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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 & Competitive AnalysisofAmusement & 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 ECONOMICCHARACTERISTICS • 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 ECONOMICCHARACTERISTICS • 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
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 ECONOMICCHARACTERISTICS
DOMINANT ECONOMICCHARACTERISTICS • Entry Barriers • Excessive Start-up Costs • Expensive Equipment • Competition from Dominating Corporations • Exit Barriers • Costly Liquidation of Equipment
DOMINANT ECONOMICCHARACTERISTICS • Product/Service Characteristics • Parks Strive to Differentiate • Scale Economies • Manufacturing Costs Differentiate Per Park • Capacity Utilization • Improvements in Capacity • Ride Reservations • Competitive Discounting
DOMINANT ECONOMICCHARACTERISTICS • 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
#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 COMPETITIVE POSITION OF MAJOR COMPANIES
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?