Hong Kong Disneyland: Where is the Magic? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hong Kong Disneyland: Where is the Magic?
Hong Kong Disneyland was the Walt Disney Company's third theme park outside America, after Tokyo and Paris. From conception to opening, the government joint venture was subjected to the absolute scrutiny of the Hong Kong public. There was skepticism towards the equity of partnership and politicians accused the administration of selling Hong Kong's interest cheap. Negative publicity plagued the Hong Kong theme park leading up to the opening. Green groups asked the park to ban shark's fin soup from the resort's wedding banquet menu. District councilors accused Disney officials of discrimination for refusing to switch to the more environmentally friendly fireworks technology they used in California. Local unionists attacked the poor working conditions and long hours at the park. If those were only the tip of the iceberg, the ticketing fiasco during Chinese New Year hammered home the message--the Disney formula was not working. In September 2006, the Hong Kong theme park announced it had missed its first year attendance target of 5.6 million. Often criticized as the smallest Disneyland in the world, the Hong Kong theme park had been tipped as a "stepping stone" for the American company's entry into mainland China. If it was indeed to serve as a prototype for another Disneyland in China, it would be critical for the management of Hong Kong Disneyland to come up with a recovery plan and realign its strategy to improve its image, boost attendance, and deliver its revenue target. Explores what could be done to enhance the smooth delivery of the American fantasy in the alien culture of the Middle Kingdom.
Swot Analysis of "Hong Kong Disneyland: Where is the Magic?" written by Josephine Lau, Bennett Yim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Disneyland Hong facing as an external strategic factors. Some of the topics covered in Hong Kong Disneyland: Where is the Magic? case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Hong Kong Disneyland: Where is the Magic? casestudy better are - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Hong Kong Disneyland: Where is the Magic?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hong Kong Disneyland: Where is the Magic? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Disneyland Hong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Disneyland Hong operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hong Kong Disneyland: Where is the Magic? can be done for the following purposes –
1. Strategic planning using facts provided in Hong Kong Disneyland: Where is the Magic? case study
2. Improving business portfolio management of Disneyland Hong
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Disneyland Hong
Strengths Hong Kong Disneyland: Where is the Magic? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Disneyland Hong in Hong Kong Disneyland: Where is the Magic? Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Disneyland Hong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Disneyland Hong has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Disneyland Hong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Disneyland Hong has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Disneyland Hong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Disneyland Hong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Disneyland Hong is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Disneyland Hong has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hong Kong Disneyland: Where is the Magic? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Disneyland Hong
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Disneyland Hong does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Disneyland Hong is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Josephine Lau, Bennett Yim can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Disneyland Hong in the sector have low bargaining power. Hong Kong Disneyland: Where is the Magic? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Disneyland Hong to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Disneyland Hong in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Disneyland Hong has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Disneyland Hong has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hong Kong Disneyland: Where is the Magic? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Disneyland Hong is present in almost all the verticals within the industry. This has provided firm in Hong Kong Disneyland: Where is the Magic? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Hong Kong Disneyland: Where is the Magic? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hong Kong Disneyland: Where is the Magic? are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hong Kong Disneyland: Where is the Magic? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Disneyland Hong has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Disneyland Hong has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Disneyland Hong even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Disneyland Hong needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Disneyland Hong, firm in the HBR case study Hong Kong Disneyland: Where is the Magic? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Disneyland Hong has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hong Kong Disneyland: Where is the Magic?, in the dynamic environment Disneyland Hong has struggled to respond to the nimble upstart competition. Disneyland Hong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Disneyland Hong has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As Hong Kong Disneyland: Where is the Magic? HBR case study mentions - Disneyland Hong takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Disneyland Hong has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hong Kong Disneyland: Where is the Magic? should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hong Kong Disneyland: Where is the Magic?, it seems that the employees of Disneyland Hong don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Hong Kong Disneyland: Where is the Magic? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Hong Kong Disneyland: Where is the Magic? can leverage the sales team experience to cultivate customer relationships as Disneyland Hong is planning to shift buying processes online.
Opportunities Hong Kong Disneyland: Where is the Magic? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hong Kong Disneyland: Where is the Magic? are -
Creating value in data economy
– The success of analytics program of Disneyland Hong has opened avenues for new revenue streams for the organization in the industry. This can help Disneyland Hong to build a more holistic ecosystem as suggested in the Hong Kong Disneyland: Where is the Magic? case study. Disneyland Hong can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Disneyland Hong is facing challenges because of the dominance of functional experts in the organization. Hong Kong Disneyland: Where is the Magic? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Disneyland Hong has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Hong Kong Disneyland: Where is the Magic? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Disneyland Hong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Disneyland Hong can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Disneyland Hong can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Hong Kong Disneyland: Where is the Magic?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Disneyland Hong can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Disneyland Hong to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Disneyland Hong can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hong Kong Disneyland: Where is the Magic? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Disneyland Hong to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Disneyland Hong to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Disneyland Hong has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Disneyland Hong can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Disneyland Hong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Disneyland Hong can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Hong Kong Disneyland: Where is the Magic? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hong Kong Disneyland: Where is the Magic? are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hong Kong Disneyland: Where is the Magic?, Disneyland Hong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing wage structure of Disneyland Hong
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Disneyland Hong.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Disneyland Hong demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Disneyland Hong business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Disneyland Hong high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Disneyland Hong in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Disneyland Hong in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Disneyland Hong needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Disneyland Hong can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hong Kong Disneyland: Where is the Magic? .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Disneyland Hong.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Disneyland Hong needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Disneyland Hong will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Hong Kong Disneyland: Where is the Magic? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hong Kong Disneyland: Where is the Magic? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hong Kong Disneyland: Where is the Magic? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hong Kong Disneyland: Where is the Magic? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hong Kong Disneyland: Where is the Magic? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Disneyland Hong needs to make to build a sustainable competitive advantage.