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Samsung and

The Theme Park

Industry in Korea
Group 11 Sec B
Partha P. Chowdhury- PGP/17/099
Parvathy Rajan- PGP/17/100
Pooja Punjabi PGP/17/102
Sandesh A PGP/17/109
Sonia Manglani PGP/17/114


Multinational conglomerate company

headquartered at Seoul, South Korea
Four core business groups :Electronics,
machinery, chemicals and finance & insurance
Sub groups : trading activities, hotels, newspaper,
state of the art medical and research institutes,
cultural and welfare foundations
Jong Ang Development Co Ltd developer of Yongin
Farmland came under this subgroup
Samsung group would be the major investor in
revamping the Yongin Farmland

Theme parks emerged as a major source of family entertainment

1930s - Competition from movie houses, economic depression
1955 - Disneyland opened in California, raising profile and profitability
of the industry to a new level

Several theme parks in Coney Island (New York)

1884 - First roller coaster, indoor amusement park Sealion Park

Russians operated a sled ride

People paid money to be terrified






Cultural and education parks
Formal greens, gardens and fountains
Incorporated historical and educational exhibits

Outdoor amusement parks

Small parks that served a metropolitan crowd
Featured traditional thrill rides, carnival midways etc but no theme

Theme parks
Family oriented, theme-based
Larger, greater variety of rides and attractions

Water theme parks

Centred around water activities, large parks featuring wave pools, river strides

Existing Market
1. North American Market
Three major Walt Disney Theme Parks
Time Warners Six Flags Corporation had Seven Parks(Second Largest)
Paramount(Wonderland), Anheuser Busch and Cedar Fair among other
Heavy investment in upgradation
2. Europe
Alton Towers, 60 year old park reshaped to Amusement Park
Blackpool Pleasure Beach in England
Three theme parks in France including Euro Disney, Parc Asterix, and
Smurfs Park
Six Flag Corporation and Anheuser Busch have also entered the
European market
3. Asia
Tokyo Disneyland, Ocean Park in Hong Kong(largest water park), Jaya
Ancol Dreamland, Beijing Amusement Park were major theme parks in

The Korean Market in the 90s and

Specific Problems
Tremendous economic growth during 80s and
90sdespite political difficulties
Urbanization rate of 74.4 percent
Expected growth rate of for second half of 90s around
8 to 9 percent
Temperate climate
Winters : December to March - temperature below -20
degrees in some places and snowfall at some places
Summers : June to early September . Heavy showers in
June and July
Vacation season : Mid July to Mid August
Festivals : Many in October
Successful international events
Steady tourism growth with travel packages being

Strategic and Operational

Operational Issues

Strategic Issues

Korean people do not have

much time for leisure
Located 60 km south of Seoul
Pricing Issues- Pay one
Took two hours due to traffic
price or per ride?
Short term problem
Change in recruitment
Parking space
pattern from academically
Currently ample parking space
good people to more service
but insufficient in peak season
oriented candidates, also to
Need to increase in case
bring diversity
Farmland expands
Is investment in a sector
Organizational Inertia
which does not go with high Lot of persuasion to move the
tech image of Samsung a
office from Seoul to Yongin
good choice?
Environmental Issues
Is changing its mission and
Land levelling
name for catering to an
Flooding of area
expanded segment viable?

Porters 5 forces Analysis:

Bargaining Power of Buyers
The targeted segment for Yongin Farmland were
the Local Families, Childrens groups and Tourists.
Buyers had required information
As the buyers reserved quite a substantial part of
the day for their relaxation and refreshment
purpose they did not mind paying for the same
Attractive flexible offers in the form of pay as you
go, pay one price or passport and membership
Not much competition between the competitors
as there is not much variation in the pricing

Owing to the above conditions we can see that

the buyers had limited bargaining power

Bargaining Power of Suppliers

3 main supplies : Land, machinery(hardware) and software
* strict government regulations over extensive use of land
and insurance
* very few suppliers capable of developing quality
( customised, market based, environmental condition based )
* large no of suppliers of smaller machines
Software : park management expertise not easily available
This gives a lot of power to suppliers to bargain. Therefore the
supplier power is very high

Threat of Substitutes
What are the substitutes?
- Close substitute : Virtual reality theme park
- Other substitutes : Modes of entertainment such as movie houses, free
admission parks and beaches, camping trips, video movies at home etc.
Willingness of buyers to substitute ?
- To try something new, different, cheaper , safer , better or more
- Time Travel time plus time spent at these parks exceeds time required
to be invested in other entertainment modes Since buyers pay here they
would also have the mentality to stay for longer hours to get their
moneys worth and time may be a luxury for many ( 5.5 days work)
- Switching costs No switching costs
Price / Performance characteristics of substitutes
- In this case there being no close substitutes apart from Virtual theme
parks , there would not be any price cutting or price wars or direct
performance impact from other substitutes since they are not direct in

Threat Of Entry
Economies of scale
Larger firms enjoy larger operating revenues

Product differentiation
Established brand identification (eg. Samsung)
Customer service, customer loyalty (eg. through
Proprietary product differences (eg. unique rides)

Capital requirements
High initial investment requirement - typically $50
million-$3billion (eg. land acquisition, land
deve3lopment, transportation network construction if
location is inaccessible etc)
High operational costs personnel salaries,
maintenance costs etc

Threat Of Entry (Contd.)

Cost disadvantages independent of size
Companies have multiple parks to take advantage of
learning curve effects, increased economies of scope
Experience curve effects learning curve effects,
economies of scale

Access to distribution channels

Access to channels like TV, yellow pages, radio etc

Government policy
Methods of ensuring visitors safety (high insurance
License requirements and time required to get
Resource scarcity (limited land) and dependence on
govt for resources (power, gas etc)

Rivalry among
established competitors

- Concentration:
The biggest players like Walt Disney capture most of the market
The scale of each theme park differed on their land available
Competitors are rather diversified like come have water parks, some have
gardens and historic parks
- Product differentiation:
Brand recognition and image mattered (Highest Market share of disney)
The price paid by customers to visit different parks is same and customer
segments do not differ much
- Excess capacity and exit barriers:
Extra capacity and staff generally required during peak seasons
Hard to get out the business because specialized skills & facilities or long
term contract commitments were there plus high cost of exit
- Cost condition :
Economies of scale were significant. Learning curve effect was there for all
Very high initial investment. Land development costs around 50% of
investments and machinery was around 20-30%
So, the Rivalry was high as market was captured by major players though
there was not much difference in product. Brand Image and location played
a big role in gaining customers.

Market Share of South

Korean Theme Parks

Yongin Farmland


Lotte World

Seoul Land
Dream Land


Children's Grand

Seoul Grand Park






Market Share of South

Korean Theme Parks
We can see from the graph that customer attendance at Farmland has
been continuously increasing over years which can be attributed to
their established brand image and new additions to the theme park
However the other competitors market share has been almost constant
In comparison to next top players(in terms of growth), the difference in
customer attendance as a percentage of Farmlands attendance is :
Farmland and dreamland 74%
Farmland and Seoul grand park 65%
So farmland had considerably higher attendance and highest market share in
Yongin Farmland
Lotte World
Seoul Land
Dream Land
Children's Grand
Seoul Grand Park

Is the Korean market conducive

to Farmland ?



11th in the top 50 amusement/theme park list ( Table 1)


Korea has a steady tourism growth rate. 25 percent of

Farmlands visitors are overseas tourists ( Table 3 )


Holds true for any amusement /theme park in any



Tremendous economic growth. Expected growth rate of

8-9 %


Political difficulties. Though this has not hampered

economic growth & growth of large business groups


Increase from US $4210 to US $7513 . Would increase

the amount spent on leisure activities

Is the Korean market

conducive to Farmland ?
The Korean market seems to be conducive to Farmlands
expansion plans. However the political situation will have
to be closely monitored from time to time as the
investment required to expand is high. Since travel
packages are popular Farmland can try to increase its
visitors through offering lucrative packages through such
travel agencies
Government planning to build subway to Yongin in future
solve the traffic congestion problem
Tremendous economic growth in Korea in the current
decade increase in the customer base
Farmland has highest growth rate in Korea

We recommend Her to go ahead with the expansion plan
Payback period comes out to be 18 years which is lesser than
industry average of 20 years for investments of such scale (excel
attached) though we have assumed that the customer base will
grow at current rate. But we hope it will increase as Farmland is
providing new features thereby further reducing the payback
Proper compensation for people who are being displaced due to
expansion plans
Promotions and Advertisements are required to attract more
customers, both domestic and foreign
Operational issues should be taken care of during expansion and
also efficiency of the system can be improved by going pay-one
price system
The upcoming subway will take care of traffic problem
Recruitment policy as per the plan of taking service oriented
people should be implemented