Theme Park 3.0

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  • Historically, people consumed entertainment in different ways – you usually had to go somewhere to consume entertainment. For example, you went to a movie theater to watch a movie, went to a golf course to play golf and had to go to the library for the bookstores to get a book. Today, technology has completely revolutionized the way many forms of entertainment are consumed. If it can change books, movies, and even golfing, can it change theme parks?
  • Market Share CalculationBased on 2009 Theme Park Index: The Global Attractions Attendance Report the following data was reported:Total Theme Park attendance for the Top 25 theme parks worldwide:185.6 million Total Theme Park attendance for all of Universal Studios’ Theme Parks: 22.465 millionMarket Share %: 22.465/185.6 = 12%Disney, a main competitor for Universal Studios Theme Parks, has a market share of 60%An increase from 12% to 20% was deemed a reasonable increase for Universal Studios for the next five yearsEnhanced Bottom Line with with new revenue streamsFinancial Data for the theme parks is not public information thus we could not ascertain these numbersInnovating new capabilities to drive organic growth at top and bottom line Higher Customer SatisfactionOn Yelp.com, for Universal Studios Hollywood the park received 3.5 stars out of 5 stars from 461 reviewsImproved Brand Equity
  • Insurgent PartnershipsNintendoSecond LifeZengyaOn-LiveSmart ServiceMobile apps or other technology to reserve ridesUse of technology to streamline attractions and minimize wait timesImprove cleanliness of parksExpanded ChannelsMobileOnlineCloud ComputingSocial GamingGlobal ExpansionNew Innovative rides/attractions
  • Universal should partner with Second Life to create a virtual replica of Universal Studios Theme Park in Second Life. This would allow people to visit Universal without having to leave their house thus overcoming the physical limitation of its theme parks and creating a larger customer base. There are various opportunities that Universal could use with Second Life. This includes, test and explore new attractions/rides/shows in the virtual world space and based on feedback from second life users the company could implement these new attractions in their theme parks. It allows not only instant feedback from users, but also the company would not have to spend millions of dollars physically implementing the attraction without having a trial run. Second Life users would pay for their virtual admission ticket, food, and merchandise, all similar to the real theme park. Additionally, sponsorships would also be an additional revenue source for Universal Studios in its virtual world. Universal could leverage its current partnerships with sponsors such as Coco-Cola and American Express to sponsor the virtual world. For example, Second Life users would receive a discount if they use their American Express card. Second Life provides another marketing/advertising medium and space for these sponsors and thus would benefit significantly from this as well. Ultimately, network effects plays a huge role in Second Life and the success of Universal’s partnership with Second life. This partnership would help generate significant interest in Universal studios, enhance customer base, maximize customer experience, broaden revenue streams, and enhance brand equity for Universal Studios.
  • Target demographic is young, technology savvy with strong interest in Universal brand.
  • Insurgent PartnershipsNintendoSecond LifeZengyaOn-LiveSmart ServiceMobile apps or other technology to reserve ridesUse of technology to streamline attractions and minimize wait timesImprove cleanliness of parksExpanded ChannelsMobileOnlineCloud ComputingSocial GamingGlobal ExpansionNew Innovative rides/attractions
  • Insurgent PartnershipsNintendoSecond LifeZengyaOn-LiveSmart ServiceMobile apps or other technology to reserve ridesUse of technology to streamline attractions and minimize wait timesImprove cleanliness of parksExpanded ChannelsMobileOnlineCloud ComputingSocial GamingGlobal ExpansionNew Innovative rides/attractions
  • Southamerica. Bollywood watching crowd – quantifyAround 15 million Indian expatriates living in different parts of the world account for over 65% of Bollywood’s earnings.Hollywood films released in 2008 – 463
  • Southamerica. Bollywood watching crowd – quantifyAround 15 million Indian expatriates living in different parts of the world account for over 65% of Bollywood’s earnings.Hollywood films released in 2008 – 463
  • Insurgent PartnershipsNintendoSecond LifeZengyaOn-LiveSmart ServiceMobile apps or other technology to reserve ridesUse of technology to streamline attractions and minimize wait timesImprove cleanliness of parksExpanded ChannelsMobileOnlineCloud ComputingSocial GamingGlobal ExpansionNew Innovative rides/attractions
  • Users do not feel inclined to return as the feel they have seen the entire park in one day.
  • Strengths:Well-recognized brands: Disney brand was ranked 9th in the Top 100 Global Brands ranking of the BusinessWeek magazine and Interbrand (DataMonitor, Disney Report, page 23)Currently interactive media comprises about 2% of the company’s revenuesParks & Resorts brings in about 30% of total revenues (approximately $10b a year).Currently North America account for 76% of Disney’s revenues
  • Theme Park 3.0

    1. 1. Theme Parks 3.0<br />Katharine Buford<br />Ritu Mather<br />Michelle Nguyen<br />Linishya Vaz<br />
    2. 2. Agenda<br />
    3. 3. The way people consume entertainment…<br />…is changing.<br />
    4. 4. What is causing this change?<br />The Catalysts of Change<br />Plus, additional trends in the economy including a recession and higher gas prices.<br />Demographic Changes & New Markets<br />Mobility<br />Web 3.0<br />Access to the Cloud<br />
    5. 5. Agenda<br />We are here<br />
    6. 6. Suppliers<br /><ul><li>Industry focus on innovation
    7. 7. Specialized knowledge and technology
    8. 8. Government & safety regulation
    9. 9. Increased cost of inputs – rising commodity prices</li></ul>Suppliers are important<br />Competition<br /><ul><li> Big players: Disney, Six Flags, & Universal.
    10. 10. Niche, specialized players
    11. 11. Other types of parks: zoos, aquatic parks, cultural parks, etc.
    12. 12. Mature domestic market in the U.S.
    13. 13. Necessity to innovate & diversify</li></ul>Barriers to Entry<br /><ul><li> Experience curve
    14. 14. Brand acceptance
    15. 15. High fixed costs
    16. 16. High marketing costs
    17. 17. Strategic location</li></ul>Substitutes<br /><ul><li> Game consoles & on-line video games
    18. 18. Toys
    19. 19. Movies
    20. 20. Sports/outdoor activities</li></ul>HIGH Barriers to Entry<br />Intense Competition<br />Substitutes are a BIG threat<br />Customers<br /><ul><li> Lots of choices
    21. 21. Distance and price sensitivity
    22. 22. Increased competition for consumers’ attention during the recession</li></ul>Customers have some power & it’s growing<br />
    23. 23. Agenda<br />We are here<br />
    24. 24. Where is the threat coming from?<br />The Insurgents<br />Zynga<br />Social On-line Gaming<br />Nintendo<br />Motion Controlled Gaming<br />On-Live<br />On-Demand Video Gaming<br />Second-Life: Virtual Reality<br />
    25. 25. What does this mean for theme parks?<br />Changing consumer expectations<br />On-demand mindset<br />Higher expectations for ease of use and customization<br />“Bleachers to couches”<br />More competition for entertainment spending – including more free options<br />New markets with new preferences<br />New tools, better access to data<br />
    26. 26. Agenda<br />We are here<br />
    27. 27. Universal Studios<br />An Incumbent such as Universal Studios has the scope, capital, access to technology and brand potential to ride this wave of change and emerge as a leader.<br />
    28. 28. Universal Studios is all about experiences that:<br />Create excitement and exhilaration in people's lives<br />Create special moments<br />Create unforgettable experiences<br />Create lasting memories. <br />
    29. 29. Who do they appeal to?<br />Movie fanatics and families with young children<br />How do they make money?<br />Admission and season pass sales, merchandise and souvenir sales, hotels and vacation packages, shopping (Universal City Walk), food and beverage sales<br />
    30. 30. How is Universal Studios using technology?<br />Online Sales<br />Universal Studios Theme Park Adventure developed for Nintendo GameCube<br />Virtual and 3-D Technology Incorporated into Rides<br />Invest in Social Gaming<br />
    31. 31. What challenges is Universal facing?<br />Maintenance standards have fallen over the years with customers finding faults with the park’s cleanliness <br />“The park feels like a dilapidated junk yard, dirty and sticky with every move you make. I wanted to have a large baby wipe with me at all times! Plus, its gotten really expensive for this not so memorable experience.”<br />The park has a scattered, non- themed look and feel<br />Not enough attractions for customers to spend an entire day.<br /><ul><li>Universal: 13 rides
    32. 32. Disney: 80+ rides</li></li></ul><li>What Makes a Successful Business Model?<br />
    33. 33. Agenda<br />We are here<br />
    34. 34. Where should Universal be in Five years ? <br />SUCCESS<br />
    35. 35. What strategies will get them there?<br />
    36. 36. Agenda<br />We are here<br />
    37. 37. What tactics should Universal employ? <br />
    38. 38.
    39. 39. What is an example of a partnership that will help Universal Studios achieve success?<br />Second Life<br />
    40. 40. Universal’s Second Life Opportunities<br />Test and Explore New Attractions/Rides/Shows<br />Virtual Attractions<br />Example: Allow avatars to direct, act, and/or produce a film<br />Promote future movie releases<br />Example: For Fast Five movie, allow avatars to race other avatars using 3D cars <br />
    41. 41. Universal’s Second Life Revenue Sources<br />Sponsors/Partners<br />Virtual Food<br />Virtual Merchandise<br />Virtual Park Admission Ticket<br />
    42. 42. Summary of Insurgent Partnerships Tactic <br />Revenue Opportunity<br />Expanding consumer base<br />Cost savings and valuable consumer insights<br />$100 million vs. $100,000<br />Increased revenues from virtual tickets, food, merchandise, sponsorships<br />Operational Fit<br />Increased human capital needs:<br />Manage partnership to maximize entertainment and revenue opportunities<br />Monitoring customer and sponsorship reviews<br />Strategic Fit<br />Perfect strategic fit that allows Universal to maximize consumers’ experience<br />
    43. 43. What tactics should Universal employ? <br />
    44. 44. Smart Service<br />Leverage new technology to improve customer service<br />Doesn’t have to be game-changing<br />Look to Disney and abroad for inspiration<br />Technology: RFID<br /><ul><li>Bracelets for Payment
    45. 45. Lost Child Protection/Prevention
    46. 46. Connect with Mobile Phone technology to “Check-In” and “Like” on Facebook, Four-Square, etc. </li></ul>Technology: Mobile Payment<br /><ul><li>In-park Purchases
    47. 47. Gate Access</li></li></ul><li>Smart Service<br />Utilize social media tracking software to track complaints in real-time<br />Develop an internal app to receive customer feedback<br />
    48. 48. Summary of Smart Service Tactic<br />Revenue Opportunity<br />Return visits, fewer complaints, happier guests<br />"A satisfied customer will tell five people about their experience, a dissatisfied customer will tell twenty-five!“ – Customer Service Representative<br />Operational Fit<br />Investment is primarily in human capital:<br />Additional staff needed to monitor social media.<br />Additional park maintenance and marketing/PR staff needed to respond to complaints<br />Strategic Fit<br />Excellent strategic fit: one of Universal’s major weaknesses is customer service.<br />
    49. 49. What tactics should Universal employ? <br />
    50. 50. Expanded Channels<br />Universal Studios has international locations in Japan and Singapore only.<br />Theme parks market in Latin America is expected to rise by US$ 53.2M (2008 to 2012). <br />Russia revenues - US$ 154.4M (2015)    <br />Enter Emerging Economies <br />Asia-Pacific theme parks market revenues projected to grow at a compounded annual rate of 6.1%<br />
    51. 51. Expanded Channels<br />Universal Studios is present only at 2 international locations with one in Singapore opened recently<br />Indian film industry revenues (2008) Rs 107BProjected annual growth rate to 2013 – 11.5%<br />Projected Ticket sales in 2013 – Rs130B($3B<br />Enter Emerging Economies <br />Set up a Bollywood + Hollywood themed park in India<br />Asia-Pacific theme parks market revenues projected to grow at a compounded annual rate of 6.1%<br />
    52. 52. It might be happening…<br />Reliance ADA Group is negotiating with Universal Studios to replicate its movie-themed amusement parks in India. <br />The result would be a $1.5 billion new park that covers 400 acres --in either New Delhi or Mumbai—<br />Combine Universal park attractions with others devoted to Bollywood films<br />Universal would take a licensing fee for its branded attractions  (Spider-Man, The Hulk and Doctor Doom)<br />BUT!<br />
    53. 53. To generate demand and interest in this theme park introduce social games and use other mediums to promote Bollywood movies released by Universal Studios<br />Bollywood theme Dance game<br />
    54. 54. Summary of Expanded Channels Tactic<br />Revenue Opportunity<br />World theme parks market is projected to reach $28.7 billion by the year 2012<br />Lower capital investment in emerging economies<br />Operational Fit<br />Capitalize on existing film distribution partnerships<br />New teams at strategic global locations<br />Strategic Fit<br />Positioned to leverage growth in entertainment in emerging economies<br />Levels the decline in US market<br />
    55. 55. What tactics should Universal employ? <br />
    56. 56. New Innovative Rides/Attractions<br />Visitors should feel like they are a part of the movie!<br />Shrek 3D - while waiting in line, have characters interact with audience via 3D<br />Add new innovative rides coinciding with release of new movies to maximize marketing efforts<br />Use technology to create innovative user experiences<br />Fast & Furious 5 - 3D simulations and virtual car races interspersed with actual movie scenes<br />Simulate Terminator style robots to engage in virtual wars with visitors outside the ride<br />
    57. 57. Summary of New Rides/Attractions Tactic<br />Revenue Opportunity<br />Investment into technology and new rides <br />Results – Returning customers & more attendance<br />Attendance increased 52% when Universal launched “Back to the Future” soon after release of the third film<br />Operational Fit<br />Teams dedicated for market research in park experience<br />R&D teams for innovative rides<br />Strategic Fit<br />Increase Brand Loyalty<br />Maintain competitiveness in the market<br />Maximizing co marketing with film distribution<br />
    58. 58. Conclusion<br />Universal’s successful implementation of these tactics will position them to take a strategic leap towards being a leader in the next generation of theme parks.<br />5 Year Success!<br />
    59. 59. Thank You!<br />Questions?<br />
    60. 60. Support Slides<br />
    61. 61. SWOT Analysis - Incumbents<br />Strengths<br /><ul><li> Strong brands and customer awareness
    62. 62. Strong tie-ins with movies, TV, and consumer products
    63. 63. Unique experience – difficult to replicate without actually attending in person</li></ul>Weaknesses<br /><ul><li> Perception as a “special-occasion”
    64. 64. Perception as kid-oriented only
    65. 65. Stress/expense of physically visiting
    66. 66. Heavy reliance on the North American market; little or no presence in emerging markets in Asia and Latin America </li></ul>Threats<br /><ul><li>Recession/decreased spending on entertainment
    67. 67. Growing number of substitutes and increased demand for the customer’s attention/mindshare
    68. 68. Oil prices/high gas prices may keep families close to home</li></ul>Opportunities<br /><ul><li>Interactive Media
    69. 69. Continued increase in use of technology
    70. 70. Global diversification, particularly in the emerging markets</li></li></ul><li>Universal Studios: SWOT Analysis<br />

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