Tourism Industry Comparative Analysis: Walt Disney and Six Flags Case Study

Case Study Analysis

A: Analysis of Walt Disney with other Competitors in the Tourism Industry

The amusement and theme parks provide the greatest recreational activity. All around the world, people of every age like to go to these parks. The major corporations in this business include Walt Disney, Sea World Parks and Entertainment, Six Flag Entertainment, NBC Universal Media and Cedar Fair LP.

The Disney Company foundation was held in 1923 with a goal to provide excellent entertainment to every age of people.  The first Disney Park was started in the year 1955. After the year 1990, Disney expanded his business by introducing television programs and live-action movies (Winsor, 2015). Currently this company is involved in media, parks and resorts business. The media networking includes globally recognized Disney channels, broadcasting and communications.  Walt studio is one of the major contributors to Disney Company to gain fame and success. On the other hand worldwide recognition boosted its business and it became a well known brand even for digital products, books, magazines. Currently, Disney Company is operating in different locations/countries such as Florida, Line, Japan, Hong Kong, China, California, and Hawaii.

SeaWorld Parks and Entertainment being a zoological organization has more than 50 years of history and engaged in the welfares, veterinary and training of animals. In this regards, this cooperation is working for rehabilitation and adaptation of animals to minimize the scare of their abundance. They are operating in 12 different locations of United States of America. A number of the diverse ride makes it attractive for the tourist to come and experience this wonderful recreational place (Ventre and Jett, 2015). They are more into introducing such rides which link the tourists with animals. Yearly based high number of animal rescue, charities and sustainable operations all over the world are the significant factors for the success of this corporation.

Six Flags Entertainment is one of the biggest theme park Corporations of the world who has been entertaining the people for more than 50 years. They have world-class rides and coasters along with attractive water parks. Moreover they are also providing movie thrills and cartoons. Worldwide its popularity is high due to excellent offers to the visitors (PARKS, 2017). Currently, they are operating in different locations in United State and countries such Spain, Belgium, Germany, Canada, Mexico, France and Netherlands.

NBC Universal Media Corporation is the world’s leading company providing entertainment, production, marketing, news, and latest information to its audience. They started their business in 1910 by introducing the world-class motion pictures, radio and television broadcasting. They possess several television stations which are producing significant motion pictures and entertainment programs (Ransbotham, 2016). Most of all, this group has a world-famous theme park to fascinate visitors. This group also develops successive strategies to increase its audience and to compete for the other theme parks in the world (www.nbcuniversal.com).

Cedar Fair LP has 13 parks operating in different locations and 4 hotels. This company has experienced staff which has yearly experience and work with dedication to meet the requirements of their audience. They possess award winning thrilling rides which can easily attract the people. Their time to time new strategies and even organizing policies keep them on high rank worldwide. This company operates water and amusement parks in US and Canada. Because of its thrilling rides it is a big rival of other companies in this industry (Lewison, M., 2017).  Among all these corporations, the Walt Disney Company is at the top rank. The competitive landscape of these companies is shown in Figure 1.

Figure 1. Market analysis of Walt Disney Company and its Competitors

As shown in Figure, the most of the market shares are occupied by the Walt Disney Company, whereas the second highest shareholding company is NBC Universal Media LLC. The SeaWorld Parks stands at the third number, while Six Flag at the fourth number. The fifth highest shareholder company is Cedar Fair LP and only 12.3 % miscellaneous shares belong to less known companies. Similarly the trends of visitors towards different companies in the year 2015 are shown in Figure 2. Among all these companies the Walt Disney showed the maximum number of visitors indicating its popularity and attraction of visitors to this company’s recreation activities.

Figure 2. Visitor trends towards the companies

B: Analysis of Disney with its Competitor Company (Six Flag)

Though the second highest shareholder company is NBC Universal which appears a great rival for the Disney, this company is involved more in media, marketing and production with less interest in the theme/amusement parks. Therefore under such cases, there is one company the Six Flags which have gained good repute all over the world because they have diverse rides, water park and cartoon broadcasting. Therefore it could provide the Disney a tough time for long term business. For the better understanding, the analysis of both companies in the form of SWOT analysis is given in Table 1 and 2.

Table 1. SWOT analysis for the Disney

Strength Weakness Opportunity Threats
Strong Brand Name Strong revenue: (2013) Parks and resorts (31.30 %) Consumer product (13.30 %) Interactive (2.4%) A diversified portfolio of  selling New movies based Merchandising and retailing Loyal customers Disney Institute (Jones, 2013) Less business in foreign countries. Around 75 % revenue comes from North America. Fear of amendments in the North American branch. Totally depends on US economy. The business may collapse in case the economy of US fell down. This could lead to financial crises. Disney has the opportunity to develop its business in foreign markets. In this way its weakness could be turned into a strength. Interest to invest and develop a business in China and India. Somehow the Disney group is succeeded in China. Interested in development of more and more games as it helped in generation of good revenue. Extension of an amusement park with exciting opportunities. Major revenue is based in North America. All the products, offers and entertainment activities are based on liking of the audience which means if audience trends changes, the business will be affected.

Table 2.  The SWOT analysis of Six Flag

Strength Weakness Opportunity Threats
Six Flag recognized the brand. Free falling US economy. Online offers of cheap tickets especially for kids. Cleaner Parks and best employees. Engagement in social works such as the fight against cancer. Best Chosen locations.     Massive debts The issue of paying to stakeholders. High payments required for now ideas while consumer attraction is low. Lack of change in entertainment for teenagers and young men Several accidents happened which affected the repute of Six Flag. No actual opportunities because of low cash. Much business is required to meet the debt of Six Flag. Good scope for the nightclubs because of different themes arrangements. Good scope for sports bar and restaurant. Option to sell the land and to overcome the debt issues. Extension of operating hours.   The Biggest threat is the business of Disney Land. Competition with the low cost (affordable) and fast growing activities. The threat of seasonal infections which reduce the number of visitors.

From all these analyses, it was clear that Six Flag is one of the competitors of Disney Company, which is trying hard to attract the visitors all over the world. Six Flags is looking for the alternative strategies so it may overcome its debt issues and find a way to compete this big tycoon. On the other hand, people love Disney so much because of its diverse and standard entertainments that they get attract easily towards Disney for recreation. Many families found it cheaper to visit a recreational place like Disney than going Europe for holidays. However, the Disney Company cannot sit quietly for a long time based on audience interest because once the audience interest changed, their business could be affected. Therefore they need to develop their ongoing strategies continuously.

C: Value Chain Comparison of the Disney and Six Flag Companies

There are certain variables which affect the business of companies. In case of Disney the value chain analysis is carried out as follows (Table 3).

Table 3. Value chain analysis of Disney

Primary Activities Support Activities
Operation Order handling Sales and Marketing Servicing Offers and Promotions Hiring of Entertainers Good recreational environment Management towards disables   Finance Infrastructure Human Resources Management Product and Technology Development Procurement  

Primary Values

Marketing and Sale

Disney has gained good repute because of its good offers and versatile activities. They always tried to promote their business by good marketing strategies. For this purpose, they hired the freelancers and professional entertainers who can perform and attract the people’s attention. They not only advertised through news but also adopted a personal interaction strategy. Using this strategy they passed their fascinating words to the customers, inspiring them and let them feel how important they are for Disney. In such cases, these customers acted like marketers for the Disney among their family, friends and other relatives. It was a free but a powerful source of advertising for Disney (Wilson, 2017).

Time to time advertisements on television through cartoons and adds they increased their customers. Different Surveys they passed to the customers which helped them to understand the perceptions of customers and improve their services. Similarly, night tickers were sold with certain packages which attracted the customers and ultimately enhanced the business. The new events were arranged during the festivals to bring a positive and energetic change among the customers (Zhu and Xu, 2010). New launchings were introduced mostly during these festivals. Disney strategy to work with local attractions increased its business as many traditional sports were changed into the diverse sports. Several companies have adopted this strategy as it is considered as a powerful tool for business. For example, Johnson & Johnson and Aqua fresh companies have been involved in many joint sales promotions especially for the sale of tooth brush (Varadarajan, 1985).

In comparison to the Disney, the Six Flags marketing style is little different. They do marketing of their parks by the characters created in cartoons and live action movies. Some of the famous characters are bugs bunny, scooby doo, tweety bird and yogi bear. These characters are a type of additional entertainment for the families. This way, their revenue is generated as more tickets are selling and more visitors come to these parks as compared with local small entertainments. Six Flags had a contract with Coca Cola that they will work together.

In this way Coca Cola will cover the beverage inside the parks and these two companies will help each other during promotional periods. In 2005, Six Flags started a sponsorship deal with Conagra Food Company for the coverage of food in its 28 parks in the United States. Similarly, a national campaign was started by advertising  a character of a bus driver with big glasses. It was true that it could not win the hearts of investors. In terms of pricing, Six Flag adopted a strategy of providing seasonal discounts as there was less business because of high entry pricing. The main problem of Six Flag was a high debt which could not settle it even with revenue generation.

Services

One of the best value chains of Disney is the recreational environment, where the families can feel safe and enjoy up to the maximum extent. Similarly, they provided the money back guarantee of their products and services. In case of dissatisfatcion of customers, the things can be returned to the company. This provides customers much relief in buying the products or planning the services. Another strategy related to services was the delivery of the bought product to the customer’s room in Disney hotels. In this way, a customer can easily buy the products without care of carrying it. The services are the main factor which can govern changes in mood among the customers. If they are provided services with good care and respect, they will be more loyal to the company.

Same is the case with Disney, whose customers show loyalty while selecting the recreational activities. In case of Six Flag, the customer loyalty was variable based on the pricing of parks entry. As long as the prices were low many people attracted and became their visitors. However, this could not hold for a long time which was seen in Disney Company. The Six Flags provided good services including high class indoor foods, games and rental stuff etc to its customers. For this purpose they had a contract with a food company to cover all their US based parks.

Supportive Values

Infrastructure

Disney provided a good infrastructure by providing proper planning of ongoing projects and future extensions. The managerial board has participated in the development of strategic actions to boost the business. Several positive actions were taken in saving the energy for the offices as well as for the rides. This thinking provided the path to meet the energy crises and in this way Disney reputed was increased. A legal team is working to organize the safety issues and making the Disney safer recreational place. This value added was the main reason for peoples attraction toward Disney because many severe accidents happened in Six Flags company which decreased its repute. As compared with the Disney, the Six Flag could not develop a good infrastructure because of lack of revenues. They had to pay a long term debt which could not let them rise and emerge as a tycoon even providing the high quality services.

Procurement

Disney knows the importance of its brand and infrastructure, designing and environment. Keeping in mind all these factors they designed and build many similar structures in foreign countries so the customers there can enjoy and feel the same experience in their home country. Further they applied some modifications based on the cultural aspects so the customers’ may think positive and do not feel discrimination. This is one of the biggest challenges to start a business in the foreign country and compete for the local rivals. Disney start operated in different countries and gain good fame. On the other hand, Six Flags introduced many changes in their system, but that could not stand in front of Disney new outlooks. The reason was low revenue and high debt of this company.

Human Resource Management

Human resource management plays a vital role in maintaining the revenues. Disney hired the multicultural employees especially in the service centers so customers of all the nationalities can be treated in good manners. On the other hand, many locals were hired which reduced the unemployment of that country. These employees became the source to provide better quality services.

It is necessary to take care of the employees whether they meet the technical and service standards or not. Disney always looks forward to providing technical courses to its employees so they could remain up to date with skills and technology. For this purpose, Disney had built a university where they can teach and trained the employees. In this regards, Six Flags could not rise up well because they were not able to extend their business by investing more and more on the parks extensions. The best thing they could only do is the land which can generate the revenue for them. Six Flags has a good leadership which can provide better management towards staff, their technical improvement and better service characters.

Technology Development

Technology development is essential for the business like tourism, theme and amusement parks. The high speed diverse rides have many technical concerns therefore technically sound staff is required for the maintenance of these rides. Disney Company has an understanding about these issues and always welcomes these issues to rectify in a short time. This company never tolerated safety concerns. Timely replacement of components of fast rides safe the customers from all the harmful accidents. All these frameworks are possible for a big investment company rather than a small infrastructural holding company like Six Flags. There were several cases where the technology failed and resulted in serious accidents. The company had to meet the legal matters created by the visitors. Rather than improving the technology, their revenue was wasted on legal matters.

D: Corporate and Business Level Strategies of Disney and Six Flag Companies

Since the major revenue of Disney Company is based on the US business which is a big threat to face financial issues in case the economy of US fell down. On the other side, Disney is not doing good business in foreign countries even its brand is recognized all over the world. Disney needs to develop some strategies to improve its business. The Disney has value chains which need a strategic implementation to increase its business in the foreign market. This way the Disney can compete the local as well as international entertainment groups such as Six Flags. Here it should be noted that globally, the six Flag has the advantage of being recognized by at least six countries that will support its business and revenue generation.  Some of the strategies which can improve the business in foreign markets are as follows.

Language Strategy

In most of the foreign countries it is a big issue of communication as locals communicate in their native language and it creates a lot of gaps between locals and foreign agencies. Disney has adopted this strategy and provided all handbooks, advertisements and marketing ads in English as well as the native language of that country. In this way people had an idea about Disney and its recreation activities.

Cultural strategy

This is the strategy which interlinked Americans and other nations by diversifying in cultural architects, themes and entertainment. Several changes were made to attract the visitors in the foreign market such as new designing and addition of world clock etc. the ghost houses based on local culture were introduced so that people may get attraction and feel like their local entertainments. The guiding staff was dressed in local clothes. To get the loyalty of the local visitors sometimes the Mickey and Goofy pics were not added for entertainments.

Corporate strategy

This is one of the biggest tasks while doing business abroad. Under such conditions, a company has a lot of threats and need to corporate with others in joint ventures which can enhance their recognition in that market and benefit them with good business. Disney Company participated a lot in such activities and allowed a number of public organizations to come and advertise in their parks. This helped the Disney Company to earn more and stable them globally. On the other hand, Six Flags participated in local corporations with coca cola and other food companies (Levitt, 2014.). Somehow, their business was improved but the revenue was less due to fewer visitors as compared with Disney.

Financial strategy

During the first year of Euro Disney land the Disney Company got a debt of huge amount. At that time Walt Disney prepared a strategic plan to meet financial loss. They purchased shares with low market price and diverse in the business along with their entertainment business. This strategy saved them from the financial crises due to up down of their entertainment business in foreign countries. That time Disney changed the name of Euro Disneyland to Paris Disneyland and some administrative posts were downsized ultimately provided stability to revenue. In foreign markets they offered promotional prices every after a certain time so more and more people got attracted and became their customers. Similarly, they provided cheap hotelling and entry tickets during the off seasons.

In this way many middleclass families were also able to go and enjoy the remarkable entertainments of Disney lands. On the other hand, Six Flags financial strategy was based on the profit earned in comparison with their competitors (Voigt, Buliga and Michl, 2017). During the year 2011, they became bankrupt but later their strategic planning was able to stable them and somehow they could manage their debts. In all the cases, the Six Flag struggles hard to develop their name among the competitors but the issue of investment put bad remarks on their success.

Conclusion

In this assignment, the analysis of Disney with its competitors was carried out. Further, the comparative analysis was conducted between the Disney and Six Flags in terms of competency, value chains, business and corporate level successive strategies adopted.  The SWOT analysis was conducted for both of the companies and compared. The big tycoon company Disney has some threats of business collapse in case of fall in US economy as its major revenue is based on US based business.

The big threat of the Six Flag is obviously Disney, but there are also some other entertainment groups which can easily compete the Six Flag in this business. In comparison with those groups, Disney has good business however, a continuous improvement is required to maintain this business. Both Disney and Six Flags have certain opportunities which may increase their business. But the bankruptcy of the six Flag is a big issue for their success. They do not have high revenue like Disney and cannot spend much on expansions or architects of their amusement parks. This becomes a big advantage for the Disney to attract more visitors.

From the study it was also concluded that Disney is one of the largest Company in the world which has attracted a maximum audience as compared with other rivals all over the world. There are chances of decline in business because of its rivals. For a long run of their business in foreign countries, they have to be more careful in the generation of revenue. They need to adopt new business and corporate strategies and accelerate them. Moreover, good marketing is required which could be a fast approach to attract more and more visitors.  They also need to have a look on their prices and should concentrate on the pricing strategy. This is the way they can maintain their name all over the world.

References

Lewison, M., 2017. Demand-based pricing in the US theme park industry. International Journal of Leisure and Tourism Marketing, 5(3), pp.271-293.

Mary Winsor Ms, R., 2015. The Magic of the Mouse: An Exploration of Brand Personality in The Walt Disney Company. University of New Hampshire Scholars’ Repository.

Ransbotham, S., 2016. Knowledge entrepreneurship: institutionalising wiki-based knowledge-management processes in competitive and hierarchical organisations. Journal of Information Technology, 31(2), pp.226-239.

Travel, T.M.R., 1983. General overview. Myofascial pain and dysfunction: the trigger point manual. Baltimore: Williams & Wilkins, pp.11-93.

Ventre, J. and Jett, J., 2015. Killer whales, theme parks and controversy: An exploration of the evidence (pp. 128-145). Channel View Publications: Bristol, United Kingdom.

Voigt, K.I., Buliga, O. and Michl, K., 2017. Making People Happy: The Case of the Walt Disney Company. In Business Model Pioneers (pp. 113-126). Springer, Cham.

Wilson, S., 2017. Personnel Strategy for Multinational Firms: A Case Study of the Walt Disney Company in China. Asian Political Science Review, 1(1), pp.65-70.

Zhu, L. and Xu, D., 2010. Marketing Strategic Change in Expansion of Disneyland: Cases Study of Disneyland’s Overseas Expansion in Shanghai.

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