Global Business 3rd Edition by Mike Peng

Exercise 5

The arrival of Hong Kong Disneyland in 2005 caused many pundits to predict the demise of Hong Kong's homegrown amusement park, Ocean Park. Several of Disney's characters, such as Mickey Mouse, Donald Duck, and Goofy, were household names all over the world. With its legendary "Imagineering," Disney was cranking out new animated characters that debuted in movies, making them well-known by the time visitors encountered them in Disney parks.
In comparison, few people outside of Hong Kong had even heard of Ocean Park. Founded in 1977, Ocean Park had been the only amusement park in town. The lack of competition did not push it to strengthen its brand image, symbolized by its Seahorse logo. The nonsmiling seahorse was far from warm and cuddly to the impressionable younger customers-it was hard for children to imagine snuggling with a seahorse. "You could say that we had no brand image at all at that time," conceded one manager. Hearing that Disney would be coming, Ocean Park introduced a sea lion named Whiskers as its new mascot. Whiskers was bigger and cuter with a big smile, triggering a much warmer and easily approachable feeling to customers. Soon after Whiskers was introduced, he became a household name in Hong Kong, particularly with children and families. In addition to stronger brand building, Ocean Park also geared up to prepare for Disney's onslaught by installing new attractions, upgrading existing rides, and enhancing interactive activities with animals (including Hong Kong's only pandas). Yet, the dazzling commencement ceremony of Hong Kong Disneyland made Ocean Park look relatively tired and dated by comparison.
Most local people were sympathetic to Ocean Park, as it seemed like a classic David versus Goliath competition. Ocean Park, the clear underdog, had become a fixture of Hong Kong's cultural heritage. Disneyland, playing the part of Goliath, represented the quintessential multinational giant set out to destroy the local icon. But the fact was that despite some improvement, Ocean Park was beginning to look and feel tired and shabby, and its attractions paled when compared with the glitz and glamour of Disney. Would Ocean Park be able to survive?
While Ocean Park did have thrill rides, its primary focus was on nature and wildlife with many animalrelated activities. Its Ocean Theater staged dolphin and sea lion shows. Its world-class Atoll Reef, Shark Aquarium, Bird Aviary, and Pacific Pier gave visitors opportunities to view wild animals and beautiful scenery up-close-a rarity in urban Hong Kong. In addition, Ocean Park had distinct Chinese characteristics that reflected its roots in Hong Kong.
"The only way we can survive is to make our park world class," stated Allan Zeman, Ocean Park's Board Chairman. Early on, Ocean Park made a clear decision that it would not try to beat Disneyland at its own game. Zeman stated: "We do not want to try to 'out-Disney' Disney." The result was an ambitious $700 million* master plan, including schemes for a new roller coaster that would be operating by 2012, a subzero Ice Palace, and a 7.6-million liter aquarium with an underwater restaurant. An extra 33 animal species would be brought in, and the number of rides doubled to 70. Ocean Park hoped to position itself as a world-class marine-based attraction with real animals in this ambitious overhaul. It would further strengthen its core competencies in "real" nature rather in contrast to Disney's strengths in cartoon characters, castles, virtual reality, and fantasy. It was hoped that Ocean Park could differentiate itself more clearly from Disneyland. However, the huge $700 million investment would put a severe financial burden on Ocean Park as half of the investment would come from bank loans. Ocean Park's profit in 2005 was only $15 million. Despite the high cost of the redevelopment plan, management kept Ocean Park's admission fee at 30% lower than Disney's: $36 versus $51 for adults in 2011.
To boost attendance of local visitors, Ocean Park introduced an annual pass with unlimited admission for an entire year. It hoped that annual pass holders might also bring along other visitors. Besides the new pricing campaign, seasonal holiday themes became another field of battle between Ocean Park and Hong Kong Disneyland. This battle highlighted the different approaches taken by East and West. For instance, in the Halloween of 2009, a creative campaign was laid out. While Hong Kong Disneyland was fashioning a sinister, dark world, like the one in Hollywood blockbusters, Ocean Park tapped into the local psyche, derived from old tales like the madness at the high street police station and the long-haired girl who was said to haunt a university laboratory. There was a clear contrast between Ocean Park that played the Hong Kong card and Disneyland that deployed strong Western elements.
By 2010, Ocean Park had not only overcome Disney's challenges, but had even managed to turn a threat into an opportunity. Far from being the death knell as predicted by many analysts, Disney's arrival in Hong Kong had been a boon for Ocean Park. Disney's opening had spurred Ocean Park into action with a dramatic turnaround. In 2010, Ocean Park achieved the highest recorded attendance (5.1 million) in its history, surpassing Disneyland's 5 million visitors. Some commentators suggested that Ocean Park was a bigger benefactor from Disneyland than was Disney itself. The opening of Disneyland had rejuvenated local interest in amusement parks. Furthermore, Hong Kong Disneyland increased the number of tourists from China and Southeast Asia to Hong Kong- particularly families interested in amusement parks. In addition to seeing Disney, it was natural for them to want to see Ocean Park. As a result, Ocean Park enjoyed increasing profits, while Hong Kong Disneyland struggled by missing attendance goals and facing doubtful profitability.
Case Discussion Questions :
How can Ocean Park further capitalize on Disneyland's presence? (Hint: Check out how other parks surrounding Disney, such as Sea World and Universal Studios, survive and thrive in Anaheim, California, and Orlando, Florida.)