BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
International Master of Business Administration
Case Study “Samsung and the theme park industry in Korea'' Module Assigned Professor Name of Students : : : : : : BA 540 Multinational Marketing Adj. Professor, Mr Frankie Yee email@example.com :
Page 1 of 14
the management of theme park often struggle with lack of staff to manage the demand. the management used about 10% of their total income for below and above the line promotions.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
Case Study on “Samsung and the theme park industry in Korea'' Executive Summary XXXXXXXX
Problem Analysis In the case of Samsung. radio and print advertisement.e: spring. the cost of maintenance for the theme park is huge. 2. ranging from $50mil . However. summer and school holidays recorded high number of visitors to the theme park. Financial Issues The price of the theme park land is relatively expensive. i.
3. However. These includes advertising. Secondly. Seasonal Fluctuations In marketing the theme park.
Page 2 of 14
. this number often drop when bad weather hit the area. mailers and partnership programs with tour operators. In managing high demand during peak season. the number of visitors for the center varies from time to time. Peak seasons. This expenses is unavoidable as the nature of the business require regular maintenance works and upgrading tasks. The cost of the land value can be really high what more when the location of this theme park is smack in the middle of the city.$3bill. several areas of issues can be extracted from the case study:1. This led to staffing and housing issues during this sudden urge.
there are many competitors that are in the same nature of business. This will lead to issues with parking spaces. On a normal operation basis. Referring to table 8 “Leisure Patterns of South Korean Customers (1994)”.April 1979. Customer Satisfaction The Management of Farmland realized that Lotte World provided better customer satisfaction and they scored pretty high during the customer satisfaction survey. academically vs
. 68% of respondent replied they will choose to drive to the theme park. Seoul Land. Transportation and Location Accessibility to the park is an issue especially with high traffic conditions. Lotte World had the competitive advantage due to its location in the heart of the city and its an indoor theme park. Dream Land. 5. Children’s Grand Park and Seoul Grand Park. 38% of respondents replied they will have about 4-5 people accompany them when they go to the theme park. parking space for about 8. however this might be otherwise during peak seasons. summer and school holidays. Although Yongin Farmland ranked no 11 out of 50 amusement parks in the world (1994). people spent about two hours from Seoul to Farmland due to traffic jam. Evaluate the theme parks industry using Porter’s Five Forces Model.E. they chose to do their chores.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
In South of Korea. Farmland recognizes the fact that its difficult to achieve similar service standard as in the Disneyland. Porter. a sudden urge of demand will arise during peak seasons. March . They are Lotte World.e: spring. they don't have enough time to do their daily chores. i. 4. In an average.000 cars are sufficient. People spent more time traveling everyday. eg: peak hours. As mentioned above. Instead of entertaining themselves over the weekend. Lotte World is catching with up being no 14 in the same rank.
Page 3 of 14
hiring process. Michael Porter’s 5 Forces Model1 Discuss the nature of the competition Who are the competitors?
1 Source: Harvard Business Review: Forces Affecting Competitive Intensity from “How Competitive Forces Shape Strategy by M. Farmland need to look into their current people-oriented inclination towards the job.
1)World Bazaar. It boast of 35 attractions and rides such as : The dragon roller coaster. there are also five other theme parks that compete with Farmland. The other four attractions are the similar attractions are in Disney World in Florida. U. Despite the use of the word "World" in its name. beach and home movies. the counterpart of Frontierland in other Magic Kingdom-style parks c) Critter Country Critter Country is a small area of the park with two main attractions. Hong Kong Ocean Park . the 4 classics Disneyland 2) Adventure land .S. Brief description of each of the theme park : 1) Tokyo Disneyland Comprising of 7 themes in the park .BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
1) To the local customers: The competitors are 1)Lotte world. matching the "Main Street. Splash Mountains and Beaver Brothers Explorer Canoe.
Page 4 of 14
. Jakarta Jaya Ancol Dreamland and Beijing Amusement Park." areas of other Magic Kingdom-style parks. 2) Ocean Park in Hong Kong The largest water park in Asia is a marine mammal park.A. 2)Seoul Land and 3)cheaper entertainment such as camping . oceanarium and animal theme park. a) World Bazaar World Bazaar is the main entry corridor and primary shopping area of Tokyo Disneyland. the general look and theme of World Bazaar is that of early 20th-century America. In South Korea . 2) To international customers The competitors are theme parks in the region such as Tokyo Disneyland. b) Western Land Westernland is an "old west" themed area. 3)Disney Land 4)Tomorrow Land 5) Western Land and the inclusion of two mini lands 7)Critter country and 8)Mickey Toon town.
The five force of Porter’s analysis model are as follows: 1) Rivalry 2) New entrants
Page 5 of 14
. From the above there are two categories of customers . To know the competition forces better . Raging River and Ocean Park Escalator are just some of the attractions. Ferris Wheel. a oceanarium . it consist of a theme park called. 4) China amusement Park Comprises of roller coaster. Mine Train. Porter’s five forces model identifies the 5 sources of competitive pressures on theme park industry and helps to determine Yongin Farmland theme park competitive intensity and profit potential. Therefore in order to compete domestically and internationally. 2) International customers or Tourists where theme park is a large attraction to this group which has a high growth potential. a water park complex. fairy tale world. and several hotels. Porter’s 5 forces analysis model will be use. Porter's 5 Forces in Yongin Farmland theme park Porter 5 forces model (see appendix 1) focus on external environment that the company has to be able to cope with. Yongin Farmland must revamp their existing facilities and bring in new attractions and new theme to the existing park as well as improve the hardware and software of the existing park. a golf course . Dunia Fantasi . Farmland must attract : 1) Domestic customers which is the primary target segment of the customer base as they represent in South Korea about 60% to 75% of the total customers visiting theme parks.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
Abyss turbo drop. Crazy Galleon. 3) North Jakarta Jaya Ancol Dreamland One of the largest recreation complexes in SE Asia. garden for families and the park is not like the rest where there is a theme instead it is trying to copy Disneyland by putting some figures of Walt Disney.
The rivalry between theme parks can also be observed by the debut of new attractions or technology. Farmland . Lotte World .279 Won at Lotte World. This is evident in their competitive offerings in ticket prices: 7. not every family is going to take a vacation to Farmland each holiday. and hotel offerings are announced in order to influence people to attend the various parks. Lotte World is located in the downtown and attract customers working or living nearby. Generally . departmental store. Seoul Land and Yongin Farmland each are in direct competition with one another. 6.494 Won at Seoul Land and 6. a global fair and the expansion of the existing zoo. The theme park itself has hotel. restaurants. the Sled Slope and the Motor Park. the rose garden and to provide for Winter theme . Rivalry amongst companies in the theme park industry is what keeps them relevant in the eyes of its customers. Due to the intense rivalry from Lotte world and Seoul Land .667 Won at Farmland. Seoul Land also located near Seoul. around the Seoul area . shopping mall . Farmland also planned to revamp its theme park with addition of the water park. entertainment. Farmland realizes this and thus is constantly looking for ways to
Page 6 of 14
. These prices represent the admission and free ride per person.. folk village and sports center. The most notable player in these region are : Lotte World . For example. A great example of this can be seen by looking at these three major theme parks. always trying to debut the newest and best experiences in order to stay ahead of one another.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
3) Substitutes 4) Buyer bargaining power 5) Supplier bargaining power Rivalry In Korea. This rivalry also affects the profits of these theme parks as they typically see a good return on their investment year over year. It has the Wild Safari . Seoul Land is more of a entertainment place for short visit. Every year new attractions. at Kyungkido.opened in 1976 originally meant to provide quality of living through healthy open air leisure activities. Each of these companies offers theme parks with varying experiences. takes after Disneyland but in a much smaller scale. Seoul Land and Yongin Farmland. there were six themes parks.
every park attempts to stay relevant and appealing to its customers by debuting new attractions/offerings as often as possible. the more profit they will be able to bring home. Every year. Other forms of competition comes from free admission parks. the International Association of Amusement Parks and Attractions (IAAPA) hosts a convention where the newest technology is put on display for the consumers (theme parks). the customer’s bargaining power will be high and the theme parks must start their promotional activities or special events to attract customers to visit the theme park. theme parks have the opportunity at this convention to see the newest technologies first hand and decide what to bring to their theme parks in the future. the suppliers to the theme park industry have a lot of bargaining power. driving up the prices and reputation of the suppliers Threat of new entrants –
Page 7 of 14
. camping trips. Bargaining power of suppliers – As I mentioned in my discussion surrounding rivalry in the theme park industry. The more guests Farmland can get to return by staying ahead of rivals Lotte world and Seoul Land. In an effort to keep customers excited year after year. When the high seasonality period is over. beaches. Since the Koreans do not have many vacation leave and Korea is a temperate country . DOGO of Japan. HUSS of Germany and ARROW of the United States are just a few of the major companies who create the attractions found in most of the theme parks throughout the world. so families can count on having a better experience on their next visit.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
improve its attractions to stay ahead of its rivals. The bargaining power of customers in the theme park industry In a good economy and during the holiday seasons. This can negatively affect the profit level of theme parks however. the buyer bargaining power is low where there are many patrons to the theme park. These are either free or cheaper than paying for a trip to the theme park. Operating under that impression. the only time for Koreans to go out with their family will be during the mid –summer to mid autumn period. These will be the peak period for most of the theme parks and it is term the high seasonality. as they bid against one another as they vie for the best technology.
Near Seoul . Seoul Land and Yongin Farmland are the most notable ones. they will be less susceptible to feel the effects of these substitutes and profit levels will continue to grow. Farmland intends to develop a resort town in Yongin with luxury hotels. though long delayed. Since theme parks are very competitive in nature.
Page 8 of 14
. Ocean Park in Hong Kong. The challenge for Farmland is finding ways to entice customers to spend their vacations with them as opposed to trips to the beach. While theme parks such as Lotte World and Seoul Land . Threat of substitutes – The threat of substitutes in the theme park industry is one of the biggest challenges theme parks are forced to overcome.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
The threat of new entrants of theme park in South Korea is not particularly high. Hong Kong Disneyland has opened with success. For these reasons I have to conclude that the threat of new entrants into the theme park industry does not seem to have too large an impact on current companies profits. However. and several theme park projects in Dubai. there are six theme park of which Lotte World . if companies can find a way to remain relevant and offer a wide range of activities for people to engage in like Farmland . they cater to customers for one or two days travel. Jaya Ancol Dreamland in Jakarta and Beijing Amusement Park. Theme parks around the world require a large scale initial investment ranging from $50 million to $3 billion. The threat of new entrants outside South Korea appears to be high especially from world class theme parks such as Tokyo Disneyland. are now starting to get under way. camping trips or staying at home and watch video-movies. golf courses and resort accommodations catering to customers with families and spend longer time in Farmland. admission parks.amusement machinery cost and working capital are the main component of the capital investment. Land development cost .Lotte World . Whether or not these projects will succeed remains to be seen. but the entry barriers for the theme park industry appear to be much lower outside of the South Korea. continuous upgrades of new attractions and renovate existing ones to attract repeat customers is a norm. The threat of substitutes will always exist as families decide where to spend their money on vacations each year. a new Shanghai Disney recent has been announced.
Ecological/environmental Issue Political issues involving ecological/environmental concerns could hinder a theme park project. Premium Insurance for Accidents Legislation requires theme park operators to carry premium insurance for accidents involving visitors as a result of the rides. deforestation etc. business potential and suitability of assess.
Land Use Getting authority approval in building a theme park in Korea could be a tedious process and takes typically 2 – 5 years before any approval could be granted. Citizens or environmental group affected by the project could raise issue such as noise pollution. and thereby market attractiveness. The subject of the PEST analysis in this report is to evaluate if Samsung Headquarter should support the business proposal by investing $300 million in revamping Farmland Theme Park. social and Technological factors. the factors are external in nature. This is especially so within the vicinity of major cities such as Seoul where land is scare. water sports facilitated. The analysis measures the market potential and situation. particularly indicating growth or decline. Economic. Essentially. like Farmland.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
How do the particularities of the South Korean environment alter your analysis? Do you foresee any specific problems? What are the key factors of success? ________________________________________________________________________ It is best to use the PEST analysis model to evaluate the particularities of the South Korean environment. which are used to assess the market for a business unit. traffic congestion. PEST is an acronym for Political. The land requires for building or expanding a theme park normally involved considerable large land plot.
Page 9 of 14
South Korea has progressively evolved into a dynamic industrial society through the decades. Taiwan and Hong Kong. the government has been developing transportation infrastructure linking major cities and most parts of the developing regions with super-highways.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
After the Korean War of 1950-1953. It was also an important business feature in the theme park industry to continue upgrading its infrastructure through investment in creating more attractions such as rides. pacing with economic growth.7B to USD 230B in 1989. Majority of the South Korean tourist industry was supported by the domestic tourism. educational and public health standards were high so as the average annual income at purchasing power parity (adjusting to the cost of living in the country) standing at USD 13. the industry faced challenges in upholding quality service standard in catering to large influx of visitors. For the theme park industry in South Korea. trains. Seoul is the principle tourist destination for visitors. industrialization and urbanization has shifted the mobility of the population and migration of large number of people from the countryside . during the peak period. and a complex structure of social classes had emerged that resembled
Page 10 of 14
. The visitor attendance typically peaked during spring/summer and school holiday. Challenges included manpower shortage. Visitors from South East Asian countries were also on the rise. subway.350 and was growing. The popularity of popular culture in these countries has increased tourist arrivals. the business is one of seasonal and intermittent in nature. That is. the location and the accessibility of the park played important criteria in the success of the parks. building management etc. Likewise. transportation. Transportation means in getting in and out of the theme park is an important consideration in attracting the visitors. China. Most non-Korean tourists come mainly from Japan. In South Korea. By 1990s. expectation and repeat business. Tourism in South Korea has been growing over the years. For those with outdoor facility.
Rapid economic growth. This gave indication of the spending power of the population benefitted from the economy growth that experienced real GDP expanded by an average of more than 8% per year from USD 2.Most people now live in urban areas. shows etc to meet customer loyalties. domestic air traffic etc to promote proximity and mobility of people in the country. the parks would be affected by the bad weathers such as torrential rains. severe winter condition.
crowded environment –traffic jam. industrialization and urbanization have caused profound transformation in the class structure of South Korea society. was one of the world’s most homogeneous. Survey in 1994 shows that south Koreans scored high on visiting places like theme park. or five and a half days a week. Most people start their day at 8am and end at around 10pm or later. often having dinner before returning from work. nature and historical place for a short one-day holiday pastime. Confucian and neoConfucion ideas and institution continued to have important impact to the society in the 1990s. Naturally. and culture. a major factor in South Korea’s economic progress. The attributes gave intense feelings of nationalism to the people of South Korean. The typical workweek is 44 hours or longer. Rapid economic growth.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
the social structure of developed Western countries. ethnic identity. Workers in South Korea have the longest work hours among the developed countries. sharing a common language. people will incline towards going to places that offer space and less crowded area to relax.Confucian influence was most evident in the tremendous value placed on education.
The theme park industry has three classes of technology inputs (1) the building and construction services that provided landscaping and architectural support (2) the hardware providers that supplied amusement machinery (3) the software providers that supplied management know how. salaried white-collar workers in large private companies and professionals with specialized training. In general. especially in cities like Seoul and Pusan. The competition for limited resources including space itself is intense. there was continuity with the past. The most evidence is the emergence of new middle class mainly residing in urban cities. space constraint – small apartment. However. people living in the urban cities like Seoul is under tremendous stress due to the working pressure – long hours. when come to pastime. consisting of civil servants. South Korea was one of the world’s most densely populated countries. The population of South Korea. The number of factory workers has grown significantly as well. The extremely crowding in South Korea.
Page 11 of 14
. was a major factor not only in economic development and in the standard of living but also in the development of social attitudes and the human relationships.
Develop quality service to meet customer satisfaction Land use to develop theme park Transportation
Key Success Factors in Theme Park Industry
Quality. to the theme parks. simulators. it was costly and difficult to engage such management software through licensing. Europe and United States. Suppliers of such high quality machinery are few and concentrated in Japan. Korean conglomerate such as Samsung Corporation. However. Safety and Security Customers expect high level of quality along all areas of the theme park. Theme park leader like Disney has developed successful management know how tools in operating their theme parks and make available educational program to train personnel in delivering world class quality service. Hyundai Corporation have been renowned for their capability in taking on big and complicated building construction projects.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
Building and Construction Services South Korea has been a powerhouse in building and construction technology. Software Providers It is most difficult in developing the management know-how in theme park industry. They are costly in acquiring and require considerable operating cost in maintenance. Users also expect advertures and experiences in an artificial environment at a calculable risk. there is demand in more high technological amusement machinery in attracting crowds. As the popularity of the theme park grows. Multivarious. Hardware Providers Hardware Providers are supplier that specialized in supplying amusement machinery such as roller coaster. Virtual reality etc. range of options and attractions
Page 12 of 14
trust and recognition to attract customers more efficiently. Emotion Theme parks need to tell a story and have to impart impressions and emotions as persuasive as possible. Escape and imagination Visitors want to get away from everyday life and expect a temporary change by the artificial and illusional stage. Capacity and queue management
Page 13 of 14
. Uniqueness The offered product and set of experiences and attractions should be clearly defined to keep uniqueness against competitors and focus on selected segment of customers Weather independency All weather operations ensure a continuous business and declutch service from environmental factors Involvement and interactivity With an increasing involvement and interactivity of the customers the surplus (value added) rise strongly for customers. accessibility to and from the park.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
Theme parks have to offer a wide range of attractions and possibilities which meet the requirement and desire of new multi-optional customers. Innovation A continuing process of innovation and redesign hedges success against changing pattern of customer behavior and fading customer loyalty. Functionality and infrastructure One stop solution taking into accounts of parking. Branding A corporate branding enables theme parks to create a good image. increase security.
bad service attitude. Poor human resource management.BA 540 Multinational Marketing Case Study ________________________________________________________________________________________________
The management of the capacity during peak and off peak times and seasonal variations in demand are a major factor for success and customer satisfaction
Continuity and theming The whole product including all activities and designs should be themed. Customers need to find them clearly.
Page 14 of 14
. The failure of the theme parks Falling customer expectation Improper marketing and branding Failed location and catchment Inept pricing and hidden cost Negative innovation and investment spital Lacking entrepreneurship and know how. Environment integration Theme parks have to be integrated well into the economical. social and ecological environment of the hosting destination.