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Environment And Strategy: Hong Kong Ocean Park

This report is approximately Ocean Area of Hong Kong - one of the largest amusement ocean park in the Orient and even in the planet. Located in financial center of Southeast China this park - add some info about playground!!

In this record we will cover such subject as strategy ideas of Ocean Playground, external and inside environment of company and its corporate, business-level and international strategy. On platform of data accumulated we'll give our suggestion and advice to CEO and Panel of Ocean Recreation area of Hong Kong about Park's strategy to the next a decade (from 2005 to 2015).

The main aim of this record is to provide in-depth tactical research to CEO and Panel users. Thus, this work is targeted on problems, opportunities and hazards of organisation, its culture and economic aspects, strengths and weaknesses of company, center competency of sea park in order to assist in improving it in expectation of entrance of Hong Kong Disneyland.

Strategy concepts and vocabulary

-Mission (Strategic purpose, not given)

Ocean Park provides all friends with memorable encounters that incorporate entertainment and education, while motivating life long learning and conservation advocacy. Our aim is to keep a healthy financial position, while striving to provide the highest benchmarks of safety, animal health care, products and guest service.

http://www. oceanpark. com. hk/html/en/footer/corporate-information/vision. html

-create all activities for perfect family holiday

-increase involvements of site visitors in environmental issues and lives of animals

-Goals and targets to fulfill its mission

"Boost the number of gross annual tourists from four million in 2004 to five million by 2010"

"To make a 0, 5 % contribution to Hong Kong's gross local product (GDP) this year 2010" (site 7)

-Vision (More given)

http://www. oceanpark. com. hk/html/en/footer/corporate-information/vision. html

Ocean Recreation area aspires to be a world head in providing excellent guest experiences in a theme park environment joining people who have nature

- Become number one marine-based park for each family not only from Hong-Kong but also from mainland China.

- Being main attraction for those holidaymakers, who visit Hong-Kong

-What performance steps would you utilize to look for the success of Ocean Park?

-It is the hometown favorite. It had been a long-time favorite of several years ((it's been operated to get more 28 years). Many local people were sympathetic to Sea Park. People who had visited the recreation area as children were now delivering their own children to visit the recreation area. Its reputation even long into mainland China. It had become a fixture of Hong Kong's ethnic history. (p. 5)

-The number of site visitors in 2004 is 4 m of people (with daily maximum capacity 35, 000 people).

-Total income in 2004 was 536, 2 HK$ m checking to 428, 3 HK$ m in 2003, surplus for 2004 12 months was 95, 7 HK$ m contrasting to deficit 4, 1 HK$ m in 2003.

- recognizability of new brand (Whiskers became a household name in Hong Kong)

-Who are the various stakeholders in Sea Park group (how might they impact on its goal and mission)?

Stakeholders, who help achieve park's goal and objective:

Hong Kong federal government, Home Affairs Bureau and the Travel and leisure Plank, employees of Sea Park firm, its tourists (customers).

Interfere with attaining park's goal and objective:

Activist organizations (certain environmental groups and animal privileges activists) - forbid of buying and transportation amazing animals to park, trade organizations and unions (bus companies and taxi drivers) - forbid in creating a mass transit railway (MTR), competition - get back market talk about.

External Environment

-Conduct a PESTEL examination for Ocean Recreation area, identify the main element driving forces for change facing Sea Park; Get ranking key driving forces predicated on their predictability and potential effect on Ocean Recreation area, then develop some scenarios and identify implications of the scenarios for Sea Park.

PESTEL:

Political:

Government support

Improving marriage between Hong Kong and Mainland China

Promotion of tourism

the easiness of the restrictions and campaign of the free travel of China in 2003 that helped to inject a new life to the tourism industry of Hong Kong

environmental law

Economic:

Growth and development of the global leisure park industry

Disneyland's arrival

Increasing variety of mainland visitors

Increasing expectations of residing in midland China

Raise and spend HK$5. 55 billion

Social:

Major events and activities (peak times and holiday themes or templates: Chinese language New Year, Easter Holiday, Summer Vacation, Halloween and Christmas)

Media, advertisement and publicity, required for these special events

Change of demographic (Inhabitants growth rate, age group circulation, size of families)

Increasing the cost of labor and much more guarantees for employees

Negative have an effect on of Outbreak of Severe Acute Respiratory Symptoms (SARS) outcome

Technological:

Development of the amusement machinery industry

Increasing attractiveness of new technologies for consumers (internet, mobile, digital camera)

Amortization of area equipment

Developing of new transportation system (for example, a mass transit railway (MTR))

Research and development activities (creating of new area amusement)

Environmental:

Opposition from certain environmental teams about the importation of wildlife to Sea Park

Expenses on maintenance of incredible animals

Protests of animal privileges activists against relocation of animals

Climate change (rainwater season in planting season, hot in warmer summer months, typhoons in warmer summer months)

Legal:

Approval of Town Planning Panel for hotel, Legislative Council for MTR place.

Restrictions on mergers

Employment laws

Key driving forces and their positioning :

1)Global changing in tourism for Hong-Kong and Asia-Pacific region (development of tourism in region)

2)Raise and spend HK$5. 55 billion from private and government loans to revamp park's well-worn product line (agreement of development plan)

3)Disneyland's arrival - worldwide success of main competitor-Disneyland, arriving to Hong Kong (Disney's success or failing)

Binary desk of situations for Sea Park's key drivers (in decreasing order of the impact on area):

Development of tourism in region

Approval of development plan

Disney's failure

Scenario

+

+

+

Successful scenario

+

+

-

+

-

+

Middle scenario

+

-

-

-

+

+

-

+

-

-

-

+

Failure scenario

-

-

-

-Define Ocean Park's industry and conduct a five forces examination: Which will be the dominant forces on the market? How may the five pushes change? What exactly are the actual dynamics that happen to be driving a car these five pushes, and how may the five makes change? What are the impacts on key opponents and on Ocean Park? What can be done to affect the impact of the five forces?

Five forces analysis for amusement park industry:

1) Risk of New Entry

In conditions of the leisure playground industry, the entry hurdle is high because of the need to get massive amount money (for playground equipment, recruiting maintenance), lots of time necessary for park's planning, construction, development and launching, a lot of licenses and legalization required (safety, sanitary, security etc. ). As well as the amusement park required land for a complete level development. This factor is important because Hong Kong has a higher land price market.

Re-write in own words!!!!!

2) Risk of Rivalry:

It is important to consider that with insufficient differentiation, tourists' choice will greatly over the purchase price and service, thus causes pressure for the powerful price and service competition. Because of high risk of rivalry, Ocean Park is implementing different plans and activities such as redevelopment and advantages of new destinations in order to catch the attention of the site visitors and distinguish themselves from rivals. A couple of no competitors with a similar range of products. Disney's introduction is only expected.

Re-write in own words!!!!!

3) Threat of Substitution:

(where these details from?? - I like this aspect!))

The main risk of substitution is Hong Kong Disneyland & Wetland Playground, a fresh international theme recreation area and an educational park (Appendix 2)??? Apart from this, there are other forms of substitution. From the training side, Hong Kong residents can transition to visit Cultural Centre, Mai Po Wetland, Hong Kong Zoological and Botanical Garden. For entertainment purpose, they can visit the Karaoke, Theatre, Game Centre, or have a day trip to China.

4) Bargaining power of customers (visitors):

(where this information from?? - I love this aspect!)

-Tourists

Tourists have a minimal bargaining power as long as "must see" image successfully built-up and the Park cannot be substituted by other substitutes. Therefore, Sea Park focuses to build up this image especially in Asia.

- Local residents

The buying power of local resident is high given that they have many selections as stated above. The turning cost is relatively low. Also, Hong Kong people like new experience and their loyalty to the product are generally low. The Recreation area, therefore, launched difference programs like "Big Five" situations with difference theme every year to bring new pleasure and experience to them. Besides, special discount in low season and calendar year pass intent to entice. . . ???

5) The power of suppliers.

Suppliers have quite high electricity. Thus, construction components of amusement trips are huge and complicated, that is why recreation area is highly attached with supplier. Often, this market is developed and the decision of suppliers is become higher now. While constructing structures (hotels, etc) with particular builder area can't easily change to some other service provider because of high turning cost). The problem with the amazing animals is certainly as Ocean Area can buy in particular country only.

Which will be the dominant forces on the market?

The dominant makes on the market are: rivalry, customers and substitutes.

How may the five makes change?

Looking forward, the five pushes will change in this manner:

-Rivalry will increase with Disney's introduction;

-Buyer power will increase slightly;

-Substitute risk will can also increase;

-Entry threat lower dramatically;

-Supplier electricity will also reduce. (Display 2. 5 - p. 72)

What will be the underlying dynamics which can be travelling these five pushes?

Aftermath of monetary crises and increasing in variety of suppliers will decrease supplier electricity.

Disney's arrival lower entry risk in entertainment recreation area industry.

Developing of new technologies will affect growing of substitutes. Also rivals with new systems will gain (in this aspect Disney has an advantage)

Disney's introduction increase requirements in diversification of Sea Park's products.

Ticket price advantages (185 HK$ for adult solution at Ocean Park in comparison to 295HK$ for the same ticket at Disney).

The main competitor (Disney) is also same market focused (individuals with children).

What are the effects on key competition and on Sea Park?

Five forces a lot more affect Wetland playground - Ocean Park's key competition, located at the northern part of Tin Shui Wai, in Yuen Long - than Ocean Park itself, because Wetland park's products are less differentiated. It offers "a 10, 000m2 visitor centre, Wetland Interactive World, and a 60-hectare Wetland Reserve. " (http://www. wetlandpark. com/en/aboutus/overview. asp). Introduction of other competitor - Disney and it's really substitutes - doesn't have an effect on much Ocean Area because it has it's its niche.

What can be carried out to effect the impact of the five pushes?

More differentiation of new products, aimed mainly to Chinese indigenous culture will affect rivalry, substitutes and buyers. Unique high-quality products and services also will influence clients. For seeking suppliers big impact will have Internet and special web-sites with best quality of service, characteristics, recommendations and prices.

Conduct a strategic group/space examination for Sea Park

There are 2 key competitors for Ocean Recreation area:

First the first is mentioned above Hong Kong Wetland Area. It is a conservation, education and tourism facility, contains large visitor centre, Wetland Interactive World and a Wetland Reserve. This park provided site visitors with opportunities to see wildlife, understanding and understanding the ideals of wetlands throughout the East Asian Region and beyond, wetlands conservation. So, it's mostly about wetlands. The Hong Kong Wetland Park is also heading to be a world-class ecotourism service to provide both local residents and international travelers. (ttp://www. wetlandpark. com/en/aboutus/mission. asp)

Compare to Disneyland and Sea Recreation area, Hong Kong Wetland Recreation area has different facilities and product range (such as themed exhibition galleries, a theater, a souvenir shop, an inside play area), provide different services and thus, like Disney and Ocean Park, has its niche. The number of facilities provided is the narrowest among 3 parks. Thus, Wetland Recreation area can't meet demand of those visitors, who are looking for excitements and extreme pleasure, which is often entirely on a rides at 2 other parks.

Who are the main visitors? Could it be local or global? Could it be has the most affordable range of facilities than Sea Recreation area and Disney? Lower prices.

The second one - arriving in a nearest future The Hong Kong Disneyland.

After 28 many years of operating as a near monopoly, Ocean Park would soon have to contend with one of the biggest names in the entertainment and theme area industry. Additionally, Disneyland targets the same band of park's customers - households with children.

It has well-known brand and reputation. It is the world head in terms of entertainment. Several of Disney's individuals (Mickey Mouse button, Donald Duck and Winnie the Pooh) were home names all around the globe, including in Hong Kong. Thus, Ocean Park's mascot, Whiskeys, seem lackluster by comparison. Image, which Disney company retains almost for a century (The Walt Disney Company was founded in 1923) and Disneyland itself (first area was exposed in 1955) for half of a century (compared to 28 many years of Ocean recreation area) helps to attract visitors not only from Hong Kong and midland China, but also from different area of the globe, especially those who are from the USA and European countries.

Among other benefits of Disneyland are:

- location: maybe it's reached in only 10 minutes from Hong Kong's air port and less than 30 minutes from downtown Hong Kong.

-at least 5. 6 million individuals were expected to go to the Hong Kong Disneyland during its first calendar year of operation (compared to 4 million of Ocean Park expected site visitors).

-the price claimed to be the least expensive among the list of five Disney carnivals across the world.

-the section of Disneyland is 310 acres in comparison to 215 acres of Sea Park.

-5 times greater investment than for Ocean Park.

-Expected economic efficiency is 3 billion more.

-world-renowned innovation

-high customer service standards

Strategic teams within the entertainment and theme area industry in Hong Kong

Broad

Ocean

Park

Geographical Scope

Global

Product range

Disneyland

Narrow

Wetland Park

Local

Conduct market segment evaluation for Ocean Recreation area: How is the marketplace segmented? How can it be segmented? Where would you position Sea Park's products and services? Where would you position the competitor's products?

Ocean Park is a part of entertainment and theme industry. Its market is households with children. Disneyland - future rival - applies to the same market. Not surprisingly, Ocean Playground has its niche market - visitor from midland China.

Internal Environment

-What resources and features does Ocean Playground have?

Resources (what a firm has):

1)Tangible:

-financial - suppliers of money (private and federal loans) - expected HK$5, 6 billion investment; HK$145 billion monetary efficiency; surplus from businesses in 2004 was HK$182, 2 million on revenues of HK$536, 2 million ???;

-physical - Sea World, marine life and real pets or animals:35 rides and destinations; 3 hotels; beneficial and convenient location on the southern part of Hong Kong Island; vast range of new activities, such as the Abyss Turbo Drop enjoyment ride, seasonal and special occurrences, popular water-related activities, interactive activities with family pets, "edutainment" programs, successful Sea Jelly Spectacular and so on.

2)Intangible:

- long-time trustworthiness of park with authorities, customers,

-new brand - sea lion named Whiskers;

-cultural traditions of Hong Kong

-great range of repeated visitors

3)Individuals:

-37, 100 employees, their skills and knowledge;

-Thomas Mehrmann, new CEO of Ocean Area, and his earlier experience at US-based Six Flags Organization;

Natural and crazy life focus (Interactive activities with animals)

Recreation and education

Capabilities (just what a company can do)

-New products, facilities and services development functionality - constantly adding new features and attractions (such as: a fresh roller coaster, a subzero Snow Palace, 7. 6 million liter aquarium with an underwater restaurant, extra 33 family pets species, the amount of rides doubled to 70), so, become a nearest future among the finest marine-based theme playground with strong reference to nature;

-Keeping park destinations fresh, novel and fascinating, while lessening costs;

- research and development, marketing and sales features: intend to refurbish and rename Sea Park's 2 major areas (the Lowland and the Highland), new hotels to be developed, including a five-star boutique, spa-type hotel - this redevelopment plan would be completed in 2012!! - advice part too!!, plan to open office buildings in the major urban areas of Guangzhou, Beijing and Shanghai to improve promotional activities in Hong Kong and draw in more mainland visitors

-new incentive reimbursement, that linked employee payment to the financial performance of park

-What might be the competence of Sea Park?

Core competences - resources and competences that are both valuable to customers and difficult to imitate

-distinctive work culture, with its own norms and practices

-local market loyalty

-unique SmartFun Total annual Pass program

-cultural aspect (social history of Hong Kong), orientation on specific market segment-mainland Chinese visitors,

-long-term reputation, particular Chinese characteristics

-powerful brand

-customer trust

-primary emphasis of OP on real nature and wildlife in contrast to Disney's talents in cartoon individuals, castles, virtual truth and fantasy

-focused on education and the live pet animal destinations -- one of the key elements that will differentiate it from Hong Kong Disneyland when it opens in 2005. (from Echo's articles)

-cost and differentiation of product (regularly adding new features and sights as well as price benefits over Disney inspired visitors to go back to the park)

-The aerial tram that can take visitors from the access side of the area over a hill to the rest of the attractions has turned into a Hong Kong tourism icon-is it still true?? (from Echo's articles)

Competitive advantages is explained by the distinctiveness of its resources and features, by offering clients greater value by means of lower prices or higher benefits and service

Competitive Benefits of Ocean Playground over Disney:

-long-time reputation, -hometown favorite,

-cultural heritage of Hong Kong, orientation mostly on site visitors from midland China

-first-mover advantages

-no need to activate in high-profile advertising and publicity, rely more on word-of-mouth

-more diverse and huge selection of products (including Sea World, marine life, real family pets plus 35 trips and destinations)

- price benefits: the admission price for Disneyland is expected more than twice higher for child and one and a half higher for adult than price of Ocean park. And tourists from mainland China are incredibly price sensitive. SmartFun Annual Go program with infinite entrance to the park because of its holders in just a year, and discounted prices for food, souvenirs

-Infrastructure - 3 hotels had been constructed contrasting to 2 at Disney.

-orientation not only on entertainment, but also on education of guests,

- differentiating by focusing on ecology and conservation issues

-recognizable brand

-In addition to all the American fun at the recreation area, traditional Chinese holiday seasons are still noticed (Chinese language New Season)

-Disney has its characters, but we've flexibility to mix and match and bring in other entertainment (from Echo's articles)

-Does Ocean Area build its strategy on its resources, features and competences?

Yes.

Importation of more species

Water/Sea-related construction

Hotel-better recreation

-Are they lasting? How can they be developed?

Sustainable somewhat, but with some restriction.

For example, it may face the opposition from environmental group.

They can't relay only on resources, features and competences-they have to be developed, innovated and refreshed, because they could commence to look dated and shabby because of their visitors.

SWOT Analysis

Positive impact

Negative impact

Internal environment

Strengths

-Diversified and large selection of amusements (thrills, pets or animals, seasonal and special incidents)

-product brand revamp

-Highly associated with culture of mainland Chinese visitors, is aware their demands and behavior

-the main, oldest and most famous amusement area in the united states (long-time reputation, hometown favorite),

-cultural heritage of Hong Kong,

-28 years of functioning as a in close proximity to monopoly

-no need to activate in high-profile advertising and promotion, rely more on word-of-mouth

-strong business link with the local administration (support from the government of Hong Kong and mainland China)

-renovation of the park's brand image

-mascot as a brand

-previous experience of Thomas Mehrmann (new CEO of Sea Recreation area) in theme playground industry (at US-based Six Flags Corporation)

-local market loyalty

-positive image of park

Weaknesses

-Located over a hills-hard to get to some riders-that's why tourists experienced rides only one time.

-different facilities are old and un-attractive and need renovation

-a great deal of activities be based upon weather???-ask Echo about it

-no considerable capital investment

External environment

Opportunities

-focusing on providing mainland China's tourists as well as overseas visitors

-development of new transportation South Island Series (when???-check case-and ask Echo about any of it) that would cause convenience and fast gain access to direct to the Playground for the foreign and local site visitors.

-plan to create a mass transit railway (MTR) stop to connect OP to the subway grid

-the development and improvement of the enjoyment machinery can impact the services and features of the organization and its own relationship to their foreign tourists.

- improve the standards of recreation area with Disneyland arrival

- fostering sponsorships

- arrange for building new hotels (boutique and spa-type) - orientation on luxury travel and leisure - new market segment

Threats

-economical instability (such as the Asian financial crisis of 1999-2001, lasted for 3 difficult years for OP ), outbreak of different diseases, such as Severe Acute Respiratory Syndrome (SARS) in 2003 (Both these factors make a difference number of guests and their buying tendencies, worsening the park finances)

-arrival of Disneyland Hong Kong

-OP was situated on valuable real house: it could be shut down and its own land could be sold off for other recreational or commercial purposes.

Recommendation - p. 6-7!!!

(recommend to utilize this business connection for future purposes, such as creating a subway series for the guests (it'll happen in 2007). Say, in 3 years

Build a mass transit railway (MTR) train station for link with the subway grid. Till 2015)

(recommend to start out innovation process, it will take about 6 years). Say, in 5 years

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