Strategic Management in a Global Context - a Case Study in Hk Ocean Pack

Strategic Management in a Global Context

A case study in Hong Kong Ocean Pack

1. Introduction

Ocean Pack is the first theme park in Hong Kong and opened in 1977 which is delivering entertainment experience to its customers. Ocean Park is running through public funding, and monitored by the Hong Kong Government which is a quasi-governmental organization(Wong, 2014 cited in Johnson, et al, 2014).

1. PESTLE analysis

Basu (2014) argues that PESTLE analysis classifies issues as political, economic, socio-cultural, technological, legal and environmental. The most important factors impact Ocean Park must be Political and Socio-cultural.

2.1 Political

Hong Kong is influenced by China as it is a special administrative region. To implement of the ‘Individual Visit Scheme’ increased a large volume of travelers(Wong, 2014 cited in Johnson, et al, 2014). MTR(2018) announced Hong Kong government accepted to build and operate the Shatin to Central line. The route is connected between Tai Wai and Hung Hom and Hung Hom to Admiralty. It can help for tourist industry as Hung Hom is the major transportation from China, which is favourable to the park. The increase of tourists has benefited Ocean Park as it is the major scenic spot to visit.

2.2 Socio-cultural

The most factor to impact Ocean Park must be demographic, lifestyle and culture. With the high percentage of citizen are ethnic Chinese, which attracted Mainland tourists to visit. Demographic advantage of Hong Kong is close to China which a potential big market. Although the growth rate is controlled, the population size of China is still huge impact. It is favourable to Ocean Park. Hong Kong Transport and Housing Bureau(2017) announced the Hong Kong-Zhuhai-Macao Bridge was agreed at the conference of Mainland/ Hong Kong. It enabled Hong Kong to enjoy the benefit of southern gateway, due to China high-speed rail system and the Hong King-Zhuhai-Macao Bridge, and the world’s leading tourism destination  will be China in future(Wong, 2014 cited in Johnson, et al, 2014). Hong Kong can enjoy the side benefit of increasing the visit from over the world.

The lifestyle and culture of Hong Kong people (Hongkonger) is long working hours and high income together with high pressure. Hongkonger are willing to pay for entertainment in order to release the stress. Chinese tends to treasure family value, spend quality time with family members, and spend money for family. To utilize the characteristic of that the park formed ‘Big Five’ of new attractions - Halloween Bash, Christmas Sensation, Lunar Lucky Fiesta, and Animal Close Encounters(Wong, 2014 cited in Johnson, et al, 2014).

1. Five Forces

Porter (1980) provided analysis of the dynamics and key structure of the industry is Porter's five-force framework. The company's strength depends on its competitive position which includes Existing rivalry, Customers, Substitutes, New entrants, Suppliers.

3.1 Existing rivalry

Porter (1979) argues the most important competitive force is existing rivalry. The market structure of the park is monopolistic competition, and few theme surrounded Hong Kong. Many consumers are likely to perceive comparable benefits among other theme packs, and none of them is able to dominate the market. Disneyland is one of the strongest rival and few theme park in Panyu and Sentosa (Wong, 2014 cited in Johnson, et al, 2014). The impact is likely unfavourable.

3.2 Customers

The increasing of population size and growth rate in demand, more and more theme parks will be open in future can be predictable, so consumers can have many selection. The impact is likely to be favourable.

3.3 Substitutes

The growth in socio-cultural and technological forces created many entertainment, such as VR gear. Nowadays, consumers may watch videos and play games on the internet or travel to overseas. The impact can be unfavorable. For future expectations, alternatives may be uncertain and the number of alternatives is certainly increasing.

3.4 New entrants

There are not easy to run a theme park as it required large area of land, strong financial and government support. In the current situation of Hong Kong, there should no easy to build another theme park in the market. However with the geographic location, it is easy to anticipate new theme parks will be built at nearby area. The impact is unfavourable for current situation.

1. Value Chain

Porter (1980) argues that The value chain can be used as a tool to analyze internal corporate activities. Its purpose is to identify which activities are most valuable to the company and which activities can be improved to provide a competitive advantage. The particular important activities would be operations, services and human resources.

4.1 Primary activities

4.1.1 Inbound Logistics

It is the production process of receipt, storage and distribution of raw materials. Souvenir is the essential item to theme park, so the inbound logistics means the souvenir from suppliers to the firm.

4.1.2 Operations

Operation is the stage of turning raw materials into final products or services. It is difficult to manage a balance between demand and supply, and cannot be inventoried. Ocean Park has built the new attractions which includes Amazing Asian Animals, Rainforest, Thrill Mountain, Polar Adventure and more(Wong, 2014 cited in Johnson, et al, 2014). Moreover, there is a high level of pressure in peak seasons, in both service production and service quality. Certainly, Ocean Park operations heavily depend on HR.

4.1.3 Outbound Logistics

It is the distribution of the final product to customers. It is mean storing and distributing the souvenir to customer.

4.1.4 Marketing and Sales

It involves promotions, pricing and brand image to appropriate consumer groups. The park has promotional activities to China and with overseas theme parks(Wong, 2014 cited in Johnson, et al, 2014).

4.1.5 Services

This activities needed to maintain service’s performance after it has been produced. As Ocean Park is family-oriented and mainly visited by tourist, so it aim for provide more convenience supplementary service to customers. Ocean Park has built three hotels - The Ocean, Fisherman’s Wharf and Summit Hotel(Wong, 2014 cited in Johnson, et al, 2014). These hotels are mainly built for tourist customer to convenience them whom can stay over in the park. And delivery service is offered for the souvenir deliver to hotel. Since it is intangible and variable, so its quality is hard to assure and service experience management to customers are important which are highly relevant to HR.