Samsung And The Theme Park Industry

Samsung & Theme Park Industry in South Korea
Group 2 - Anshuman, Chintan, Dhinesh, Gaurav N, Kaushik, Milind
GMP, XLRI Jamshedpur

Industry Dynamics
Bargaining Power of Suppliers
Entry Barriers
Bargaining Power of Buyers
Threat of Substitutes
Rivalry among Existing Competitors
There were fewer than 10 suppliers who were capable of developing quality machinery.
Machinery were custom designed for particular market and environment conditions.
- Park management expertise not easily available – huge licensing fee and very selective.
Large Scale Initial Investment ($ 50 – 3000Mn) – Land Development; Amusement Machinery; Working Capital.
- Heavy marketing and Ad. Budgets.
- Revenue reinvestment for expansion & up gradation.
- Economies of scale and scope are significant
- Strict Government Regulations and hence typical period required for arranging government approval – 2 to 5 years.
- Large Insurance Premiums often drove small players away
- ‘Know how’ tough to emulate
- 6 theme parks including Farmland – Lotte World is in the heart of the city.
Visitors in Groups are charged less.
Virtual Reality theme parks.
- 5.5 day work -> Other means of entertainment.
- 5 competitors.
Lotte World – Indoor theme park
- Seoul Land – 23rd in the “Top 50 theme parks worldwide”.
- Farmland – Highest Growth Rate.
- Seasonal factor affected all competitors (but not in the same pattern ). Positively impacts Lotte World but negatively impacts Farmland.
- Farmland- Highest per capita expenditure on food, beverages and souvenirs.

SWOT Analysis for Joong-Ang Development Company
Opportunities
Strengths
Threats
Weaknesses
- Subway
- “Park and Ride”
- Scope for market expansion – untapped market of 5 Mn.
- Korea’s Economic growth rate: 8 – 9 %
- Steady Intl tourist growth (25% of customers are tourists).
- Scope to increase merchandise sales and admission & ride fee
- Inception of the new water park during June to September will attract customers from Lotte to Farmland.
- 3700 acre land
- President has been working in Hospitality sector.
- Economies of Scale / Scope
- Highest per capita expenditure on food, beverages and souvenirs.
- Parent Co’s Strong financial muscle.
- Attendance to theme parks shows a decreasing growth trend(0.9% and 6%)
- Learning curve.
- Stay time is less due to traffic congestion issues.
- Seasonal fluctuations.
- 6 theme parks including Farmland – Lotte World is in the heart of the city.
- Issues from fringe stakeholders (farmers).
People’s preference is shifting towards Historical attractions
-Accessibility to the park – 60 Km from Seoul; Traffic jam.
-Parking – Insufficient during peak days.
-Theme parks did not fit well with the “high tech” and “global” image of Samsung
- Organizational style – non service oriented employees and their outlook towards customer satisfaction.

Expansion Plan
Revamp Plan for Farmland: $ 300 Mn over 2 years(Phase 1)
Proposed names: Everland, Green Country and Nature Land.
Waterpark – Caribbean Theme: $ 140 Mn.
Global Fair: $ 85 Mn.
Expansion of existing zoo and parks – night time laser show and a fable fantasy garden: $ 50 Mn.
Augment parking
Sources of Funds – Samsung Group
Phase 2 – Resort Town (Exact budget not available)
New Mission – Create a zeal for long lasting life that is combined with harmony of nature.
If Plan approved, it will become prototype destination resort town I the entire world.

Thank You!!

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Samsung And The Theme Park Industry

by Anshuman Jaiswal on Apr 02, 2010

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