Strategic decision Making
Answer the following questions: Explain why the Amusement Park Industry is Global and Transferable (or why it is not) providing supporting source documentation for your answer. List and explain the top five, in prioritized order (most critical/worst first), mistakes that Disney has made in their International operations. As Disney’s newest Global Consultant (clearly because of this degree program) how will you assist them to correct their past mistakes as they move forward with their Global expansion?
132 .. EXTERNAL/lNTERNAL ANALYSIS
What are the short-term (one year) and longer-term (two to five years) impacts
of these trends on the business?
0 How certain are you of these factors and‘trends?
Internal Analysis
Use the following questions to guide your deliberation.
What positions do you occupy in the minds of the customers, suppliers, buying
influences, competitors, employees, and other relevant people?
What are the critical factors that differentiate you from your competitors?
What factors will affect your ability to respond to opportunities and threats?
0 What are the elements of your Achilles’ heel?
What can you do to increase your strengths and minimize your weaknesses?
CUSTOMER lNTERFACES
Please answer the following questions:
Who are your key customer groups?
How do you currently reach them?
What information do you provide on their behalf?
0 In your interactions with them, do they create value for your products and ser-
vices? Why or why not?
Use Exhibit 3.5 to prepare a customer action plan as a’supplement to your business
plan. , A
VALUE PARTNERSHIPS
w J .. Please answer the following, ’ H
0 Please identify your partners, suppliers, and network (if you have one).
How do you add value ‘to your interactions with them? 1’
0 How do they add value to your products and services?
Prepare an Action Plan for each of your partners, suppliers, and network.
Source: Questions are drawn from Richard J. Koch and Richard Koch, Smart Things to Know about Strata gy
(Oxford, ’U.K.: Capstone Publishing Ltd., 1999), pp. 10-11 ; Michel Roberts, Strategy Pure &. Simple 11: How
Winning Companies Dominate Their Competitors (New York: McGraw~Hill, 1998), p. 3.
CASE-lN-POINT: DISNEY AROUND THE WORLD
While Walt Disney, the founder of Walt Disney Studios, did not invent the amuse-
ment park, he is well-known for having reinvented it. Disney found that most such
parks were largely designed for children, but he felt that there should also be a park
FORMULATING STRATEGY AND DEVELOPING A BUSINESS MODEL 133
that parents and children could enjoy together. Inspired by the cartoon and movie
characters created by the Walt Disney Studios, Disney createda type of amusement
park that came to be known as the “theme park.”
Even though all signs pointed to success when Disneyland first Opened, Walt Dis-
ney‘rrsaid that Disneyland would never be finished as long as there is imagination still
alive. In accordance with these words, Disneyland continues to introduce new attrac-
tions and stretches the imagination of their engineers, also know as the “imagineers.”
Creativity and individuality are encouraged to raise employees’ sense of importance
and interest in their jobs.
Walt Disney Company maintains stringent training standards for its front-line theme
park employees, whom they call cast members. Their training puts a heavy emphasis
on human relations skills. Janitorial cast members are particularly important because
they are often the first ones to have contact with the visitors. They are taught to carry
out their responsibility with the goal of creating a pleasant atmosphere for visitors.
Park employees are cross-trained and trained by peers. In addition, new employees
receive periodic evaluations by their peers. Discussion and feedback sessions are
also undertaken regularly. Peer pressure, instead of complex policies, works as the
primary control factor. In the early days, theme park management already had very
clear-cut priorities, and these priorities served as decision guidelines. For example,
safety, courtesy, appearance, and efficiency were the guiding elements.79 As long as
the employees felt that their actions fit expectations based on these elements, they
were empowered to make decisions on the spot.
Disney theme parks are complemented by Disney television programs, motion
pictures, and merchandise. All of these off-site experiences come together in the
theme park tour, during which one can revisit familiar characters.
DISNEYLAND IN ANAHEIM, CALIFORNIA, 1955
Disneyland was opened on July 17, 1955.80 It was the most publicized amusement
park in history. The $8 million investment was promoted as a “kiddieland for adults”
and attracted 40,000 visitors the first summer it opened. During the first year of op-
eration, the park averaged 10,000 visitorsper day, which was more than the company
1 needed to break even.81 Typically, the expenses for admission, rides, food, and amuse-
ments in Disneyland were about twice as much as other amusement parks. Visitors
also said that Disneyland was so large that it was impossible to see the whole park
in one day. This was a boon to Disneyland management because it meant the visitors
f , – would then return to see the rest of the park. In addition, there were enough exhibits,
shows, scenic wonders, and activities that were free of charge to warrant a second
visit. Adults appeared to have as much fun in the park as children. They accounted
for 75 percent of the rides taken, or about 7.7 rides per visit, while children accounted
for 4.4 rides.82 Disneyland found that many visitors were young adults and couples
on a low budget and on a brief vacation. Common complaints concerned long lines
Waiting for rides because each ride took too few people, excessive commercialism,
and sore feet from walking and standing. Even though these complaints persisted,
Disneyland remained the most attended amusement park in California. It reCOrded
attendance of 13,360,000 in 2004.83
134 EXTERNAL/ INTERNAL ANALYSIS
Operating a theme park was a new venture to Walt Disney Studios. Disneyland
Was an imaginative world where happiness and excitement were delivered and “were
the only feelings management Wanted their visitors to experience. The theme park
offers an illusory world to its visitors, and they are willing to pay to live in an artificial
environment for a short time.
With its original features and attractions based on Disney Studios productions,
Disneyland is an American original. Disney found the formula for success in the
theme park business.
WORLD DISNEY RESORT, ORLANDO, FLORIDA, 1971, 1982, 1989,
AND 1998
The success of Disneyland in Anaheim was the model for Disney’s eastern move~
ment to Florida for the World Disney Resort. The resort was completed in stages:
the Magic Kingdom in 1971; the Experimental Prototype Community of Tomor-
row, a.k.a. EPCOT, in 1982; the Disney-MGM Studio in 1989; and the Animal
Kingdom in 1998. This time, Disney had the space that Anaheim could not offer. It
took advantage of the vast land of 28,000 acres near Orlando to expand its tourist
services.84 In addition to the attractions, it offers hotels, golf courses, campgrounds,
and shopping villages.
The core competence that Disney developed in the theme park business it developed
between 1955 and 1970 was a successful domestic regional transfer from the West
Coast to the East. The Magic Kingdom is a replica of Disneyland in California. In
Florida, Disney took it one step further and expanded into the hotel and merchandise
retailing businesses.
TOKYO DISNEYLAND, 1983, AND TOKYO DISNEYSEA, 2001
The first Disney theme park built outside of the United States was Tokyo Disneyland,
located on the shores of Tokyo Bay. Tokyo Disneyland has been a success from the
beginning. It- draws up to 17 million visitors annually. It attracted 300 million visitors
in the nineteen years and 208 days after its inauguration, a record that took thirty-four
years for Disneyland in California.85 More significantly, it survived the recession in
Japan during which all theme parks suffered losses.
Tokyo Disneyland offers seven themed “lands” and a total of forty-six attract
tions.86 Conceptually, it is not different from the. theme parks in the United States.
Its officials have suggested two factors in this success. First, it is located in an area
with a residential population of 30 million. Second, it contains the crucial American
culture that appeals to the Asians. The American flavor is what the park visitors go
to Tokyo Disneyland for. The Tokyo Disneyland was designed to be a close replica
of Disney theme parks in the United States. It is critical to the park’s success that the
visitors have all~around and complete American experiences when they are in Tokyo
Disneyland. Hence, signs, shows, and food are Westernized. Visitors are given as
close to authentic an exposure to American culture as posSible. Many other theme
parks built in Japan by foreign companies naturally adapted to Japanese culture over