The SWOT analysis technique was originated by Albert S Humphrey in the 1960s while he was working for the Stanford Research Institute (TAM UK). SWOT analysis is usually grouped into two categories according to whether if the organization’s objectives effected by the structure of the organization or the structure of the environment which are, the internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats). It is a structure planning method that used to evaluate the helpful and harmful factor of the organization in achieving their objective. 2.1 Identification of strengths
Strengths are the characteristics of the business or project that give it an advantage over others (Robbins et al, 2012). 2.1.1 Strong Brand Awareness
The most powerful strength that Disneyland Park has is their strong brand awareness throughout the entire world. Not just because there are the one of the world’s pioneer of amusement park but they are also the first amusement park that made the idea of themed park popular. In addition the backing up of brand reputation of their parent company “The Walt Disney Company” with their movies releasing and famous animated characters like the iconic Mickey Mouse which has know for more than 90 years in the United States has provided Disneyland an incredibly strong product portfolio. Moreover Disneyland has a large cumulative attendance (close to 16 million tourists every year) than any other theme parks in the world due to them provide a broad range of offering for all age groups and personality.
2.2 Identification of weaknesses
Weaknesses are internal factors that place the business at a relatively disadvantaged position (Robbins et. al., 2012). 2.2.1 Diversity of product portfolio
Walt Disney World includes several different theme parks within its resort and hotel, and provides a wide range of products and services to its customers. This makes centralized management and monitoring difficult, as it is hard to keep track of multiple departments in the company at once. As a result, the business’s performance suffers due to delayed responses to problems and issues that arise from time to time.
2.2.2 Accidents and unfortunate incidents
Over the years, accidents have occurred at Disneyland, and many are the results of negligence on the part of the theme park itself. Due to this, the company has received negative publicity and this has jeopardized the image of the brand, leading to weak trust from customers.
2.3 Identification of Opportunities
Opportunities are elements that the organization could exploit to its advantage from the external environment (Robbins et al, 2012).
2.3.1 Growth of tourism industry and increased spending power in the economy With the rapid growth of tourism and increasing spending power in the emerging economies nowadays, Disneyland could increase their presence by expanding and building more theme parks in district that has high population of tourist, for example China. Furthermore the growth of TV industries and movie production over the world too providing Disneyland a great platform in increasing their assets and else, widen the brand itself. By expanding in the filming production using their existing ability of Imagineering to build or create new characters from TV shows and movies, Disney thus has a big leeway in producing new merchandise, new attraction and new rides in the theme park.
2.4 Identification of Threats
2.4.1 Increase in numbers of amusement parks
Nevertheless Disneyland faces external threats that could cause trouble for their business such as competitors (Robbins et al, 2012). As more and more amusement park is built Disneyland is not anymore the only selection, their major local competitors Universal Studio is gaining huge popularity throughout these years and has steal customer away. Beside, numerous theme parks over the world have also potentially stolen away visitors of Disneyland. Moreover the deficiency of constant innovation and upgrade of the theme park has put Disneyland in the risk of losing its charm eventually losing their visitors.
3.0 Evaluation of alternative strategies
3.1 Proposed alternative strategies
3.1.1 Maintaining a competitive advantage through differentiation of products and services The tourism industry continues to grow every day. As new theme parks emerge, Disneyland should implement a competitive strategy as to not lose its edge in the industry and lose customers to its competitors. One possible strategy to achieving this is by differentiating the products and services that it offers to customers. Differentiation is the value provided to customers through unique features and characteristics of an organization’s products, rather than by charging the lowest price (Albany, n.d.). For Disneyland, this can be done through improving quality, image management, rapid product innovation, high customer satisfaction and advanced technological features. What makes Disneyland special is its constant innovation and technology of the theme park’s facilities, ranging from skyscraping rides imbued with light shows to movie theatres with surreal cinematic.
With competing theme parks like Universal Studios, Disneyland should focus its resources on research and development of new concepts and ideas through the design department, Walt Disney Imagineering. If the company successfully develops a new technology, it will have an advantage over the other theme parks, and this will allow them to have unique selling points. Furthermore, Disneyland can acquire patents for its newly invented products to bar other rivals from copying the idea. Through thorough market research, Disneyland can also focus on developing and improving products and services that the customers prefer, so that satisfaction can be maximized. With high consumer satisfaction, it will not matter as much if the company does not charge the lowest price possible for its products, because customers will be willing to pay in exchange for high quality services. Research on new concepts will generate stable long term income for Disneyland through a stream of interested and loyal patrons.
However, research and the development of a new product is very costly, and may be very risky as well due to the fact that the uncertainty of outcomes, which may or may not meet the original brief and customer wants. For example, Disneyland may spend $1 million on the construction of a new facility, only to find that it attracts very little visitors resulting in income that is not enough to cover the upkeep of this particular attraction. In this case the company would be making a loss. Generally, the research and development of an idea or a new concept takes a long time, and during this period of time consumer preferences as well as the condition of the industry may change. The difficulty in anticipating such changes makes this strategy appear to not be worthy of much investment in the company’s eyes.
3.1.2 Improving safety of the theme park to build trust among customers One of Disneyland’s weaknesses is the accidents that occurred in the theme park over the years, questioning its safety and affecting the image of the company. Some of these incidents were caused by negligence on the part of the guests, such as deliberately refusing to follow safety rules in the park, the guests’ health issues, as well as generic accidents that did not result from anyone’s actions. However, the increasing amount of accidents due to the negligence of the park maintenance and operators has resulted in the wavering faith and confidence that customers have in Disneyland. In July 2005, two trains on the California Screamin’ coaster at Disney’s California Adventure crashed into one another and resulted in 25 injuries. This accident was found to have been caused by a faulty brake valve that was installed a few days prior to the incident (Courier-Journal, 2007).
If the company is to maintain its competitive advantage, it is wise to first focus on improving the quality of its products and services, which will ensure that there will be less defects resulting in unforeseen incidents that may jeopardize the image of the theme park. This will also lower buyers’ costs in the long run, as higher quality means less breakdowns and quicker responses to problems. Need of safety is one of the first fundamental fulfillment in Maslow’s hierarchy of needs. Therefore, ensuring the customers their safety would develop their trust in using the theme park’s facilities. Taking extra steps to maintain the facilities and rides in their higher qualities will prevent damages in the future, which will reduce possible repair costs, loss of working hours, insurance premiums and hospital costs if injuries were to occur. This would mean profit can be maximized. However, some disadvantages to this option must be taken into account while planning.
Improving safety measures usually requires a large sum of money and also time. If Disneyland chooses to import machine parts and engineers from well-known factories overseas instead of the previous ones obtained locally, it will incur a higher amount of extra costs which is likely to decrease profit for the particular accounting period in which the implementation occurs. Besides, installment and maintenance periods to upgrade the park’s facilities are typically long. During these periods, the theme park may not operate at all and will incur a loss in income than when it is opened. Although customers worry about their safety, there are also people who would still pay to visit the park and use its facilities. To close down the theme park temporary while implementing safety changes and upgrades would mean the loss of potential income from these customers.
3.2 Selection of best strategy
It is very important for the company to choose a strategy that best compliments its strengths as well as to overcome its weakness and suppressing threats. Disneyland is faced with competing theme parks that are emerging over the years. To maintain its large customer base and to not lose its edge in the industry, it is very important for the company to increase its competitive value and advantage. Rival theme parks are Disneyland’s biggest threats. In order to have an advantage over the other theme parks, the company should focus on research and innovation which will allow them the benefit of being the first park with a newly developed technology or facility. At the same time, because Disneyland’s weakness lies on the accidents and unfortunate incidents that occurred in the theme park, it is also wise to focus on improving the safety aspects of the park, as this will ensure customer loyalty and trust. Through SWOT analysis of the company, it is advised that Disneyland choose to implement the strategy of enhancing theme park safety.
The company’s problem lies generally on the increasing occurrences of incidents that affect the company’s image and customer trust in the brand. If this is not dealt with, it could cause a lot of problem for the company in the future when customers being to lose faith in the theme park’s facilities. This would also eventually lead to lower profit for the company in the event of frequent reimbursements for accidents and insurance claims. Upgrading the safety aspects of the theme park facilities can minimize this, therefore leading to more stable income. While it is true that Disneyland has strong rivals in the industry, they are not that bad of a threat to the company as of yet, and it is more advisable to channel their resources onto more important issues like safety, as this can have huge impact on the company. Although such strategy will require a large amount of money and time to implement, it will generate higher profit in the long run and therefore is an ideal strategy for stability and sustainability of the company as one of the leading theme parks.
4.0 Implementation of Selected Strategy
The selected strategy can be implemented through two managing functions; controlling and organizing.
4.1 Controlling Function
In an organization, controlling is important to ensure every work processes smoothly. An effective control monitors both performance and whether the organization’s expectations are sufficient to meet goals. According to Mostert and Snyman (2007), controlling is the process of monitoring, comparing and correcting work performance. It is important because it is the way that managers know whether the organizational goals are being met or not and helps to protect the organization and its assets with controls and plans (Robbins et. al., 2012). The control process consists of measuring actual performance, comparing it against a standard, and taking managerial action to correct any inadequate standards.
4.1.1 To implement feedforward control, feedback control and concurrent control Feedforward control is “a type of control that takes place before a work activity is done” (Robbins et. al., 2012, p 662). It initializes action in anticipation of problems that may arise in the future, and is therefore the most desirable type of control because it is a form of prevention. This is very important for Disneyland to improve the safety of the theme park. For example, the company may consider importing high quality machine parts for the construction or the repair of theme park facilities so that chances for accidents are low. At the same time, it may also bring in experienced engineers and managers to train workers as well as to oversee construction and maintenance of the theme park so that the quality of its product can be preserved. With dedicated staff, there will less likely be negligence and accidents can be prevented. Concurrent control deals with correcting problems as they arise during the progress of a work activity so that management can take corrective actions before they become too costly (Credit Research Foundation, n.d.).
This is important to minimize maintenance costs, and to do this, Disneyland can appoint teams in charge of monitoring the upgrading and repair work so that any complications that occur can be quickly dealt with without wasting too much time or money. Besides that, selecting appropriate managers to directly supervise activities during the operations of the theme park can ensure that safety issues and complaints from customers are addressed immediately. Boyd and MacNeill (as cited in Robbins et al, 2012) pointed out that school principals who utilized management by walking around are very effective in their jobs. This is because they interact directly with their subordinates and can correct problems as they occur. Feedback control is a type of control that takes place after a work activity is done, and corrects problems after they occurred (Robbins et al., 2012). Feedback tells the managers how effective their planning efforts were. This is important information as it allows management to analyze strategies and actions and whether or not to continue them based on the initial outcome. For Disneyland, feedback allows them to work on improving the safety and quality of their products and services by reflecting from past incidents and mistakes.
4.2 Organizing Function
Organizing function is important to arrange works and making decision on how to improve or achieve the company goals. Organizing is defined as arranging and structuring work to accomplish the organization’s goals. It is the process of establishing an organization’s culture, which is the formal arrangement of jobs within an organization. For example, wearing an uniform create an unique and consistent organization’s culture. When managers are involved in structuring an organization, they are engaged in organizational design. There are six key elements of organization function, which include work specialization, departmentalization, chain of command, span of control, decentralization and formalization. In competitive strategy, the suitable elements to be used are work specialization and departmentalization.
4.2.1 Work Specialization
In organizing function, decisions need to be made on what needs to be done and who will do it. According to Kokemuller (2013), work specialization helps to divide those tasks into specific job tasks. Work specialization, also known as division of labor, is the degree to which tasks in an organization are divided into separate jobs. In other words, jobs are broken down into simple, small and separate operations in which each worker could specialize. This element is the source of productivity because the job variety makes it possible for people to choose, or be assigned to, works or position that they are well suited or enjoyed. In this case, people can learn skills and become expert in their assigned jobs. For example, Disneyland can break down the maintenance of its theme park facilities into several sections and appoint a few experienced workers to take charge of them. This was, engineers can be trained in specific areas of work and the high level of professionalism will minimize the chances for mistakes to occur, and if they do, to be easily taken care of.
4.2.2 Process Departmentalization and Functional Departmentalization Some heavy task can be grouped to relieve the burden of each worker and make the task goes smoothly. Hence, departmentalization helps in grouping workers and assigning group works to different group. Departmentalization is defined as the fundamental on which jobs are grouped in order to achieve organizational goals (Educational-portal, 2013). Departmentalization can be important because it helps organization to have their specialty by having their own unique way of classifying and distributing work activities. Functional departmentalization groups jobs by functions performed (Robbins et al, 2012). The advantages to implementing this are that efficiency is achieved from putting together similar specialties and people with similar skills, knowledge and orientation, as well as coordination and in-depth specialization within these areas. Disneyland can consider creating more departments for safety management so that decisions can quickly be made within these departments should the need to address certain issues and customer complaints arise. The limitation to these, however, is poor communication between different departments and areas of management. Therefore, it is important for the company to frequently Meanwhile, process specialization groups jobs on the basis of product or customer flow.