Introduction


            The increasing number of tourist whose purpose is to find a place where they can relax, enjoy and be entertained has been one of the major cause of there are different countries who tries to develop their own theme park or enhance their existing theme park and Hong Kong is never an exemption.     The Hong Kong Special Administrative Region (HKSAR) Government views tourism as a sustainable industry and one of the major pillars of Hong Kong’s economy.


 


This is really not surprising considering the fact that the said industry, indeed, brings in to the country lots of money. In 2001, the total tourism receipts amounted HK .3 billion (Hong Kong SAR Government Information Centre 2005), which contributed to a considerable percentage of Hong Kong’s GDP. As the Government realises that tourism is a vehicle for economic and social development, some proactive policies had been adopted to further strengthen and enhance Hong Kong’s capacity to be a key tourist destination.


 


Because of the opportunities given by the tourism industry, Hong Kong government is trying to sustain its competitiveness in tourism through the theme parks available in the country. Primarily, the main goal of this paper is to conduct a strategic analysis for the Theme park industry in Hong Kong. Herein, the business environment of the theme park industry will be analysed using two marketing tools for analysis (PESTLE and Porter’s Five Forces Model). Furthermore, the discussion will also include the scenario planning both optimistic and pessimistic.


 


Industry Background


            Currently, there are two existing and operating theme park industries in Hong Kong. These include the Ocean Park Hong Kong and the Hong Kong Disneyland. The main goal of the development the theme park industries is to provide a place for local residents in Hong Kong where they can enjoy, relax and be entertained by the different features offered by the industry.  In addition, theme park development also aims to attract more people to visit Hong Kong.


 


            The theme park industries play a vital role in both tourism industry and the Hong Kong government. The number of tourists that visits each theme park has been able to help boost the economy of Hong Kong.  Reports predicted that the theme park bring about 5.2 million people from different places worldwide and a certain proportion will be accounted from mainland China. In that assumption, it means a greater advantage for the tourism industry to accumulate more expenditure from its tourists.


 


PESTLE Analysis


            The theme park industry in Hong Kong will be analysed using PESTLE Analysis. PESTLE stands for Political, Economical, Socio-cultural, Technological, Legal and Ecological aspects.


 


            Political


            Firstly, the political environment concerns the role of the government concerns the role of the government and its affects in an organisation. It also includes the extent to which the government intervenes in the economy. The Hong Kong government has been very supportive with the theme park industry.


 


Since the government of the Hong Kong believes that these industries will be beneficial for the region, the government of Hong Kong is also open for other possibilities of establishing new theme park that will meet the needs of both the local residents and their tourists for a best family holiday spot. For example, the Hong Kong Disneyland is a joint venture between the HK government and the Walt Disney, while Ocean Park is a theme park which is owned by HK SAR government. These means, that HK government have a control of the theme park industry.  


 


            Economical


            Secondly, the amount of economic activity in the economic environment is extremely an important aspect.  Whilst assessing the economic environment in which theme park industry operates. The government tries to terminate the level of economic activity to provide positive and friendly environment for the theme park industry. It can be said that Hong Kong economic situation is strong and stable. With this, Hong Kong is able to sustain good relation with theme park industry especially for Hong Kong Disneyland. The economic stability of the region has helped the theme park industry to have a good economic performance.


 


            Socio-Cultural


            Social environment is of great importance when being applied to different organisations, in case the theme park industry.  Hong Kong has been considered as one of the regions in Asia which is considered to be a strong tourist destination. With the increasing number of people who wants to live a quality life by enjoying and relaxing in a fine holiday spot, it can be said that the theme park industry have a greater opportunity to grow even more in Hong Kong. The demographic changes and the psychographics of Hong Kong society has open more chances for the theme park industry to achieve its goal and mission.


 


            Technological


            Technological factor has helped in reducing the barriers of entry for other theme park industry. It has also supplemented in the cost of capital in other areas, to enhance the services provided by theme park industry.  Through the use of online marketing, it becomes easy for theme park industry to promote the business to their target market in different parts of the world.  


 


            Legal


            Legal aspect is also an important factor of the business environment. It can be said that since the theme park industries in Hong Kong was partly owned (Hong Kong Disneyland) and wholly owned (Ocean Park) by its government, these industries had been able to make all its business operations and transactions adhere to the rules and regulations provided by HK government. With this, theme park industries are assured that they will never be accused for any illegal actions which in return will help them have a good reputation in the market environment.


 


            Ecological


            The ecological factors directly impact the travel industry trends and the theme park industries. The weather conditions in Hong Kong determine the profitability of theme parks. The better the weather conditions the higher is the
number of visitors. Ecological factors play an important part in the success of the theme park industries as it affect input manufacturing capacity. Without proper yield a company will be unable to meet the existing market demand, creating a strong opportunity for its competitors.


           


Porter’s Five Forces Model


Porter’s Five Forces model (Porter, 1990) shows the macro analysis of the theme park industry situation in Hong Kong.


 


·        New entrants


The deregulated state of the market provides certain opportunities for
new entrants to start the business. The theme park industry in a mature market, divided between existing theme park industries. The continuous change of life style preferences create various opportunities for them park industry content. The theme park areas have serious entry barriers, especially for small players, as the existing industries have strong reputation, develop economies of scale and continuously invest in new technologies.


 


·        Buyers


The global operations of different theme parks industries and the strong local operation of theme park industry in Hong Kong have shown that consumers have a very strong bargaining power. Strong competition between global and regional niche players and constant change of preferences for the tourist will have strong impact on theme park industries.


 


·        Substitutes


Substitute theme park industry that will be developed in Hong Kong will have significant effect on the number of tourist or visitors who will avail the services of the existing theme park industries. For example, Ocean Park is the only theme park operating in Hong Kong and has shown strong business performance, but when the Hong Kong Disneyland was opened which provides new features for a theme park, the performance of Ocean Park has been affected. 


 


·        Suppliers


The scale of operations, the size of the theme park industry in Hong Kong and the highly recognised strong identity provide the theme park industries with bargaining power against local and global operations.


 


Competitors Analysis


            In Hong Kong, the two existing theme park industries are the Hong Kong Disneyland and Ocean Park. Although, each industry has special and unique features and each has a different market segment, competition in both industries can still be considered as tough and strong. However, because the government has a control with these theme park, the competition are reduce which help both the industries to operate at their best and gain competitive advantage against each other.


 


Scenario Planning


            Based on the environmental analysis for theme park industries in Hong Kong, the following scenarios are being visioned for these industries.


 


Optimistic Scenario


            With the increasing number of tourists who wants to visit relaxing and entertaining places, it can be said that ten years from now, theme park industries in Hong Kong is perceived to be more competitive in the global world. In addition, if the government of Hong Kong will continue to support the theme park industry and enhance the services and its features, theme park industry will gain good reputation and in 2016, these industries will be considered as a world-class industry in Hong Kong.


 


Pessimistic Scenario


            If the Hong Kong government would not consider ways on improving the facilities or the operation of theme park industries, it can be perceived that in year 2016, theme park industries in Hong Kong can only be considered as a history for the region and their dream of being recognised as a region that provides world-class holiday destination will not be achieved..


 


For these scenarios, it can be said that the optimistic scenario is more plausible to happen than the pessimistic one.  Since, the business environments of the theme park industries are considered to have a positive impact for the industries’ operation, it can be said that theme park industries will be able to have a sustainable competitive advantage. And because of the support of the government with these industries, a greater possibility of achieving growth is at stake for the theme park industry.


 


Conclusion


 Analysis shows that the willingness of the government of Hong Kong to become a world-class tourist destination is the key environmental factor that enhances the growth of theme park industries in the region. The business environment of the theme park industries in Hong Kong has enabled the industries to gain competitive position not only in the local market but more importantly to international market. It can also be said that with the positive reactions of the Hong Kong business environment, theme park industries will have a good future. All in all, theme park industries in Hong Kong post a greater opportunity to be more recognised in the world.


 


Reference


Hong Kong Special Administrative Region of the People’s Republic of China 2005, Available at [http://www.info.gov.hk/eindex.htm]. Accessed on [08/05/06].


 


Hong Kong Disneyland 2006.  Available at [www.hongkongdisneyland.com]. Accessed on [08/05/06].


 


 


Hong Kong Ocean Park 2006.  Available at [www.oceanpark.com.hk]. Accessed on [08/05/06].


 


  


ASSIGNMENT 2: OCEAN PARK ANALYSIS


 


Introduction


            Theme park industry has become one of the most important industries in Hong Kong. The region has been able to realise that theme park industry opens the opportunity for Hong Kong to be recognised as a tourist destination in the world. One of the theme park industries operating in Hong Kong is the Ocean Park. Thus, the goal of this paper is to conduct an internal analysis for the Ocean Park. Herein, the discussion will give emphasis on the competitiveness of the company.  In addition, the discussion will include the determination of the strategies used by the company.


 


Company Background


            Ocean Park is one of the theme parks operating in Hong Kong which is wholly owned by the Hong Kong government. Before Hong Kong has become operational, Ocean Park has been considered as the only theme park developed in the region. Ocean Park is located between the Aberdeen and Repulse Bay. It is considered as the largest leisure paradise in Southeast Asia and one of the largest marine parks throughout the world, Ocean Park covers a total land area of over 200 acres and the park was constructed on both sides of the mountain. Herein, a cable car system connects the lowland and headland and gives spectacular views of South China Sea and Hong Kong.


            Ocean Park has been built because of the donations of the Royal Hong Kong Jockey Club and opened in January 10, 1977. The theme park was under the control of statutory board of Ocean Park Corporation.  The company provides an affordable marine animal education as well as entertainment. It is said that there are approximate 4.2million visitors in Ocean Park yearly.  Accordingly, there are 40 different rides and attractions in the park. The main attractions of Ocean Park are divided into three sectors:  The Marine land which composed of the mysterious underwater worlds, headland rides and the lowland gardens.


 


Resource Audit


This part of the analysis will discuss the assessment of the resources of the company. In this manner, the consideration of factor conditions for Ocean Park will be considered. Factor conditions refer to the corporation’s ability to turn the basic resources both natural and unnatural into a specialised advantage which will benefit the company’s performance and enhance competitive advantage. These resources include skilled or human resources, technological resources and natural resources. In lieu with Ocean Park the company has been able to create its own resources into more beneficial resources which help the company achieve its business objective and succeed in the market environment.  The skilled labour or human resources have been given a good management system that maintains the productivity and enhance the skills of such employees. The management of Ocean Park sees to it that all their employees have equal opportunities to grow and enhance its potential which benefits that company along the way.  Herein, trainings and career development are emphasised to make the workers feel that they are given important and all their hardships for the company will be worthy. 


In terms of natural resources, the company sees to it that the natural resources are not affected by their operations.  Specifically, the company make use of the natural resources as the main tourist attraction to market the company. As the company realised, that their business has a direct impact with the natural environment, Ocean Park sees to that they are able to manage the environment effectively. This can be seen in the imposed environmental management system of the Ocean Park.  This commitment includes the aim of reducing the impact of their operations on the environment by using the natural resources responsibly.


In accordance with the technological infrastructure, the company sees to it that they utilised technologically advanced facilities and equipment to give their target market quality services. The company uses information technology to make all their transaction organised and manageable.  In addition, they use state of the art technological facilities to maintain the smooth operation of the park.


 


Value Chain Analysis


In order to better understand the activities leading to competitive advantage; it can begin with generic value chain. Value chain is the framework for examining the strengths and weaknesses of an organization, and for using the results of this analysis to improve performance (Campbell et al, 2002). Porter (1980) described the activities of organization as the “value Chain”, which may be classified into primary activities (that create, transfer or support something of value) and support activities (that assist the primary activities by providing resources or infrastructure). The value chain is useful in outsourcing decision. Understanding the linkages between activities can lead to more optimal make-or-buy decision that can result in either a cost advantage or a differentiation advantage.


            The company is wholly owned by the Hong Kong government. This means that all activities of the company adhere to the decision of the government.  The operation of the company includes accommodation of a number of customers who visits the park.  The operation of the company to create value includes ticketing system and the management sees to it that the people in the park are not overcrowded. Moreover, the company also uses the capability of the information technology to handle all value chains strategically and systematically.  And lastly, it gives emphasis to its suppliers by valuing them through seminars and other informative activities.


 


Competitive Advantage


Winning business strategies are grounded in sustainable competitive advantage or position in the marketplace (Oliver, 1997). One of the sustainable competitive advantages of Ocean Park is how the management of the company do their business.  Guided by the so-called strategic management system, the leaders of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values and the value of diversity among the employees and staffs. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders. 


Another sustainable competitive advantage of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  The company also makes it sure that they motivate, inspire, coach, guide and support their staffs to realise the mission of the Ocean Park. Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages.


 


Core Competencies


            The company’s core competencies include the ability of the management to provide quality services among its customers. In addition, the continuous development and improvement made by the company to adhere to the changing needs of its target market can also be considered as one of the core competencies of Ocean Park. With this, the company tops the itinerary of many tourist of Hong Kong, especially those with children. Furthermore, the effective and efficient operational management used within the company can also be considered as one of the core competencies of Ocean Park.


 


Culture and Stakeholders Analysis


This type of analysis is used to recognize all stakeholders in a certain situation: in this case all stakeholders involved in Ocean Park will be analysed.  The stakeholder analysis is a method that the researcher can use to recognise and evaluate the significance of key people, groups of people, or institutions that might extensively persuade the success of Ocean Park.   The findings of the stakeholder analysis can provide early and essential data about who will be affected by the operation of Ocean Park positively or negatively, who can influence the failure or success of the company, which individuals, groups and agencies would be involved in the business operation and how and whose capacity needs to be built to enable those individuals or group of individuals to participate. Thus, the analysis of stakeholders will provide a foundation and structure fro the participatory planning and monitoring that will follow.


In this case, the key stakeholders of the company includes, the management of the company under the control of Ocean Park Corporation the employees and staffs, the customers (local residents and tourists), communities, government institutions and other shareholders, and rivals.  These stakeholders are one of the key factors why the Ocean Park has been able to sustain it competitive advantage. 


The management skills and abilities of the leaders of the company have made Ocean Park become the largest marine-oriented theme park in Asia and in the world. Further, the loyalty of the customers and the trust it gave to the company has helped the company maintain its competitiveness. The role of the staffs and employees are the ones that make the company continuously achieve the needs and demands of the customers.  Other stakeholders support can be considered as additional factor that makes the company what it is right now.


 


Financial Analysis


Financial Reporting Analysis has many factors to consider in order achieve the main objective. Measurement of different resources should be included. For many people, the expression measurement probably evokes more negative than positive responses. The words are associated with ideas like discipline, control, and accountability. They rekindle thoughts of pocket-protected technicians with clipboards gathering data to support time and motion studies. They suggest a lack of freedom, a stifling of creativity, an environment of work without fun. Interestingly, when things are going well, measurement may be welcome because it reinforces positive feelings, informs others of our positive accomplishments, and forms the basis for performance-based rewards.


In the case of Ocean Park, it can be said that the company has a strong financial performance. Although, the opening of Hong Kong Disneyland had a significant effect on the profit of the company, the management of Ocean Park are still able to maximise their financial resources for improving the Park to survive in their competition with Disneyland.


 


Company Strength & Weakness


Strengths


            As mentioned above, Ocean Park has been known as the largest and most competitive marine oriented and education theme park not only in Asia but in different parts of the world. This recognition can be attributed to the strengths of the company. One of its strength is its ability to anticipate the demands of the customers and its ability to provide high-quality services which in return make their customers become loyal of availing all their services. The company has been able to implement a strategy that will suit the needs of the company to provide quality services and to continually make the business become a tough competitor among its rival. 


In addition, one of the company’s strength is its strong environmental commitment.  The company imposed an environmental management system which includes community consultation, proactive planning, compliance, sustainable development and auditing for continuous development.  Furthermore, the continued focus on controlling costs and increasing efficiency can also be noted as one of Ocean Park’s strengths to maintain is annual profit growth.


                       


 Weaknesses


            Although the company encompasses much strength to be competitive in theme park industry, it also has some weaknesses.  One of the weaknesses of the company is the inability of the management of the company to anticipate the challenges brought by the opening of Hong Kong Disneyland which affects their sales.  In addition, the company is also lacking the capacity to manage carefully their business because of the large entities and separate units of the business.  The company is faced with different unsolved issues because of lack of strategic decision making.  This weaknesses, if not given attention may lead failure for the company to achieve its goal of providing quality products and services


 


Conclusion/Recommendation


All in all, it can be said that the management of the company has been able to utilise all its resources into an asset which makes them gain competitive advantage in the theme park industry and tourism industry worldwide. It shows that the ability of the management to focus on their business strategy make Ocean Part a strong competitor in the marketplace. In order for the company to maximise its strengths and minimise or totally eliminate its weaknesses, the company must be able to use or impose a strategic management system that will help them enhance their business operations


 


References/Bibliography


Campbell, D, Evans, N and Stonehouse, G 2002. Strategic Management for Travel and Tourism. UK: Butterworth-Heinemann.


 


Ocean Park 2006.  Available at [www. oceanpark.com.hk]. Accessed on [08/05/06].


 


Oliver, C 1997, “Sustainable competitive advantage: Combining institutional and resource-Based views.” Strategic Management Journal 18(9): 697-713.


 


Porter, ME 1980.  Competitive Strategy. Free Press.


 


 


 


 



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