Case Analysis of Hong Kong Disneyland free essay sample

The park was the first American park in Chinese territory. Hong Kong was a prime tourist destination for a large number of people from the mainland. Disney focused on people from mainland, the local residents and international tourists. The culture of Hong Kong differs from the mainland and the local residents were infamous for their low patience and different tastes for entertainment. Since it’s opening, the park has been in news regarding the operational problems associated with it. The issues with Disneyland were primarily due to Operations, Marketing and Finance. Based on their previous experiences, Disney left no stone unturned to ensure flawless operations but in spite of that there were some operational issues that tarnished the Disney brand after its opening. Overall Disney failed to gauge the Chinese market and provide a park that was unique in nature and different from the other parks in the region. Service Concept Hong Kong Disneyland was expected to serve 5. 6 million visitors for its first year. To facilitate thousands of visitors to park, like other Disney parks, Hong Kong Disneyland adopted service factory concept, to take the advantage of its scale and employ less expensive unskilled workers to provide low customization service. As the park ran with line flow process, the operation was highly efficient with the costs greatly reduced. To differentiate tself from other theme parks, Disneyland kept its distinctive competence while building park in Hong Kong, those include cartoon characters, theme park structure/ attractions, efficient operation of theme parks, customer service value and so on. They are the unique capabilities that Disney possesses, allowing it to gain advantage over the competition. Hong Kong and China mainland were perceived to be the major tourist markets for the new park. Learnt from the failure in Euro Disneyland, Disney paid attention to observe Chinese culture. It planned park in Hong Kong through careful consultation from a local feng shui master; the costumes of Disney characters were modified to suit Chinese tastes; it offered various Asian foods besides American burger to make visitors from all over the world feel at home; in addition, the park had trilingual staff speaking English, Mandarin and Cantonese. Overall, Disney was willing to change the peripheral of its service to adapt to Hong Kong. Issues and Recommendations Hong Kong Disney land got lukewarm response since its opening. The attendance rate just could not reach a satisfactory level. A lot of issues have been identified. These service related issues according are analyzed with operations strategic decisions P(I)CQW 1. Process issue As service factory concept was used by Hong Kong Disneyland, generally the park provides a standard service at less flexibility with low cost labors. However, to be a order winner, the park has to differentiate itself from other theme parks. Customized service should be provided. Disney should turn its service to mass customization so as to satisfy different group of customers. Hong Kong Disneyland should consider adding environment and sustainable operations to its process. One way is to adopt ISO 14000 standards. It not only helps to solve the problem like fireworks pollution and human rights complaint but also provides Disney social advantages and financial benefit. 2. Quality issue Hong Kong is known for its fast life where people were infamous for their impatience. This was a tough challenge for Disney’s form operations point of view since this meant that any sort of operational issues were unacceptable. Like during the Park preview, the management had to apologize for the arrogant attitude of its American staff. Disney University should customize its trainings to provide quality service towards Asia customers. Meanwhile, more quality control should be introduced to improve service quality. 3. Capacity issue The actual number of visitors per year never hit the expected number. However, sometimes the park still got too crowded and had to prevent visitors from coming in. During Chinese New Year in Feb 2006, hundreds of people with valid 6-month ticket could not enter the park. It led to chaos and further eroded Hong Kong Disney’s image. Generally this is due to poor capacity planning. Disney tried to boost attendance rate, but neglect its peak capacity. It should smooth demand relative to available park capacity. 4. Workforce issue Employees complained the unfair and inhuman treatment from the management. The 5000 frontline â€Å"case members† had to wear heavy costumes and worked long shifts of 11 to 13 hours per day under a chaotic shift system. Yet they had to accept the unfair salary calculation compare to that of US Disney parks. The management should reconsider frontline staff welfare and try to boost staff morale. Under Service Profit Chain, satisfied and loyal employees are far more productive thus to generate more service value to customers. Customer satisfaction drives customer loyalty. And loyalty is the key determinant of company’s profitability 5. Other issues Location Location is one of the key determinants of business success. Unfortunately, Hong Kong Disney’s direct competitor – Ocean Park, has a much better strategic location – it locates conveniently at the central of Hong Kong Ireland, easier to access to populations. To counter this weak perspective, Hong Kong Disneyland should offer 1-way free Mass Transit Railway service (approximate 5% of ticket price) for the visitors during weekdays (capacity planning). Public Relation The public relation of Hong Kong Disney was proved to be a nightmare. Public criticism never stopped ever since its construction – environmental problems, human rights issue, violating laws, arrogant American staff and so on. These criticisms could negatively impact attendance, foil the reasonable attempts to solve the problems of the park, and it could make it difficult to obtain financing for future expansion. Hong Kong Disney should abandon its American pride and be modest to fit into Chinese culture. Conclusion Disney is a services organization and by its very virtue the services provided are intangible. In such a organization customer dissatisfaction is the biggest worry since any sort of issues will pass through the word of mouth and Disney could soon lose out more faster than it has earlier anticipated. In the short run Disney should focus on service recovery approaches by regularly collecting the customer feedback and focusing on the operational issues highlighted through the survey. A more effective strategy would be to turn customers and employees into stakeholders by getting a sense of belongingness with the park. People are the biggest assets of a service organization and Disney should look after the well being of its employees. Disney should use a differentiation strategy in the Chinese market along with that Disney should aim at providing an entertainment with education. That can be: setup a Disney school to teach kids drawing, dancing or stage performance. This will be a strong selling point as Chinese parents often focused enormous attention on their children’s education. It is aware that the sugary world Disney offered might be a little out of step with children. At the planning of Hong Kong Disneyland, the park featured four themed â€Å"lands† that mirrored those of Disneyland in Anaheim. The attractions mainly targeted families and kids, and only a few for Teens Adults. Now days, children are more sophisticated and independent. More attractions for Teens Adults should be built. Disney should work towards reviving and expanding the park; Government should inject more capital into the project and allocate more land to make the park bigger and less crowded. Disney should aim for unique attractions which are only available in Hong Kong. This is to counter the competitiveness of its future competitor Shang Hai Disneyland which is four times bigger. A part of the additional capital should be used to make the operations more effective and drive the ticket prices down.