Ocean Park Case Study

Introduction

Ocean Park, Hong Kong’s only homegrown theme park, was opened in 1977. It is the largest marine-based theme park in Asia, focusing on providing facilities for educational, recreational and conservation activities to the public. The park houses fourteen rides, an assortment of aquariums, a giant panda exhibit, observatories and educational laboratories. It is also the only Asian Park to be accredited by the American Zoo and Aquarium Association.

Problem- Hong Kong Tourism

In 2004, the tourism industry in Hong Kong composed of 2.9% of its gross domestic product (GDP). With approximately 21.8 million visitors that year, the majority of tourists came from China. However, this was likely to change because of China’s less stringent requirements for traveling to other counties. In addition, the amusement park industry was not the highlight of Hong Kong tourism. Hong Kong was known to be a business city and was associated with deal-making, dining, and shopping.

After the economic devastation from the 1997 Asian financial crisis, Hong Kong realized that they needed to diversify their economy. With this new outlook, the Hong Kong government began focusing on developing industries based on knowledge and driven by innovation. In 2001, the Hong Kong government announced the development of five tourism clusters to increase the attractiveness of Hong Kong to tourists. Included in this process was the redevelopment of Ocean Park.

Problem Statement

In order for Ocean Park to attract more tourism, it launched a syndicated loan to raise HK$4.1 billion to revamp itself. How will the banks assess Ocean Park’s strategic plan? Would they buy the park’s strategy in light of the competition posed by Disney?

Outlook

Ocean Park will be a fierce competitor in the Hong Kong entertainment industry. Despite rivalry from Hong Kong Disneyland, the new master plan from Ocean Park poses various opportunities and strengths for the theme park.

TOWS Analysis

The major threat for Ocean Park is the emergence of Disneyland into the Hong Kong entertainment market. Disney already operated seven out of the top ten theme parks in the world and annual revenues were growing 10% at the time of the park’s grand opening. Ocean Park is a local Hong Kong park with no global recognition or additional locations and now has to compete against the leader in the global theme park industry. However, the upside of this new-found competition is that Disney’s presence in Hong Kong would bring more visitors and turn the region into a family destination and therefore create an opportunity for Ocean Park.

An additional threat to Ocean Park is the increased competition from a range of other areas such as the growing tendency for families to spend long weekends on the mainland or other parts of Asia and increased competition for families to spend time and money at shopping malls.

There are various opportunities for Ocean Park. The government first provided for growth of tourism through development of five tourism clusters to increase the attractiveness of Hong Kong, the redevelopment of Ocean Park being one of them. An additional opportunity is the Ocean Park focus on reality as opposed to Disney’s focus on fantasy. Ocean Park focuses on animals and nature and that difference of reality can connect people with nature through ocean and animal encounters to differentiate itself from Disney.

Ocean Park also has the opportunity to brand itself as home grown so Hong Kong people can take pride in it, while Disney is labeled as an American brand. The biggest opportunity is park growth. The number of attractions could double, shows could triple and the number of animals could increase. With the proposed park changes under the master plan, Ocean Park has the opportunity to grow by 50% daily.

Few weaknesses are apparent for Ocean Park. First, tourist activities in Hong Kong were biased strongly towards shopping with 50% of tourist expenses spent on shopping and only 3% spent on sightseeing. This proves to be a weakness for Ocean Park currently with only 15% of revenue coming from in-park shopping and spending. A second weakness is that Ocean Park uses no formal metrics for measuring service excellence and thus has no way of enhancing the knowledge of employees and customer service at the park.

Ocean Park has many strengths that could lead to opportunities for success in the future. Tourism is a major pillar of the Hong Kong community and the theme park industry is forecasted to grow 5.7% by 2009. In order to take advantage of the tourism, Ocean Park offers a 20% discount to travel agents who send guests to the park as opposed to Disney’s lower 10% discount. In addition, with Disney’s higher prices, Ocean Park kept prices affordable and “provides

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