Samsung Everland

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Richard Ivey School of Business
The University of Western Ontario

SAMSUNG EVERLAND: MANAGING SERVICE QUALITY (A)
Charles Dhanaraj prepared this case under the supervision of Professor John Haywood-Farmer solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors might have disguised certain names and other identifying information to protect confidentiality.

Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. This material is not covered under authorization from CanCopy or any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca.

Copyright © 1997, Ivey Management Services Inc. Version: (A) 2000-01-06

In Decernber 1994, Her Tae-Hak, president of Samsung's Joong-Ang Development Company, South Korea, was concerned with the level of service quality at Yongin Farmland (Farmland). It was clear to Mr. Her that Farmland had to have a coherent service quality management strategy because his goal was to position the company as one of the world's leading theme parks. However, despite the service quality program he had initiated since he assumed his present position in October 1993, preliminary findings indicated that Farmland's service quality levels were much below those at leading theme parks, not only intemationally, but also within South Korea. He wondered if the moves he had already rnade were in the right direction, how Farmland could achieve intemational standards of service quality, whether it would be worth doing, and if it would really provide a sustainable competitive advantage in the world market.

THE GLOBAL THEME PARK INDUSTRY

The early 1990s saw theme parks around the world emerge as major sources of family entertainrnent. The earliest evidence of a business where people paid money to be terrified was in the early 1600s when several Russians operated a sled ride with a 70-foot vertical drop. In the late 1800s, several theme parks were set up on Coney Island , New York, including the first roller coaster (1884) and an indoor amusement park (Sealion Park). In the 1930s, the amusement industry suffered because of the combined impact of the alternative entertainment offered by movie houses and the economic depression. However, with the opening of Disneyland in 1955 in California, the industry revived

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Walt Disney was credited with raising the profile, as well as the profitability, of the industry to new heights.

The Walt Disney Company, with three major theme parks in the United States, one in Japan and one in Europe, was the world's largest theme park chain as measured by revenues. Time Warner's Six Flags Corporation was the second largest with seven parks in the United States and plans to expand into China and other Far East countries. Paramount and Anheuser Busch were other conglomerates that owned theme parks. In 1994, total attendance for the world's top 50 theme parks, found in 15 countries, was about 222 million, a growth of five per cent over 1993. The 23 parks in the top 50 situated in the United States accounted for 47 per cent of the total attendance; the six parks in Florida represented 20 per cent of total attendance. Exhibit 1 shows some details of the top 10 theme parks.

Asian parks constituted 33 per cent of the total worldwide attendance, with Japan's eight parks representing 19 per cent. Tokyo Disneyland (TDL), which opened in 1983 as a joint venture with the...
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