Ocean Park: Business Analysis
1. Introduction
Tourism is among the most important business sector in Hong Kong. With its multitude of shopping malls, theme parks and tourist sites, the tourism sector is indeed considered by the local government as a major economic contributor; for this reason, efforts have been continuously done in order to enhance its main tourist spots. Ocean Park, a main theme park in the country, is one of the most sought-after sites of both locals and foreign visitors. The theme park is found in between Aberdeen and Repulse Bay, and is currently recognized as one of the largest leisure sites in Southeast Asia as well as the one of largest marine parks in the world. Aside from these, the park also offers various rides, sceneries, activities and quality services that park-goers would enjoy. Despite being a popular theme park, the business is also encountering a few challenges that must be addressed strategically. In this business analysis, the environment and strategies of the company will be analyzed through the use of different analytical tools.
2. Environmental Analysis (SWOT)
- Strengths
Being a major player in Hong Kong’s theme park industry, Ocean Park has a number of essential strengths that make it a highly competitive company. One of which is the brand name portrayed by the company; through this brand identity, visitors, including those abroad, recognize what Ocean Park has to offer. Through its global image, the company acquires access to foreign markets. The diversity of its clientele is then another essential strength of the business. Having diverse customers made Ocean Park a globally-known brand. Moreover, this supports the company’s profitability. The theme park has been established in 1977; with years of successful operation, the company has grown accustomed to various business challenges. Its years of experience had then served as one of its strengths as this enables it to predict and understand the needs of its customers. Through this strength, the company was able to employ various strategies and introduce quality services that meet the customers’ standards. One of these strategies was product/service diversification. Ocean Park not only offers entertainment but education as well; specifically, the park also promotes marine knowledge and awareness through mini-lectures and seminars. Aside from diversity, the environmental commitment involved in its strategies is also another strength that helps in attracting more customers.
- Weaknesses
One of the major weakness of the company is it lack of effective and strategic business management. This weakness has been apparent as the rise of strong competitors, such as Hong Kong Disneyland, had greatly affected the company. Despite its strong financial performance, the company has gone through considerable profit losses since the opening of the new theme park.
- Opportunities
The tourism sector of Hong Kong has been down in 1997 mainly due to the SARS outbreak. However, the latter part of 1998 had shown signs of tourism revival and has continued up to the present. This progress has been emphasized by the growing occupancy rates in local hotels, the increasing number of mainland Chinese visitors as well as the rising activeness of the Hong Kong Tourism Authority which has effectively organized various overseas tourism campaigns. The tourist sector has also been revived through the increased number of business travelers entering the country; moreover, leisure travel has also recovered through the increased availability of inexpensive tour packages. These outcomes then stress the continuing growth of the country’s tourist sector. Companies, such as Ocean Park, then have the opportunity to invest on major developments and strategies that would optimize the influx of foreign visitors. Ocean Park also has the opportunity to use its ability to acquire pertinent consumer data, which allows it to develop products/services that are based on consumer needs and preferences. By developing product development plans with its skilled staff, the company can make the most of the opportunity to produce salable and original products.
- Threats
The tourist sector in Hong Kong is a highly competitive industry. This is mainly due to the number of theme parks available in the country. As most of these competing parks offer similar services and products, the competition level becomes even stricter. In the case of Ocean Park, its main competitor is the newly-established Hong Kong Disneyland. Considering that the Disney brand presents a strong impact to customers worldwide, the operations of Ocean Park is then greatly threatened by this company. Ocean Park should then develop strategies that could overcome this essential threat.
3. EVR Congurance
- Environment
Political
The Hong Kong government is very much supportive of the country’s tourist sector; most theme parks in Hong Kong in fact have some form of affiliation to the government. Ocean Park for instance, is owned by the HK SAR administration; the new Hong Kong Disneyland is a business venture between Walt Disney and the HK government. These examples then indicate the significant role of the political sector in the operations of these businesses. Aside from taking part of the management of these amusement parks, the local government also realizes the contribution of the sector to the economy; thus, it has been active in identifying various possibilities that would facilitate the establishment of more new theme parks in Hong Kong.
Economical
After the SARS issue, the economic situation of Hong Kong has recovered and has now grown stable and strong. With the progressing performance of the country’s economy, the tourist sector likely expects the influx of more and more foreign visitors brought about by the rise of business and tourist travelers. As the tourism sector is considered as one of the most essential economic contributors of Hong Kong, companies operating within the industry, including theme park operators, would obtain support from the local government. This environmental factor then implies that theme parks will be supported by both political support as well as current economic stability.
Socio-Cultural
Hong Kong has been recognized as one of the major tourist hubs in the world. With the presence of several nationalities in the country, it can be said that the country’s socio-cultural aspect is rich and diverse. With socio-cultural diversity, theme park operators can then expect the influx of foreign visitors who are also interest or accustomed to leisure and recreational activities. The presence of foreigners in the country also increases the awareness of the locals to new and different forms of amusement park entertainment. This then allow theme park operators to attract both local and foreign park-goers.
Technological
The presence of high end technology in Hong Kong allowed the establishment of more theme parks in the country as well as the introduction of new rides and related theme park activities. The presence of technology also supported the marketing efforts of the business operators, enabling them to promote their services locally and globally. In addition, as majority of the locals and foreigners visiting the country are exposed to advance technology, park-goers in general are interested to try innovative activities and services offered by theme parks. The openness of the market to technology then helps theme park operators in attracting more visitors.
- Value
Ocean Park is operating within a highly competitive industry, where strong rivals are also offering similar services and employing similar strategies. This then threatens the profitability of the company. Nonetheless, Ocean Park has access to various opportunities including the continuous growth of the tourism sector as well as its access to essential business resources such as workforce, technology and target markets.
- Resources
As a major theme park in Hong Kong, Ocean Park is able to serve its diverse clientele through strong brand identity. Through technology, the company is able to promote its services locally and abroad. Its years of successful operations also allowed it to acquire highly competent and skilled staff; its workforce then helps the company to maintain effective operations and develop new strategies that would meet changing customer trends. Despite these strengths, the company would have to consider its downsides so as to continuously progress and develop. Specifically, it would to train its staff to become better strategic players and planners. This would help in overcoming major competitors and buffering the effects of competition.
4. 5 P’s
In this section, the strategies of the Ocean Park management will be assessed through the 5 P’s of strategy ( 1998).
- Plan
Ocean Park develops its business as a plan as they are developed with intended purposes. One example is the strategic plan of Ocean Park to make an investment HK .5 billion for business expansion. The main objective of this strategy is to ensure that Ocean Park would sustain its competitiveness in the market. From this example, it is clear that making strategies as a plan involves the development of purposeful business activities. On this part however, the main flaw of the company is its immediacy of its strategic actions. While it has developed the strategies purposefully, time is also essential in order to prevent the negative impacts of certain business issues and challenges.
- Ploy
The business strategies of Ocean Park are all directed to specific objectives; in this case, the company lacks strategies that can serve as a ploy, or those that could outwit competitors. By ploys, the strategic moves of the company will be less predictable; hence, other companies will not be able to anticipate the effect or copy the strategy. Nonetheless, the company uses its competitive advantages and resources such as its workforce and leaders in order to outdo the competition.
- Patterns of Behavior
From the business and people strategies developed and implemented by the Ocean Park management, it can be deciphered that the strategic pattern of its business activities are influenced by quality performance and customer-orientation.
- Position
The position of the company within the tourism and theme park industry is high; this evaluation is after the consideration of the investment the company makes in order to sustain its competitiveness. As its market position falls along with other major theme parks in the local and international level, the strategies of the company are then developed in accordance to its current position. By doing so, the company is able to achieve its expected business outcome or developments.
- Perspective
The perspective aspect of Ocean Park’s strategies is influenced by the pattern factor. Specifically, the strategies of the company are all directed to quality and satisfaction. This perspective of the company is then established among the staff by means of the value the company gives them. By motivating and enhancing its staff, Ocean Park employees are then able to employ the same treatment to the customers. This strategy helps the company to build a people-oriented working environment; this in turn enables Ocean Park to be committed to the people they serve.
5. Capabilities
- Unique Resources
(1997) noted that the company’s unique resources or competitive advantages are one of the winning essentials of business operations. In Ocean Park, these include the tangible and intangible resources. One of the company’s tangible resources is its people, which include its managers and leaders. Through efficient and skilled staff, the company is able to deliver the best to the customers as well as promote the park effectively worldwide. The programs and strategies developed by the company to shape its staff according to the standards of Ocean Park are also important tangible resources. The values of the company serve as the main intangible resource of Ocean Park. In particular, the company openly values its relation with both its internal and external customers. By valuing its staff, the company is able to obtain highly contributory and productive staff members. The value given to the staff is then passed on to how they deliver their services. By building a people-oriented company, Ocean Park is able to acquire both loyal employees and customers.
- Internal Competencies (Value Chain)
The value chain analysis is done for assessing the resources and capabilities of a company, primarily how this company generates its competitive advantage. This summarizes the chain of activities that takes place in the company, starting from product development to its distribution to the consumers (1980). Through this tool, the company is able to evaluate its operational performance ( 2002). Below is the value chain model for Ocean Park (Fig. 1):
Figure 1: Value Chain Model for CCM
Product Development. In this stage, Ocean Park focuses its resources to support the development of its entertainment activities and services for the clients or park-goers. At this point of the value chain, the company is determining which service will suit or attract the interest of the customers and how these planned services will be marketed.
Product Evaluation. Certain expenses are required in this value chain link, primarily due to electrical facilities, performance assessment and preparation of production materials. Here, the main aim of the company is to ensure the quality and security of the products or services that they intend to offer to the public. Through this value chain link, the company is able to produce the best for its target markets.
Marketing. A significant expenditure is acquired in this value chain link. In Ocean Park’s case, the production of the park catalog as well as the maintenance and updating of the company website are the main marketing factors. Printed and broadcasted advertisements are also done at this point so as to market the theme park to the rest of the world.
Distribution. This value chain link represents how the company deliver the products and services it has advertised. Thus, for this the main component is the people or staff who will deliver the park’s services. To ensure that park-goers enjoy their stay to Ocean Park, the company management employ the most efficient staff as well as subject its hired employees to sufficient training.
Retailing. This aspect covers the means of the park in order to acquire more patrons of their amusement rides and entertainment activities. For this, the company collaborates with travel agencies and offers possible Hong Kong tour packages that would include a trip to Ocean Park.
- External Competencies (Porter’s Five Forces)
To understand the external competencies of Ocean Park, (1985) five forces model was used:
Rivalry
The level of rivalry within Ocean Park’s environment is high. This is mainly due to the presence of several competing companies of similar sizes. Moreover, rivalry level increases because of product and service differentiation inadequacy. The competitors of Ocean Park, such as Hong Kong Disneyland, are also very aggressive in making fresh moves so as to increase sales and market share. Aside from this, these companies are also targeting similar market segments, making the level of rivalry even higher.
Entrants
For Ocean Park, the entrant factor can be considered as low due to a number of reasons. One of which is the fact that operating such business demands a considerable capital. A great deal of capital will not only be necessary for putting up the business itself but also in acquiring the best professionals and technology for product development as well as marketing. Moreover, time is necessary for the company in order for it to flourish; Ocean Park started in 1977 and spent years of operation before it became a major company. Aside from capital and time, entering the same business and competing with Ocean Park can be difficult due to customer loyalty and strong brand preference factors.
Buyers
This aspect of Porter’s five forces pertains to the power of the buyers over the manufacturer or the company. In the case of Ocean Park, the buyer power is high. This assessment is based on the nature of buyer power sources surrounding the company. For instance, the buyer power for Ocean Park increases as buyer concentration is high. This power is brought about by the presence of product/service substitutes; as buyers have several choices for recreation, customers have greater control on which park to go to. This then suggests that in order for Ocean Park to gather as much customers, customer-oriented strategies must be employed.
Suppliers
Considering that Ocean Park is a major company, other suppliers will be very willing to supply entertainment goods and supplies to a large company. However, the company should also note that healthy relation with suppliers is as important as those with its customers. So as not to affect the quality and security of its products and services, it is imperative that the company refrain from changing one supplier to the next.
Substitutes
As mentioned, the tourism and theme park industry is very competitive; Ocean Park is operating in a business environment where several major companies are producing and offering similar products or services. In addition, the target markets of these companies are similar as well. The consumers then have several product options to choose from, making the level of substitutes high for Ocean Park.
6. Competencies
(2007) have stated that strategies are essential to business success; in order for these strategies to work, companies should make the most of their available resources. In Ocean Park’s case, the company has a number of strengths and resources that were strategically utilized. For instance, as the company has the financial resources to support business expansion, the company they see it fit to use this to achieve even greater product and service diversity. This will help in achieving more customers and achieve higher levels of customer satisfaction. The company also invests on training its staff, which is also one of its major competencies. Through training, motivation and empowerment, the company is able to build employees who can contribute to Ocean Park’s continuous success.
7. Conclusion
Through the business analysis tools used in the discussion, it became clear that Ocean Park has been able to succeed in Hong Kong’s theme park industry through its distinct strengths and resources. By means of using these competitive advantages, which include people, brand identity, corporate culture, business plans and financial resources, the company is able to surpass most business challenges. From the analysis, one of the company’s strong points is its ability to optimize its competitive advantages. However, with the rise of strong competitors, the company has encountered significant losses both in market and sales. It is then essential that the company develops appropriate and timely strategies that would counter the effects of strong competition. It is also necessary for the company to develop and implement business strategies whose outcomes are less predictable; in this way, it will be easy for the company to outdo other competing companies. In conclusion, strategies are made not only for the purpose of developing current operations, but most importantly, they must be created to surpass unpredictable business trials.
Credit:ivythesis.typepad.com
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