 Case Study Assignment

Group Members:
 M.Rehan Arshad (7057/FMS/MBA-34/F-15)
 M. Umair Asghar (7082/FMS/MBA-34/F-15)
 Hassam Gulzaib (7081/FMS/MBA-34/F-15)

 Submitted to: Sir Tazeem Ali Shah

Q# 1. Trace the evolution of the theme park & the challenges Mr. Her has
already made. What is your assessment ?

Solution:
According to my assessment Mr. Her has faced following challenges regarding theme park listed
below.

 Financial Issues
The price of the theme park land is relatively expensive, ranging from $50mil - $3bill. 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.
Secondly, the cost of maintenance for the theme park is huge. This expenses is unavoidable as
the nature of the business require regular maintenance works and upgrading tasks.

 Seasonal Fluctuations
In marketing the theme park, the management used about 10% of their total income for below
and above the line promotions. These includes advertising, radio and print advertisement, mailers
and partnership programs with tour operators.
However, the number of visitors for the center varies from time to time. Peak seasons, i.e: spring,
summer and school holidays recorded high number of visitors to the theme park. However, this
number often drop when bad weather hit the area.

 Competitors
In South of Korea, there are many competitors that are in the same nature of business. They are
Lotte World, Seoul Land, Dream Land, Children’s Grand Park and Seoul Grand Park. Lotte
World had the competitive advantage due to its location in the heart of the city and its an indoor
theme park. Although Yongin Farmland ranked no 11 out of 50 amusement parks in the world
(1994), Lotte World is catching with up being no 14 in the same rank.
  Transportation and Location
Accessibility to the park is an issue especially with high traffic conditions, eg: peak hours.
People spent more time traveling everyday, they don't have enough time to do their daily chores.
Instead of entertaining themselves over the weekend, they chose to do their chores. In an
average, people spent about two hours from Seoul to Farmland due to traffic jam. As mentioned
above, a sudden urge of demand will arise during peak seasons, i.e: spring, summer and school
holidays. This will lead to issues with parking spaces. On a normal operation basis, parking
space for about 8,000 cars are sufficient, however this might be otherwise during peak seasons.

 Customer Satisfaction
The Management of Farmland realized that Lotte World provided better customer satisfaction
and they scored pretty high during the customer satisfaction survey. Farmland recognizes the fact
that its difficult to achieve similar service standard as in the Disneyland. Farmland need to look
into their current hiring process, academically vs people-oriented inclination towards the job.

Q# 2: Be prepared to present a details plan for Mr. Her to proceed towards

world-class performance.

Solution:

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. 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. The five force of Porter’s analysis model are as follows:

 Rivalry
 New entrants
 Substitutes
 Buyer bargaining power
 Supplier bargaining power
  Rivalry -

Farmland ,opened in 1976 originally meant to provide quality of living through healthy open air
leisure activities. It has the Wild Safari , the rose garden and to provide for Winter theme , the
Sled Slope and the Motor Park. Due to the intense rivalry from Lotte world and Seoul Land ,
Farmland also planned to revamp its theme park with addition of the water park, a global fair and
the expansion of the existing zoo.

Rivalry amongst companies in the theme park industry is what keeps them relevant in the eyes of
its customers. Every year new attractions, restaurants, entertainment, and hotel offerings are
announced in order to influence people to attend the various parks. This rivalry also affects the
profits of these theme parks as they typically see a good return on their investment year over
year. For example, not every family is going to take a vacation to Farmland each holiday.
Farmland realizes this and thus is constantly looking for ways to improve its attractions to stay
ahead of its rivals, so families can count on having a better experience on their next visit. The
more guests Farmland can get to return by staying ahead of rivals Lotte world and Seoul Land,
the more profit they will be able to bring home.

Other forms of competition comes from free admission parks, beaches, camping trips. These are
either free or cheaper than paying for a trip to the theme park.

 The bargaining power of customers

In a good economy and during the holiday seasons, the buyer bargaining power is low where
there are many patrons to the theme park. Since the Koreans do not have many vacation leave
and Korea is a temperate country , 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.

When the high seasonality period is over, 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.

 Bargaining power of suppliers

As I mentioned in my discussion surrounding rivalry in the theme park industry, every park
attempts to stay relevant and appealing to its customers by debuting new attractions/offerings as
often as possible. Operating under that impression, the suppliers to the theme park industry have
a lot of bargaining power. 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. Every year, 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). In an effort to keep customers excited year after year, 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. This can negatively affect the profit level
of theme parks however, as they bid against one another as they vie for the best technology,
driving up the prices and reputation of the suppliers

 Threat of new entrants

The threat of new entrants of theme park in South Korea is not particularly high. Near Seoul ,
there are six theme park of which Lotte World , Seoul Land and Yongin Farmland are the most
notable ones. Theme parks around the world require a large scale initial investment ranging from
$50 million to $3 billion. Land development cost ,amusement machinery cost and working
capital are the main component of the capital investment. Since theme parks are very competitive
in nature, continuous upgrades of new attractions and renovate existing ones to attract repeat
customers is a norm.

The threat of new entrants outside South Korea appears to be high especially from world class
theme parks such as Tokyo Disneyland, Ocean Park in Hong Kong, Jaya Ancol Dreamland in
Jakarta and Beijing Amusement Park. Hong Kong Disneyland has opened with success, a new
Shanghai Disney recent has been announced, and several theme park projects in Dubai, though
long delayed, are now starting to get under way. 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. 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.

 Threat of substitutes

The threat of substitutes in the theme park industry is one of the biggest challenges theme parks
are forced to overcome. While theme parks such as Lotte World and Seoul Land , they cater to
customers for one or two days travel. Farmland intends to develop a resort town in Yongin with
luxury hotels, golf courses and resort accommodations catering to customers with families and
spend longer time in Farmland. The challenge for Farmland is finding ways to entice customers
to spend their vacations with them as opposed to trips to the beach, admission parks, camping
trips or staying at home and watch video-movies.

The threat of substitutes will always exist as families decide where to spend their money on
vacations each year. However, if companies can find a way to remain relevant and offer a wide
range of activities for people to engage in like Farmland ,Lotte World , they will be less
susceptible to feel the effects of these substitutes and profit levels will continue to grow.
Q # 3: What have been the keys to Everland success?

Solution:

Following below are the Key Success Factors in Theme Park Industry which adopted by
everland and lead to success.

 Quality, Safety and Security

Customers expect high level of quality along all areas of the theme park. Users also expect
adventures and experiences in an artificial environment at a calculable risk.

 Multivarious, range of options and attractions

Theme parks have to offer a wide range of attractions and possibilities which meet the
requirement and desire of new multi-optional customers.

 Emotion
Theme parks need to tell a story and have to impart impressions and emotions as persuasive
as possible.

 Functionality and infrastructure

One stop solution taking into accounts of parking, accessibility to and from the park.

 Branding
A corporate branding enables theme parks to create a good image, increase security, trust and
recognition to attract customers more efficiently.

 Innovation
A continuing process of innovation and redesign hedges success against changing pattern of
customer behavior and fading customer loyalty.
  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.

 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

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.

 Environment integration
Theme parks have to be integrated well into the economical, social and ecological
environment of the hosting destination.

Q # 4: As chairman of the samsung group, what is your assessment of Mr.

Her's performance?
Solution:

The chief issue which Mr. Her ignoring is that he is not paying attention for combined venture
through in Korea. And also the Farmland had to go it unaccompanied to give "software" for
Samsung theme park.

 Korean environment, labour five and a half days a week.

 Purchaser satisfaction is lessening

 Operating benefits at six percent are extremely small evaluated to standard of twenty

percent

 Convenience to the park is complex

 Unable to attract purchasers in peak period

 Affected through climate as there are not any exactly indoor facilities

Theme parks industry is highly technological, and it require innovation and new products with
the passage of time, we recommend

 Product Development

Everland should provide quality service in order to retain their customers and for this it is advised for

 Market Penetration

Theme park is a growing industry and Asia is considered to be a highly attractive market, so Everland
should go for Market Development

Everland must implement focus strategy in order to increase their quality in service to delight their
customers, because Theme parks business is based on returning back customers (those who visit again &
again)

Everland should also build a strong R&D department, because successful theme Parks need strong market
research to better understand their customers
Q # 5: Is Everland's approach sustainable?

Solution
 Yes, there Adapted Useful approach from Disneyland put them sustainable.

 To improve Everland’s quality of service and make their guest have a special experience,
it is essential to understand and adopt Disneyland’s way of doing business, by having
specific service standards and developing service as a product. The recommended new
service standards and approach will assist Everland to maintain and reinforce excellent
service by being approachable, engaging, and making customers wanting to re-visit.
However, motivating employees to maintain the quality service will always be
challenging for Everland when it is hard to measure guest’s expectations and service
quality. Developing service standards will help understand how to handle issues and
ensure the guest to have a great experience at Everland.

 Adopting Disneyland’s service strategy will benefit the company, employees, and
customers. Managing the “Moments of Truth” and having employee training programs
will be the steps to bring change to the management to achieve a goal and vision of
improvement in service quality. Everland will need to consider the big picture of service
strategy that will lead to excellent employee performance and encouraging the guest to
have a great moment during their stay.

 After adapting approach Results

Applying new standards to Everland. The paramount factor that influences a guest of
whether or not had a “magical” experience and wishes to re-visit depends on how the
employee delivers service. Through adopting Disney’s service standards of
“reorganization, recruiting, vision and mission, training, teambuilding, and re-
evaluation”, the new approach Adapting Disneyland’s Service Strategy to Korea’s
Everland Theme Park 21 of service to Everland will be accomplished. The new standard
and recommendations should be based on the fact that Everland should respect and treat
employees the same way they want them to pleasure guests.

Q 6: Is world class performance a desirable goal for Samsung Everland? will

it provide a sustainable competitive advantage?
Solution

Definitely, The competitive strength of farmland as well as its planned

circumstances will give it an edge.
 Farmland had the uppermost development rate inside Korean business
 SAMSUNG representation is a big corporation.
 Master plan contains a number of new parks as well as latest facilities, will persist with
sumptuousness hotels, and also will give a super class resort.

 Samsung spend in such a destructive development plan for Farmland. Samsung have to enhance
our purchaser satisfaction stages. Samsung also require altering the Farmland name through
other name to give a better representation of the corporation that can attract citizens with a
little different understanding. Formerly Samsung come to theme park, Samsung will give a high
excellence experience to illustrate repeat purchasers. Repeat industry is very significant to our
continued existence.

 His previous efforts to foster a service oriented society are like forces changing the profitability
in this part look assuring with high obstacles to entrance, low negotiating power of purchasers
and so on. Farmland has extra or fewer sufficient parking for the instance being, other
than if Samsung are going to get bigger, this will be a chief restricted access our purchaser
satisfaction stages were lagging behind the chief opponent.

Q # 7: As Mr. Her what action would you take now?

Solution
 Action We Will Take

Benchmarking targets were identified for inefficiently-managed attractions. In particular, roller

coaster-type attractions were found to be of lower efficiency in general, requiring higher inputs
than other types of attractions in terms of installation area, installation cost and repair cost
without producing greater outputs. Rather, rotating type-attractions were found more efficient.
Lastly, the study analyzes each attraction’s efficiency and satisfaction to discuss what attractions
are appropriate for installation in future theme parks. While roller coaster type attractions have
relatively low operational efficiency, they are able to deliver high customer satisfaction and thus
carry a brand effect that increases theme park customers’ revisit intention.

 Overcome listed below issues

  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.
 Poor human resource management, bad service attitude.

Q # 6: what does it to take to give an organization a sustainable competitive advantage

based on service quality? you might want to think about some specific high-quality service
producers ----McDonald's Singapore Airlines, Wal Mart, Shouldice, McKinsey, etc..

Solution
 Service in Theme Parks Service in theme parks is defined as an act of help or assistance
to satisfy customers. Adapting Disneyland’s Service Strategy to Korea’s Everland Theme
Park 7 Service standards differ in every theme park. Theme parks try to make their own
service standards and focus on how to develop service quality. This is because service is
the most important factor that brings back customers to revisit a theme park and every
customer wants to be treated well with the service they receive.

 There are many examples of good and bad service experiences; poor customer service
can give a customer the reason to never return. Conversely, good experience will be
memorized forever, and will be told to other friends and family members. Good service
will increase customer satisfaction and give the customer a reason to re-visit. Guests
whom visit theme parks deserve to have a pleasant stay and enjoy friendly service

.
 To achieve better customer service, combining guests’ expectations and having higher
service goals for the employees can make a difference. Although it is difficult to measure
service quality, it is essential to have a standard measurement of service because service
gives a significant impact on how your guests remember their experience. One moment
of superior service delivered by an employee will change the perception of the company,
and will make the customer’s decision to want to return to Disneyland than to choose to
go to a different amusement park. A reputation for quality service can also become an
important part that will differentiate the company from other properties having an
exceptional image and identity that will that will also increase brand recognition.
 Also, attracting new customer costs more time and effort than retaining existing
customers. The cost to maintain and satisfying existing customers is less than spending
money to bring in new customers and satisfying them. Once customers are satisfied, the
retention rate goes high, and they become loyal customers whom spend more money than
new customers and tell their friends and family about the great experience they had
during their visit which automatically becomes a marketing tool to attract new customers
(Smith, Adapting Disneyland’s Service Strategy to Korea’s Everland Theme Park

THE END