As a young leader in an increasingly competitive job market, I feel as though I gained many pieces of knowledge during this course. Going forward, I hope that I can be more aware of forces that are affecting decisions made by my Company and be able to discuss them amongst my peers. Even though I am young in my career, I have been exposed to many changes at the Walt Disney Company but have not been as in tune with the decisions as I would have liked.
I think understanding the strategy behind Company pricing in the last chapter was perhaps the most eye-opening to me since Disney has always been known for it's pricey cost of admission. As Disney continues to increase its cost on admission, room rates, food and beverage, parking, etc. each year, the pricing chapter forced me to think about the strategy involved as our country recovers from a recession and continues to see the price of gas increase. It may be expensive, but the attendance has yet to slow down which tells me that the price continues to be right.
I am a leader of a very diverse group of people who differ not only in race, but age and gender as well. That being said, I'm very much looking forward to next semester's class surrounding organizational behavior, because I think understanding how to motivate different groups of people is a huge aid to success as a leader in today's business.
Tuesday, May 31, 2011
SECA 11: Globalization
Every year, Walt Disney World attracts thousands for foreign visitors to its resort. Even though there are three Disney resorts in foreign countries (France, Japan, and Hong Kong) and a fourth currently under construction (China), international tourists flood the Orlando area every year. The greatest impact is seen in the British and South American tourists and Disney caters specifically to these two groups in various ways.
For example, this summer Disney will employ several Portuguese-speaking hosts and hostesses whose sole purpose will be to act as translators for our guests visiting from Brazil. These new Cast Members will be strategically placed throughout the parks and resorts in order to help make the language barrier for our Brazilian tourists (who typically travel together in large groups) as minimal as possible.
The effect of tourists from international markets on prices at Walt Disney World is hard to determine.
I say this because even though the Company attracts foreign visitors, at the same time their numbers do not outshine the volume of domestic travelers Walt Disney World will accommodate each year. Disney must therefore find a balance in the price of tickets that is weighted more towards the income of its domestic guests vs. their international guests. For those traveling from Europe, this is great news due to the current strength of the Euro and the steady demise of the US dollar.
For example, this summer Disney will employ several Portuguese-speaking hosts and hostesses whose sole purpose will be to act as translators for our guests visiting from Brazil. These new Cast Members will be strategically placed throughout the parks and resorts in order to help make the language barrier for our Brazilian tourists (who typically travel together in large groups) as minimal as possible.
The effect of tourists from international markets on prices at Walt Disney World is hard to determine.
I say this because even though the Company attracts foreign visitors, at the same time their numbers do not outshine the volume of domestic travelers Walt Disney World will accommodate each year. Disney must therefore find a balance in the price of tickets that is weighted more towards the income of its domestic guests vs. their international guests. For those traveling from Europe, this is great news due to the current strength of the Euro and the steady demise of the US dollar.
Sunday, May 29, 2011
SECA 10:Pricing Strategies
At Walt Disney World, a bundling pricing strategy is utilized. Basically, the longer you stay, the less you pay per day.Think of it as a Costco-style approach, buy in bulk to save!
For example, according to Disney.com, a 1-day ticket for Guests aged 10+ costs $73.80. However, if you purchase a 3-day ticket, the price decreases to $45/day. That's quite a drop off and the price per day continues to decline as you purchase additional days. There are of course, other ticket options that can be added including Disney's Park Hopper (allows you to visit multiple parks in one day), Disney's Water Park fun and more (includes admission to a water park and DisneyQuest Interactive Theme Park) option and the no expiration option (for a price you can make sure you unused tickets are good forever). There are also a wide range of discounts available for Florida residents, AAA members, and the military. However, they all focus around the same simple idea of decreasing ticket prices per day and the length of your stay increases. This helps entice people to stay at our resort for a longer period of time (thus, causing them to spend more money on hotels, merchandise, and food and beverage).
Disney is a price-setter in the Orlando theme park market, and usually will announce increases in ticket prices in August each year. Typically, Universal Orlando and Sea World Orlando wait for Disney to announce an increase in admission prices before announcing their own. This was evident last summer, when on August 4, Disney announced admission increases only to be followed by similar announcements from Universal Orlando and Sea World Orlando on August 6. This competitive atmosphere allows the three major theme park companies in Orlando to benefit from the success each other is experiencing. Since I have been in the industry (January 2008), none of the major Orlando resorts has decreased ticket prices after seeing the other resorts announce an increase.
For example, according to Disney.com, a 1-day ticket for Guests aged 10+ costs $73.80. However, if you purchase a 3-day ticket, the price decreases to $45/day. That's quite a drop off and the price per day continues to decline as you purchase additional days. There are of course, other ticket options that can be added including Disney's Park Hopper (allows you to visit multiple parks in one day), Disney's Water Park fun and more (includes admission to a water park and DisneyQuest Interactive Theme Park) option and the no expiration option (for a price you can make sure you unused tickets are good forever). There are also a wide range of discounts available for Florida residents, AAA members, and the military. However, they all focus around the same simple idea of decreasing ticket prices per day and the length of your stay increases. This helps entice people to stay at our resort for a longer period of time (thus, causing them to spend more money on hotels, merchandise, and food and beverage).
Disney is a price-setter in the Orlando theme park market, and usually will announce increases in ticket prices in August each year. Typically, Universal Orlando and Sea World Orlando wait for Disney to announce an increase in admission prices before announcing their own. This was evident last summer, when on August 4, Disney announced admission increases only to be followed by similar announcements from Universal Orlando and Sea World Orlando on August 6. This competitive atmosphere allows the three major theme park companies in Orlando to benefit from the success each other is experiencing. Since I have been in the industry (January 2008), none of the major Orlando resorts has decreased ticket prices after seeing the other resorts announce an increase.
Thursday, May 19, 2011
SECA 9: Rivalry
The Walt Disney Company is the number one entertainment company in the world. A subset of that, the Walt Disney World Resort is the top theme park destination in the world as well. The Walt Disney World Resort is able to maintain this title year after year by offering a great product and continually delivering new, unique, and exciting experiences people can't get anywhere else. To say that any company rivals the success of the Walt Disney World Resort would be a farse, but the Walt Disney World resort does have rivals who compete for our business in the Central Florida tourism market.
The biggest rivals the Walt Disney World Resort faces off against are the Universal Orlando Resort. Universal Orland has not been in the market as long as Walt Disney World, but have both established themselves as worthy destination that offer unique experiences (modeling the same practices utilized by Disney).
In order to be successful in any industry, you have to offer a product that is unique to your company and is not easily found somewhere else. In looking at Walt Disney World, we do this very well, feeding off of our Guests' bond to movies, television shows, and brand recognition to help ignite the success of our resort. We refer to this practice as "synergy". For example, last year, Disney's Wide World of Sports underwent a massive rehabilitation and re-branding. Every year thousands of amateur and professional athletes compete in various athletic events at the complex, allowing Disney to gain great exposure in the athletic market. However, as Disney owns and operates ESPN, a name that is synonymous and recognized in the world of sports, so it made sense to incorporate the ESPN name/logo into our on-site sports complex. After it's rehab, Disney's Wide World of Sports emerged as the new, ESPN Wide World of Sports Complex.
This idea of "synergy" is viewable in our theme parks as well, as we often utilize various attractions and characters to promote different parts of our business. Classic attractions such as The Haunted Mansion and Pirates of the Caribbean were turned into film franchises, while successful movies such as Cars, Finding Nemo, Beauty and the Beast, and the Lion King, have been the inspiration for various attractions, shows, restaurants, and character meet and greet areas. Practicing synergy has helped grow our business and left our competitors struggling to imitate our success.
This imitation was best attempted by the Universal Orlando resort in 1999. After undergoing a massive expansion, Universal Orlando was debuting three new hotels operated by the Loews Hotel group, a massive retail and dining area dubbed "Universal's Citywalk," and a new theme park called Islands of Adventure. They were attempting to transform themselves into a vacation destination like Walt Disney World as opposed to a place people could visit in one or two days. Unfortunately for them, they failed miserably.
Islands of Adventure was supposed to transform the theme park world. Universal promoted it as "The most technologically advanced theme park in the world," but it lacked in emotion. They attempted to establish a bond with their guests like Disney does by creating attractions based on comics , superheros, and a successful movie franchise, but guests did not and have not responded like they imagined they would. Universal's major expansion failed miserably and the Company has been sold twice since it's debut.
**Side note. In June 2010 Islands of Adventure underwent a major rehabilitation to incorporate the 'Wizarding World of Harry Potter' into their theme park. It has been a great success thus far, boosting Universal's attendance and profit margins. The affect on Walt Disney World? Our attendance increased as well!**
The biggest rivals the Walt Disney World Resort faces off against are the Universal Orlando Resort. Universal Orland has not been in the market as long as Walt Disney World, but have both established themselves as worthy destination that offer unique experiences (modeling the same practices utilized by Disney).
In order to be successful in any industry, you have to offer a product that is unique to your company and is not easily found somewhere else. In looking at Walt Disney World, we do this very well, feeding off of our Guests' bond to movies, television shows, and brand recognition to help ignite the success of our resort. We refer to this practice as "synergy". For example, last year, Disney's Wide World of Sports underwent a massive rehabilitation and re-branding. Every year thousands of amateur and professional athletes compete in various athletic events at the complex, allowing Disney to gain great exposure in the athletic market. However, as Disney owns and operates ESPN, a name that is synonymous and recognized in the world of sports, so it made sense to incorporate the ESPN name/logo into our on-site sports complex. After it's rehab, Disney's Wide World of Sports emerged as the new, ESPN Wide World of Sports Complex.
This idea of "synergy" is viewable in our theme parks as well, as we often utilize various attractions and characters to promote different parts of our business. Classic attractions such as The Haunted Mansion and Pirates of the Caribbean were turned into film franchises, while successful movies such as Cars, Finding Nemo, Beauty and the Beast, and the Lion King, have been the inspiration for various attractions, shows, restaurants, and character meet and greet areas. Practicing synergy has helped grow our business and left our competitors struggling to imitate our success.
This imitation was best attempted by the Universal Orlando resort in 1999. After undergoing a massive expansion, Universal Orlando was debuting three new hotels operated by the Loews Hotel group, a massive retail and dining area dubbed "Universal's Citywalk," and a new theme park called Islands of Adventure. They were attempting to transform themselves into a vacation destination like Walt Disney World as opposed to a place people could visit in one or two days. Unfortunately for them, they failed miserably.
Islands of Adventure was supposed to transform the theme park world. Universal promoted it as "The most technologically advanced theme park in the world," but it lacked in emotion. They attempted to establish a bond with their guests like Disney does by creating attractions based on comics , superheros, and a successful movie franchise, but guests did not and have not responded like they imagined they would. Universal's major expansion failed miserably and the Company has been sold twice since it's debut.
**Side note. In June 2010 Islands of Adventure underwent a major rehabilitation to incorporate the 'Wizarding World of Harry Potter' into their theme park. It has been a great success thus far, boosting Universal's attendance and profit margins. The affect on Walt Disney World? Our attendance increased as well!**
Monday, May 9, 2011
SECA 8: Product Differentiation/Quality
A long time ago, Walt Disney was at a small, local amusement park with his daughters. As he sat on a park bench watching them enjoy themselves on the merry-go-round, he came up with an idea, to build a theme park where kids and adults could enjoy experiences together.
"We believed in our idea - a family park where parents and children could have fun - together." - Walt Disney
With that thought, the idea of Disneyland was born! Or at least, that's how the story goes. But the idea behind the story, that Disney Parks and Resorts are a family destination remains the same. As a brand we focus on family entertainment over everything else and that focus has resulted in five (soon to be six) theme park/resorts all over the world, with Walt Disney World in Orlando, FL holding the crown as the number one theme park destination in the world.
Over fifty years later, the idea of appealing to families remains the focal point of the success at Disney.While other theme parks owned by Six Flags, Cedar Fair, and Universal offer great experiences, none of them have been able come close to the success experienced at Walt Disney World, as it remains the top theme park destination in the world. These other companies tend to develop attractions that will offer guests thrills and chills, building roller coasters and drop towers that go to insane heights! Disney however, spends eons of time developing a story behind its attractions, creating a world of fantasy and imagination that immerse our Guests into an incredible experience. This attention to detail and focus on providing entertainment every family member can enjoy together has been a consistent recipe for success at Disney, and is one we will not stray from.
"Your dead if you aim only for kids. Adults are only kids grown up, anyway." - Walt Disney
The strategy of focusing on family entertainment has also helped drive the success of other Disney business ventures, including our movie studios and entertainment media (ABC, ESPN, etc.), only strengthening the belief held by Walt Disney all those years ago.
"We believed in our idea - a family park where parents and children could have fun - together." - Walt Disney
With that thought, the idea of Disneyland was born! Or at least, that's how the story goes. But the idea behind the story, that Disney Parks and Resorts are a family destination remains the same. As a brand we focus on family entertainment over everything else and that focus has resulted in five (soon to be six) theme park/resorts all over the world, with Walt Disney World in Orlando, FL holding the crown as the number one theme park destination in the world.
Over fifty years later, the idea of appealing to families remains the focal point of the success at Disney.While other theme parks owned by Six Flags, Cedar Fair, and Universal offer great experiences, none of them have been able come close to the success experienced at Walt Disney World, as it remains the top theme park destination in the world. These other companies tend to develop attractions that will offer guests thrills and chills, building roller coasters and drop towers that go to insane heights! Disney however, spends eons of time developing a story behind its attractions, creating a world of fantasy and imagination that immerse our Guests into an incredible experience. This attention to detail and focus on providing entertainment every family member can enjoy together has been a consistent recipe for success at Disney, and is one we will not stray from.
"Your dead if you aim only for kids. Adults are only kids grown up, anyway." - Walt Disney
The strategy of focusing on family entertainment has also helped drive the success of other Disney business ventures, including our movie studios and entertainment media (ABC, ESPN, etc.), only strengthening the belief held by Walt Disney all those years ago.
Friday, April 22, 2011
SECA 7: Cost Structure/Leadership
As a front-line manager at the Walt Disney World Resort, one my main responsibilities is to manage the amount of labor being utilized in relation to the attendance in our theme park. This is the main cost leadership strategy I use.
It is actually a fairly simple strategy. Each morning, the opening manger on the team will log into our network and run a labor report, allowing them to see the daily attendance forecast and the amount of labor hours being utilized at each of our attractions. They will then e-mail this report to the rest of the team, allowing us to see where we stand from a labor perspective at the start of the business day. Typically, each attraction will be several hours over budget at the start of the day, as we build in extra labor in anticipation of Cast Members arriving late or calling in sick for their shifts.
Later in the day (usually 5 hours after the opening manager arrives), when the next manager arrives, they will run the report again, allowing us to see how much closer to our budget we have come. At this time, we will also be provided with a revised forecast for our park attendance. If the forecast has risen or stayed even, little to no action is required on our part as a leadership team. If the attendance forecast has dropped however, we must start granting Cast Members early releases from their shifts, as our labor budget will drop as well.
This is an efficient strategy because when attendance is lower than expected, it usually means revenues will be lower than expected as well. For this reason we will shed labor to compensate for the difference. For example, if attendance was originally forecasted to be 72,000 on Saturday, my team will make sure we staff our attractions appropriately. At the Jungle Cruise attraction, this high attendance forecast means we will have all of our efficiency positions up, including fastpass distribution, fastpass return, wheelchair assist, and stroller parking while running ten boats on the river. These positions will allow us to accommodate our guests in the most efficient manner. However, by mid-day the attendance forecast has dropped to 59,000, I will now drop these positions earlier or not utilize them at all. There now may only be a need for 8 boats on the river and one Cast Member can handle fastpass distribution and return by themselves.
Shedding labor based on our attendance figures helps us remain profitable on a daily basis. It also allows us to remain as efficient as possible. Think about this, if it is forecasted to be a busy day, I will staff my attractions accordingly. If that forecast drops by mid-day however, would I still need all of the same positions? No. In fact, if I were to keep them, my Cast Members would most likely distract themselves, engaging in idle conversations due to the lack of guests and overbalance of Cast Members on the clock. They would be tripping all over each other!
In this case, our cost structure goes hand in hand with efficiency, which are two areas of focus Disney excels in.
It is actually a fairly simple strategy. Each morning, the opening manger on the team will log into our network and run a labor report, allowing them to see the daily attendance forecast and the amount of labor hours being utilized at each of our attractions. They will then e-mail this report to the rest of the team, allowing us to see where we stand from a labor perspective at the start of the business day. Typically, each attraction will be several hours over budget at the start of the day, as we build in extra labor in anticipation of Cast Members arriving late or calling in sick for their shifts.
Later in the day (usually 5 hours after the opening manager arrives), when the next manager arrives, they will run the report again, allowing us to see how much closer to our budget we have come. At this time, we will also be provided with a revised forecast for our park attendance. If the forecast has risen or stayed even, little to no action is required on our part as a leadership team. If the attendance forecast has dropped however, we must start granting Cast Members early releases from their shifts, as our labor budget will drop as well.
This is an efficient strategy because when attendance is lower than expected, it usually means revenues will be lower than expected as well. For this reason we will shed labor to compensate for the difference. For example, if attendance was originally forecasted to be 72,000 on Saturday, my team will make sure we staff our attractions appropriately. At the Jungle Cruise attraction, this high attendance forecast means we will have all of our efficiency positions up, including fastpass distribution, fastpass return, wheelchair assist, and stroller parking while running ten boats on the river. These positions will allow us to accommodate our guests in the most efficient manner. However, by mid-day the attendance forecast has dropped to 59,000, I will now drop these positions earlier or not utilize them at all. There now may only be a need for 8 boats on the river and one Cast Member can handle fastpass distribution and return by themselves.
Shedding labor based on our attendance figures helps us remain profitable on a daily basis. It also allows us to remain as efficient as possible. Think about this, if it is forecasted to be a busy day, I will staff my attractions accordingly. If that forecast drops by mid-day however, would I still need all of the same positions? No. In fact, if I were to keep them, my Cast Members would most likely distract themselves, engaging in idle conversations due to the lack of guests and overbalance of Cast Members on the clock. They would be tripping all over each other!
In this case, our cost structure goes hand in hand with efficiency, which are two areas of focus Disney excels in.
Thursday, April 14, 2011
SECA 6: R & D
Innovations in the theme park industry are always affecting Company's decisions. Every year, theme parks are faced with the challenge of creating new experiences for their guests that will lore them away from their competitors and keep them coming back to the park on a regular basis.
One of the most recent innovative trends in the theme park industry is the use of mobile devises to alert guests of attraction wait times throughout the park. The ironic part of this situation, is that it was not pioneered by the industry, but of the guests visiting the parks. Suddenly, apps (like "Disney World Wait Times Free) were available for download in Apple's App Store and the Google's Android Marketplace, allowing guests who were in a particular theme park to update wait times they observed throughout the day for other users of the same application.
Shortly after these user-inspired apps hit the market, Walt Disney World partnered with Verizon Mobile to create the Verizon Mobile Magic Application, which instantly became a much better substitute for guests visiting our theme parks than previous, user-based apps. Disney's Verizon Mobile Magic allows guests to receive live, up to the minute updates on wait times at their favorite attractions, character meet and greet locations, and restaurants. It is truly a time-saver, allowing guests to strategically map out their day by avoiding lines, utilizing out Fastpass system where appropriate, and make lunch/dinner plans away from the busiest times of day.
When it comes to incorporating the time-cost trade-off into decisions to introduce new products, Walt Disney World is very strategic. We rely on a system called "synergy," in which we to self-promote our brands/products within our Company simultaneously. For example, in 2008, we debuted one of our most popular attractions, Toy Story Mania at Disney's Hollywood Studios. Two years later, with the attraction still soaring in popularity, the movie Toy Story 3 was released by our movie studio, further increasing the Toy Story brand and helping promote it to people who may have yet to experience the attraction in our theme park. While I am not privy to the introduction of new products yet (give me time, I'll get there), this strategic synergy system is always employed in the debut of new attractions. It can be seen again this summer, with the debut of "Cars 2" from our movie studio, and the unveiling of "Cars Land" a brand new, 12-acre addition to Disney's California Adventure theme park at Disneyland in Anaheim, CA. It is obvious that Disney is self aware of the time-cost, trade-off system and the benefits of using synergy to ensure it is utilized properly to maximize their profits.
To explain the extent to which The Walt Disney World Company is an innovator would take many, many blog posts. in 1955, Walt Disney shook up the "Amusement Park" world with the debut of Disneyland, the world's first "Theme Park." It has all continued on from there. Since 1955, the Walt Disney World Company has created many "firsts" in the theme park industry including the debut of the world's first steel roller coaster (Matterhorn Mountain), the first park-hopper passes (allowing Guests to visit multiple parks in one day on a single ticket), and the creation of a Fastpass system (allowing guests to bypass standby lines). Going forward, the Walt Disney World Company will continue to be an innovator, as recently highlighted by the Orlando Sentinel in an interview with Tom Staggs. In the interview, Tom revealed plans for Disney's future, where Guests will enjoy the benefits of reserving ride times from home, entertaining themselves while in line through the use of "interactive queues," and a more efficient check-in process at our resorts. The interview (quoted below) only solidified Disney as a true innovator, not only in the theme park industry, but the travel, tourism, and entertainment industries as well.
Here is an article from the Orlando Sentinel Article surrounding Disney's "Next Generation Experience" project, reported by Jason Garcia on February, 17, 2011:
"Future visitors to Walt Disney World will be able to reserve ride times from their home computers and bypass hotel check-in desks once they arrive at the resort, the head of the Walt Disney Co.'s global theme-park division said during an investors conference Thursday.
Those advances are among of a series of technological initiatives Disney is developing in hopes of making visits to its increasingly crowded theme parks easier to plan and less intimidating to navigate, Walt Disney Parks and Resorts Chairman Tom Staggs said at the conference in Anaheim, Calif.
"In the coming years, we'll introduce a broad set of systems and tools that will help us create a more seamless and personalized experience and help guests get more out of their visit with us," Staggs said. The ultimate goal, he added, is "to welcome more and more people, while making their experience more satisfying, more personal and more immersive."
Staggs' comments provided the first detailed glimpse at a secretive initiative dubbed "Next Generation Experience," or "NextGen," that Walt Disney Parks and Resorts has been working on for more than a year. The budget for the project is said to be around $1 billion — as much money as Disney spent to build its recently launched Disney Dream cruise ship.
In his remarks Thursday, Staggs described a "version of Fast Pass for an entire Disney vacation." Future guests, he said, will be able to reserve specific ride times for popular attractions, secure seating for shows, make restaurant reservations and pre-book other experiences before they leave their homes on vacation. They will also be able to obtain their room keys in advance, eliminating the need to check into hotels and allowing them to proceed immediately to their rooms or a theme park once they arrive on Disney property.
Other advances, he said, will include personalizing rides and character greetings for individual guests, adding more interactive queues to entertain people while they wait in line for attractions, and designing behind-the-scenes systems for operations workers to better monitor and steer crowd flow to ease congestion.
Disney will also aim to cull more personal information from its guests, which Staggs said "will put better information into the hands of our cast, so they can deliver even better and more personalized service for our guests." Although Staggs did not specify what information Disney would seek, possibilities range from simple details such as names and birth dates to favorite characters and credit-card numbers. Access to such information would allow Disney to target more personalized sales offers to guests, even as they wander around its parks.
Staggs didn't go into further details about how Disney intends to implement some of the plans, and the company would not elaborate on his comments. But there is widespread speculation among former Disney executives and bloggers who follow the company that some of the plans will use radio-frequency identification, or RFID, microchips that can be implanted into tickets or wristbands, loaded with personal information and used to interact with sensors installed in everything from hotel-room doors to ride animatronics.
Disney has signed a confidentiality agreement with a California company that manufactures RFID wristbands, whose clients include other amusement operators such as Great Wolf Resorts.
Staggs declined to say when Disney will launch many of the initiatives, though some elements — such as interactive queues — have been slowly rolling out in parks in recent months. Staggs said Disney has applied for "a number" of patents related to the work.
"It will be some time before we roll out the bulk of these developments," he said. "But we're well into development."
The decision to pump $1 billion or more into developing systems that help with vacation planning and crowd flow underscores one of the biggest challenges facing Disney's flagship theme-park resorts — particularly Disney World, which has four parks and roughly 25,000 hotel rooms.
As those resorts have grown bigger over the years, they have also become more complex to navigate and more crowded, threatening to undermine Disney's historically high guest-satisfaction ratings and to deter repeat visits.
"We know that our guests love creating great memories," Staggs said. "We also know they don't exactly relish waiting in line, checking in at the resort, worrying about missing their favorite attractions, or feeling uncertain about how to best navigate and access our properties."
There are risks. Former company officials have questioned whether technological advances would boost attendance or guest-spending enough to justify the billion-dollar price tag — or whether advance-planning by some guests could spoil the experience for those who do not pre-plan and arrive at a park only to find the most popular attractions already booked.
Privacy advocates could also protest if they think Disney is collecting too much personal information about its guests.
But Scott Smith, an instructor at the University of Central Florida's Rosen College of Hospitality Management, said there are also several advantages to the projects Disney described. Issuing hotel-room keys in advance, for instance, will ensure Disney gets its guests into its parks more quickly.
Smith likened it to similar advance-check-in options at some Las Vegas casino resorts where "the idea is that you go right to the craps table.
"Disney is probably looking at the same type of philosophy," Scott said. "The sooner we check you in, the sooner you go into our parks and start spending money."
Also, a new generation of technology-savvy travelers increasingly expects features such as customizable vacations and interactive attractions, he said.
"Their audience is so much more sophisticated now," Smith said. "If you're not investing in this already, you're going to get left behind. And the last thing Disney wants is to be saddled with the reputation of being old school.""
As you can see from the article, Disney is the definition of innovation.
One of the most recent innovative trends in the theme park industry is the use of mobile devises to alert guests of attraction wait times throughout the park. The ironic part of this situation, is that it was not pioneered by the industry, but of the guests visiting the parks. Suddenly, apps (like "Disney World Wait Times Free) were available for download in Apple's App Store and the Google's Android Marketplace, allowing guests who were in a particular theme park to update wait times they observed throughout the day for other users of the same application.
Shortly after these user-inspired apps hit the market, Walt Disney World partnered with Verizon Mobile to create the Verizon Mobile Magic Application, which instantly became a much better substitute for guests visiting our theme parks than previous, user-based apps. Disney's Verizon Mobile Magic allows guests to receive live, up to the minute updates on wait times at their favorite attractions, character meet and greet locations, and restaurants. It is truly a time-saver, allowing guests to strategically map out their day by avoiding lines, utilizing out Fastpass system where appropriate, and make lunch/dinner plans away from the busiest times of day.
When it comes to incorporating the time-cost trade-off into decisions to introduce new products, Walt Disney World is very strategic. We rely on a system called "synergy," in which we to self-promote our brands/products within our Company simultaneously. For example, in 2008, we debuted one of our most popular attractions, Toy Story Mania at Disney's Hollywood Studios. Two years later, with the attraction still soaring in popularity, the movie Toy Story 3 was released by our movie studio, further increasing the Toy Story brand and helping promote it to people who may have yet to experience the attraction in our theme park. While I am not privy to the introduction of new products yet (give me time, I'll get there), this strategic synergy system is always employed in the debut of new attractions. It can be seen again this summer, with the debut of "Cars 2" from our movie studio, and the unveiling of "Cars Land" a brand new, 12-acre addition to Disney's California Adventure theme park at Disneyland in Anaheim, CA. It is obvious that Disney is self aware of the time-cost, trade-off system and the benefits of using synergy to ensure it is utilized properly to maximize their profits.
To explain the extent to which The Walt Disney World Company is an innovator would take many, many blog posts. in 1955, Walt Disney shook up the "Amusement Park" world with the debut of Disneyland, the world's first "Theme Park." It has all continued on from there. Since 1955, the Walt Disney World Company has created many "firsts" in the theme park industry including the debut of the world's first steel roller coaster (Matterhorn Mountain), the first park-hopper passes (allowing Guests to visit multiple parks in one day on a single ticket), and the creation of a Fastpass system (allowing guests to bypass standby lines). Going forward, the Walt Disney World Company will continue to be an innovator, as recently highlighted by the Orlando Sentinel in an interview with Tom Staggs. In the interview, Tom revealed plans for Disney's future, where Guests will enjoy the benefits of reserving ride times from home, entertaining themselves while in line through the use of "interactive queues," and a more efficient check-in process at our resorts. The interview (quoted below) only solidified Disney as a true innovator, not only in the theme park industry, but the travel, tourism, and entertainment industries as well.
Here is an article from the Orlando Sentinel Article surrounding Disney's "Next Generation Experience" project, reported by Jason Garcia on February, 17, 2011:
"Future visitors to Walt Disney World will be able to reserve ride times from their home computers and bypass hotel check-in desks once they arrive at the resort, the head of the Walt Disney Co.'s global theme-park division said during an investors conference Thursday.
Those advances are among of a series of technological initiatives Disney is developing in hopes of making visits to its increasingly crowded theme parks easier to plan and less intimidating to navigate, Walt Disney Parks and Resorts Chairman Tom Staggs said at the conference in Anaheim, Calif.
"In the coming years, we'll introduce a broad set of systems and tools that will help us create a more seamless and personalized experience and help guests get more out of their visit with us," Staggs said. The ultimate goal, he added, is "to welcome more and more people, while making their experience more satisfying, more personal and more immersive."
Staggs' comments provided the first detailed glimpse at a secretive initiative dubbed "Next Generation Experience," or "NextGen," that Walt Disney Parks and Resorts has been working on for more than a year. The budget for the project is said to be around $1 billion — as much money as Disney spent to build its recently launched Disney Dream cruise ship.
In his remarks Thursday, Staggs described a "version of Fast Pass for an entire Disney vacation." Future guests, he said, will be able to reserve specific ride times for popular attractions, secure seating for shows, make restaurant reservations and pre-book other experiences before they leave their homes on vacation. They will also be able to obtain their room keys in advance, eliminating the need to check into hotels and allowing them to proceed immediately to their rooms or a theme park once they arrive on Disney property.
Other advances, he said, will include personalizing rides and character greetings for individual guests, adding more interactive queues to entertain people while they wait in line for attractions, and designing behind-the-scenes systems for operations workers to better monitor and steer crowd flow to ease congestion.
Disney will also aim to cull more personal information from its guests, which Staggs said "will put better information into the hands of our cast, so they can deliver even better and more personalized service for our guests." Although Staggs did not specify what information Disney would seek, possibilities range from simple details such as names and birth dates to favorite characters and credit-card numbers. Access to such information would allow Disney to target more personalized sales offers to guests, even as they wander around its parks.
Staggs didn't go into further details about how Disney intends to implement some of the plans, and the company would not elaborate on his comments. But there is widespread speculation among former Disney executives and bloggers who follow the company that some of the plans will use radio-frequency identification, or RFID, microchips that can be implanted into tickets or wristbands, loaded with personal information and used to interact with sensors installed in everything from hotel-room doors to ride animatronics.
Disney has signed a confidentiality agreement with a California company that manufactures RFID wristbands, whose clients include other amusement operators such as Great Wolf Resorts.
Staggs declined to say when Disney will launch many of the initiatives, though some elements — such as interactive queues — have been slowly rolling out in parks in recent months. Staggs said Disney has applied for "a number" of patents related to the work.
"It will be some time before we roll out the bulk of these developments," he said. "But we're well into development."
The decision to pump $1 billion or more into developing systems that help with vacation planning and crowd flow underscores one of the biggest challenges facing Disney's flagship theme-park resorts — particularly Disney World, which has four parks and roughly 25,000 hotel rooms.
As those resorts have grown bigger over the years, they have also become more complex to navigate and more crowded, threatening to undermine Disney's historically high guest-satisfaction ratings and to deter repeat visits.
"We know that our guests love creating great memories," Staggs said. "We also know they don't exactly relish waiting in line, checking in at the resort, worrying about missing their favorite attractions, or feeling uncertain about how to best navigate and access our properties."
There are risks. Former company officials have questioned whether technological advances would boost attendance or guest-spending enough to justify the billion-dollar price tag — or whether advance-planning by some guests could spoil the experience for those who do not pre-plan and arrive at a park only to find the most popular attractions already booked.
Privacy advocates could also protest if they think Disney is collecting too much personal information about its guests.
But Scott Smith, an instructor at the University of Central Florida's Rosen College of Hospitality Management, said there are also several advantages to the projects Disney described. Issuing hotel-room keys in advance, for instance, will ensure Disney gets its guests into its parks more quickly.
Smith likened it to similar advance-check-in options at some Las Vegas casino resorts where "the idea is that you go right to the craps table.
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Also, a new generation of technology-savvy travelers increasingly expects features such as customizable vacations and interactive attractions, he said.
"Their audience is so much more sophisticated now," Smith said. "If you're not investing in this already, you're going to get left behind. And the last thing Disney wants is to be saddled with the reputation of being old school.""
As you can see from the article, Disney is the definition of innovation.
Wednesday, April 6, 2011
SECA 5: Production
As a Walt Disney World leader at the Magic Kingdom, I rely on several factors surrounding production when looking at efficiency. Research has shown that guests who visit the Magic Kingdom, have a better overall experience in our theme park when they are able to experience 8.5 attractions. As an attractions guest service manager in Adventureland and Liberty Square, it is one of my responsibilities to make sure my attractions (eight total) are achieving their hourly guest carried targets. In theory, if each attractions area in the Magic Kingdom is working efficiently enough, they will hit their guest carried targets, and the average guest will be able to experience 8.5 attractions.
In order to be as efficient as possible, I am set up for success through my partners in workforce management. They are able to look at the forecasted attendance for a particular day and provide me this information so I can staff my attractions appropriately. If the forecasted attendance for the day is 30,000 guests, I will approach my staffing levels differently than I would for a forecast of 50,000 guests (in fact, as our attendance increases by approximately 8,000 guests, more positions are added to the days workload to accommodate the additional demand). This difference in staffing consists of what we call "efficiency positions." For example, at The World Famous Jungle Cruise, we have an hourly guest carried target of 1,400 guests with a sustained wait (a sustained wait here is defined as any wait time over 15 minutes). When we have a sustained wait at the Jungle Cruise, I need to make sure I'm running 10 boats on the river (our maximum number), have enough Cast Members staffed throughout the day so breaks go out on time, and make sure positions such as Fastpass return, Fastpass distribution, Fastpass merge assist, and boat dispatch assist are scheduled to be utilized throughout the day (typically during the peak hours of 1100-1900). On a 30,000 guest day, this sustained wait is almost never achieved, and these "efficiency positions" work in a negative way (law of diminishing returns) because my Cast Members don't have enough guests to focus on and instead turn their focus to idle chatter amongst themselves.
Every attraction at Walt Disney World has their own "efficiency positions" and each are tailored to be staffed at certain attendance levels depending on the particular attraction. These positions, combined with the use of the Disney Fastpass system, allow our guests to migrate through the park as effectively as possible, in hopes they will achieve the desired 8.5 attractions per guest. I do not expect this procedure of utilizing "efficiency positions" on high attendance days and dropping them on low attendance days to be discontinued any time soon, simply because it is a process that has been observed successfully for many years and proven effective.
As I have mentioned before, there are no real "rivals" to Walt Disney World as no one in the industry has ever come close to threatening our success. Therefore, we benchmark our success against ourselves. My team holds weekly meetings with my leader and direct reports, discussing our guest satisfaction scores, looking at guest verbatim, and discussing average wait times experienced compared to the results from prior years. Based on this information, we are able to determine what attractions are operating less efficiently than in the past and re-focus our attention on in in the coming days and weeks to ensure we are staying at and even exceeding the high standards of success Walt Disney World prides itself on.
In order to be as efficient as possible, I am set up for success through my partners in workforce management. They are able to look at the forecasted attendance for a particular day and provide me this information so I can staff my attractions appropriately. If the forecasted attendance for the day is 30,000 guests, I will approach my staffing levels differently than I would for a forecast of 50,000 guests (in fact, as our attendance increases by approximately 8,000 guests, more positions are added to the days workload to accommodate the additional demand). This difference in staffing consists of what we call "efficiency positions." For example, at The World Famous Jungle Cruise, we have an hourly guest carried target of 1,400 guests with a sustained wait (a sustained wait here is defined as any wait time over 15 minutes). When we have a sustained wait at the Jungle Cruise, I need to make sure I'm running 10 boats on the river (our maximum number), have enough Cast Members staffed throughout the day so breaks go out on time, and make sure positions such as Fastpass return, Fastpass distribution, Fastpass merge assist, and boat dispatch assist are scheduled to be utilized throughout the day (typically during the peak hours of 1100-1900). On a 30,000 guest day, this sustained wait is almost never achieved, and these "efficiency positions" work in a negative way (law of diminishing returns) because my Cast Members don't have enough guests to focus on and instead turn their focus to idle chatter amongst themselves.
Every attraction at Walt Disney World has their own "efficiency positions" and each are tailored to be staffed at certain attendance levels depending on the particular attraction. These positions, combined with the use of the Disney Fastpass system, allow our guests to migrate through the park as effectively as possible, in hopes they will achieve the desired 8.5 attractions per guest. I do not expect this procedure of utilizing "efficiency positions" on high attendance days and dropping them on low attendance days to be discontinued any time soon, simply because it is a process that has been observed successfully for many years and proven effective.
As I have mentioned before, there are no real "rivals" to Walt Disney World as no one in the industry has ever come close to threatening our success. Therefore, we benchmark our success against ourselves. My team holds weekly meetings with my leader and direct reports, discussing our guest satisfaction scores, looking at guest verbatim, and discussing average wait times experienced compared to the results from prior years. Based on this information, we are able to determine what attractions are operating less efficiently than in the past and re-focus our attention on in in the coming days and weeks to ensure we are staying at and even exceeding the high standards of success Walt Disney World prides itself on.
Tuesday, March 8, 2011
SECA 1b: Porter's 5 Forces in theme park industry.
For my SECA post I have chosen to focus on the theme park industry as I showcase knowledge and examples I have gained as part of my employment with the Walt Disney World Resort.
Rivalry -
In the United States, there are five major players in the theme park industry – Cedar Fair, Six Flags, Merlin Entertainment (owner of Busch & Sea World theme parks), Universal Parks and Resorts, and Disney Parks and Resorts. Each of these companies offers theme parks with varying experiences, always trying to debut the newest and best experiences in order to stay ahead of one another. A great example of this can be seen by looking at the three major theme parks located in Orlando, FL.
In Orlando, Walt Disney World, the Universal Orlando Resort and Sea World Orlando each are in direct competition with one another. This is evident in their competitive offerings in ticket prices: $87.33 at Walt Disney World, $82.00 at Universal, and $71.99 at Sea World. These prices are all represent the cost of an adult, 1 park, 1 day ticket. If you’d like to visit more than one park in a day or increase the number of days you visit each resort, each company increases their prices competitively.
Theme parks also offer ways for Guests to gain discounted tickets to their parks, usually through a promotional campaign with a sponsor. The best example of this can be seen in the partnership between Six Flags and Coke. Each summer, Six Flags and Coke typically run a promotion for an established length of time where if you bring a can of coke to the ticket office, you get a discount (in recent summers the promotion was buy one ticket, get one free). Promotions like this force rivals like Cedar Fair to come up with creative ways to lower ticket prices in order to stay competitive with Six Flags.
The rivalry between theme parks can also be observed by the debut of new attractions or technology. When Walt Disney World debuted its one-of-a-kind “Fastpass” system, which allowed guests to experience shorter wait times, other theme parks around the world were quick to follow with their own version. After the success of Universal Orlando’s Wizarding World of Harry Potter, many people throughout the theme park industry were interested to know if Walt Disney World would announce a new attraction. Almost right on cue, Walt Disney World announced the largest expansion (over $1 billion) in the history of its Magic Kingdom theme park where it will debut new restaurants, attractions, and entertainment offerings for its guests beginning in 2012.
Rivalry amongst companies in the theme park industry is what keeps them relevant in the eyes of its customers. Every year new attractions, restaurants, entertainment, and hotel offerings are announced in order to influence people to attend the various parks. This rivalry also affects the profits of these theme parks as they typically see a good return on their investment year over year. For example, not every family is going to take a vacation to Walt Disney World each summer. Walt Disney World realizes this and thus is constantly looking for ways to improve its attractions to stay ahead of its rivals, so families can count on having a better experience on their next visit. The more guests Disney can get to return by staying ahead of rivals Universal and Sea World, the more profit they will be able to bring home.
The bargaining power of customers in the theme park industry -
In a good economy, customers do not have a great deal of bargaining power within the theme park industry. Theme parks have steadily increased their overall ticket prices over the past decade, with the only exception coming in the recent “Great Recession” of 2008-2009, which saw overall theme park attendance drop for the first time since the months following September 11, 2001.
In an attempt to combat the recession and customers’ hesitancy at spending money on travel and tourism, theme parks began offering discounts the industry had never seen before. The biggest example of these can be seen by looking at Walt Disney World in Orlando, FL. In 2009-2010, Walt Disney World started offering great incentive packages as part of their “What Will You Celebrate?” campaign. Under this new campaign, Disney offered its guests four nights for the price of seven at any of their on-site hotels. Additionally, in the theme of celebrating personal milestones, Disney offered guests free admission on their birthday – the first time in the history of the Company that Guests were admitted for free. Walt Disney World also started to offer a free dining plan in the months of September for all Guests who booked a stay at a Walt Disney World hotel. Finally, in 2010 Disney started a second campaign, encouraging people to volunteer their time (i.e. Habitat for Humanity) in exchange for free admission to their parks.
These are some great examples of how the frugal bargaining power of customers affected the profits of a major power in the theme park industry.
Bargaining power of suppliers –
As I mentioned in my discussion surrounding rivalry in the theme park industry, every park attempts to stay relevant and appealing to its customers by debuting new attractions/offerings as often as possible. Operating under that impression, the suppliers to the theme park industry have a lot of bargaining power. Bollinger & Mabillard, Intamin, Vekoma, Arrow, Premier Rides, The Gravity Group, and S & S Power are just a few of the major companies who create the attractions found in most of the theme parks throughout the world. Every year, the International Association of Amusement Parks and Attractions (IAAPA) hosts a convention where the newest technology is put on display for the consumers (theme parks). In an effort to keep customers excited year after year, theme parks have the opportunity at this convention to see the newest technologies first hand and decide what to bring to their theme parks in the future. This can negatively effect the profit level of theme parks however, as they bid against one another as they vie for the best technology, driving up the prices and reputation of the suppliers
Threat of new entrants –
Out of Michael Porter’s Five Forces, the threat of new entrants into the theme park industry is one that has not proven easy to do in the past. In the past decade, there has not been a major theme park in the United States that has opened its doors. In fact, the trend has been the opposite as we have seen several parks close their doors for good. Hard Rock Park (Myrtle Beach, SC), Geauga Lake (OH), Cyprus Gardens (Lakeland, FL), Six Flags New Orleans (LA), Six Flags Kentucky Kingdom (KY), and Astroland (NY) and some examples of large, well-funded theme parks that have folded in recent years.
I think that they most obvious reason for this trend is that there simply aren’t many more markets in the United States left to tap. The most recent attempt to gain entry into a great tourist destination came with Hard Rock Park in Myrtle Beach, SC in 2008. After one season, the park declared bankruptcy and sold to new ownership who attempted to revitalize the park under the name Freestyle Music Park for the 2009 summer season. However the name change didn’t do enough for the success of the park and Freestyle Music Parks closed its doors for good in the fall of 2009.
Outside of the United States however, the threat of new entrants appears to exist. In recent years, Hong Kong Disneyland has opened with success, a new Shanghai Disney recent has been announced, and several theme park projects in Dubai, though long delayed, are now starting to get under way. Whether or not these projects will succeed remains to be seen, but the entry barriers for the theme park industry appear to be much lower outside of the United States. For these reasons I have to conclude that the threat of new entrants into the theme park industry does not seem to have too large an impact on current companies profits.
Threat of substitutes –
The threat of substitutes in the theme park industry is one of the biggest challenges theme parks are forced to overcome. While the majority of theme parks such as Six Flags, Cedar Fair, and small, family-owned parks (Hersheypark, Holiday World, Dollywood, etc.) exist as one or two days travel destinations, larger resorts such as Walt Disney World, Universal Orlando Resort, and Sea World Orlando often try and sell multi-day ticket packages to their customers. The challenge for these resorts is finding ways to entice customers to spend their vacations with them as opposed to trips to the beach, cruises, Las Vegas, etc.
Walt Disney World has done a great job of attempting to alleviate these substitutes. As a resort, Disney offers its guests a wide range of experiences including four incredible theme parks, two water parks, a retail and dining shopping district, championship golf courses, miniature golf, a state of the art sports and athletics complex, and over twenty unique hotels with great dining experiences. Recently, Disney has also made great strides in expanding their cruise line, as they plan on debuting two new cruise ships in 2011 and 2012.
Disney also offers their own version of a time share called the Disney Vacation Club. This “club” offers guests the unique opportunity to buy into property ownership not only at Walt Disney World, but at over five hundred locations worldwide. Property ownership at Walt Disney World is a great example of how Disney attempts to stay current amongst not only their competitors in the theme park industry, but other substitutes of the travel industry as well.
The threat of substitutes will always exist as families decide where to spend their money on vacations each year. However, if companies can find a way to remain relevant and offer a wide range of activities for people to engage in like Walt Disney World in Orlando, FL, they will be less susceptible to feel the effects of these substitutes and profit levels will continue to grow.
Monday, February 21, 2011
SECA 1a: Strategy
According to the lecture, strategy can be defined under two sub-topics, operational effectiveness and strategic positioning. In the theme park and tourism industry, strategy is extremely important in determining success amongst comsumers. At Walt Disney World, we employ several examples of operational effectiveness and strategic positioning that keep us ahead of our "rivals" in the theme park business.
Walt Disney World achieves operational effectiveness in several ways. Perhaps the best example of this can be seen in the DOCC (Disney's Operational Command Center) base which is located in the utilidors of the Magic Kingdom. In the DOCC base, a team of Disney Cast Members monitor the amount of Guests in the four Disney theme parks. They do this through an intricate series of cameras and sensors that alert them to how many Guests are coming through the turnstiles, how many Guests are in line at particular restaurants/attractions, and how how the guests are "flowing" through the park. As a Leader at the Magic Kingdom, the information given to me is essential to my operation. Each hour I receive a recap of how many Guests rode my attractions, letting me know if each attraction acheived its "guest carried target" in that particular hour. If the guest carried target is not achieved in a particular hour, I am able to immediately react to the information and look at either adding additional ride vehicles or add extra labor positions to ensure the next hour is more efficient. Similarly, in cases where the guest demand is not high enough, the information provided in the DOCC reports lets me know when to scale back on ride vehicles and labor.
Another great example of how Walt Disney World acheives operational effectiveness is through our Fastpass distribution system. Disney's Fastpass is a special system designed to help our guests experience minimal wait times at our most popular attractions. The rational behind the system is rather simple. Instead of waiting 40, 50, or 60 minutes for one of their favorite attractions, a guest can simply approach the attraction and insert their park ticket into a Disney's Fastpass machine located just outside the entrance to the queue. The guest will then receive a fastpass coupon instructing them to return to the attraction at a later time. This allows the Guest to enjoy lunch/dinner or another attraction where the line may not be as long. The DOCC base monitors the Fastpass distribution for each attraction, ensuring that we only distribute a certain number of tickets per hour (the number various depending on attendance). This way, the Fastpass line stays at a minimal wait while the standby line for each attraction maintains a consistent wait time.
Other theme parks such as Six Flags and Universal Parks have attempted their own versions of a fastpass system, but they lack the intelligence behind Disney's Fastpass. Unlike Disney, you must pay for the privilege to use their version of fastpass and the attractions are not monitored. For example while Disney limits the number of Fastpass tickets made available for Space Mountain each hour, guests who want to ride The Mummy at Universal Studios can flood the fastpass line, so long as they have purchased the ticket. It's just not nearly as efficient.
Walt Disney World has perhaps the strongest hold on strategic positioning within today's theme park industry. Before Disneyland was constructed in 1955, Walt Disney laid the foundation for the Company when he stated that the focus of Disneyland would be families. Not adults, not kids, but the family as a whole. Over 60 years later, the same strategy holds true at Walt Disney World today. At Walt Disney World, we utilize the practice of Disney Synergy (self-promotion of products such as movies through attractions, shows, merchandise, etc.) to bring families to our theme parks. Walt Disney World does this better than anyone, as it is the only theme park in the world where people can meet their favorite Disney Characters, ride an attraction based on a film, eat in a restaurant they saw in a movie, or purchase merchandise related to a popular TV show. Other theme parks have tried to model this trend, but no one has been able to duplicate the success of Walt Disney World mainly because the quality of the Disney brand is so well-known.
When it comes to Cost Leadership vs. Product Differentiation, I think it is clear that Walt Disney World employs both of these strategies, but tends to lean more heavily on product differentiation. This can be attributed to the example of synergy stated in the previous paragraph. While most theme parks throughout the world offer great roller coasters, thrill rides, etc., Disney offers great experiences that people have an emotional attachment to. This can be seen in most of the resorts, restaurants, and attractions that Walt Disney World offers. For example, Walt Disney World doesn't build roller coasters, instead we build a recording studio where you are greeted by a limo driver who needs to take you across town to an Aerosmith concert (not to worry, they got you a really fast car!); an attraction called "The Rock 'N' Roller Coaster staring Aerosmith."
These are just some examples of how the Walt Disney World Resort utilizes Operational Effectiveness and Strategy to remain the number one tourist destination in the world.
Walt Disney World achieves operational effectiveness in several ways. Perhaps the best example of this can be seen in the DOCC (Disney's Operational Command Center) base which is located in the utilidors of the Magic Kingdom. In the DOCC base, a team of Disney Cast Members monitor the amount of Guests in the four Disney theme parks. They do this through an intricate series of cameras and sensors that alert them to how many Guests are coming through the turnstiles, how many Guests are in line at particular restaurants/attractions, and how how the guests are "flowing" through the park. As a Leader at the Magic Kingdom, the information given to me is essential to my operation. Each hour I receive a recap of how many Guests rode my attractions, letting me know if each attraction acheived its "guest carried target" in that particular hour. If the guest carried target is not achieved in a particular hour, I am able to immediately react to the information and look at either adding additional ride vehicles or add extra labor positions to ensure the next hour is more efficient. Similarly, in cases where the guest demand is not high enough, the information provided in the DOCC reports lets me know when to scale back on ride vehicles and labor.
Another great example of how Walt Disney World acheives operational effectiveness is through our Fastpass distribution system. Disney's Fastpass is a special system designed to help our guests experience minimal wait times at our most popular attractions. The rational behind the system is rather simple. Instead of waiting 40, 50, or 60 minutes for one of their favorite attractions, a guest can simply approach the attraction and insert their park ticket into a Disney's Fastpass machine located just outside the entrance to the queue. The guest will then receive a fastpass coupon instructing them to return to the attraction at a later time. This allows the Guest to enjoy lunch/dinner or another attraction where the line may not be as long. The DOCC base monitors the Fastpass distribution for each attraction, ensuring that we only distribute a certain number of tickets per hour (the number various depending on attendance). This way, the Fastpass line stays at a minimal wait while the standby line for each attraction maintains a consistent wait time.
Other theme parks such as Six Flags and Universal Parks have attempted their own versions of a fastpass system, but they lack the intelligence behind Disney's Fastpass. Unlike Disney, you must pay for the privilege to use their version of fastpass and the attractions are not monitored. For example while Disney limits the number of Fastpass tickets made available for Space Mountain each hour, guests who want to ride The Mummy at Universal Studios can flood the fastpass line, so long as they have purchased the ticket. It's just not nearly as efficient.
Walt Disney World has perhaps the strongest hold on strategic positioning within today's theme park industry. Before Disneyland was constructed in 1955, Walt Disney laid the foundation for the Company when he stated that the focus of Disneyland would be families. Not adults, not kids, but the family as a whole. Over 60 years later, the same strategy holds true at Walt Disney World today. At Walt Disney World, we utilize the practice of Disney Synergy (self-promotion of products such as movies through attractions, shows, merchandise, etc.) to bring families to our theme parks. Walt Disney World does this better than anyone, as it is the only theme park in the world where people can meet their favorite Disney Characters, ride an attraction based on a film, eat in a restaurant they saw in a movie, or purchase merchandise related to a popular TV show. Other theme parks have tried to model this trend, but no one has been able to duplicate the success of Walt Disney World mainly because the quality of the Disney brand is so well-known.
When it comes to Cost Leadership vs. Product Differentiation, I think it is clear that Walt Disney World employs both of these strategies, but tends to lean more heavily on product differentiation. This can be attributed to the example of synergy stated in the previous paragraph. While most theme parks throughout the world offer great roller coasters, thrill rides, etc., Disney offers great experiences that people have an emotional attachment to. This can be seen in most of the resorts, restaurants, and attractions that Walt Disney World offers. For example, Walt Disney World doesn't build roller coasters, instead we build a recording studio where you are greeted by a limo driver who needs to take you across town to an Aerosmith concert (not to worry, they got you a really fast car!); an attraction called "The Rock 'N' Roller Coaster staring Aerosmith."
These are just some examples of how the Walt Disney World Resort utilizes Operational Effectiveness and Strategy to remain the number one tourist destination in the world.
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