Amusing The Million Essay
Problem Statement –While Cedar Fair is steadily growing revenue to the 2013 estimated value of $1. 1B, their operating profit percentage has ranged from 50% to -17% over the past 5 years and relies heavily on season pass sales and visitors over a limited operating period of 130 days, leaving them vulnerable to competitive moves by the market leaders in the Amusement Park Industry. Analysis Plan / Data Used / Key Assumptions – We will use the Porter 5 forces Model for the Cedar Fair and to compare with the other amusement parks.
The 5 forces will help us to understand the strong forces which will help the cedar fair to be more profitable in future. Key data will include from each of the amusement park websites. Also the revenue income provided by IBIS for each amusement park. The financial analysis particularly profit margin provided by mergent online will allow us to access financial performance for each company. Cedar Fair owns and operates 11 amusement parks, four outdoor parks, one indoor water park and five hotels.
Cedar park lacks brand identification due to their diverse portfolio. The brand name of Cedar Fair is rarely associated with park or hotels. Data Analysis and Tool Use – Using the Porter’s 5 Forces model the strongest rivalry is from the Walt Disney, universal studios, Sea world and Six Flags. Since the Disney is global and has resorts and attractions for all age groups and also it is open all year along and generates income. Disney also keeps updating its theme parks wit new attractions and new technology to attract new customers or repeat too.
Large resorts try to entice the customers to come to the parks instead to going to beaches by giving them special passes on internet. The mid-size theme parks attract the local customers who are close by and can drive and go back without spending the night at the hotels. Conclusions – The competition among the parks is intense, as the market is saturated and small. To increase the customers in cedar fair should give free pass on birthdays and also introduce packages which can be bought with the installment plan.
Recommendation to Management – My recommendation would be that since the economy is improving and people have little bit of money to spend on vacations, so they should advertise special offers for the summer time on the internet and TV. They should try to attract more customers from the local region as they cannot compete with the big resort theme parks such as Disney, Universal Studios, and sea world. They should have access to multi-skilled and flexible workforce those who have the ability to quickly adopt new technology. US Amusement Parks Market Share US Parks Total Revenue 2012.
Total Income 2012 Percentage Market Share (%) Walt Disney Company $6. 2 billion 5,986M 44. 5% Universal Park and Resorts $2. 1 Billion 95M 15% Sea World Parks & Entertainment $1. 4 Billion 55M 11% Cedar Fair $1. 1 Billion 118M 7. 7% Six Flags $1. 06 Billion 249M 7. 9% (IBIS World, 2013) Below is the 5 Forces Model.
1) Wood, L. (2013, February 11). Research and markets: 2013 report on the $16 billion us amusement parks & arcades market featuring Walt Disney, six flags, cedar fair, SeaWorld, and universal parks & resorts.
Retrieved from http://www. businesswire.com/news/home/20130211005621/en/Research-Markets-2013-Report-16-Billion-Amusement 2) IBIS World. (2013). Us industry reports. 3) Theme Parks Are on a Roll by Christopher Palmeri in the June 3-9, 2013 issue of Bloomberg Businessweek http://www. businessweek. com/articles/2013-05-30/u-dot-s-dot-theme-park-revenue-is-on-its-best-ride-in-years 4) IAAPA. (2013). Amusement park and attractions industry statistics. Retrieved from http://www. iaapa. org/resources/by-park-type/amusement-parks-and-attractions/industry-statistics 5) Six Flags; https://www. google. com/finance? q=NYSE%3ASIX&ei=w_GHUuD9H4OTsgffMA.
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