Ocean Park

Introduction

            Obviously, the tourism industry plays an important role in the world, no matter environmentally or on the economy. It is believed that the tourism planning within the industry is extremely significant. In Hong Kong, tourism has been a very important aspect in their economy. For this paper, one of Hong Kong’s main tourist attractions, the Ocean Park will be examined with regards to its core competencies and competitive advantage.

            Since its opening in January 1977 as a non-profit organization, the home-grown Ocean Park has developed itself into an attraction connecting people with the nature by attracting more than 76 million tourists by the end of last year. Ocean Park has also been named one of the “10 Most Popular Amusement Parks in the World” by Forbes.com (2006). The company sees this recognition as a source of pride for their staff and the people of Hong Kong. The park will continue to offer new and exciting attractions as well as events and programs to bring people closer to nature. It was also chosen by Hong Kong citizens as the most favorite scenic spot in Hong Kong last year.

 

Resource Audit

            Owned by a nonprofit organization, Ocean Park hasn’t always been so popular. Just before 2000 it was an aging, poorly maintained attraction, and business was so poor that it was on the verge of being closed down. A facelift complete with new management and upgraded food outlets injected new life into the park a few years ago. Ocean Park now has a new jellyfish house and five annual events – including a Halloween bash that proved a huge success – on top of its popular pandas, giant aquarium, and cable car ride (2006). Additionally, Ocean Park has the ability to finance its chosen strategy which requires the park a significant investment in new attractions, services, and products; distribution channels; production capacity; and working capital.

In terms of physical resources, design of space is another keep up the good work attribute. Given that the location of the park, the layout of rides, activities and other facilities is a challenging task. Apparently the visitors here are satisfied with the current arrangement. Because space design is an important factor in the creation of image, further improvements in layout (especially when adding other activities and rides) must be designed with two objectives in mind. One is the maximization of organizational effectiveness and efficiency in serving the needs of the visitors. And the other is making sure that the changes further strengthen the ocean theme and ambiance of the park.

It is important to remember that, in service environments, the ambient cues interact with the social cues to influence consumers’ level of pleasure and arousal (2006). In their interactions with the park, the sense of human touch to the visitors is conveyed by the personnel who are the predominant actors. In the eyes of the visitors, the contact personnel are an important dimension of a service organization’s image as they are the first points of contact in the service encounter. Since first impressions are lasting impressions, the contact personnel, who are part of the total servicescape, have a key role in the formation and management of an image. The contact personnel maintain this major role until the completion of the service delivery process (i.e. by the time the visitors leave the park). Fortunately, for Ocean Park, their human resource is competent enough to handle the visitors. Employee courtesy, helpfulness, understandability, language skills and appearance are some characteristics of the human resource staff of Ocean Park.

            Disney land, being its biggest competition, it cannot be helped to compare the two theme parks. As the aura in Disney is laced with magic, the ambience in Ocean Park is quite different. Reputed to be eight times bigger than Disneyland, the layout of the park is airier, which provides guests with more room to explore. The park is divided into the lowlands and the headlands. The Lowlands is the tamer part of the park as it houses viewing features such as the Goldfish Pagoda, the Amazing Birds Theater Show, The Hong Kong Jockey Club Giant Panda Habitat, Dinosaurs Now and Then, and the Dolphin University, where dolphins are trained to perform (2006).

            Intangible resources of Ocean Park includes goodwill or what customers are prepared to pay to the park, reputation – Ocean Park having a track record pulling in more than 4.03 million visitors so far for the year 2006. That’s the best visitor count the park has seen since opening in 1977, and Forbes magazine recently named the park one of the world’s 10 most popular amusement parks ( 2006).

 

Core Competencies

            Core competencies of Ocean Park include the following:

• Strategic location. Tourists from the rest of the world visit Hong Kong, being one of the top ten destinations in Asia with more than 11 million visitors per year.


• Strategic marketing positioning. It has been in existence for more than 20 years and many tourists and locals are familiar with the entertainment that the park offers. Additionally, the park offers attractions that are appealing to different ages.

 

Strategic Competitiveness

In the last 5 years, many parks failed particularly due to bureaucracy issues, location in rural areas, and lack of a developed middle-class in the vicinity of the park. Disney Park being its main competitor differentiates itself by focusing on fairy tales and magic. However, both can complement each other in drawing tourists to Hong Kong.

Ocean Park also is in partnership with the Hong Kong local government. This guarantees uninterrupted financial and governmental support to the construction of various projects and the park’s initial years of operation. This also assures that government will help fend off community criticism on Ocean Park and its projects.

 

The Value Chain Model

The Value-Chain was conceptualized and popularized by  in 1985 through his book, a best-seller, Competitive Advantage: Creating and Sustaining Superior Performance. The primary activities includes the following, inbound logistics, production, outbound logistics, sales and marketing, and maintenance. Support activities include administrative infrastructure management, human resources management, research and development team and procurement (2003). According to  (1985) a company’s value chain is embedded in a larger stream of activities that he termed the value system.

Suppliers have value chains that create and deliver the purchased inputs used in a company’s chain. Suppliers not only deliver a product but also can influence a company’s performance in many other ways. In addition, many products pass through the value chains of channels (channels value) on their way to the consumer. Channels perform additional activities that affect the consumer, as well as influence the company’s own activities (2003). Simply, the value chain is a model that describes a series of value-adding activities connecting a company’s supply side (raw materials, inbound logistics, and production processes) with its demand side (outbound logistics, marketing, and sales). By analyzing the stages of a value chain, managers have been able to redesign their internal and external processes to improve efficiency and effectiveness (1996), which could be applied to Ocean Park.

Value chain is a model that helps to analyze specific activities a theme park can do to create value and competitive advantage in the marketplace. Since it was originally written for business strategy we will simplify it according to theme parks to make things easier. The essence of the value chain model is every organization benefiting from or contributing to other organizations is a link in a value chain. From this simplistic notion of value chain, every theme park can be described by three basic functions service-in, service-out and value-add.

 

 

 

 

 

 

 

 

 

 

 

Porter’s Generic Value Chain

Obtaining a competitive advantage entails Ocean Park’s application of a business strategy that results to the achievement of a value that exceeds the cost of manufacturing its attractions and services. Thus, there is value in creating activities that Ocean Park should consider to achieve competitive advantage.

Any visitor to a theme park, except those like jungle safaris that involve live animals, must abandon the private auto and experience the environment as a pedestrian. This status stands in sharp contrast to the everyday life of being a commuter in an auto- and train-dependent world. The contrast with suburban life is especially graphic. In suburbia the car is a necessity and walking is discouraged by the layout of housing subdivisions that rarely, if ever, offer pedestrian paths. Because most visitors to Ocean Park come from the areas outside the central city and even outside the country, their experience of communion with the crowd is a rare occasion. Suburbanites also find a classic urban experience of this kind at malls. Lately, as crime levels have risen in the city and lifestyle changes, such as cocooning, characterize the routines of urban residents, they too seem to enjoy the unfettered, crime-free pedestrian environment of the theme park, if not the mall as well.

            Experiencing Ocean Park also transforms family relations. At home the father rules and the mother manages. Adults define the agenda of daily life. Children exist within a social world of parent expectations. At the park things are different, and even reversed. The kids most often define the routine of the park visit. They direct their parents to the attractions they would most like to see (1997).

Finally, the park experience involves an extraordinary encounter with architecture. Here the built environment itself, as with other themed milieus, is a form of entertainment. Each structure provides its own fantasy. The park itself is architecture that entertains.

 

PEST Analysis

In order to analyze the environmental aspects of Ocean Park, PEST analysis will be used.  PEST Stands for Political, Economic, Sociocultural and Technological factors that influence overall performance in the market place.

 

Political Sector

A company will not be able to gain success, good reputation and trust if it will not consider legal and political sector as part of their strategy. Thus, Ocean Park has been able to follow the principles of business ethics. The company considers legality in all their actions. The management and staff of Ocean Park make sure that all their services adhere to the standards and wills satisfy their customers regardless of nationality and age. Politically, the company had been able to follow all the standards set by the Hong Kong government and other international organization, most especially with regards to laws governing animals which are present in the park.

 

Economic Sector

Economically, it can be said that for more than 20 years, Ocean Park had enjoyed being at the top of its competitors. The economic status of Ocean Park is highly remarkable that it always give its consumers the best and quality attractions and services. Even with the entrance of the Disneyland Park, Ocean Park was still able to get an advantage. Ocean Park’s continued presence has been able to have a stable economic capacity to sustain and maintain its competitive position in the market place.

 

Sociocultural Sector

Culture is an important factor in understanding an industry, because for any organization to operate effectively it must for some extent have a general set of believe and assumptions on how culture will influence the productivity and the success or failure of any company. Culture environment is one of the important principles that influence the organization. (1991) identifies that there are four dimensions that differentiate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which help to understand that people arrive to organizations with their own national culture. In Ocean Park, the management sees to it that they value the opinion of their employees no matter what is their nationality. Since, Ocean Park is accessible to any nationality and age; it cannot be denied that they need employees from different cultures to be in the company to help in the decision making. 

It is also indicated that the international managers has been able to create a positive relationship in the local managers. Moreover, the management of the company has seen to it that they would be fair in treating all their employees. In addition, as mentioned earlier, the company sees to it that their social commitment is being achieved by satisfying the consumers with their quality products and services in aviation and special material industries.

 

Technological Sector

The complexities of achieving success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both Technology and business managers towards more strategically oriented approaches for planning and management of any industry (1993). Ocean Park has been able to use technological advancement for creating new and innovative attractions and services needed by its visitors. Part of this is their utilization of modern technology in producing new attractions and services that will meet the demands of their target market. They also use the purpose of information technology by creating their own website to let prospective visitors have an easy access of knowing the park and the attractions and services that the company has made for them.

 

Five Forces

According to  (1980), some industries tend to become more profitable and competitive than the others. Henceforth, an existing industry such as Hong Kong’s Ocean Park should always remember that their industry will only survive by utilizing a strategy that would enhance the competitiveness of the business. In Porter’s model it is assumed that there are five forces that particularly affect an industry. The model is useful if a manager who strives to get the better off rivals. The framework provides excellent understanding of the industry context in which the business operates.

Power of Suppliers. An industry requires raw materials to produce their goods and services which lead to buyer-supplier relationships within the industry. Ocean Park requires to various suppliers which can supply them with the goods and services that they need. These suppliers could be those from the food industry, human resources, animal accessories, and others which are present in the provision of services and attractions at Ocean Park.

Power of Buyers. This refers to the impact which customers or the visitors have on the industry. There are reasons why the power of consumers or buyers in Ocean Park is high. One major reason is that there are many theme parks in the place and thus visitors can chose which park they will go. Thus, buyers are not forced to follow the prices dictated by the theme parks along with other rules in the market such as availability of the services and attractions to be offered to them. 

New Entrants/Barriers to Entry. The possibility of new theme parks entering the industry influences the pace of the competition. Thus, the key is to evaluate the methods of entry and exit for a new player to the industry. Although any theme park should be able to enter and exit the sector, each industry presents different levels of difficulty influenced by economics. These unique characteristics of the each industry are referred to as barriers to entry which may come from different aspects of the business ranging from supplies to technology. They seek to reduce the rate of entry of new entrants which leads to maintenance of a level of profits for the existing players.

Substitutes. These are the products which are available from other industries which can meet an identical or similar need for the consumers or visitors. Existing substitutes could come in the form of movie houses, restaurants, or any other place which the visitors can go instead of going to Ocean Park.

Industry competitors. The known competitor of Ocean Park is basically Disneyland. Ocean Park has held the monopoly of Hong Kong theme park for the longest time and though it still continues to enjoy its status as the market leader, competition has emerged because of the emergence of new theme parks like Disneyland.

 

SWOT Analysis

            To formulate an effective strategy, senior management must take into account the distinctive competencies of the organizations, and they must scan the environment. They must determine what competitors are doing, or planning to do, and take that into account. They must critically examine other factors that could have either positive or negative effects. This is sometimes referred to as the SWOT approach and in the succeeding paragraphs will be applied to the situation in Ocean Park, Hong Kong.            

The park, which sprawls across both sides of a mountain in southern Hong Kong, was overhauled a few years ago in preparation for Disney’s arrival. Ocean Park knows its strengths – a hybrid of thrills and animals, fun and education – and sells them well. In contrast to Disney, Disney is all about fantasy, cartoons, and castles. Ocean Park is real. It has real animals, real fish. Some have also decided that Hong Kong Disneyland may not be worth its steep entry fee – .90 to – compared to Ocean Park, which costs .80. Ocean Park is also more centrally located than Disneyland, which is built on the lush Lantau Island 30 minutes away from downtown Hong Kong ( 2006).

            The Ocean Park, which is a long time expert to entertain its mainland customers is also putting more efforts in providing convenient transportation than language training. It arranges a shuttle bus directly from Huanggang checkpoint to the Ocean Park to save transportation procedure and expenses of mainland visitors. The Ocean Park hopes the shuttle bus may bring in more visitors from the region of Pearl River Delta (2006). Other strengths of the theme park are discussed below, including the other aspects of the SWOT analysis.

 

Strengths:

Ø  There are enough financial resources that are allocated for the operation of the park

Ø  The government is prepared to provide support for half of the funding of Ocean Park’s redevelopment cost

Ø  Appealing to the all age groups

Ø  Has already been around for more than 20 years

 

Weaknesses:

Ø  The theme park has to come up with more diverse attractions to lure visitors

Ø  High prices may push potential visitors to competitors with affordable prices

 

Opportunities:

Ø  Provide packages to increase visitors

Ø  Growing market trend

Ø  New competitors continually enter the market

 

Threats:

Ø  The threat of not appealing to target market at all therefore generating a loss as opposed to profit

Ø  Entry of new theme parks

Ø  Vulnerability of the tourism cycle

 

Probable problems

Themed environments are not always embraced by consumers. Despite their growing popularity as a marketing solution, they can be problematical to customers. Ocean Park also faces these problems including the following discussed in the succeeding paragraphs.

Because Ocean Park is relatively bigger than Disney, guests should be prepared to hike for longer periods of time, a factor which the designer of the park has seriously considered (2006). Visitors who easily get tired or are not used to long walks may opt not to visit the park at all. Ocean Park must therefore come up with strategies designed to encourage these kinds of visitors even with the tiresome hikes. Several intervals like food kiosks and viewing areas should therefore be situated in the middle of the hiking trails on the way to the bigger rides in Ocean Park.

A lack of market knowledge from the Ocean Park management could prove costly, especially if unable to anticipate the problems of seasonality and occupancy caused by the Hong Kong location. Most crucially perhaps, a failure to appreciate Hong Kong’s composition of a series of individual national markets exhibiting different consumption patterns could also prove bad for Ocean Park. The vast differences between the forecast and actual visitor origin profile for the park underline this problem.

 

 

 

 

 

 

 

 

 

 

 

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