Industry & Competitive Analysis

of
Amusement & Theme Parks

Desiree Gapasin
Valerie Russell
Janice Carlos
Katie Miner
 AGENDA
 Dominant Economic Characteristics
 Driving Forces
 Competition Analysis
 Competitive Position of Major
Companies
 Competitor Analysis
 Key Success Factors
 Industry Prospects and Overall
Attractiveness
 DOMINANT ECONOMIC
CHARACTERISTICS
 Stage in Life Cycle
– Mature
 Companies in the Industry
– 450 amusement parks in the U.S.
– Top 5 Corporations= 65% of Market

 Scope of Rivalry
– Parks compete against each other on an
international level
 DOMINANT ECONOMIC
CHARACTERISTICS

 Market Size
– $9.6 Billion in Revenues
– 319 Million Park Attendance

 Market Growth Rate

– 2001= 1% Increase
– Projected Decrease in Attendance and
Revenues for 2002
 DOMINANT ECONOMIC
CHARACTERISTICS

 Industry Structure  Customers

– Destination Parks – 75% Attend as
• Disneyland Families
• Universal Studios
– 54% Under the
– Regional Parks Age of 18
• Six Flags
• Cedar Points – 46% Adults
 DOMINANT ECONOMIC
CHARACTERISTICS

 Entry Barriers
– Excessive Start-up Costs
– Expensive Equipment
– Competition from Dominating
Corporations

 Exit Barriers
– Costly Liquidation of Equipment
 DOMINANT ECONOMIC
CHARACTERISTICS
 Product/Service Characteristics
– Parks Strive to Differentiate
 Scale Economies
– Manufacturing Costs Differentiate Per
Park
 Capacity Utilization
– Improvements in Capacity
• Ride Reservations
• Competitive Discounting
 DOMINANT ECONOMIC
CHARACTERISTICS

 Technology/Innovation
– Tests For Safety
– Improvements of Attractions
• New Development for Rides
• Scenery
• Shops
 DRIVING FORCES
 Rivalry Between Firms (medium)
- about 450 parks in the US
- different types of parks
- revenues constantly climbing

 Supplier’s Bargaining Power (low)

- about 375 manufacturers & distributors in
the US
- low switching costs
- not easy for suppliers to integrate forward
to directly compete
 DRIVING FORCES

 Buyer’s Bargaining Power (high)

- alternative suppliers available
- quality & price is important
- big account

 Potential New Entrants (low)

- capital requirements
- government policy
- reputation/established
 DRIVING FORCES

 Threat of Substitutes (low)

- Amusement & Theme Park incorporates fairs,
carnivals, water parks, etc.

 Other Stakeholders
- Government
- IAAPA
- NAPHA
- TEA
COMPETITON ANALYSIS

Market Share

30
39.6

5
4.7
5.5 5.2 10
Disney Six Flags Universal
Anheuser Busch Viacom/Paramount Cedar
Other
 COMPETITIVE POSITION OF
MAJOR COMPANIES

5
4
Revenue (billions)

3
2
1
0
0 10 20 30 40
Number of Parks

Disney Viacom Six Flags Cedar Anhueser Busch Universal

 COMPETITIVE POSITION OF
MAJOR COMPANIES
#1—Walt Disney #2—Six Flags,
Parks Inc.

 Industry Leader in  Owns the most parks—

Sales & Visitors 37, domestically

 Leader in Ride
 Disney Image, “Mickey Innovations
Mouse”
 Warner Brothers
 International Appeal Characters
 COMPETITIVE POSITION OF
MAJOR COMPANIES
#3—Anheuser Busch

 Unique Appeal: Animals, Beer,

Water Rides, Gardens,
Naturalistic themes

 Entertaining & Educational

 World’s Most Popular marine-life

park: Sea World, Orlando
 COMPETITOR ANALYSIS
Primary Characteristics of Theme Parks:
 Family Appeal
 Contain Themed Environments
 “Ambient Entertainment”
 High Investment Level per unit of ride or
show capacity
 High Standards of service, maintenance, &
cleanliness
 Ability to entertain visitor for 5 to 7 hrs
 Pay-one-price admission policy (usually)
 KEY SUCCESS FACTORS
 Customer Appeal
– Disney: Fairytale
– Six Flags: Extreme Trills
– Busch: Educational/Naturalistic
 Strategic Alliance
– Licensing Agreements
– Joint Ventures
 Technology
 Safety Standards
 INDUSTRY PROSPECTS &
OVERALL ATTRACTIVENESS
 Industry Profitability Instability
– Seasonal Operations, Weather, Economic
Conditions, Terrorism

 U.S. Market Saturation

 International Market Prospects

– Asia, Europe, Latin America
 Technology
– Renovation & Innovation
 INDUSTRY PROSPECTS &
OVERALL ATTRACTIVENESS
 Lifecycle
– US—mature
– International—growth
 Developing Trends
– Themes
– Visitor Participation
– Simulation & Virtual Reality
– Water Attractions
– All-weather Operation
 INDUSTRY PROSPECTS &
OVERALL ATTRACTIVENESS

“ Rather than being viewed as a stand

alone attraction theme parks will
become part of a balanced leisure
product and tourism system that
contributes to the economic
development, employment, and
resource preservation of an entire
region.”
 The End!

Thanks! Any Questions?