5 Force Model

Topics: Amusement park, Hong Kong, Lantau Island Pages: 4 (1251 words) Published: April 12, 2011
Strategic Management
Individual Assignment

Porter’s 5-Forces Model in Hong Kong theme park industry

Name: Lau Hiu Ying
Instructor: Yi TANG

1. Introduction
Theme Park is an entertainment venue that includes rides, restaurants, activities, and attractions, woven around a theme such as celebrity or characters. Therefore, Hong Kong has a pair of theme parks which are Hong Kong Disneyland (an international famous theme park) and Ocean Park (a recreational, educational, home-growth theme park). Both of the theme parks have attracted about 10 million visitors in 2009/2010. In this paper, the Hong Kong theme park industry will be analyzed by using Porter’s 5-Forces Model in order to decide whether the industry is worth for investment. 2. Analysis of Porter’s 5-Forces Model

The analysis of Porter’s 5-Forces Model in Hong Kong theme park industry is shown below. Threat of New Entry
Capital Requirements
In terms of the amusement park industry, the entry barrier is high due to the need to invest large amount of financial resources. In addition to the amusement park required land for a full scale development. This factor is important because Hong Kong has a high land price real estate market. Brand Identity

Both of the theme parks have a good reputation in service and in safety. Moreover, Ocean Park is a Hong Kong's home-grown theme park; Hong Kong Disneyland is an international famous theme park. Both of them have their own brand identity. Thus, the threat of new entry is low in Hong Kong. Threat of Rivalry

Numerous Competitors
The theme park industry in Hong Kong is facing a high threat of rivalry as there are numerous theme parks nearby Hong Kong in Shenzhen, such as Windows of the World Park, Minsk World and Shenzhen Happy Valley. Lack of Differentiation

It is important to consider with lack of differentiation, visitors’ choice will greatly over the price and service, thus causes pressure for the intense price and service competition....
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