Strategic Business Management Analysis Of Hong Kong Disneyland

Introduction

Even monopoly business structures have to undergo intense competition and hence frequently change their management strategies in order to maintain their market coverage. The same goes with every business structures, we need a strategic business management as it is the most vital factor for assisting the flourish of the company.

The objective of this report is to talk about Hong Kong Disneyland which is the renowned theme park across the globe. Firstly, we will discuss the details of Disneyland then analyze the external factors such as the political and economical aspect which could affect their relationship with possible future customers.

Disneyland

Hong Kong Disneyland is the largest theme park in Hong Kong. It is situated in penny’s bay in the Lantau island. Disneyland started to function in 12 September 2005 and is Majority-owned (53%) by the Hong Kong Government but managed by Disney. Hong Kong Disneyland currently occupies 27. 5 hectares (68 acres)[11] and hosts 6 million to 7 million visitors annually. The park currently has seven themed areas hosting various rides, shops, restaurants, and live entertainment, Park and resort is one of four major business segments of the company; the other three is Consumer Products, Media Networks, and Studio Entertainment. In 2013, Hong Kong Disneyland was theme the 13th most visited theme park in the world.

Business strategy

Disneyland differentiation strategy allows the organizations to outsource unique resources and is capable to satisfy the needs of different customers. It attracts people of all ages with Disney character which is unique to Disneyland, with the characters being part of our childhood, other than that it provides fascinating rides which could be enjoyed by various ages. This makes Hong Kong Disneyland much more competitive not only in Hong Kong but also in Asia where it attracts tons of tourists from countries such as the Philippines, Indonesia, Malaysia and other south east Asian countries.

Vision

Hong Kong Disneyland Resort inspires happiness and delivers a world-class experience through creativity, great leadership and a passionate Cast. Besides, boost up the tourism and economic grow in Hong Kong. The mission is to put Happy and Safety first, diversify it range of services, offer economical visiting package, to deliver service deliberately from the heart and Be a socially and environmentally friendly company.

SWOT analysis

• Strength

Disneyland has been ranked 13th theme park in 2013 as the most visited theme park in the world According to AECOM and TEA. The park has an international recognition and its unique features attracts visitors with their wide variety and a great range of amusement such as different shows and performance matching with stunning fireworks. Disneyland targets locals and the tourist from Asia.

• Weakness

although Disneyland has international recognition, its main source of income depends on local visitors. As the ticket prices of Disneyland (HK$600+) is not as competitive as ticket prices of Ocean Park (HK$400+), the quantity demanded for ticket of Disneyland is quite low. Hong Kong residents don’t often visit the park. In fact, in 2015 to 2017 Hong Kong Disneyland suffered increased loss in 3 consecutive years. Moreover, the theme park is located in the remote area and far from the city center which discourage visitors from visiting it regularly. In addition, as most of the rides and entertainment are in the open area, so the weather condition greatly affects the demand for the services of Disneyland.

• Opportunities

China and other Southeast Asian economy is growing fast with many choosing Hong Kong as a travel destination, it would be beneficial for Disneyland as most travelers would consider going to the park as Asia only have 3 Disneyland including Tokyo and Shanghai Disneyland. Due to close proximity and enhanced transportation such as the Zhuhai Macau Hong Kong bridge and the High-speed railway currently available, Mainland china visitors would greatly contribute to the success not only the park but the whole economy of Hong Kong. Moreover, the making of the greater bay area would be a great opportunity for mainland china and Hong Kong to reconnect and flock in more visitors to the park, this could have an enormous economic impact on Disneyland.

• Threats

The direct threat to Hong Kong Disneyland is the possible intense competition with other theme parks such as the Ocean Park and other Disneyland in Asia where it could snatch potential customers. As for indirect threats, there are growing aging population in Hong Kong and is becoming more severe, which could decline local visitors in a rapid phase as most elderly wouldn’t be too interested in theme parks, and in addition to that Hong Kong’s birth rate is in decline at a startling rate. The social condition could be a threat to possible visitors as the tourist declines, less tourist would be willing to travel to hong kong with unstable socioeconomic environment, there has already been a drastic decrease of about 40% tourist in the past few months which is affecting different sectors, Hong Kong Disneyland being included. >>>> add statistic of tourist decline

Competitor

Direct competitor

As mentioned above multiple times, the rival of Disneyland is obviously Ocean Park. Ocean Park is the largest theme park succeeding to Hong Kong Disneyland, it is in the southern district of Hong Kong and s easily accessible by MTR and Bus. Ocean Park currently covers over 915,000 square meters of land and features varieties of animal attractions, thrill rides and shows in two different locations, the Waterfront and the Summit. Launched by the governor of Hong Kong Sir Murray MacLehose in 1977 has attracted almost 100 million guests since its opening. Ocean park nearly attracts over 7. 7 million guests each year and has been named one of the most popular amusement parks in the world in 2006. With Disneyland and Ocean Park providing similar entertainment, undoubtedly there would be fierce price and non-price competition. In comparison with Disneyland, Ocean Park provides wide variety of services including animals exhibits and much more thrilling rides than Disneyland. Ocean Park also focuses on differentiation, where it provides different activities in different occasions such as haunted houses on Halloween. Ocean Park has been widely popular with locals where some visit it multiple times a year.

Indirect Competitor-The AIA Great European Carnival and Big Buddha

The AIA Great European Carnival operates during winter seasons in Hong Kong particularly around December to February and is located in central, a business district in Hong Kong facing a stunning sea view of Kowloon sky scrapers. It has several thrilling rides with some iconic carnival characters with plenty of stall games. During those 3 to 4 month it functions every year it attracts tons of locals and tourists. It is now currently their 5th anniversary and since it only operates in a limited period of time the opportunity cost of going to other options would increase. This indirectly competes with the customers demand for entertainment from Hong Kong Disneyland.

The Big Buddha also known as Tian Tan Buddha is a large statue of Buddha Shakyamuni covered bronze is situated on the Lantau Island at the peak of Mount Muk Yue, it is known for its symbolic of harmony in relationship with man and nature, people and faith. Although it is a Buddhist site, plenty of tourist flocks in Ngong Ping to see this enormous statue with its iconic 268 steps to reach the Buddha. The construction of the Buddha started in the early 1990s so it is already part of Hong Kong’s culture and heredity, with it even being depicted on the landmark stamp issued by the Hong Kong Post Office. For most tourist, the Big Buddha is a must visit site in Hong Kong, which indirectly competes with demand on the Disneyland as the time of tourist would be divided.

PEST Analysis

• Political

Political factor is a paramount factor that affects Hong Kong Disneyland. With that being said, the implementation of the individual visit scheme which began in 28 July 2003 allowed mainland Chinese travelers to Hong Kong on individual basis which would ultimately increase the visitors to Disneyland. However, after the umbrella movement in 2014, central government restricted the visit of individual tourist to once per week in 2015. There has also been a penetrating atmosphere on the political aspect which deter mainland tourist from visiting Hong Kong greatly reducing potential customers of Disneyland as mainland tourist hold approximately 80% of Hong Kong tourist. Varying political environment greatly affects Disneyland.

• Economic

Economic factors all around the world affects each other, every industry could not be kept away from feeling the influence of different economic factors. The decline and growth of it ultimately affects business sectors in Hong Kong and indirectly affects other countries as well. For instance, during the financial year there was an increase in attendance and revenue and hotel occupancy being almost full. However, when the ticket prices started to increase in 2016 and 2017, there was substantial decrease in visitors so price competition is significant to Hong Kong Disneyland as the law of demand is applicable to customers.

• Social

Hong Kong Disneyland takes advantage of topmost seasons such as the Chinese New Year and the Christmas Holiday. The park creates theme according to the festival to attract local and international people of different backgrounds. However, due to the declining birth rate of Hong Kong on the past decades there are fewer young children or young adults being engrossed in the iconic Disney world in the local population, this could possibly be a threat to the growth of Disneyland.

• Technology

Due to the accelerating advancement of technology, internet and smart gadgets become part of our daily lives we live through the convenience that technology bring to us. Most of the news we grasp is from the internet and hence Disneyland could use it as a form of marketing, promotion and building a close relationship with its customers by keeping up information on the internet. Walt Disney cartoons broadcasts from TV are the beginning of the dominance of Disneyland and seemed to encroach with our culture. Therefore, Disneyland could further upsurge its revenue by attracting more visitors, for instance because of the popularity of the Disney cartoon ‘Frozen’ there was a recorded higher number of visitors after the movie was released. Conversely, since the information on the internet is too abundant, there could be some spoilers and negative comments about the park which could dissuade people from visiting it. Still, the Hong Kong Disneyland could fully utilize the power of technology by making it more convenience for potential customer to book ticket through the websites and give detailed information on the park (which is what Disneyland is currently doing) and make promotion for their special events and activities.