Walt Disney Parks Resorts Management Strategy Essay Example

Walt Disney Parks Resorts Management Strategy Essay Example Walt Disney Parks Resorts Management Strategy Paper Walt Disney Parks Resorts Management Strategy Paper Walt Disney Parks and Resorts Management Strategy Policy For my final paper I chose to discuss The Walt Disney Company. Since the Company is so large and made up of four primary business segments, I decided to focus on one particular segment: Parks and Resorts. This segment is composed of the theme parks, cruise-line, and vacation club resorts. The Walt Disney Company Parks and Resorts strive to be the leader in innovative and creative family entertainment in the world. The mission of The Walt Disney Company Parks and Resorts is to provide â€Å"magical† experiences to all guests that visit our Parks and Resorts. We use technology, innovation, and imagination to create a unique entertainment experience comparable to nothing else. Our core values are: -Provide world-class customer service based on the Disney Service Model -Make sure every guest that comes to our Parks and Resorts has a â€Å"magical† experience -Use our rich culture, traditions, and heritage to differentiate our products -Create new entertainment experiences using our innovative technology and storytelling -To make happiness and dreams come true The Walt Disney Company Parks and Resorts is apart the Amusement Park Industry. This industry began as early as 1600 and really started flourishing in the mid 1900’s. The big competitors in the market are Six Flags Entertainment Corp, Universal Studios, Cedar Fair Entertainment Company, SeaWorld Parks Entertainment, and the Herschend Family Entertainment Corporation. The companies that are not in the industry are the traveling carnivals and fairs. This is because they are only in one place for a short period of time. They pose very little threat and/or competition to the amusement park industry. The demographics of the macro-environment are very broad. Since the amusement park industry is geared towards family entertainment, both genders and all ages are present. Many different races are also involved because there are parks in many different countries. Theme parks are now handicap accommodating too. The social forces vary depending on which area the theme park is in. Even in the United States, Disneyworld (Florida) and Disneyland (California) vary in there social forces. Cast Members (Disney’s term for employees) in CA are trained to be friendly and greet every guest, while in FL they are trained to only greet guests who seek them out. The political, legal, and regulatory factors again, vary from theme park to theme park. The parks in the United States have more restrictions than say those of Hong Kong, China. In the U. S, minors (age 15-17) are only allowed to work 20 hours a week. In Hong Kong, young persons (ages 15-17) are allowed to work up to 48 hours a week. Regulatory factors such as this differ in each region. The Walt Disney Company Parks and Resorts has quite an extreme variety of natural environments. The weather in Florida for example can get in the 100’s regularly whereas in California it can get as cold as the low 50’s. These weather conditions actually are a big factor in guests determining which park they want to visit. Technology seems to stay consistent between most of the theme parks. In fact, many of the theme parks have some of the same rides at their parks. The global forces actually can create threats to the company. The addition of the newest theme park to the company, Shanghai Disney, took several years to become accepted. This has been common throughout the duration of The Walt Disney Company. Many people vote against a new theme park or resort because of the crowds that it will attract and the amount of space it will occupy. General economic conditions vary in each region. The U. S. economic decrease actually ended up boosting the attendance at the theme parks. This is because families weren’t able to afford big vacations to Hawaii and Europe but they still wanted to have a vacation, so they went to a Disney park for a day or two because it was more affordable. The macro-environment plays a big role for the Parks and Resorts. Since the company is global and has parks in different countries, all of these macro-environment components vary in each country/region. This can be very difficult to manage since decisions about the company have to be based on each individual theme park. Some of these components, such as natural environment, play a huge role in park attendance. In this industry, park attendance is the key factor to success. The Walt Disney Company Parks and Resorts faces many competitive forces. The first of these is competition from rival sellers. Although Disney does offer a truly unique entertainment experience, people do enjoy going to other theme parks. Six Flags for example is known for their record breaking rollercoasters. Disney doesn’t offer a lot of roller coasters, so people who want that thrill are likely to go to Six Flags over a Disney park. Universal Studios focuses on themed rides. Although Disney’s rides are themed, it’s not to the extent that Universal does. The thing that sets Disney apart over the other competitors is not only its storytelling but its superb guest satisfaction. In the amusement park industry, there is little threat of new entrants. A theme parks initial startup costs are in the millions (roller coasters on average cost about $10-20 million alone). The entry to this market is also difficult because you have to find a significant amount of space to utilize if you plan on growing. Also, technology changes frequently and older rides are replaced with newer rides, so competing in the market is an ever-changing, ongoing process. There aren’t a whole lot of substitute products in this market; theme parks are a very unique industry. If you are looking for that rich family experience, going to a zoo or museum might give somewhat of a similar family experience. If you are looking for a thrill, sky-diving and bungee jumping are some of the alternatives. Overall though, you really can’t get the kind of experience you get from a theme park anywhere else. Suppliers of Disney’s Parks and Resorts don’t have a lot of bargaining power. For one, all of Disney’s rides, shops, and stores are designed and manufactured by Walt Disney Imagineering (owned and operated by The Walt Disney Company). They design every detail in the parks down to the type of chair to use in a particular restaurant. Suppliers of food and beverage have somewhat of a bargaining power. For example, if Coke is the only cola beverage served throughout the parks, if coke wants to charge Disney more for their product, Disney will most likely have to accept because it would be extremely costly to replace Coke with Pepsi throughout all of its parts. Buyers (guests) also have little bargaining power. Ticket prices are non-negotiable, and in the park, if guests want to eat or drink, they have to buy the in-park food since they have nowhere else to get food. If a guest has a bad experience or upset about something, Disney will usually give them some sort of compensation such as a front of the line pass. This lets the buyer feel like they have power when in reality, a front of the line pass costs nothing for Disney accept the cost of the paper, but is very beneficial to an angry guest. Out of all of the competitive forces, the one that is the biggest threat is the competition from rivals. Each different theme park competitor offers its own style of entertainment. Disney offers a unique â€Å"magical† family entertainment experience while Six Flags offers big thrilling roller coasters. I think that the market balances out because sometimes you might want a thrilling ride so you go to Six Flags but when you want that family entertainment you would go to a Disney park. There are six main competing firms in the amusement park industry. After creating a strategic group map that compared ticket price and attendance, I was able to see which firms are competing rivals. Disney Parks and Resorts is by far the leader in the industry and has no direct rivals. Universal Studios and SeaWorld Parks Entertainment are close rivals and form a strategic group. Cedar Fair Entertainment Company, Six Flags Corporation, and Herschend Family Entertainment are all in a strategic group. They attract around the same amount of visitors each year as Universal and SeaWorld, but have significantly lower ticket prices. Universal and SeaWorld earn a small increase in revenues over Cedar Fair, Six Flags, and Herschend.