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 - – geopolitical disruptions, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, 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.
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.
Highly skilled collaborators
– Disneyland Hong has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Hong Kong Disneyland: Where is the Magic? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– Hong Kong Disneyland: Where is the Magic? firm has clearly differentiated products in the market place. This has enabled Disneyland Hong to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Disneyland Hong to invest into research and development (R&D) and innovation.
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.
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.
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.
Ability to recruit top talent
– Disneyland Hong is one of the leading recruiters in the industry. Managers in the Hong Kong Disneyland: Where is the Magic? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Disneyland Hong are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
Innovation driven organization
– Disneyland Hong is one of the most innovative firm in sector. Manager in Hong Kong Disneyland: Where is the Magic? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Disneyland Hong supply chain. Even after few cautionary changes mentioned in the HBR case study - Hong Kong Disneyland: Where is the Magic?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Disneyland Hong vulnerable to further global disruptions in South East Asia.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Disneyland Hong is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hong Kong Disneyland: Where is the Magic? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Hong Kong Disneyland: Where is the Magic? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Disneyland Hong 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Josephine Lau, Bennett Yim suggests that, Disneyland Hong is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Disneyland Hong has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
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.
High cash cycle compare to competitors
Disneyland Hong has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Disneyland Hong in the consumer business. Now Disneyland Hong can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Disneyland Hong can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Disneyland Hong can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Learning at scale
– Online learning technologies has now opened space for Disneyland Hong to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Disneyland Hong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Disneyland Hong can use these opportunities to build new business models that can help the communities that Disneyland Hong operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 -
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.
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.
Stagnating economy with rate increase
– Disneyland Hong can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
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.
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.
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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Disneyland Hong has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Disneyland Hong needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.