKCEC is not equipped with the seat risers required for it to function as a proper concert venue.
3. Why is it a problem?
It is a problem because Hall 3 will not be used as a concert venue year round therefore management needs to evaluate the viability of purchasing, storing, and maintaining the seat risers versus renting them on an as needed basis. The problem is further complicated because only two companies rent out the risers therefore if the rental option is chosen, HKCEC needs to ensure availability for the dates concerts are to be held in Hall 3. To further complicate things, HKCEC’s main competition for concert halls, The Hong Kong Coliseum also rents its seat risers from one of the competitors.
4. What is the timeline (When)?
Given the information provided in the case, the timeline appears to be ASAP.
5. How can the issue/problem be resolved?
The problem can be solved by HKCEC either:
i) Purchasing the seat risers at an estimated cost of HK$3,000,000. Training staff to set them up, take them down, and maintain them, and to pay HK$3,000,000 in storage costs when they seat risers are not in use.
ii) Rent the seat risers from one of 2 suppliers on an as needed basis incurring a HK$800,000 set up/take down charge each time plus an additional HK$30,000 per day rental charge.
iii) Rent the seat risers from one of the two suppliers for the entire off-season. Again this will be at a cost of HK$800,000 for the initial set up at the beginning of the off-season and the take down at the...