) Is the Global theme park industry is an interesting industry to be in?
Yes. The five forces analysis supports as below.
| |Strength of |Explanation |
| |Force | |
|Rivalry between |Medium |High industry concentration |
|established competitors| |Competitors are more specialized than diversified |
| | |Significant brand identities and product differences |
| | |Industry is growing rapidly but no excess capacity |
| | |High exit barriers |
| | |Fixed costs are relatively low |
| | |Low switching costs for customers |
|Threat of entry |High |Strict capital requirement with large-scale initial investment and high upgrading |
| | |cost |
| | |Large firms have an absolute cost advantage |
| | |No proprietary product differences in the industry |
| | |There are established brand identities |
| | |Customers do not incur switching costs |
| | |Serviceable used equipment is expensive |
| | |New entrants have difficulty accessing distribution channels |
| | |New entrant has some problems finding skilled employees, materials, and suppliers |
|Competition from |Medium |Substitutes do not have performance limitations which are not offset by a lower |
|Substitutes | |price |
| | |Low switching costs |
| | |Adequate substitutes are available but availability of close substitutes are still |
| | |low |
|Bargaining Power of |Medium |Large number of buyers with small purchases |
|buyers | |Buyers do not face significant switching costs |
| | |Buyer does not need a lot of information |
| | |Buyers are not price sensitive |
| | |Provides incentives to decision makers |
| | |Hard to enter the other party’s business through vertical integration |
|Bargaining Power of the |Low |Inputs are standard |
|Suppliers | |Can switch between suppliers quickly and cheaply |
| | |Suppliers would find it difficult to enter into the business |
| | |No union of cartels of suppliers |
| | |Importance of the industry to suppliers' profit |
Although the theme park industry is full of challenge, it is an attractive industry for its specialty. It is not easy to meet real competitors when you have sufficient capitals to start.
2) More specifically, will the idea of the theme park work in Korea?
Yes, because Korea market has been changed better for the theme park industry to survive and prosper.
• Korea economy thrives in the nineties together with an increasing large urban population, which means the potential customer would be greater. The leisure pattern of Korean is becoming diversified. And there exists a strong demand of theme park tour especially among young people, students of white color company employees, who are willing to go to the theme park in groups. All these are also showed in the attendance number growing. At the same time, Korea is attracting the global event, which helps the tourism growth steadily.
• As in many Asia countries, the insurance premiums in Korea are not so high as in North America, which provide better opportunity to the theme park industry. Disney is not interested in Korea market, however, the power of local chaebols is strong enough to develop the theme park industry and bring it to a new level.
3) Should Samsung invest in the proposed Master Plan ($300 million investment)?
Yes, because Samsung would win the game in several aspects.
• The investment return would be hard to refuse. According to the survey report, the potential of the theme park still needs to be dug further. The additional investment will bring more profits.
• The challenges Farmland are facing now are to be solved by the plan, such as transportation, parking and so on.
• Consider the finance status of Samsung, it is a high time to expand the business and build the global empire image. The confidence and ambition should be conveyed to the Samsung staff and the Korean people, also the world-wide.
• The plan meets Samsung quality-oriented strategy, which makes customer satisfaction and high quality services key phrases. The service will be improved by providing new attracting items.
• The plan would turn the farm based park to a brand new mountain resort, which is more modern and attractive, and is going to convey the values of the Samsung Group. Culture and social impact of Samsung Group would be enhanced. The global and high-tech image of Samsung would be delivered as well as the brand recognition.
• The next step plan seems to be a good opportunity for Samsung to enhance its hotel and recreation business. That also gives the Master Plan strong support and keeps it interesting to foresee the future benefits.
• Provided people keep be optimistic about Korea economy, the master plan will ultimately help Samsung to win.
