Industry & Competitive Analysisof

Amusement & Theme Parks

Desiree GapasinValerie RussellJanice CarlosKatie Miner

AGENDA Dominant Economic

Characteristics Driving Forces Competition Analysis Competitive Position of Major

Companies Competitor Analysis Key Success Factors Industry Prospects and Overall

Attractiveness

DOMINANT ECONOMICCHARACTERISTICS

Stage in Life Cycle– Mature

Companies in the Industry– 450 amusement parks in the U.S.– Top 5 Corporations= 65% of Market

Scope of Rivalry– Parks compete against each other on

an international level

DOMINANT ECONOMICCHARACTERISTICS

Market Size– $9.6 Billion in Revenues– 319 Million Park Attendance

Market Growth Rate– 2001= 1% Increase– Projected Decrease in Attendance and

Revenues for 2002

DOMINANT ECONOMICCHARACTERISTICS

Industry Structure– Destination Parks

•Disneyland•Universal Studios

– Regional Parks•Six Flags•Cedar Points

Customers– 75% Attend as

Families

– 54% Under the Age of 18

– 46% Adults

DOMINANT ECONOMICCHARACTERISTICS

Entry Barriers– Excessive Start-up Costs– Expensive Equipment– Competition from Dominating

Corporations

Exit Barriers– Costly Liquidation of Equipment

DOMINANT ECONOMICCHARACTERISTICS

Product/Service Characteristics– Parks Strive to Differentiate

Scale Economies– Manufacturing Costs Differentiate Per

Park

Capacity Utilization– Improvements in Capacity

•Ride Reservations•Competitive Discounting

DOMINANT ECONOMICCHARACTERISTICS

Technology/Innovation– Tests For Safety– Improvements of Attractions

•New Development for Rides•Scenery•Shops

DRIVING FORCES Rivalry Between Firms (medium)

- about 450 parks in the US- different types of parks- revenues constantly climbing

Supplier’s Bargaining Power (low)- about 375 manufacturers & distributors in the US- low switching costs- not easy for suppliers to integrate

forward to directly compete

DRIVING FORCES

Buyer’s Bargaining Power (high)- alternative suppliers available

- quality & price is important- big account

Potential New Entrants (low)

- capital requirements- government policy- reputation/established

DRIVING FORCES

Threat of Substitutes (low)- Amusement & Theme Park incorporates

fairs, carnivals, water parks, etc.

Other Stakeholders- Government- IAAPA- NAPHA- TEA

COMPETITON ANALYSIS

Market Share

39.6

105.25.54.75

30

Disney Six Flags UniversalAnheuser Busch Viacom/Paramount CedarOther

COMPETITIVE POSITION OF MAJOR COMPANIES

0

1

2

3

4

5

0 10 20 30 40Number of Parks

Rev

enu

e (b

illi

on

s)

Disney Viacom Six Flags Cedar Anhueser Busch Universal

COMPETITIVE POSITION OF MAJOR COMPANIES

#1—Walt Disney Parks

Industry Leader in Sales & Visitors

Disney Image, “Mickey Mouse”

International Appeal

#2—Six Flags, Inc.

Owns the most parks—37, domestically

Leader in Ride Innovations

Warner Brothers Characters

COMPETITIVE POSITION OF MAJOR COMPANIES

#3—Anheuser Busch

Unique Appeal: Animals, Beer, Water Rides, Gardens, Naturalistic themes

Entertaining & Educational

World’s Most Popular marine-life park: Sea World, Orlando

COMPETITOR ANALYSIS

Primary Characteristics of Theme Parks:

Family Appeal Contain Themed Environments “Ambient Entertainment” High Investment Level per unit of ride or

show capacity High Standards of service, maintenance,

& cleanliness Ability to entertain visitor for 5 to 7 hrs Pay-one-price admission policy (usually)

KEY SUCCESS FACTORS Customer Appeal

– Disney: Fairytale– Six Flags: Extreme Trills– Busch: Educational/Naturalistic

Strategic Alliance– Licensing Agreements– Joint Ventures

Technology Safety Standards

INDUSTRY PROSPECTS & OVERALL ATTRACTIVENESS

Industry Profitability Instability– Seasonal Operations, Weather,

Economic Conditions, Terrorism

U.S. Market Saturation

International Market Prospects– Asia, Europe, Latin America

Technology– Renovation & Innovation

INDUSTRY PROSPECTS & OVERALL ATTRACTIVENESS

Lifecycle– US—mature– International—growth

Developing Trends– Themes– Visitor Participation– Simulation & Virtual Reality – Water Attractions– All-weather Operation

INDUSTRY PROSPECTS & OVERALL ATTRACTIVENESS

“ Rather than being viewed as a stand alone attraction theme parks will become part of a balanced leisure product and tourism system that contributes to the economic development, employment, and resource preservation of an entire region.”

The End!

Thanks! Any Questions?