please help

I need:

1. Introduction

2. stakeholder analysis

3.Problem statement

4. Identification and evaluation of alternatives

due time in 35 minutes

Jonathan Landis and Kanina Blanchard wrote this case sovely to provide matorial for class discustion. The authors do not intend fo ilustrate either elfoctive or inoffective handing of a manogerial aituation. The authars may have disguisod cortain names and ofher. identilying informetion to protect confidentiabity. This publication may not be transmited, photocopiod, digitied, or otherwise reproduced in ary form or by any means without the permission of the copyright holder. Reproducbion of thia material is not covered under authorization by any reproduction rights organization. To order coples or request permisslan to reproduce materlaks, contact Moy Publishng, Mey business Sehoo, Westom University, London, Ontario, Canada. N56 oN1; (0) 519.661.3208;(e) casesdivey.ca; www. Woypubishingica. Our gow is to pubNish materials of the hiphest qualiy, subme any errate to publishcaseseghey.ca. Cogynight 9 2022, lvey Business School Foundafian Versien 2022-97-15 In August 2016, 10-year-old Caleb Schwab was killed while riding the newly constructed Verrckt waterslide at Schlitterbahn Waterparks \& Resort's (Schlitterbahn) Kansas City, Kansas, location. Described as the world's tallest waterslide at the time, Verrckt took its name from the German word for "insane" or "crazy." At the time, the water park was one of the United States' most sought-after getaways." However, on that tragic day, a design malfunction caused Schwab's raft to go airborne, causing his neck to collide with a metal hoop that covered the slide's exterior. Given the speed Schwab's raft was travelling, the extreme force was enough to kill him instantly. Both the park's operations manager and owner faced charged related to Schwab's death and various injuries sustained by other park patrons over the previous two summers. 3 How should the park owners have responded? WATER PARK INDUSTRY IN THE US According to IBIS World, " the water park industry then included amusement parks that featured waterslides, water play areas, splash pads, spray grounds, lazy rivers, and other recreational bathing, barefooting, and swimming environments. The industry was growing annually at 1.9 per cent and was expected to stay at that rate through to 2024. Between 2014 and 2019, the US water park market totaled 55.1 billion in revenue and grew at 7.5 per cent a year. The top 20 North American water parks recorded an attendance of 16.2 million visitors in 2018. . The key external drivers of growth were attributed to consumer spending, the number of adolescents aged 10 to 19, domestic trips by US residents, and inbound trips by non-US residents. 'This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives presented are not necessarily those of Schitterbahn Waterparks \& Resort or any of its employees. 'Skip Hollandsworth, "Schlitterbahn's Tragic Slide," Texas Monthly. August 2018, httpsthwww texasmonthly. cominewspoliticsjeft-henry-vernuckt-schlitterbahns-tragic-slidel; see image at Briana Smith, $20M Settement Reached in Vernickt Water Slide Tragedy, "Logal Reader, May 9, 2017, hitps.llwwwilegalreader.com/20m-settlement-reached-in-vernuckt-waterslide-tragedyl. 3. "Schlitterbahn Co-owner Jailed on Charges of Murder, Aggravated Battery and Aggravated Child Endangorment," ABC Eyowiness News, March 27, 2018, hilps-llabc13 corndschliterbahn-co-owner-arfested-feffey-hency-murder-waterslidedeath3268797i: 4 IBiS World provides thusted industry research on thousands of industries worldwide. "Kevin Kennedy, "Water Parks," 1bisWorld OD535, April 2021, httpsilmy-ibisworid-com. proxyt, il uwo ca/usienindustryspecializediod 5351/ /about. Page 2 W25626 Industry revenue was positively influenced by rising per capita disposable incomes, falling unemployment rates, and an improving economic outlook. Before the impact of COVID-19, increased consumer spending, which was rising at an annualized rate of 2.9 per cent, had contributed to the industry's growth as visitors consumed more discretionary items like water park tickets and souvenirs. In addition, IBIS World stated that the industry's largest water parks were owned and operated by massive global players like The Wait Disney Company and Six Flags Entertainment Corporation. Exhibit I highlights the market shares of the four largest participants. Furthermore, the water park industry exhibited a moderate level of market share concentration in which the top five companies accounted for 30 per cent of total revenue in 2021. However, 138 companies operated in the water park industry, and most of them were single-establishment operators that target localized markets. The industry also relied heavily on marketing to promote new attractions to potential customers. In total, marketing and advertisement costs accounted for 4.5 per cent of industry revenue.? REGULATORY ENVIRONMENT IN KANSAS Before Schwab's death in August 2016, the state of Kansas was known for having few regulations related to amusement park rides. Amusement and water park companies were well known for lobbying legislators for autonomy in maintaining operations and conducting self-inspections. The state mandated annual inspections of permanent amusement park rides but allowed operators to hire private inspectors to perform checks rather than requiring state inspections." Additionally, the state only conducted random audits of water parks' records, and there were no other local safety regulations." And while the US federal government's Consumer Product Safety Commission could set safety standards for products like children's toys, it did not have the authority to regulate water parks. 14 Before Kansas had considered imposing inspection requirements in 2008, a Schlitterbahn lobbyist urged state legislators to allow large parks to handle their own inspections. In June 2016, shortly before Caleb's death, the state Department of Labor inspected all of Schlitterbahn's rides and cleared them for use. At the time of Caleb's death, the Verrckt slide complied with Kansas's legal requirements, which mostly involved proper record keeping (see Exhibit 2)." David Mandt, a spokesperson for the International Association of Amusement Parks and Attractions, said that 85 million people safely visited water parks every year, making an accident like the one in Kansas City "extremely rare." Furthermore, he explained that "we go to great lengths to ensure the safety of our guests." In contrast to Kansas, other states like New Jersey imposed rules like requiring engineering staff and licensed field inspectors to review all rides. Pennsylvania, too, required state-certified inspections when a new ride was created and every 30 days thereafter. Pennsylvania also conducted unannounced quality assurance inspections." "Kennedy. "Water Parks." TKennedy, "Water Parks," - John Hanna, 'Kansas Water Park Operates under Limited State Regulation," CTV News, August 12, 2016, https:l/mww ctunews calword/kansas-water-park-operates-under-limiled-stale-regulation-1.3027247. - John Hanna, "Regulations Limited for Kansas Water Park," Las Vegas Sun, August 12. 2016, https I/lasvegassun comews/2016/aug/12/regulations-limited-for-kansas-water-park/. "Hollandsworth, "Tragic Slide." "1 Makenzie Koch, "Court Documents Detail Aleged Negligence in Design of Schlitterbahn Water Slide that Killed to-YearOid," Fox 4. March 23, 2018, hitpsi/fox4kc-comews/court-documents-detail-allegations-ofnegligence-in-design-ofschliterbahin-water-slide-that-killed-10-year-oldr. "Hanna, "Regulations." "Hanna, "Kansas Water Park." Ken Martin, a Virginia-based amusement park safety consultant, said, "As far as Kansas having a bad reputation in the industry, they're known for having little to no regulations. It's been that way for years., 14 SCHLITTERBAHN WATERPARKS \& RESORT HISTORY Jeff Henry, the son of an accountant, and his wife grew up at his family's New Braunfels, Texas, water park resort, which was called the Landa. '. Unlike his brother and sister, who went off to college, Henry decided to pursue other things. As a young boy, he swam, fished, canoed, rafted, and hunted for turtles. An entreprencur at heart, he decided to buy damaged car-tire inner tubes at gas stations, and he repaired them to sell to tourists, who used them to float in a nearby river. 16 Henry's passion for water park rides and devices began when he noticed riders hitting the water too hard at the bottom of one of the park's slides, and he decided to create a piece of equipment that slowed them down. He called the device a "water brake." In the early 70 s, his inspiration for water park design became stronger still after he and a friend visited two new water parks called Wet n' Wild and Disney's River Country, both in Orlando, Florida. He decided to convince his father to buy a piece of property next door to the family water park, and there they built a 60 -foot replica of a German castle. His father called the park Schlitterbahn. His brother handled the park's finances, and his younger sister took over marketing. Henry was in charge of attractions..17 By 1990 , the new park had become a big hit. It attracted nearly 500,000 people a year. Visitors enjoyed free parking and were allowed to bring their own meals. The park contained a 50,000 -square-foot pool, an inner-tube ride, the Cliffhanger Tube Chute, the Raging River Tube Chute, and a manmade river that encircled the park and behaved like a real river. 18 At this point, the park started attracting national attention. Due to the increased publicity, the Henry family bought another 25 -acre property three blocks east of the main park. Henry created two new rides for this park, the Boogie Bahn, which was a boogie board ride, and the Dragon Blaster, which was a watery roller coaster. He also constructed another water roller coaster ride, the Master Blaster, which was six stories tall and filled with extreme turns. 19 Given all Henry's achievements, the suceess sometimes went to his bead. He would nonchalantly prop his feet up on the table during meetings, and he was sometimes known to be stubbom with coworkers. People met Henry and instantly disliked him because he was always so adamant that he was right. But he was not concerned with what people thought of him. He only cared about creating the world's best water park nides. 20 Henry also capitalized on his inventive efforts and suecess by exporting his inventions globally. He sold technology to two world-renowned resorts, Atlantis Paradise Island in the Bahamas and The Palm in Dubai. He was always focused on creating the biggest and best attractions the world had ever seen. "I always set out to break all the records," he once said. "I want to be the first at the bar to buy a drink, and I want to be the first to meet a pretty girl, and I want to be the first at everything. I want to have the biggest, the tallest, and the fastest rides at my parks." "21 "Hanna, "Kansas Water Park." "Hollandsworth, "Tragic Silde." "Hanna, "Kansas Water Park". Page 4 W25626 In 2006 , the Henry family opened a year-round water park in Galveston, Texas, the success of which caught the eye of prospective developers nationwide. One proposal was to create a Sehlitterbahn-branded park in Kansas City, Kansas. Without hesitation, the Henry family agreed. To make matters even better, a real estate investment trust offered to lend the family 5174.3 million to belp kickstart the project. In addition, the State of Kansas also contributed $200 million in sales tax revenue bonds, as officials saw the park as an opportunity to grow the state's cconomy. The Schlitterbahn water parks were becoming bigger than anyone could have imagined. 22 Before Schwab died, there were five Schlitterbahn-branded water parks in the United States: four in Texas and one in Kansas City, Kansas, the newest addition to their chain. It was estimated that 2 million people visited the parks every year. At a Schlitterbahn park, there was truly something for everyone. Families that attended a Schlitterbahn water park every weekend were called "Bahnophiles," and they would sometimes even spend an entire vacation visiting one of the parks. 23 THE INSANE VERROCKT SLIDE In November 2012, Henry aftended a trade show and met producers from the Travel Channel who were working on a program called Xtreme Waterparks. When asked if he had any ongoing projects, Henry, without thinking, said that he and John Schoolcy, his chief collaborator, were planning to ereate the world's fastest and tallest waterslide at Schlitterbahn's Kansas City location. 24 Naturally, Henry wanted to impress the producers but realized this meant building a ride never seen before. He consulted with his brother end sister, and the project concept was bom. After going over the plans with his team, he sent an email saying, "We all need to circle on this.... I must communicate reality to all. Time, [sic] is of the essence. No time to die. ... I have to micro manage [sic] this. NOW. This is a designed product for TV, absolutely cannot be anything else. Speed is 100% required. A floor a day. Tough schedule., In November 2013, the ride was given the name Verrickt. Henry and his team completed the design calculations in just over five weeks, a much shorter time frame than what they were used to. To ensure Verruickt worked as planned, Henry and Schooley (neither of whom had an engineering background) and their staff needed to design the precise specifications of the slide. They needed to keep in mind the slope of the slide's hill, the raft sizes, and the minimum and maximum weights of the riders. Complex engineering methodologies related to which gravitational and centrifugal forces riders should sastain to keep them safe were imperative to the ride's safety. Designing a slide of that magnitude, size, and speed was not an easy task. Henry deployed a team of engineers and architects to assist in the design but tended to rely on trial and error. 26 During the testing stages, the crew from Xireme Waterparks documented the team's journey building the slide. Whenever Henry did interviews for the show, his demeanor suggested that the Vernickt slide consumed him entirely. In one interview, he said, "Verruickt could hurt me; it could kill me. It is a seriously dangerous piece of equipment today because there are things that we don't know about. If we mess up, it could be the end. I could die going down this ride. "27 Throughout the testing process, delays often occurred 2 Hollandsworth, "Tragic Slide. n Hollandsworth, "Tragic Slide." A Hollandsworth, "Tragic Slide." is Timothy Bela. "How a Freak Aocident Happens," Esquire, January 29, 2019, htpasliwww.esquire comvnewspolitics/a23568619/schittertbahn-freak-accident-caleb-schwab/. "Hollandsworth, "Tragic Side." 27 Hollandsworth, "Tragic Slide," and lod to many redesigns. The slide's engineering team deemed that the slide was simply too fast to be safe. The project's construction workers drew the stark comparison of working for Disncyland: the amount of work was exhausting, and most construction workers had no experience with that kind of project. 20 Despite the design and logistical issues that occurred throughout the testing process, the culture at the Schlitterbahn was known to be unstable; instances of misbehaving, incompetence, and immaturity were the norm. During a night when the park's staff were testing Verrckt, sandbags that were meant to simulate people flew off the rafts. The staff, however, remained apathetic. 20 In July 2014, the slide was officially ready for the public. Right before it opened, employees questioned why the imposed age requirement of 16 had been removed. The reasons were never communicated. When the slide opened, it attracted widespread publicity and was featured in print, TV, and video pieces throughout the country. 30 THE TRAGEDY One aftemoon on August 7, 2016, Scott Schwab, a Kansas state representative, and his family attended Schlitterbahn's Kansas City water park. The temperature was warm and sunny, a perfect day for some family fun. Calcb, Schwab's 10-year-old son, had heard all about the widely publicized Verrckt and told his parents he had to try it. 31 The park's rules for the slide required riders to be at least 4 feet 6 inches tall ( 54 inches). Caleb was 4 feet 11 inches and weighed 72 pounds. When Caleb climbed to the top of Verrckt, he was placed in a raft and joined by two women, aged 32 and 25 . Little did the riders know that the raft had a tendency to go airbome more frequently than other vessels. When it was released, Caleb was in the front seat. 32 When the gate swung open, the raft tipped forward and began to move. When it approached the bottom of the hill, something went wrong. Instead of staying in the ride's caged exterior and remaining on the second hill, the raft went airbome. It smashed into a metal pole and netting meant to prevent riders from getting tossed. Park attendees going about their day heard a loud noise, a sound that was likened to the ride derailing. Very quickly thereafter, a flow of blood was seen creeping down the slide. People stood with their hands over their mouths, reacting to the horror they had just witnessed. Caleb's head had collided with a semicircular metal hoop that arced over the top of the slide. It sliced into his neck, decapitating him and killing him instantly. 33 THE AFTERMATH Initially, after the incident, the Henry family stayed quict. The only correspondence that came from Schlitterbahn was a statement from their spokesperson, who said, "We honestly don't know what happened" but added that they were "deeply and intensely saddened for the Schwab family and all who an Bella, "Freak Accident." 20 Bella, "Freak Accident." "Bella, "Freak Accident." 14 Bella, "Freak Accident." "Be Bella, "Freak Accidere;" Hollandsworth, "Tragic Slide." "Bella, "Freak. Aocident." Page 6 W25626 were impacted by the tragic accident., "Immediately, the media began covering the story. The public soon became aware of how relaxed Kansas's water park regulations were. Reporters started asking questions to former Verrckt riders and leamed that this was not the first time people bad been injured on the ride.. When the Kansas Bureau of Investigation questioned him about the safety of the ride, Miles declared that he had not received complaints and had been confident it was completely safe. However, investigators leamed from the park's operations reports that there were indeed problems with Vernuckt but that they were never made public. It was found that Miles had received 17 staff reports over the course of the two previous summer seasons about Caleb's raft requiring maintenance. Between August 31, 2014, and August 5, 2016, 11 customers said they had suffered head, neck, and back injuries. The investigation also revealed that Miles ordered a lifeguard to fabricate a safety report that disguised the severity of an injury that someone had sustained on the Verruickt. Investigators concluded that Miles had avoided and delayed making repairs because doing so would have temporarily closed the ride. Additionally, be chose not to onder repairs when it was discovered that urgent maintenance was needed on the braking system. In May 2017, Schlitterbahn's attomeys reached a nearly \$20-million scttlement with the Schwab family. Maintaining their silence, neither Henry nor his siblings made any public remarks about what had oceurred the previous summer. It seemed as if nobody knew what happened. 3 . In March 2018, Kansas City prosecutors issued indictments. Miles and the Kansas City Schlitterbahn faced charges for aggravated endangerment of a child, aggravated battery, interference with law enforcement, and involuntary manslaughter. Henry, Schooley, and the family-owned construction company were charged with similar indictments. Once again, Henry had nothing public to say, though the park did release a statement promising a strong defense (see Exhibit 3). 40 MOVING FORWARD Was the park's response blameworthy or praiseworthy? How should Schlitterbahn's owners have responded? * "Son of U.S. politican killed on world's talest waterslide in Kansas," CBC, August 8, 2016. https:llwww. cbcoaews/world/kansas-water-slide-fatalify-1.3711326 "Bella, "Freak Accident." * Steve Vockrodt. "Audit of Schliterbahn Water Park Finds Many Violations ahead of May 25 Opening." The Kansas Cily Star, May 22, 2018, https llwww kansascity cornhewniocallarticle 206619219 haml. N Andrew Vaupal, "indictment Targets Two Schlitterbahn Workers for Lying about Faled Braking System," Kansas Cioy Business Joumal, May 30, 2018, hatpsilhww bizjoumals comkansascityinews/201805/30/schiilerbahn-vemuckt-failedbraking-systemhtral. * Melssa Chan, "Family of Boy Decapitated on Water Slide Gets $20 million Settlement" Time. May 4, 2017. hitps:/ime com/47669e6/caleb-schwab-water stide-death-settlement/. "Schlitterbohn Water Park Indictments Highlight Lax State Rules," CES News, March 30, 2018. hitps: ll www cbsnews cominews/caleb-schwab-kansas-indictments-highlight-lax-state-nles-on-water-parks; Hollandsworth, "Tragic Slide:". a Sam Harte, "Schlitterthan 'Shocked' at Alogations: Promises Vigorous Defense," KSH8, March 26, 2018. hitpsillwww kshb.cominews/ocal-news/schitterbahn-releases-new-stalement-on-criminat-indictmert. EXHIBIT 1: MARKET SHARE OF FOUR LARGEST US WATER PARKS, 2021 EXHIBIT 2: MOST RECENT COMPLIANCE REPORT BEFORE SCHWAB'S DEATH Mr, Mutr tame ence, Central Manager Schlimerbahe zancas city Stoo Mute Avenut Canas city, ks eAts? Dear Mr, Lamence: 10, 2016 te ensure that all requirements of the Kanas Amsiemem Ade Act, 25A. 44-16ol through 44 : 1615 and X.AR. 49-5S-1 through 49.5512 are met. Included in this avdat a verfication that the following were apalable. * The current certification of an inapector's qualifations to insect amunement rides: - The current certificate of indeccoon signed by a qualfied inspector; - The current maintenance and inpection recorth. - The currert resuls of nondestructuve testine: * The anunement nde mandacturer's eperational manuak - Operator Trainine Mecords. - Maport of minerery Upon coe pterion of our mut we have corfirmed the following: 1. The current centifate of impection a vivbly poutrd on ali rides. Arele wienal (CSA) 3. Puly maintenance and inspection receret for each ride are documented prior to operation and Aolse the gudetines set forth in the Manvacturer's Operational Matual. 4. Venfication thut mion Deqructive Festing (NDT) a not reoulred by the Mamulucturer of each 5. Manufacturer's Operationai Mamal is avaluble for each ride. 6. Cach employe is trained evtenswely. Training indudes an annual erientation prior to epenire. Addicionaby specialied training is included every 2 weekis in the employee's weeky sehedule. A mead and understand the "Aegatici ravobook" whichis updated annuatly. 7. The Meport of Einerary wal recelved by Koet on Mary 23, 2016 We apprecate your cooperation and teking the time to work with ws throush this budit. mesenctior. Chime cif chivise: Ternsis. berecter Kaviai Depertument of Labor Devaion of indurerial Safory and Heath Source: Kansas: Department of Labor, "Report on Schilterbahn Compliance", Augus! 11, 2016, hitpsigray-arecontent.s3 amazonaws com/VibWischlitterbahn*20kDOL. 20 Reportf, pdf. EXHIBIT 3: SCHLITTERBAHN'S RESPONSE TO ALLEGATIONS We were shocked by the allegations being made by the Attorney General about Tyler and our KC park. The allegation that we operated, and failed to maintain, a ride that could foreseeably cause such a tragic accident is beyond the pale of speculation. Many of us, and our children and grandchildren, have ridden the ride with complete confidence as to its safety. Our operational mantra has been and will forever be Safety First. The accusation that we withheld information or altered evidence is completely false. We have operated with integrity from day one at the waterpark - as we do throughout our waterparks and resorts. We put our guests and employees safety first; and safety and maintenance are at the top of our list of priorities. Since the date of the incident we have worked closely with law enforcement, at no time have we withheid evidence; at no time have we altered evidence. The indictment uses quoted statements from a reality TV show that was scripted for dramatic effect that in no way reflects the design and construction of the ride. Quotes were purported to be from definitive design meetings, when they were, in fact, "acting." During the civil matter, attorneys involved noted that we cooperated fully, provided thousands of documents, and that nothing was withheld or tampered with. The secret Grand Jury never heard one word from us directly, nor were we allowed to provide contradictory evidence. And we have plenty. In fact, the indictment presented is so full of false information that it has shocked the Kansas legal community, as you can see in the statement from Tyler Mlies' attorneys below. Our legal team will be speaking out against each of the allegations point by point in the coming weeks and months. Rest assured, we stand behind our staff and all our parks. We will be fighting these charges aggressively. We know that Tyler is innocent and that we run a safe operation - our 40 years of entertaining milions of people speaks to that. We look forward to proving this in court where we know the facts will prove this was an accident. Source: Sam Hartle, "Schlitterbahn 'shocked' at allegations; promises vigorous defense. "Scripps Media, Inc, March 26, 2018, https:/lwww. kshb.cominews/ocal-news/schlitierbahn-releases-new-statement-on-criminal-indictment