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National University of Ireland Dublin

Bachelor of Science: Financial management

BSC 13C

Business Strategy

Pre-course Assignment

Lecture: Colm Foster/Frankie Yee

Student: Phuong Dinh Chung

Student ID: 09159380


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Hong Kong Disneyland is the co-operation between Disney and Hong Kong
government, which was announced from 1998 and is opened to the public from
September 2005. This theme park is the fifth Disneyland on the World, and the second on
the Asia, the first is Tokyo Disneyland, a well-known theme park. Hong Kong
Disneyland is expected to be successful and attracted around 5.6 million visitors in the
first year of operations. However, there are some issues which constrain the growth of
Disneyland in Hong Kong as well as cause an unexpected performance of the theme park
from 2005 until now.

The Hong Kong Disneyland was expected to overcome the Ocean Park, a famous theme
park in Hong Kong from 1977 and then to become the market leader of the Hong Kong
and China theme park industry. However, the issues in management, estimation, market
competitors, and internal and external environment strategy are the barriers to delay
Disneyland to achieve their goals.

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The perceptual map above shows the position of Hong Kong Disneyland in the market
with their competitors, and specially Ocean Park, their main competitor in Hong Kong
and China market. It is clearly seen that Hong Kong Disneyland is on a disadvantage
position to compare with other competitors, the Disneyland has a higher ticket price, but
the attraction is just over average. This position was a result of the poor estimation of
Disneyland when they started their business in Hong Kong and Asian. Disneyland aimed
to build their park with an image of high price and high value and experience, it means
they charged a higher price for their tickets, comparing with their competitor, to be suited
with the higher service value which they provide to their customers. However, in
customers’ mind, the attraction of Disneyland is not worth with their ticket price when it
is compared with Ocean Park and other competitors and the experience is also marked
lower. There are three reasons to support for this perception. The first, the ticket price of
Hong Kong Disneyland is although slightly lower than Universal and Tokyo Disneyland,
but it is much higher than its main competitor, Ocean Park. The difference of prices can
be seen on Appendix 3 of the case study, the ticket of Disneyland is approximately 60%
higher than Ocean Park in a regular day, and 5 times higher for annual ticket with the
same value. The second, although Disneyland is a famous brand on the world for family
and your people value, but in China it is a different story, the Chinese culture is not
familiar with American culture, so the attraction of this theme park is marked lower in
customer’s minds. In addition, Disney aimed to bring the whole theme park from the
USA to Hong Kong, which they thought it can help the visitor the real experience about
Disneyland. Unfortunately, the experience for the customers who visited is also lower,
because they can not understand well the Disneyland culture and it makes a poor
returning customers rate. The third, the key success factor of Hong Kong Disneyland can
not be compared with the Tokyo Disneyland and Ocean Park. The case stated that the
Tokyo Disneyland covers 45 hectare of land, with 45 entertainment items, whereas Hong
Kong Disneyland now can only serve with 15 hectares although their capacity is 126
hectares, and with only 22 items. They also can not compete with Ocean Park, the theme
park with 17 hectares and 43 entertainment items (www.oceanpark.com.hk). A smaller
land and lesser item for a theme park mean a poor image, visitors feel the price of ticket
is not worth, the entertainment items are not enough to enjoy, and especially they need to

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waste more time to queue in line to play the games, and it usually make visitors
unsatisfied. The Case presented that the Ocean Park even got increased of 20% for local
visitor in 2006, the first operation year of Disneyland, although it was estimated that
Ocean Park can lose 25% of its customers due to the opening of Disneyland. It proves the
weak impact of Disneyland to their competitors, and in an opposite way, proves Ocean is
a strong competitor of Disneyland.

Although Hong Kong Disneyland is on a disadvantage on the positioning map, they


really try and do some reactions to be more competitive advantage from the first day of
operation. They slightly integrate their culture with Chinese culture to serve the Chinese
better, by service Chinese food, expanding restaurant seats and operating hours. They
also run several marketing campaign to attract more visitor and make a better image for
Disneyland in customer’s minds. For example, Hong Kong Disneyland operate an
education consumers shows in China which named” Stories behind the characters”, to
help the mainland be more familiar with Disneyland. They also discount their ticket price
directly and indirectly. For example, $50HK is offered for local residents to attract more
visitors, or they launched “Double the Magic Campaign” which allowed the local
residents to return to the park for free. They also issue their Summer Pass with a
reasonable price to increase the visitors on Sumer holiday.

However, their actions can not cover their issues in many operating department which
results them by a lesser attraction and lower experience from the customers’ eyes. In the
future, Hong Kong Disneyland will face more challenges to grow. Firstly, it is the
complain from the public about the impact of Hong Kong Disneyland to the environment,
which causes the dead of more than 500,000 kilograms of adult fish and 3 million
juvenile fish of 26 different species, according to government figures, and the air
pollution from fireworks. This issue will bring two problems to Hong Kong Disneyland.
The first is financial problem, when the company and Hong Kong government has to
compensate for the farmers. The second, the image of Hong Kong Disneyland is worse as
the can not protect the environment. Secondly, the project of building a new Disneyland
theme park in Shanghai is a bad news for Hong Kong Disneyland. The new theme park

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with eights times bigger than Hong Kong Disneyland will be their new and strong
competitor in 2014. It will also take over the care of the Walt Disney organization, which
means the expansion of Hong Kong Disneyland will be delayed. Estimation from
Business Week stated that the attendance of Hong Kong Disneyland will drop as much as
60% when the park in Shanghai opens.

The map above estimates the position of Hong Kong Disneyland in the future, when the
Shanghai Disneyland opens. At that time, the mainland Chinese will be more attractive to
come to Shanghai to experience a better park when comparing with Hong Kong
Disneyland with a similar price. At this case, the Hong Kong Disneyland can only hope
for the local residents, and the visitors to Hong Kong. In 2005, people can say that
visitors come to Hong Kong to visit Disneyland, in the future, it can be visitors come to
Hong Kong and visit Disneyland.

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The two positioning maps show the poor situation and status of Hong Kong Disneyland
in the moment and the future. To overcome this situation, with more challenges in the
future, it is definitely not easy. The Hong Kong Disneyland now should focus more on
attracting local residents and foreign visitors, creating more value to attract returning
visitors. Being friendlier with the environment and making more public relation as well
as marketing campaign are also ideas to help the company to get a better position in the
future.

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References:
• Ocean Park: Attraction and Show. [Online]
Available at: http://www.oceanpark.com.hk/html/en/park-
experience/attraction-show/ [Accessed 23 March 2011]
• Schuman, M, 2006. Disney's Hong Kong Headache.
Available at:
http://www.time.com/time/magazine/article/0,9171,1191881,00.html
[Accessed 23 March 2011]
• Ireland, R.D. Hoskisson, R.E. & Hitt, M.A. 2011. The Management of Strategy:
Concepts and Cases. 9th ed. Asia: Cengage Learning.
• Susan H. C. TAI & Lorett B.Y. LAU, 2009. Export of American Fantasy World
to the Chinese. Case Studies in Management, 7(2).