Emerging Markets: Ocean Park Fights Disneyland Case Studies Examples

How Ocean Park dealt with the threat imposed by Disneyland

Although Hong Kong Disneyland’s opening at Hong Kong initially posed a threat to the existing Ocean Park in the amusement park industry, the latter was able to convert this threat into an opportunity. Disneyland’s arrival at Hong Kong enabled Ocean Park to upgrade its rides, special features, collection of species, and other recreational activities and facilities; some of these facilities, such as the subzero ice palace and underwater restaurant, were the first to be introduced at Hong Kong (and surrounding regions) and thus attracted many customers. Ocean Park invested $700 million to fulfill the aim of coming at par, and even surpassing, Disneyland by highlighting its specialties, which would inevitably make it distinct from Disneyland and attract more visitors. In addition to this, Ocean Park quickly recognized that it had started appearing lackluster, shabby, and obsolete next to Disneyland and that Disneyland had a strong global brand image, owing primarily to its warm, welcoming, and imaginative cartoon characters, whereas it lacked a solid brand image; to ameliorate the situation, Ocean Park replaced its old unappealing sea horse logo with a welcoming and attractive sea lion named Whiskers. Furthermore, Ocean Park realized the strengths of its local market in Hong Kong, devising strategies that center on local assets of the country which is important when a local company is competing with a multinational company in the same market (Peng, 2012). In order to address the demands of the local population, Ocean Park invested and expanded its wild life projects, since wild life and nature were a rarity and urban Hong Kong. This differentiated Ocean Park from Disneyland, which was primarily based on fantasy and virtual reality. Ocean Park, cleverly noticing that on common holidays Disneyland adopted a largely western culture, implemented ideas that were primarily eastern, thereby “tapping into the local psyche”: while Disneyland’s culture seemed mainly foreign to the people of Hong Kong and surrounding countries, that of Ocean Park was more close to home and personal.

Head-to-head competition: Yes or no?

Competing head-to-head means “making product choices that directly match the competitor’s products” (Klemperer, 1992). Depending on the market, a company may or may not compete head-to-head. In a saturated market that sells a narrow range of largely identical products and services, it might be difficult to attain an edge by not competing head-to-head and instead introducing new and distinct products from those of the competitors and therefore head-to-head competition might be more favorable in such cases; in a market where there is plenty of room for innovation, creation, and distinguishing one from competitors, it is better to not compete head-to-head and instead set oneself apart from competitors by underscoring differences. In my opinion, not competing head-to-head can be a successful way of dealing with strong multinational competition depending on the situation. In the case of Ocean Park, it was sensible and clever to not compete in a head-to-head fashion and instead implement changes that would strengthen Ocean Park’s image and distinct features or specialties. By extension, Ocean Park did not compete head-to-head, which would have raised prices eventually and led to losses in the long run, and instead chose to compete with Disney Land by introducing products that would fill the gap between the product range of Disney Land, in other words, diversifying its own products and services so that people who would not find similar facilities at Disney Land would eventually turn to Ocean Park for entertainment. As a corollary of this tactic, Ocean Park ended up raising its revenue and profit, and cutting down costs.

How Ocean Park can capitalize on Disneyland’s presence

Ocean Park can maximize the utility of its opportunities and capitalize on Disneyland’s presence in Hong Kong by making characters which it can publicize via movies and amusement park-related advertisements to boost its brand image and attract an even greater proportion of visitors. This will help Ocean Park increase its revenue remarkably, also helping it deal with the issue of low profits owing to the huge investment and low ticket pricing. Such film and television franchises will enable Ocean Park to compete better with Disneyland if it incorporates them into its theme parks. Ocean Park can also build rides which are close together so that people visiting from neighboring countries can visit most rides in a single day. Ocean Park can also try to minimize its wait times, one of the biggest issues at Disney Land, where visitors are required to wait for two hours between successive fast passes for different rides; to deal with this problem even better, Ocean Park can introduce additional options such as Universal Studio’s Front of Line Pass or VIP Experience, which, although more costly, reduce wait times and save time for people who want to visit the maximum number of rides in a single visit. Lastly, Ocean Park can build rides which are more thrilling and thus allow visitors to enjoy more exhilarating experiences.

References

Klemperer, P. (1992). Equilibrium Product Lines: Competing Head-to-Head May Be
Less Competitive. The American Economic Review, 82(4). Retrieved from http://www.stern.nyu.edu/networks/phdcourse/Klemperer_Head_to_head_competition.pdf
Peng, M. (2012). Global Business (3rd ed.). South Western Cengage Learning.