Walt Disney Corporation has a loyal base of consumers that is long established since its founding in the 1920s. Today, Walt Disney Company comprises over 5 distinct business components including Media Networks, Studio Entertainment, Interactive, Parks and Resorts and Consumer Products. Constantly emphasizing a dedication towards creating timely entertainment for the whole family, Walt Disney passed on a legacy towards maintaining fantasy, a legacy which its theme parks continue to be known. This papers considers the history and place of the amusement part industry via a situation analysis. It specifically considers Disney by identifying its strengths, weaknesses, opportunities and threats via SWOT analysis. It then looks at Disney's current positioning strategy within the theme park industry with respect to its brand strategy. In the amusement park industry today, there are 5 external drivers: consumer spending, domestic trips by US residents, inbound trips by non-US residents, and the number of adolescents (ages 10-19) and time spent on sports and leisure (IBIS 2015). The economic downturn of 2008 hit the amusement park industry in the United States in a severe way. Time and money spent on leisure and travel decreased significantly. However, by 2010 income levels as well as consumer spending had began to bounce back. Job expansion led to increases in disposable income. Time spent on leisure activities in expected to decrease from 5.28 to to 5.26 hours per day between 2014 and 2019 (IBIS 2015), amusement park industry will be relatively sheltered from this effect, with expected revenues rising at growth rate of 1.8% estimated annually to $16.8 billion by 2019 (IBIS 2015). Industry employment has also risen to 2.3% per annum in the five years up to 2014 (IBIS 2015).Industry growth has resulted in large investments by companies such as Walt Disney towards quality improvements. Between 2009 and 2013, Disney invested over 2.4 billion dollars into its theme parks. Universal Parks and Resorts invested $1.2 billion in its own domestic offerings (IBIS 2015). Chairman Thomas Staggs has stated publicly that improvements and expansions will continue for the next several years (Ting 2012). In 2012, Disney remodeled its amusement park in California (California Adventure), adding a themed "Cars Land" of 12 aces (Ting 2012). In May 2014, Disney World's Magic Kingdom and Disneyland's California Adventure raised ticket prices to more than double the price of a ticket in 2003 to $96 for persons 10 years or older (Investors 2014). These increases and investments reflect a healthful state of the industry. Amusement park industry can be a hotbed for legal activity, which may be expected given the business. Some parks such as Six Flags deal with frequent lawsuits regarding safety measures, others may face alternative issues. Most of the industry has proven to be compliant with regulation, there is some pressure for greater federal oversight (Noland 2013). ASTM International represents a standard writing entity which is independent and includes government regulators, attraction operators, and consumer advocates in pursuits of industry standards regarding testing, design, manufacture, operation, inspection and quality assurance. The regulations decided by ASTM International are generally accepted as the main institution which sets standards for amusement park industry members (Noland 2013). Many parks follow ASTM standards, official legislature regarding amusement park safety is frequently administered at the state level (Noland 2013). The IAAPA states that 44 out of 50 states regulate parks (IAAPA 2012). Amusement parks, additionally, must comply with labor regulations including the Fair Labor Standards Act, as well as the Occupational Health and Safety Administration regulations (IBIS 2015). Fair Labor Standards Act sets pay requirements for minimum wages and overtime (DOL 2014). Occupational Health Safety Administration operates through the United States Department of Labor in regulation of health and safety conditions (DOL 2014). Water parks generate new and additional requirements for health and safety. The Virginia Graeme Baker Pool and Spa Safety Act, for example was enacted following a Consumer Product Safety Commission report on entrapment of small children in pools by suction. (2015). Technology affects the amusement park industry. Amusement parks have a heavy interest in technological adoption in order to bring a prime customer experience. Visitors demand higher, faster thrills and rides and this creates significant costs in capital to amusement parks (IBIS 2015). Amusement parks also seek to improve technological advances across other parts of the visitor experience such as waiting times, ticket purchasing and food production (IBIS 2015). Disney developed the MyMagic+ Program recently which entails guests wearing a "Magic Band" which contains information like room number and credit card information. Parks and many restaurants have Magic Band touch points which allow guests to enter PIN number to pay for meals, enter hotel rooms and even get faster entrance to rides (Fast Company 2014). Disney also developed a My Experience app, enabling guests to track character appearances at different parks. New technologies such as these have produced results. Disney reports that "Magic Band+" increased participation by guests over regular credit card use by 50%, resulting in wait times at park entry points by approximately 25% (Fast Company 2014). Smartphone apps are increasingly popular for amusement park industry members, showing wait times, maps and nearby restaurants (Anderson 2011). Universal has its own Wait Times app for Universal Studies. Disney's Mobile Magic uses GPS for locating characters and attractions. Amusement parks also wish to improve cost allocation via technology. Future investment concerns include improving technology infrastructure to lower energy use and improve HVAC systems (IBIS 2015). In the amusement park industry, the target consumer typically is children and teens plus families. Because of this, there is a tendency for the industry to be on the receiving end of protective criticism from families and other advocacy group. Also, the industry is particularly sensitive to economic upturns and downturns as visits are often taken during vacation time. Consumer spending, travel and weather are all factors which may affect the industry (IBIS 2015). Industry DynamicsThe industry for amusement parks has a high level of concentration, with over 400 enterprises operating. Large companies are expected to advance their growth via acquisition of smaller companies (IBIS 2015). Barriers to entry remain high; 78% of 2014 industry revenue was generated by only 4 companies (IBIS 2015). Capital investment required for entry is significantly high, and the market is in a mature stage of life cycle. In 2016, the amusement park industry is still growing, however. Sales in the industry are projected for 15.4 billion, seeing 4% growth over the last 5 years (IBIS 2015). Despite the market being mature, room for expansion and development still exists --- especially in the segment for smaller parks, as well as in states that do not have amusement park presence as well as in international markets. Walt Disney Company The Walt Disney Company began in 1923 under the name of The Disney Brothers' Studio with the mission of providing whole-family quality entertainment (Disney 2015). Today, Disney comprises 5 total product portfolio sections including Walt Disney Studio, Disney Consumer Products, Media Networks, Parks and Resorts and Disney Interactive (Disney 2015). Under ownership in Media Networks are Disney/ABC Television Group, ABC Entertainment Group, ESPN, ABC Family, ABC News, Disney Channels Worldwide and ABC Owned Television Stations Group. Marketing research, sales, broadcasting and communications are the responsibilities of this segment of the business (Disney 2015). Walt Disney Studios includes Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Touchstone Pictures, Disney Theatrical Group and Disneynature, Walt Disney Studios Motion Pictures and Disney Music Group. The base from which Disney started is Walt Disney Studios, responsible for the magic of Disney in the movies loved by generations (Disney 2015). Consumer Products includes Disney Publishing Worldwise, the Disney Store and Disney Licensing and works in merchandising globally. Apparel, toys, magazines, digital products and books as well as the The Disney Store brick and mortar and e-business retain chain have operating presence in Europe, Japan and North American and over 350 stores across the globe (Disney 2015). Disney Interactive works in producing gaming technologies featuring the great characters. Here we focus on Disney's North American activities in the amusement park industry, namely Walt Disney World Resort in Florida and Disneyland Resort in California. Disneyland was the original amusement park for Walk Disney and opened in 1955. Walt Disney World opened in 1971, and remains today the highest frequented tourism attraction in North America (Disney 2015)SWOT Analysis Strengths. The brand name of Disney is among the strongest. It is rare to find an average civilian who does not know about Disney in some fashion. The company has an uncanny ability to maintain consistent strong revenue streams across all segments. In 2013, the most profitable segment was in the media networks, accounting for 45.2% of total revenues. Parks and resorts claimed 31%, consumer products claimed 8%, studio entertainment claimed 13.3%, interactive claimed 2.4% (Marketline 2014). Disney's widely diverse portfolio points to the fact that different market segments feature strong selling points individually (Marketline 2014). In other words, when a new movie is offered through its studio segment, it can concurrently retail merchandise at its retail store and then create a theme park attraction. Disney also features some of the most loyal customer bases in the world. The Disney Institute has been created by the Disney Corporation as a training ground to help other businesses adopt Disney's best practices approach to customer retention (Jones 2013). Weaknesses. Nearly 75.5% of revenue in 2014 came from Disney's operations in US and Canada (Marketline 2014). Being locationally dependent on revenues in a single market invites vulnerability to economic fluctuations. A bust cycle like 2008 would likely hit Disney hard once again. Opportunities. Disney's weaknesses exists as an opportunity for foreign expansion and to focus on generating revenues in foreign markets. While Disney already is in France with some occupancy, it is interested in developing in India and China in the future. Currently, a resort is being built in Shanghai (Marketline 2014). Disney teamed with Viacom in 2013 for distribution of Disney networks in Shanghai. In the industry for emerging gaming, Disney has done quite well by developing games and other gaming products. In 2013, revenue grew to $799 million (Marketline 2014). Disney has focused in recent years on amusement park expansion. Disney's California Adventure addition of Cars Land included a 12 acre add on as well as a re-styling to recapture a 1950s Americana setting (Ting 2012). Disney is famous for its two North American theme parks. Replication in other locations is an opportunity for further profits. Alternatively, further expansion in these two locations poses little risk and great benefit, as it has built up an amazing presence and can only improve. Threats. Because the majority of revenue is tied to North America, Disney may be affected by consumer target market shifts in demand. If Disney does not meet the specific demands of consumer wants, Disney will lose its heavy market leeway. Its success depends very heavily on the expectations and preferences of consumers that can unpredictably change. Disney may hedge against this threat by expansive marketing and consumer research.Recommendations
References
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