Diamond Model of Cultural Theme Blocks Operation:
Taking “Nanjing 1912” as an Example
Xiao-hu Zhou1, Hai-long Jiao1, Zhong-jin Zhang2, Yun-qin Chen1
1
School of Economy and Management of Nanjing University of Science and Technology, Nanjing, China
2
Development and Reform Bureau of Xuanwu District, Nanjing, China
(njuzxh@yahoo.com.cn)
Abstract - As economy grows rapidly and growth mode
converts, meanwhile, as the culture industry is brought into
the national twelfth five-year development plan, cultural
theme blocks are emerging unceasingly. However, some
problems, for example, blind imitation, wrong positioning,
fuzzy operation pattern, limited market expanding, appear
when they are built. A long-term survey on “Nanjing
1912”concludes that the successful development of these
blocks should follow the diamond model which combines
four factors of strategic positioning、space innovation、
commercial cluster and profit pattern. Specifically,
reasonable positioning is the strategy security of block
operation; space innovation improves operation efficiency;
commercial cluster exerts the cluster effect; profit pattern
helps to make profits successfully. Effective operation of
cultural theme blocks is the combined effects of four factors.
Factors are connected with each other that they form a
mutually promote enhanced system. The operation diamond
model can provide a new view for further research.
Keywords- Block operation, culture theme block,
diamond model, space innovation
I.
PROBLEM INTRODUCTION
With China's rapid economic growth and the
transition of economic growth mode after 30 years’
reform and opening up, a number of cities in China
gradually shift from “society of production” to “society of
consumption” [1] and the city blocks grow vigorously. As
part of the urban public space, city blocks convert their
traditional business models gradually in the continuous
development process [2]. On one hand, in the development
of the process of renovation, city blocks begin to focus on
the import of function elements such as diversification,
theme and cluster and make full use of functions
including tourism, leisure, entertainment, real estate. And
these elements and functions bring new vitality into the
development of a city block [3]. On the other hand, with
the cultural industry taken into national planning, cultural
resources will play an increasingly important role in the
development of society and economy. Against this
background, lots of cultural theme blocks with various
different characteristics emerge. These blocks combine
____________________
Fund Project: National Natural Science Foundation of China “Influence
of entrepreneurs self-efficacy on strategic change: empirical research
based on cognitive theory”(71172102); Teaching reform research
project of Jiangsu Province “Entrepreneurship education theory and
practice research of college students based on the mental ability”.
culture, history and commerce to highlight the historical
and cultural heritage features and meet the needs of
shopping, entertainment, leisure and many other demands.
The emergence of large numbers of cultural theme
blocks is the result produced by government policies,
urban development and market demand together. And also
it is both an important trend in the commercial street
development and the further extension in the form and
further expanding in the connotation of the pedestrian
street. The emergence of large numbers of cultural theme
blocks is good to regional economic growth, social
development and cultural heritage.
However, not only does the development of cultural
theme blocks face the theoretical lack, but also they meet
the practice challenges. In the development and operation
of cultural theme blocks, there are some problems. For
example, the number of blocks is big but the volume is
small [4]; some pitfalls arise in the product development
and design [5]; the theme positioning is not clear, which
blindly imitates [6]; the operation model is fuzzy [7]; the
expanding is limited [4]. These problems hinder the further
development of culture and leisure blocks greatly. Some
blocks have taken some measures to solve these problems.
Nanjing Mizuki Qinhuai leisure block focuses on the
effect of business clusters and spatial planning but the
positioning is not clear throughout its development which
results in the unsustainable development. The spatial
distribution and commercial operations of Shanghai
Xintiandi are successful, but it’s uneasy to go to the
whole country because of the imitation of cultural
characteristics. And some other blocks adopt traditional
“second-landlord” model. All of these restrict the further
development and growth of cultural and leisure blocks. In
the society which develops rapidly nowadays, how to
operate cultural and leisure block has become an
important practical issues in the development of culture
industry.
II.
“NANJING 1912” AND FOUR ELEMENTS
MODEL
“Nanjing 1912”cultural theme block is located in the
interchange of Yangtze River Road and North Pacific
Road in Nanjing city which is adjacent to the presidential
palace. “Nanjing 1912”covers an area of more than
40,000 square meters which is divided into A, B two
regions and "peace"," love"," Republic"," new century"
four Street Plazas, a total of more than 20 buildings in the
style of the Republic. In these buildings mixed with green
gray and brick red, each building is relatively independent
and has distinguishing features and sizes with elegant
style. These buildings are well-proportioned in the shape
of “L” around the presidential palace and become
commercial buildings with culture of the republic. The
architecture is a mix of Chinese and European style and
absorbs commercial elements with modern fashion.
"Nanjing 1912"is the only one block containing
dining, entertainment, leisure, sightseeing and party and
mixing traditional styles, cultural taste and fashion in
Nanjing. Because of the consumption-oriented,
all-weather cluster format, the precipitation of the city
history and resources of the country and the
world-renowned brand make “Nanjing 1912”be the
unique urban living room. “Nanjing 1912”changes
outsiders and foreigners’ bias of Nanjing economic circle.
The slogan,” Beijing has Sanlitun, Shanghai has Xintiandi,
Nanjing has 1912”, is popular both at home and abroad.
“Nanjing 1912”has achieved good social effects,
economic effects, and brand effect and has become the
urban living room mixed culture, history with fashion
after 7 years’ development since it opened in 2004
Christmas. In terms of economic effects alone, consumers
has reached about 5 million in 2010; the growth of GDP
is 400million RMB every year; and the tax paid to
government is more than 100million each year. “Wuxi
1912”, “Yangzhou 1912”, “Suzhou 1912”, “Changzhou
1912”, “Hefei 1912"have opened, while in Xi'an, Huai'an,
Jinan, Luoyang, the 1912 project are promoting actively.
So far, More than 100 cities have invited “Nanjing
1912”to join. The pace of “Nanjing 1912”is moving fast
and it has become the most famous brand which is in
charge of operation of culture theme block.
In the early 2010, our team started to track the
“Nanjing 1912” case. After 16 months of investigation
and analysis, we find that the 1912 case contains an
operation rule, namely, strategic positioning 、 space
innovation、commercial cluster and profit pattern, which
is suitable for other cultural theme blocks.
Reasonable positioning
Profit pattern
Space innovation
Commercial cluster
Fig.1: the diamond framework of culture theme blocks operation
At first, strategic positioning draws up a reasonable
and clear positioning strategy and determine target market
and target customers to point out the direction for the
rapid development of cultural theme blocks. Space
innovation means the use of the principle of space
production and the innovation of space production and
landscape design to annotate the theme of cultural theme
blocks [8]. Commercial cluster emphasizes the theory of
cluster effect and considers the gathering of block formats
to exert the constellation effect and synergy effect. At last,
profit pattern is to find effective profit way for blocks and
pay attention to the relationship and collaboration with
stakeholders, such as the cooperation with businesses,
management together with government, businesses and
customers and so on. Profit pattern needs to update or
change in time according to the changes of external
environment and internal development.
Effective operation of cultural theme blocks is the
interaction of four factors. Factors are connected with
each other that they form a mutually promote enhanced
system. The effect of each factor depends on other factors.
For example, a block that owns a good positioning but
doesn’t have a good business model, may not achieve
good enough. On this basis, a diamond framework of
cultural leisure blocks operation is proposed to provide
new insights and perspectives for the development and
operation of cultural leisure blocks.
III. REASONABLE POSITIONING:
STRATEGY SECURITY OF OPERATION OF
CULTURAL THEME BLOCKS
Cultural theme block is a living space form with
sense of place and convenience which depends on
gathered residential areas [6]. Its theme is the accumulation
of years of culture, the lifestyle, the symbol of a fashion
element and the embodiment of charisma. What the
selling point of the block is the highlight to attract
customers. Not only is the selection of the theme novel,
unique and ingenious, but also it highlights the local
characteristics and cultural features. Therefore, the
effective theme position will directly determine the
strategic foundation of the cultural theme blocks.
“Nanjing 1912” identifies three overall positioning
principles: first of all, make full use of uniqueness of
resource and link up with historical and cultural landscape;
second of all, make it be the symbol region which reflects
cityscape; at last, ensure the unity of economic and social
benefits. These principles set operation management goals
for “Nanjing 1912” and provide a standard for the
accuracy of theme positioning.
As the developer, “Nanjing 1912”group has had a
deep analysis of internal and external environment. At the
same time, with the help of PEST analysis, “Nanjing
1912” gives a full description of unique cultural resources
and special niche advantage. Thus, “Nanjing
1912”positions itself as an “urban living room which
concentrates Nanjing city culture and the republic style
history and leads fashion according to its unique
resources and location advantages”. Also take “three
places and three points” as the core to deepen new brand
positioning and development direction of “Nanjing 1912”.
The positioning goal is to create an urban tourist
attraction full of cultural characteristics of the Republic,
create a new life, new experiences, new fashion trade area,
create a new landmark contains stylish dining, leisure and
entertainment.
As the culture base, “Nanjing 1912” carries on
summary and upgrades of culture, further heightens and
enhances the center position of the presidential palace to
create an open Republic Museum of architectural culture.
In the future, some events, such as ROC culture
exhibition, will be hold to propagandize and packaging
the mansion ancient style building to enrich cultural
background and make it be the exhibition of republic of
culture. In brand building, “Nanjing 1912”insists on
experimental consumption route and enhances the
operational environment, optimizes retail format,
strengthens management, promotes the block’s overall
brand and image to attract international and domestic
famous firms to join in. With these methods, “Nanjing
1912” makes customers to "enjoy life, enjoy the 1912."
Therefore, the positioning of “Nanjing 1912” reflects
many superior resources of block which is the unity of
history culture and commercial civilization and the mix of
fashion elements and classic flavor. It makes “Nanjing
1912”appear in front of customers unprecedentedly and
fills the gap in business combination format of Nanjing.
At the same time, with the help of the presidential palace
which is the mix of the oriental and the western culture,
“Nanjing 1912” embodies its perspicuity, superiority, and
inimitability which means a higher level of differentiation
value and avoids confrontation with highly Sophisticated
Trade Centers nearby successfully when it provides its
products and services the customers.
IV. SPACE INNOVATION:
IMPROVEMENT OF OPERATION EFFIECIENCY
Lefebvre (1974) clearly pointed out that space is a
social product and its production is the same as any other
kind of production. Space which is not given but
produced is the outcome of social practice. As a special
type of space, cultural leisure blocks are not only the
material sense of space, but also they are the space with
social significance and cultural significance [2].
“Nanjing 1912” cultural theme block, which is a
special form of urban space, is an important component of
the urban cultural heritage. It plays an important role in
the continuation of the urban history and culture, and
becomes a city's collective memory. Therefore, it is not
only a physical space, or a spiritual space, is also a social
space. The historic block innovation not only makes the
space physical form change, but also changes space and
cultural significance. It reflects today's urban consumer
society and the social ecology at the context of
globalization [9].
Embark from the innovation of space production and
landscape design, the space design of “Nanjing 1912”
keeps in harmony with the presidential palace. The
volume of “Nanjing 1912” is coordinate with that of the
presidential palace. The “Nanjing 1912” buildings are as
high as a two-layer building approximately 10 meters
which stay the same with the height of buildings of the
Republic. “Nanjing 1912” draws heavily on the design of
the presidential palace in terms of architectural style. The
imitation of the French Renaissance style of the office
buildings of the President palace, especially the handling
of on-line of arches and arches have been fully reflected
on "Nanjing 1912".
The design of traffic line in the block meets the three
principles of convenience, privacy and visibility.
“Nanjing 1912” is in the shape of “L”. The region along
the Yangtze River Road and near the Presidential Palace
is the leisure area and the region along the Pacific North
Road and near the Yangtze River is the dining area while
along the back of Yangtze River Road is the bar area. This
setting meets the requirements of the commercial form.
Catering, leisure, teahouses and cafe bars should be along
the street for the reason that their customers are not fixed
while the bar’s customers are fixed which means the
demand of location isn’t high. Considering the
consumption habits of customers and of the large
customers of dinning, the dinning area is set in the centre.
Customers can choose whether to go forward to the
leisure area or walk backwards to the bar area after meals
which increases convenience of consumption. In the
meanwhile, the design of traffic line takes privacy into
consideration. These subtle and scientific space designs
enhance consumer convenience and ensure customers’
satisfaction and loyalty to “Nanjing 1912”.
After the commercial transformation of “Nanjing
1912”, a series of conversion of space features and space
functions occur. In the space features, “Nanjing 1912”
transforms from a historical block into a commercial
traveling culture block while in the space functions,
“Nanjing 1912” changes from the original residential
functions to the leisure and tourism functions which
promotes the transformation from residential space to
consumption space. Thus, historical block becomes an
urban heritage landscape for tourism and urban
consumption space. In the process of space production of
“Nanjing 1912”, several relevant groups in social practice
are involved. The space production is both a physical
process and a production process of social relations which
is an interaction result of power, capital and culture.
Different stakeholders have cognition, perception and
practice in the space which changes the appearance of the
historical blocks in the natural sense, psychological sense
as well as social sense.
V. COMMERCIAL CLUSTER:
EXERTION OF THE CLUSTER EFFECT
Only clear strategic positioning and space innovation
are not enough, as the main part of tourism and business
operation, the operation of cultural theme blocks also
needs to follow the general rules of business operation,
especially the application of commercial cluster effect.
With the help of density economy, commercial cluster has
the effect of blocks cost advantages, organization
advantages and brand advantages to come up with driving
effects and forms the whole competitive advantages for
the cultural theme blocks [10].
Commercial cluster can bring the scale effect of
blocks brand and can capture consumers’ perceived space
effectively and also can help to create and spread blocks
brand quickly [11]. The higher its profile, the more firms
would join in the cluster, the easier the cluster develops
scale economy and external economy and the more
market attractiveness to the enterprise which do not enter
this field [12]. “Nanjing 1912” has attracted number of top
business brands, such as South Beauty, Niher Cantonese
cuisine , Mazzo, A8, Soho, Starbucks, Pizza Hut. At the
same time, “Nanjing 1912” has become the rendezvous of
top Fashion consumption brand. The total advertisement
of Coke, Chivas regal, Budweiser each year in blocks has
reached tens of millions which is more than 50% of the
total advertising expense for the brands in Nanjing, in
some part, even more than 80%. In addition, “Nanjing
1912” has helped more than 40 works of the outdoor
scene of film and television photography. As the base of
outdoor photography, the block has attracted more than
10 groups of feature camera or photography team per day
on average. In addition, “Nanjing 1912” has become an
important issue center of new cars with more than ten
new car conferences held here every year. Meanwhile,
more than one thousand times reception was held for the
leaders from all parts of the country every year. All of
these have indicated that “Nanjing 1912” has become the
important platform for Nanjing city to show city vigor to
the domestic and to nations and improve the city’s soft
power.
Commercial cluster can greatly reduce the cost and
time for consumer to search goods in shops and transfer
among shops, thus forming a kind of "clusters attractive",
also greatly reducing the cost of block operation [13]. After
“Nanjing 1912” opened, some commodities in the shops
are partly from the same producers, so commercial ads
did by manufacturers for their products reduce the cost of
merchants. At the same time, not only does the cluster
include the convenience and elegant of consumption, but
also it contains the completeness of facilities. The
improvement of block environment is beneficial to the
entire businesses, but the expense is huge. If merchants
are only in charge of for their own business, not only is
cost larger, but also unharmonious situation appears. With
the help of unified planning, construction and conduction
of management committee, the cost of construction and
maintenance decreases. There is a remarkable attraction
of “Nanjing 1912”. The number of visitors has reached
nearly ten thousand per day and it reaches 50,000-60,000
people in holidays. For example, a record was set that
100,000 people gathered in the 1912 blocks on Christmas
Eve. In 2010, the number of consumers had reached 5
million, which can bring as high as 400 million RMB to
the added value of GDP each year.
The business cluster of “Nanjing 1912” has promoted
an regional economic growth and the economy growth
has driven the increasing of disposable income in this area
while the increasing of disposable income promotes the
development of relevant industries and the increasing of
labor demand which in turn, promotes the development of
the commercial cluster. And the circulation forms the
multiplier effect for the commercial cluster. After the
block operated formally, rental prices of surrounding
commercial have risen to more than 2 yuan per square per
day on average which creates an record of average rising
rate of rent in Nanjing. At the same time, supporting
facilities with “Nanjing 1912”at the centre, develop
rapidly. The number of convenient hotel has developed
from 3 to 14 which gained 470%; KTV increases from 1
to 4 which gained u400%. The area of culture and leisure,
catering business surrounding “Nanjing 1912” has
increased 80,000 square meters rapidly. There are more
than 50 business households in “Nanjing 1912”which
directly provides more than 5000 jobs, and indirectly
creates a great number of job opportunities.
VI. PROFIT PATTERN: ACHIEVMRNT OF PROFITS
In the era of low-profit competition, the competitive
advantage of enterprises cannot turn into business profits
naturally. Companies should rely on the innovation of
profit model to make more increasing sales, revenues and
profits than competitors. Profit model needs to define
customers, and chooses customers [14]. Also it raises the
value proposition to the customers so it offers appropriate
products and services to satisfy their needs. With the help
of a certain path, or channel, products and services are
sent to customers. In the meanwhile, companies get paid
from customers and build a connection with them to
support them. In addition, a company plays an important
role in the value chain, it connects and collaborates with
other companies to create values for customers together.
1 、Re-define the customers and select the target
market. To know customers’ need is the beginning of
company operation. According to customers’ needs, an
enterprise proposes value proposition. However,
customers’ need usually changes. Under this circumstance,
re-defining customers is needed. A company re-defines
customers, chooses new target customers and comes up
with new proposition to innovate profit model [15].
Considering the characteristic of customers, especially
young people who are into fashion and the situation that
leisure districts of Nanjing is out of order and Nanjing
doesn’t have the symbol place for night life, “Nanjing
1912” relies on its characteristic to shows styles of
Republic and operates as a block. “Nanjing 1912”is
welcomed by customers, for the reason that, not only does
it provides a relax place, but also it makes customers to
feel the cultural atmosphere and matches the young’s
needs of pursuing fashion.
2 、 Strengthen management communication, and
promote the relationship integration of stakeholder. In the
innovation of profit model, changes will arise inevitably.
Sufficient communication is needed that shareholder,
employees and other stakeholders can reach agreement on
the interest produced by innovation of profit model. Also
communication can encourage enthusiasm and ensure the
implementation of innovation. A company should create
suitable environment, use management methods and
develop enterprise culture to promote a new round of
profit model innovation.
In the development process of “Nanjing 1912”, it
emphasizes the connection with 4 elements(government、
business、employee、consumer). To government—with the
help of government’s design and on the basis of policies
and its own development planning, “Nanjing 1912”
enhances the relationship with government. On one hand,
government’s support contributes to provide favorable
environment for firm development. On the other hand,
firm development is able to benefit tax, employment and
so on. To business—by means of preferential investment
conditions and excellent supporting facilities, “Nanjing
1912”attracts other firms’ investment; in the same time,
with the help of strictly selection and standardize
operations, “Nanjing 1912” and cooperative enterprises
reach to win-win. To employee—“Nanjing 1912”focuses
on training and education and conveys its culture and
values so that employees can know them very well and
have a sense of belonging. In this way, they can make
progress with the firm. To consumer—“Nanjing 1912”
continues to highlight its own characteristics and conveys
its culture conception to consumers. What “Nanjing
1912”wants to bring to consumers, is more that just
consumption, is the experiences of leisure and feelings of
culture.
3、Timely to change the profit model and develop a
unique value network. In a highly competitive
environment, value and profit often move in the industry
value chain. The most profitable part of the value chain
today may be in trouble tomorrow and the value chain can
be broken, compression and re-integration. Considering
the segment of profit and its own strength, a firm should
select a reasonable position in the value chain. “Nanjing
1912”is eager to develop the relationship with suppliers,
distributors and partners to give full play of synergy effect
and form a network providing value for customers. A firm
who contains a unique value network can have an
advantage difficult to imitate. This forms an important
thinking of business model innovation.
In the development process of “Nanjing 1912”, it
changes its profit model duly to adapt to environmental
change to develop better. So far, the profit model of
“Nanjing 1912”has been changing three times. In the era
of version 1.0, the profit model is traditional
“second-landlord” model. In this stage, “Nanjing 1912”is
unprofitable. In the era of version 2.0, Nanjing 1912
group collaborates with local government and developers
and pursuits more ways of cooperation. And it also
involves in the development, implementation planning
and construction of projects to create a regional
benchmarking projects and lead the development
direction of regional economy. In the era of version 3.0,
Nanjing 1912 group involves in land operations directly
and it pays equal attention to operation and development.
In this era, Nanjing 1912 group serves as the role of the
Chinese Urban Culture Business Integration operator
which is trying to lead the breakthrough innovation of
commercial pattern and tap the charm of the cultural
consumption of fashion to meet the spiritual needs of the
urban consumers.
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