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 - – increasing transportation and logistics costs, there is backlash against globalization, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
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.
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.
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.
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.
Ability to lead change in Global Business field
– Disneyland Hong is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Disneyland Hong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Hong Kong Disneyland: Where is the Magic?, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hong Kong Disneyland: Where is the Magic?, is just above the industry average. Disneyland Hong needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Disneyland Hong has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 -
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.
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.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Disneyland Hong to increase its market reach. Disneyland Hong will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Disneyland Hong can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Disneyland Hong can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
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 -
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? .
Shortening product life cycle
– it is one of the major threat that Disneyland Hong is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 .
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Disneyland Hong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
