The largest US-based theme parks utilize strategies of value, uniqueness, niche markets, innovation, variety and quality.

Abstract Purpose – This paper aims to examine the competitive strategies employed by two of the largest theme park operators in Florida, based on a content analysis of popular media articles about theme park giants in the USA. It aims to provide a comparative examination of their competitive strategies, to develop a conceptual model of the same and to expand knowledge about current competitiveness in the theme park sector. Design/methodology/approach – This study used directed content analysis to identify and analyze strategies applied in the theme park sector as manifested in the mass media. Each database was searched using the following four key terms: competition, strategy, Disney and Universal Studios. Results were screened for relevance based on their inclusion of all four key terms. At the conclusion of the search, 87 articles from 34 US-based sources were amassed, varying in circulation size and published between 1985 and 2013. Each article was read, and sentences that suggested the use of a strategy were recorded. Although the intention was to leave each data point at a one-sentence maximum, occasionally, a second sentence was included for context and clarification. Each article was read twice to ensure the inclusion of all potential data points. Findings – The findings suggest that the largest US-based theme parks utilize strategies of value, uniqueness, niche markets, innovation, variety and quality as highlighted in the research literature. However, this study also confirms two additional competitive strategies that have heretofore not been examined in tourism studies – currency and convenience – as advantageous management and promotional mechanisms against their competitors. Research limitations/implications – Limitations to this research include a limited number of popular media articles available for analysis. This precluded a random sample of articles. In addition, the study was based on print media statements and keyword identification, which could also limit the generalizability of the findings. Nonetheless, it is believed that the case studies researched in this paper are indicative of many of the competitive strategies used by theme park managers throughout the world. Practical implications – The paper developed a competitive strategy model that has utility for them park planners and managers, as they attempt to understand the competitive advantages and those of their direct competitors. The findings in this study have broader implications for other theme parks throughout the world. Social implications – The social implications of this study are manifold. They include the notion that theme park attendees manifest certain behaviors and seek out certain experiences as they make decisions on which parks to attend. The notions of value, uniqueness, niche markets, innovation, variety, quality, currency and convenience all reveal how some consumers determine their choice of venue for recreational travel. Originality/value – This paper provides an original research of the theme park sector by examining two of the USA’s largest theme park giants and the strategies they use in a comparative and competitive manner to attraction clientele and maintain visitation. In particular, the paper develops a conceptual model based upon the review of strategies literature and, then, tests it and modifies it based on the findings of the study.

Keywords USA, Universal, Content analysis, Disney, Theme parks, Competitive strategies

Paper type Research paper

Introduction

The purpose of this study is to provide a model of strategies employed in the theme park industry, which does not currently exist in academic research. This purpose is

Received 17 February 2015 Revised 14 May 2015 Accepted 18 June 2015

DOI 10.1108/IJCTHR-02-2015-0009 VOL. 9 NO. 3 2015, pp. 225-240, © Emerald Group Publishing Limited, ISSN 1750-6182 INTERNATIONAL JOURNAL OF CULTURE, TOURISM AND HOSPITALITY RESEARCH PAGE 225

accomplished by synthesizing current academic knowledge on strategy from both a tourism perspective and a business perspective. This knowledge is then combined with conclusions from a content analysis of articles written about two of today’s largest theme park companies in the USA. The model developed by this study provides a foundation for further academic research to analyze the life of the theme park sector or to transfer strategies from the theme park sector and apply them to other industries.

The theme park sector is different from traditional tourism outlets because it exists in a human-created, artificial environment, yet it is an increasingly competitive and attractive sector (Clavé, 2007; King, 1981; Mayer, 2002; Milman, 2010, Yildirim, 2011). The theme park sector represents a major component of the tourism industry in the USA (Liu, 2008). In 1985, more than 30 American amusement parks received more than one million visitors per year. By 2010, approximately 290 million people visited these parks, and by 2012, more than 400 amusement parks and related attractions operated in the USA (International Association of Amusement Parks and Attractions, 2015). Despite the growth of the amusement park industry, including an increased number of theme parks, research is lacking on the topic of specific strategies used by theme parks to attract customers.

Central Florida is now the world’s unofficial “theme park capital”, with dozens of competing parks and attractions (Braun et al., 1992). Of the top 25 amusement parks and theme parks worldwide, the highest concentration is in Florida, with seven parks (Rubin, 2014). Disney theme parks dominate the sector by virtue of size and diversity, although many others are now viable competitors. Success and attention caused the expansion of attractions already in the area and brought in new parks, resulting in the amusement-based tourism economy in Florida today (Braun et al., 1992; Milman and Dickson, 2014). Of the top 25 amusement parks and theme parks worldwide, Walt Disney World and Universal Orlando, both in Central Florida, are the top two competitors in the USA based on total guest attendance (Rubin, 2014). Walt Disney World’s Magic Kingdom saw 18,588,000 visitors in 2013, and Islands of Adventure Park at Universal Orlando saw 8,141,000. For this reason and the example set by their competitive relationship, Walt Disney World and Universal Orlando are the primary focus of this study.

Competition and strategy

Competitiveness has no single academic definition. Porter (1980) notes that competition in the broader sense should be termed extended rivalry. Competition is dynamic and rests on innovation and the search for strategic differences (Porter, 1998). Competition helps companies strive strategically for higher-quality products and services for long-term profitability (Crouch and Ritchie, 1999). A destination is competitive if it can attract and satisfy potential tourists, and a wide range of tourism- and business-related factors determine competitiveness (Enright and Newton, 2004). No matter what the definition, competition exists between players in a region or industry and requires an advantage over competitors (Font et al., 2006; Gooroochurn and Sugiyarto, 2005; Porter, 1980). Competition between service providers includes jockeying for position, for which companies use price, advertising and customer service to compete (Porter, 1980). Companies feel the effects of each other’s moves and are prone to react to them, using a variety of methods to achieve their goal. Porter (2008, p. 25) elaborates on his “five competitive forces that shape strategy” to determine how competitive an industry is and in what specific areas. Porter’s final concept, rivalry among existing competitors, is the most closely examined in this study.

Tourism companies put consumers first to compete as leaders in quality with radical innovations that strengthen the firm’s strategic position (Poon, 1993). A theme park’s unique set of resources and competencies create a sustained competitive advantage when others cannot imitate them (Haugland et al., 2011). According to Fuchs (2004), successful tourism destinations now have to consider customer satisfaction as the most important source of competitive advantage. Dissatisfaction can easily damage the competitiveness

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of a service provider (Buhalis, 2000). Competitiveness is a key element to study as the theme park sector continues to grow and change (Enright and Newton, 2004). In today’s competitive business environment, winning does not just mean surviving; it means leading (Poon, 1993). The competitiveness of tourism destinations and attractions gained more focus in academic research addressing tourism and the theme park sector in recent years with increased focus on competition (Gooroochurn and Sugiyarto, 2005).

Research on competitiveness is often done in a vacuum, in which an industry is assessed without appropriate context (Enright and Newton, 2004). According to Gomezelj and Mihalič (2008), there is a strong need to identify and explore competitive advantages and disadvantages, and to analyze the actual competitive position of the players in an industry. Many of the structural approaches to competitiveness from the 1990s are obsolete in today’s world (Løwendahl and Revang, 1998). According to Løwendahl and Revang (1998), researchers need to assess the applicability of existing theories and openly discuss their relevance and limits in a new light.

Strategy is the means to achieve a competitive advantage in any industry. Strategy is fluid and responds to changes in the rules of competition and competitors (Fleisher and Bensoussan, 2003). Porter (1996, 2008) views strategy as building defenses against competitive forces or finding a position in the industry where the forces are weakest. Grant (1991) argues that strategy is the match an organization makes between its internal resources and skills, and the opportunities and risks created by its external environment. Generally, strategy is a position a company consciously decides to take. Strategy depends critically on a subtle understanding of the industry of which it is a part and the competitors it faces (Porter, 1980). As mentioned previously, Porter (2008, pp. 26-33) defines five competitive forces that shape strategy; one of these forces is “rivalry among existing competitors”, which includes ways a company may try to outdo another, by means of price discounting, new product introductions, service improvements or any other means. Rivalry is a primary consideration to understand specific strategies in the theme park sector.

Strategy in the theme park sector

Traditional tourism was standardized and rigid, requiring travel agencies and other intermediaries to find packages and information for consumers to buy and use (Poon, 1989, p. 91). Flexibility, niche marketing and diagonal integration characterize contemporary tourism, which create new possibilities for strategy building in tourism. The theme park sector itself underwent major structural changes over the past few decades that impact strategy as well. Braun and Soskin (1998) acknowledge substantial changes in industry structure and in the market environment led to an observable alteration of theme parks. “As the theme park sector continues to mature, so too will its strategies evolve” (Braun and Soskin, 1999, p. 442).

Based on a synthesis of strategies research from the past 35 years, a model was developed for this paper to understand better the complexity of strategy in the theme park sector. In the model, six separate and distinct strategies emerge (Figure 1). For the sake of this study, it is understood that each strategy is exclusive of all others, per the definitions listed hereafter, although multiple strategies can and should be employed at the same time to achieve a competitive advantage. These strategies are the framework against which data collected from the media are compared to establish relevant strategies in the theme park sector.

The first strategy is value, meaning a company provides a product or service at a lower cost than its competitors. Porter (1980) captures this idea as an overall cost leadership strategy, when a company tries to be cheaper than others. Porter (1996) later uses this same theme in his variety-based positioning strategy, which requires a company to focus only on a subset of a customer’s needs to fulfill that specific need better than its competitors can. This concept is also labeled the category or tangible resource management strategy or the

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distribution strategy, which sees price as the central element of success (Claver-Cortés et al., 2007).

The value strategy is common in tourism. Tourism providers between the 1960s and 1980s focused on price and selling cheap destinations (Font et al., 2006). Gilbert (1990) explores this value concept in his commodity areas theory or locations tourists view as being good deals. For leisure travelers, price is an important key element in the decision-making process (Buhalis, 2000). Braun and Milman (1994) allude to theme parks when they note that repeat travelers to Central Florida are more likely to try different leisure experiences on their return visits.

The second strategy is uniqueness, wherein a company provides something others do not, so customers will choose the unique product first. This is also known as differentiation and can be a purposive strategy a company uses to become unique in the industry (Poon, 1993; Porter, 1980, 1996; Prideaux, 2002). Gilbert’s (1990) status areas theory complement Porter’s ideas, suggesting that success can exist because of a unique product or service. Service organizations can achieve a competitive advantage with a unique product (Pine and Gilmore, 1999).

The third strategy is catering to a niche, wherein a company fills a specific existing need for a subset of people. Porter (1980) identifies this concept in his focus strategy, when a company picks one area to specialize in. Porter (1996) again restates this concept in his needs-based positioning strategy, stating that companies tailor to fit the needs of a specific subset of people. His ideas about access-based positioning also relate to the niche strategy, with a specific group of people based on geography or scale. Claver-Cortés et al. (2007) also develop a specialization and intangible resource management strategy that includes this idea, emphasizing segmentation for a competitive advantage.

Theme parks commonly catered to niches in the past. To attract more visitors, theme parks offer more options tailored to specific segments of their target market (McClung, 1991). For example, many modern theme parks are trying to cater to the young adult niche with thrill rides geared toward that group. Destination theme parks that specialize generally have a better chance of achieving their strategies (Buhalis, 2000).

The fourth strategy is innovation, marked by technological improvements. Poon (1989) suggests that sustained innovation exists to pique tourists’ interest as a flexible specialization strategy. Industry innovation is critical for theme parks, including the use of new technology to customize products for consumers (Claver-Cortés et al., 2007; Fyall et al., 2008; Poon, 1989).