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 Destination Parks Disneyland Universal Studios Regional Parks Six Flags Cedar Points Customers 75% Attend as Families 54% Under the Age of 18 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) Other Stakeholders - Amusement & Theme Park incorporates fairs, carnivals, water parks, etc. Other Stakeholders - Government - IAAPA - NAPHA - TEA
COMPETITON ANALYSIS
COMPETITIVE POSITION OF MAJOR COMPANIES
COMPETITIVE POSITION OF MAJOR COMPANIES #1—Walt Disney Parks Industry Leader in Sales & Visitors Disney Image, “Mickey Mouse” International Appeal #2—Six Flags, Inc. Owns the most parks—37, domestically Leader in Ride Innovations Warner Brothers 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 Strategic Alliance Technology 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?