Samsung and the theme park industry in Korea'' Problem Analysis In the case of Samsun, several areas of issues

can be extracted from the case study:1. Financial Issues The price of the theme park land is relatively expensive, ranging from $5 mil - $!bill" The cost of the land value can be really high #hat more #hen the location of this theme park is smack in the middle of the city" Secondly, the cost of maintenance for the theme park is huge" This expenses is unavoidable as the nature of the business re$uire regular maintenance #orks and upgrading tasks" 2. Seasonal Fluctuations In marketing the theme park, the management used about % & of their total income for belo# and above the line promotions" These includes advertising, radio and print advertisement, mailers and partnership programs #ith tour operators" 'o#ever, the number of visitors for the center varies from time to time" (eak seasons, i"e: spring, summer and school holidays recorded high number of visitors to the theme park" 'o#ever, this number often drop #hen bad #eather hit the area" In managing high demand during peak season, the management of theme park often struggle #ith lack of staff to manage the demand" This led to staffing and housing issues during this sudden urge"

!ompetitors In South of )orea, there are many competitors that are in the same nature of business" They are *otte +orld, Seoul *and, ,ream *and, -hildren.s /rand (ark and Seoul /rand (ark" *otte +orld had the competitive advantage due to its location in the heart of the city and its an indoor

theme park" 0lthough 1ongin 2armland ranked no %% out of 5 amusement parks in the #orld 3%4456, *otte +orld is catching #ith up being no %5 in the same rank" ". #ransportation and $ocation 0ccessibility to the park is an issue especially #ith high traffic conditions, eg: peak hours" (eople spent more time traveling every day7 they don8t have enough time to do their daily chores" Instead of entertaining themselves over the #eekend, they chose to do their chores" In an average, people spent about t#o hours from Seoul to 2armland due to traffic 9am" 0s mentioned above, a sudden urge of demand #ill arise during peak seasons, i"e: spring, summer and school holidays" This #ill lead to issues #ith parking spaces" :n a normal operation basis, parking space for about ;, cars are sufficient, ho#ever this might be other#ise during peak seasons" <eferring to table ; =*eisure (atterns of South )orean -ustomers 3%4456>, !;& of respondents replied they #ill have about 5-5 people accompany them #hen they go to the theme park" ?;& of respondent replied they #ill choose to drive to the theme park" %. !ustomer Satis&action The @anagement of 2armland realiAed that *otte +orld provided better customer satisfaction and they scored pretty high during the customer satisfaction survey" 2armland recogniAes the fact that it.s difficult to achieve similar service standard as in the ,isneyland" 2armland need to look into their current hiring process, academically vs people-oriented inclination to#ards the 9ob" Bvaluate the theme parks industry using (orter.s 2ive 2orces @odel" @ichael (orter.s 5 2orces @odel ,iscuss the nature of the competition 'ho are the competitors( 1) #o the local customers* The competitors are %6*otte #orld, C6Seoul *and and !6cheaper entertainment such as camping , beach and home movies"

2) #o international customers The competitors are theme parks in the region such as Tokyo ,isneyland, 'ong )ong :cean (ark , Dakarta Daya 0ncol ,reamland and Eei9ing 0musement (ark" In South )orea , there are also five other theme parks that compete #ith 2armland" Erief description of each of the theme park: %6 Tokyo ,isneyland -omprising of F themes in the park ,%6+orld EaAaar, the 5 classics ,isneyland C6 0dventure land , !6,isney *and 56Tomorro# *and 56 +estern *and and the inclusion of t#o mini lands F6-ritter country and ;6@ickey Toon to#n" a6 +orld EaAaar +orld EaAaar is the main entry corridor and primary shopping area of Tokyo ,isneyland" ,espite the use of the #ord G+orldG in its name, the general look and theme of +orld EaAaar is that of early C th-century 0merica, matching the G@ain Street, H"S"0"G areas of other @agic )ingdom-style parks" b6 +estern *and +esternland is an Gold #estG themed area, the counterpart of 2rontierland in other @agic )ingdom-style parks c6 -ritter -ountry -ritter -ountry is a small area of the park #ith t#o main attractions, Splash @ountains and Eeaver Erothers Bxplorer -anoe" The other four attractions are the similar attractions are in ,isney +orld in 2lorida" C6 :cean (ark in 'ong )ong The largest #ater park in 0sia is a marine mammal park, oceanarium and animal theme park" It boast of !5 attractions and rides such as : The dragon roller coaster, 0byss turbo

drop, -raAy /alleon, 2erris +heel, @ine Train, <aging <iver and :cean (ark Bscalator are 9ust some of the attractions" !6 Iorth Dakarta Daya 0ncol ,reamland :ne of the largest recreation complexes in SB 0sia, it consist of a theme park called, ,unia 2antasi , a #ater park complex, a oceanarium , a golf course , and several hotels" 56 -hina amusement (ark -omprises of roller coaster, fairy tale #orld, garden for families and the park is not like the rest #here there is a theme instead it is trying to copy ,isneyland by putting some figures of +alt ,isney" 2rom the above there are t#o categories of customers, 2armland must attract: %6 ,omestic customers #hich are the primary target segment of the customer base as they represent in South )orea about ? & to F5& of the total customers visiting theme parks" C6 International customers or Tourists #here theme park is a large attraction to this group #hich has a high gro#th potential" Therefore in order to compete domestically and internationally, 1ongin 2armland must revamp their existing facilities and bring in ne# attractions and ne# theme to the existing park as #ell as improve the hard#are and soft#are of the existing park" To kno# the competition forces better , (orter.s 5 forces analysis model #ill be use" Porter's % Forces in +ongin Farmland theme park (orter 5 forces model 3see appendix %6 focus on external environment that the company has to be able to cope #ith" (orter.s five forces model identifies the 5 sources of competitive pressures on theme park industry and helps to determine 1ongin 2armland theme park competitive intensity and profit potential" The five force of (orter.s analysis model are as follo#s: %6 <ivalry

C6 Ie# entrants !6 Substitutes 56 Euyer bargaining po#er 56 Supplier bargaining po#er ,i-alry In )orea, around the Seoul area, there #ere six themes parks" The most notable player in these region are: *otte +orld , Seoul *and and 1ongin 2armland"" Bach of these companies offers theme parks #ith varying experiences, al#ays trying to debut the ne#est and best experiences in order to stay ahead of one another" 0 great example of this can be seen by looking at these three ma9or theme parks" *otte +orld, Seoul *and and 1ongin 2armland each are in direct competition #ith one another" This is evident in their competitive offerings in ticket prices: F,CF4 +on at *otte +orld, ?,545 +on at Seoul *and and ?,??F +on at 2armland" These prices represent the admission and free ride per person" The rivalry bet#een theme parks can also be observed by the debut of ne# attractions or technology" *otte +orld is located in the do#nto#n and attract customers #orking or living nearby" The theme park itself has hotel, departmental store, shopping mall , folk village and sports center" Seoul *and also located near Seoul, at )yungkido, takes after ,isneyland but in a much smaller scale" /enerally , Seoul *and is more of a entertainment place for short visit" 2armland ,opened in %4F? originally meant to provide $uality of living through healthy open air leisure activities" It has the +ild Safari , the rose garden and to provide for +inter theme , the Sled Slope and the @otor (ark" ,ue to the intense rivalry from *otte #orld and Seoul *and , 2armland also planned to revamp its theme park #ith addition of the #ater park, a global fair and the expansion of the existing Aoo" <ivalry amongst companies in the theme park industry is #hat keeps them relevant in the eyes of its customers" Bvery year ne# attractions, restaurants, entertainment, and hotel offerings are announced in order to influence people to attend the various parks" This rivalry also affects the profits of these theme parks as they typically see a good return on their investment year over

year" 2or example, not every family is going to take a vacation to 2armland each holiday" 2armland realiAes this and thus is constantly looking for #ays to improve its attractions to stay ahead of its rivals, so families can count on having a better experience on their next visit" The more guests 2armland can get to return by staying ahead of rivals *otte #orld and Seoul *and, the more profit they #ill be able to bring home" :ther forms of competition come from free admission parks, beaches, camping trips" These are either free or cheaper than paying for a trip to the theme park" #he bargaining po.er o& customers in the theme park industry In a good economy and during the holiday seasons, the buyer bargaining po#er is lo# #here there are many patrons to the theme park" Since the )oreans do not have many vacation leave and )orea is a temperate country, the only time for )oreans to go out #ith their family #ill be during the mid Jsummer to mid-autumn period" These #ill be the peak period for most of the theme parks and it is term the high seasonality" +hen the high seasonality period is over, the customer.s bargaining po#er #ill be high and the theme parks must start their promotional activities or special events to attract customers to visit the theme park" /argaining po.er o& suppliers 0 0s I mentioned in my discussion surrounding rivalry in the theme park industry, every park attempts to stay relevant and appealing to its customers by debuting ne# attractionsKofferings as often as possible" :perating under that impression, the suppliers to the theme park industry have a lot of bargaining po#er" ,:/: of Dapan, 'HSS of /ermany and 0<<:+ of the Hnited States are 9ust a fe# of the ma9or companies #ho create the attractions found in most of the theme parks throughout the #orld" Bvery year, the International 0ssociation of 0musement (arks and 0ttractions 3I00(06 hosts a convention #here the ne#est technology is put on display for the consumers 3theme parks6" In an effort to keep customers excited year after year, theme parks have the opportunity at this convention to see the ne#est technologies first hand and decide #hat to bring to their theme parks in the future" This can negatively affect the profit level of theme parks ho#ever, as they bid against one another as they vie for the best technology, driving up the prices and reputation of the suppliers

#hreat o& ne. entrants The threat of ne# entrants of theme park in South )orea is not particularly high" Iear Seoul , there are six theme park of #hich *otte +orld , Seoul *and and 1ongin 2armland are the most notable ones" Theme parks around the #orld re$uire a large scale initial investment ranging from $5 million to $! billion" *and development cost ,amusement machinery cost and #orking capital are the main component of the capital investment" Since theme parks are very competitive in nature, continuous upgrades of ne# attractions and renovate existing ones to attract repeat customers is a norm" The threat of ne# entrants outside South )orea appears to be high especially from #orld class theme parks such as Tokyo ,isneyland, :cean (ark in 'ong )ong, Daya 0ncol ,reamland in Dakarta and Eei9ing 0musement (ark" 'ong )ong ,isneyland has opened #ith success, a ne# Shanghai ,isney recent has been announced, and several theme park pro9ects in ,ubai, though long delayed, are no# starting to get under #ay" +hether or not these pro9ects #ill succeed remains to be seen, but the entry barriers for the theme park industry appear to be much lo#er outside of the South )orea" 2or these reasons I have to conclude that the threat of ne# entrants into the theme park industry does not seem to have too large an impact on current companies profits" #hreat o& substitutes The threat of substitutes in the theme park industry is one of the biggest challenges theme parks are forced to overcome" +hile theme parks such as *otte +orld and Seoul *and , they cater to customers for one or t#o days travel" 2armland intends to develop a resort to#n in 1ongin #ith luxury hotels, golf courses and resort accommodations catering to customers #ith families and spend longer time in 2armland" The challenge for 2armland is finding #ays to entice customers to spend their vacations #ith them as opposed to trips to the beach, admission parks, camping trips or staying at home and #atch video-movies" The threat of substitutes #ill al#ays exist as families decide #here to spend their money on vacations each year" 'o#ever, if companies can find a #ay to remain relevant and offer a #ide range of activities for people to engage in like 2armland ,*otte +orld , they #ill be less susceptible to feel the effects of these substitutes and profit levels #ill continue to gro#"

'o# do the particularities of the South )orean environment alter your analysisL ,o you foresee any specific problemsL +hat are the key factors of successL It is best to use the (BST analysis model to evaluate the particularities of the South )orean environment" The analysis measures the market potential and situation, particularly indicating gro#th or decline, and thereby market attractiveness, business potential and suitability of assess" (BST is an acronym for (olitical, Bconomic, social and Technological factors, #hich are used to assess the market for a business unit, like 2armland" Bssentially, the factors are external in nature" The sub9ect of the (BST analysis in this report is to evaluate if Samsung 'ead$uarter should support the business proposal by investing $! Political *and Hse /etting authority approval in building a theme park in )orea could be a tedious process and takes typically C J 5 years before any approval could be granted" This is especially so #ithin the vicinity of ma9or cities such as Seoul #here land is scare" The land re$uires for building or expanding a theme park normally involved considerable large land plot" 1cological2en-ironmental Issue (olitical issues involving ecologicalKenvironmental concerns could hinder a theme park pro9ect" -itiAens or environmental group affected by the pro9ect could raise issue such as noise pollution, traffic congestion, deforestation etc" Premium Insurance &or Accidents *egislation re$uires theme park operators to carry premium insurance for accidents involving visitors as a result of the rides, #ater sports facilitated" million in revamping 2armland Theme (ark"

1conomic 0fter the )orean +ar of %45 -%45!, South )orea has progressively evolved into a dynamic industrial society through the decades" Ey %44 s, educational and public health standards #ere high so as the average annual income at purchasing po#er parity 3ad9usting to the cost of living in the country6 standing at HS, %!,!5 and #as gro#ing" This gave indication of the spending

po#er of the population benefitted from the economy gro#th that experienced real /,( expanded by an average of more than ;& per year from HS, C"FE to HS, C! E in %4;4" Tourism in South )orea has been gro#ing over the years" @a9ority of the South )orean tourist industry #as supported by the domestic tourism" @ost non-)orean tourists come mainly from Dapan, -hina, Tai#an and 'ong )ong" Misitors from South Bast 0sian countries #ere also on the rise" The popularity of popular culture in these countries has increased tourist arrivals" Seoul is the principle tourist destination for visitors" 2or the theme park industry in South )orea, the business is one of seasonal and intermittent in nature" The visitor attendance typically peaked during springKsummer and school holiday" 2or those #ith outdoor facility, the parks #ould be affected by the bad #eathers such as torrential rains, severe #inter condition" *ike#ise, during the peak period, the industry faced challenges in upholding $uality service standard in catering to large influx of visitors" -hallenges included manpo#er shortage, transportation, building management etc" Transportation means in getting in and out of the theme park is an important consideration in attracting the visitors" That is, the location and the accessibility of the park played important criteria in the success of the parks" In South )orea, pacing #ith economic gro#th, the government has been developing transportation infrastructure linking ma9or cities and most parts of the developing regions #ith super-high#ays, trains, sub#ay, domestic air traffic etc to promote proximity and mobility of people in the country" It #as also an important business feature in the theme park industry to continue upgrading its infrastructure through investment in creating more attractions such as rides, sho#s etc to meet customer loyalties, expectation and repeat business"

Social <apid economic gro#th, industrialiAation and urbaniAation has shifted the mobility of the population and migration of large number of people from the countryside "@ost people no# live in urban areas, and a complex structure of social classes had emerged that resembled the social structure of developed +estern countries" 'o#ever, there #as continuity #ith the past" -onfucian and neo-onfucion ideas and institution continued to have important impact to the

society in the %44 s"-onfucian influence #as most evident in the tremendous value placed on education, a ma9or factor in South )orea.s economic progress" The population of South )orea, sharing a common language, ethnic identity, and culture, #as one of the #orld.s most homogeneous" The attributes gave intense feelings of nationalism to the people of South )orean" South )orea #as one of the #orld.s most densely populated countries" The extremely cro#ding in South )orea, especially in cities like Seoul and (usan, #as a ma9or factor not only in economic development and in the standard of living but also in the development of social attitudes and the human relationships" The competition for limited resources including space itself is intense" <apid economic gro#th, industrialiAation and urbaniAation have caused profound transformation in the class structure of South )orea society" The most evidence is the emergence of ne# middle class mainly residing in urban cities, consisting of civil servants, salaried #hite-collar #orkers in large private companies and professionals #ith specialiAed training" The number of factory #orkers has gro#n significantly as #ell" +orkers in South )orea have the longest #ork hours among the developed countries" The typical #ork#eek is 55 hours or longer, or five and a half days a #eek" @ost people start their day at ;am and end at around % pm or later, often having dinner before returning from #ork" In general, people living in the urban cities like Seoul is under tremendous stress due to the #orking pressure J long hours, cro#ded environment Jtraffic 9am, space constraint J small apartment" Iaturally, #hen come to pastime, people #ill incline to#ards going to places that offer space and less cro#ded area to relax" Survey in %445 sho#s that south )oreans scored high on visiting places like theme park, nature and historical place for a short one-day holiday pastime"

#echnology The theme park industry has three classes of technology inputs 3%6 the building and construction services that provided landscaping and architectural support 3C6 the hard#are providers that supplied amusement machinery 3!6 the soft#are providers that supplied management kno# ho#" /uilding and !onstruction Ser-ices

South )orea has been a po#erhouse in building and construction technology" )orean conglomerate such as Samsung -orporation, 'yundai -orporation have been reno#ned for their capability in taking on big and complicated building construction pro9ects" 3ard.are Pro-iders 'ard#are (roviders are supplier that specialiAed in supplying amusement machinery such as roller coaster, simulators, Mirtual reality etc" to the theme parks" 0s the popularity of the theme park gro#s, there is demand in more high technological amusement machinery in attracting cro#ds" Suppliers of such high $uality machinery are fe# and concentrated in Dapan, Burope and Hnited States" They are costly in ac$uiring and re$uire considerable operating cost in maintenance" So&t.are Pro-iders It is most difficult in developing the management kno#-ho# in theme park industry" Theme park leader like ,isney has developed successful management kno# ho# tools in operating their theme parks and make available educational program to train personnel in delivering #orld class $uality service" 'o#ever, it #as costly and difficult to engage such management soft#are through licensing" Speci&ic Problems ,evelop $uality service to meet customer satisfaction *and use to develop theme park Transportation

Key Success Factors in #heme Park Industry 4uality5 Sa&ety and Security -ustomers expect high level of $uality along all areas of the theme park" Hsers also expect adventures and experiences in an artificial environment at a calculable risk" 6ulti-arious5 range o& options and attractions Theme parks have to offer a #ide range of attractions and possibilities #hich meet the re$uirement and desire of ne# multi-optional customers" 1motion

Theme parks need to tell a story and have to impart impressions and emotions as persuasive as possible" Functionality and in&rastructure :ne stop solution taking into accounts of parking, accessibility to and from the park" /randing 0 corporate branding enables theme parks to create a good image, increase security, trust and recognition to attract customers more efficiently" Inno-ation 0 continuing process of innovation and redesign hedges success against changing pattern of customer behavior and fading customer loyalty" 7ni8ueness The offered product and set of experiences and attractions should be clearly defined to keep uni$ueness against competitors and focus on selected segment of customers 'eather independency 0ll #eather operations ensure a continuous business and declutch service from environmental factors In-ol-ement and interacti-ity +ith an increasing involvement and interactivity of the customers the surplus 3value added6 rise strongly for customers" 1scape and imagination Misitors #ant to get a#ay from everyday life and expect a temporary change by the artificial and illusion stage" !apacity and 8ueue management The management of the capacity during peak and off peak times and seasonal variations in demand are a ma9or factor for success and customer satisfaction !ontinuity and theming The #hole product including all activities and designs should be themed" -ustomers need to find them clearly" 1n-ironment integration Theme parks have to be integrated #ell into the economical, social and ecological environment of the hosting destination"

#he general causes &or &ailure o& the theme parks 2alling customer expectation Improper marketing and branding 2ailed location and catchment Inept pricing and hidden cost Iegative innovation and investment spital *acking entrepreneurship and kno# ho#" (oor human resource management, bad service attitude"