korean and the theme park essay

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SAMSUNG KOREA AND THE THEME PARK INDUSTRY IN KOREA

Charles Dhanaraj and Young Very Kim prepared this case underneath the supervision of Professor Paul Beamish exclusively to provide materials for discussion in the classroom. The writers do not want to illustrate possibly effective or perhaps ineffective controlling of a managerial situation. The authors may well have concealed certain titles and other discovering information to guard confidentiality.

SAMSUNG has the right to reproduce and use this case for its educational purposes. Ivey Management Providers prohibits any form of reproduction, storage or perhaps transmittal with out its drafted permission.

This material is certainly not covered beneath authorization from CanCopy or any reproduction privileges organization. To order replications or ask for permission to reproduce materials, contact Ivey Publishing, Ivey Management Companies, c/o Richard Ivey University of Organization, The School of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fernkopie (519) 661-3882; e-mail [emailprotected]

Variation: (A) 2002-11-22

In March 1994, Her Tae-Hak, President of Samsung’s Joong-Ang Creation Company was driving to his workplace, past the “Yongin Farmland (Farmland), an amusement complex massive over 3, 700 miles in the Yongin valley.

Her was spearheading a major drive within the company to position the theme park as one of the planet’s leading location towns. His master program called for an investment of about US$300 million over the next five years, being internally funded by the Samsung korea Group. Regardless of the booming Korean economy plus the increasing requirements for leisure time attractions, a global competitive environment of the amusement park industry brought up several problems. Should The samsung company invest in this aggressive enlargement plan for Farmland? Was this an attractive sector for purchase? Her was scheduled for any meeting with the Chairman from the Samsung Group for a formal presentation from the propo salat the end in the month.

A GLOBAL THEME PARK SECTOR

The early 1990s saw the emergence of theme leisure areas as a significant source of family entertainment, not simply in the United States nevertheless around the world. The first evidence of a company where people “paid cash to be terrified was in early 1600s once several Russians operated a sled drive with a 70-foot vertical drop. In the late 1800s, several motif parks had been set up in Coney Island (New York) in the us. The 1st roller coaster was set up in 1884, followed by an indoor

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leisure park, Sealion Park. In the 1930s, the amusement market had to deal with alternative entertainment offered by film production company houses and setbacks as a result of economic depression. Nevertheless , with the Disneyland Park opening in 1955 in California, the sector was elevated and Walt Disney was credited with raising the profile, as well as the profitability, of the industry into a new elevation. There was a number of parks and attractions, each with a several approach to pulling crowds and showing all of them a good time:

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Cultural and Education Theme parks were a remnant in the old-fashioned form of European playground. Such recreational areas featured formal greens, gardens, and fountains. Generally they will incorporated historical and educational exhibits. ï‚•ï€ Outdoor Amusement Parks had been small parks that dished up a metropolitan or local market. These kinds of parks presented traditional enjoyment rides, carnival midways, and a few entertainment. Many amusement parks would not have a style to the architecture, rides, and entertainment.

ï‚•ï€ Theme Theme parks were generally family-oriented entertainment complexes that had been built in regards to theme. Motif parks were larger together a greater number of rides and attractions than amusement parks.

ï‚•ï€ Water Idea Parks had been a recent sensation, a special sort of theme parkscentered on drinking water activities. Large water leisure areas featured influx action swimming pools, river voyages, steep vertical drop slideshow, and many different twisting flume slides. Most of the theme theme parks were people of the Worldwide Association of Amusement Parks and Attractions, which in turn tracked the attendance by various motif parks. In 1993, United states parks accounted for 48 per cent of the around the world attendance, Hard anodized cookware parks thirty-three per cent, European parks 13 per cent, and Central and South American parks 4 per cent (see Table 1).

North America

The Walt Disney Company was your largest area chain on the globe with 3 major topic parks in america. Time Warner’s Six Flags Corporation was the second largest with several parks disseminate in the United States. Extremely important, Anheuser Busch and Cedar Fair were some of the various other conglomerates who have owned theme parks. In mid-1993, Vital bought Canada’s Wonderland amusement park originally produced by Taft Transmitting Company in 1981. Regardless of the mature characteristics of the market in the United States, numerous theme theme parks were trading heavily in upgrading their facilities, and extending the motif parks’ companies.

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Europe

In 1980, Alton Towers, a 60-year aged park in North Staffordshire (England), composed primarily of historic home gardens, repositioned by itself as a theme park by adding a roller coaster plus some other interesting attractions. The recreation area was incredibly successful within a very brief time. The success of Alton Towers triggered a number of fresh theme leisure areas in the late eighties and the early on 1990s, which includes Blackpool Delight Beach (England) that presented the planet’s tallest roller coaster. In Portugal alone, three major theme parks appeared in the early on 1990s: Walt Disney’s $3 billion Euro Disney, the $150 , 000, 000 Parc Asterix located northeast of Paris, france, and the $110 million BigBang Schtroumpf (Smurfs) theme park just north of Metz. Half a dozen Flags Firm and Anheuser-Busch both just lately opened fresh theme theme parks in Spain coinciding with the 1992 Barcelona Olympics. Asia

Tokyo Disneyland was opened in 1983 simply by Walt Disney as a partnership with the Asian Land Business (OLC). The success of Tokyo Disneyland set off a wave of theme park developments in Asia. OLC and Disney got agreed to open a second theme park, “Tokyo Disney Sea in 2001. Sea Park in Hong Kong, made its debut in 1977, was the largest water park in Asia with an annual presence of 3. two million.

Jaya Ancol Trick, located in North Jakarta, Indonesia, was one of many largest entertainment complexes in south east Asia. Dreamland had a amusement park (Dunia Fantasi), a waterpark complex, an oceanarium, a golf course, a beach and many hotels. China and tiawan was a major growth marketplace. Beijing Enjoyment park, were only available in 1981, reported that among 1990 and 1993 revenues increased more than 2, 500 per cent and earnings just before interest and taxes had been up 200 per cent. Above the next five years, 6 regional idea parks were to be developed having a total purchase of more than $100 mil.

FINANCIAL CONCERNS

The amusement park business essential a considerable initial purchase, typically starting from $50 mil to $3 billion. With respect to the real-estate marketplaces, the cost of the land value itself could possibly be very high. Topic parks essential over 55 acres of land for a full size development, with some of the idea parks utilizing 10, 000 to 30, 000 miles. Since accessibility of the park location was obviously a key accomplishment factor in the industry, amusement park developers selected land sites in a central area that was relatively expensive.

Alternatively, they could select a remote location at an affordable and develop the vehicles network. Either way, the area development costs constituted nearly 50 per cent of the general investment. The amusement equipment constituted 20 to 30 per cent from the total investment, and the working capital requirements used the remaining 20 to 31 per cent from the investment. The amusement tools required for the park was also high-priced, most of that

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going from $1,000,000 to $50 million. Businesses which recently had an in-house property development competence or equipment technology ought to control of these types of costs. Many parks occasionally added fresh attractions or perhaps renovated existing ones to draw replicate customers. The parks typically reinvested most of their revenue for growth or upgrading purposes. The economies of scale and scope had been significant in the market. Increasingly, parks got bigger and larger to generate more working revenues. As well, companies experienced multiple parks to take advantage of the training curve results in the management of theme parks and the increased financial systems of opportunity. Most of the operating expenses intended for theme leisure areas (about 75 per cent) were pertaining to personnel.

Entry fees1constituted more than 60 % of the total revenues of your theme park, as the rest arrived primarily by food, refreshment, and goods sales. To take care of the tickets revenue a centralized solution system was generally recommended. An all-inclusive breaks admission cost entitled consumers to as many rides and shows as they desired. This approach led to longer stays by parks causing increased meals and refreshment sales. An additional centralized entry method was to sell ride/show tickets in sets or coupon catalogs (i. electronic., five discount coupons for $5, but doze coupons to get $10). The two approaches to central ticket sales minimized the number of employees managing money through the park resulting in improved productivity and control.

Walt Disney Company’s economical profile was generally used to assess the return on investment within the industry. The income for the theme parks segment from the Walt Disney Company had been at US$2. 042 billion in 1988 and grew to US$3. four billion in 1993. Functioning income was pegged at US$565 , 000, 000 in 1988 and US$747 , 000, 000 in 1993. The go back on value for the Walt Disney Company was pegged in 17 to 25 percent. One of the analysts remarked around the theme theme parks segment of Walt Disney:

Theme recreational areas are going to become increasingly stable and annuitylike, with the ability to create $700 to $750 mil in earnings a year.

There are signs of weak profitability inside the U. S i9000. operations, since the market was maturing and the competition was getting more extreme. Tokyo Disneyland, the Japanese procedure, was growing and lucrative. However , EuroDisney, the European theme park, was obviously a disaster to get the company with huge loss since operations began in 1992. The business was planning on a break-even in 95.

Entrance fees varied from $5 to $25 depending on the location and trustworthiness of the recreation area.

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MARKETING AND SOCIAL ISSUES

The standard appeal of theme/amusement parks was to preteens, teenagers, and youngsters. Changing demographics were causing most theme parks to think with regards to a larger market, especially families, corporate and business groups, and even senior citizens. There have been five key market sections for topic parks: ï‚•ï€

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Community Families ” people within a day’s travel who stopped at mostly in weekends. Most parks centered exclusively with this segment, which usually generally constituted 60 to 75 per cent of the presence.

Children’s Teams ” schools, churches, recreation agencies, scouts, and othergroups who traveled in chartering on summer season weekdays.

Evening time Market ” teens and young adults whom came for entertainment, concerts, and romancing at night.

Corporate Groupings ” included consignment product sales and group parties. Visitors ” an amazing market to get large topic parks in destination areas such as Sarasota.

Customer satisfaction was a critical issue in theme parks management. Powerful park managers used extensive marketing study to understand consumers and also spent a lot of effort to promote the area. To reach the diverse groups, parks stressed increased beautification and the variety of entertainment and food services offered. Theme park managers were working with tour guides and authorities tourist advertising boards to draw the tourist throngs to their leisure areas.

Theme parks spent regarding 10 % of their gross annual revenues for advertising. Radio, magazine, yellow page (telephone book) advertisements, family and group discount rates, and direct mail were the most frequent promotional methods. Among huge theme recreational areas, television advertising and marketing was a great visual method to capture the excitement. Some parks spent a major percentage of their marketing budget for tv set promotion.

An issue for the theme theme parks industry was your seasonal and intermittent nature of the organization. Theme parks’ attendance peaked in the spring/summer and in the school holidays. Possibly in the holidays, bad weather could adversely affect the attendance. The seasonal variances put a whole lot of tension on the motif parks’ managing. During the optimum season, the advantages of employees raised; quite often the management were required to find workers beyond the domestic territory and provide housing for out-of-town employees.

The sudden surge in demand frequently choked the service systems such as travel, building supervision, etc . It was the availability of leisure time and a high discretionary income that drove the commercial excitement industry. Financial downturns a new severe impact on industry income. Also, consumers could replace a trip to theme theme parks with other modes of entertainment. Consumers substituted products/services in order to try something new, different, more affordable, safer, better, or more easy.

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admission parks and beaches, camping trips, or perhaps video-movies in the home were competitive options for leisure time.

REGULATORY ISSUES

Authorities regulations had been quite stringent because of the extensive land employ, and the potential for serious injuries. Licensing requirements and methods of ascertaining functional expertise to make sure visitors’ protection varied coming from country to country. In a few countries, wherever land was scarce, government authorities limited the spot of the land that the builders could take on with theme leisure areas. Park government was dependent on the government for utilities just like power, gas and normal water. A typical period required for arranging government endorsement for a amusement park could be up to two to five years, depending on the country.

A related issue was insurance premiums. Offered the likelihood of injuries in the theme parks and the chance of serious damage, 100 percent insurance coverage was a must on the market. Although basic safety records in the industry were very good, the insurance premiums had been extremely full of some parts of the world, specifically in the United States. Yet , the large premiums often forced the small players in the industry out of business. Countries in Asia would not have this handicap.

TECHNOLOGY CONCERNS

The theme park industry had three classes of inputs: the building and construction services that offered landscaping and architectural support; the hardware providers that supplied entertainment machinery; plus the software companies that supplied management information.

The entertainment machinery sector had cultivated over the years. Most of the largedrives, including the Hurricane and also the Giant Tyre, were produce in Japan, European countries or the United states of america. There were fewer than 10 suppliers who were able of developing quality machines, such as DOGO of Japan, HUSS of Germany, and ARROW of the United States. Most of these suppliers worked internationally, and the machines were custom designed and made to order to suit the particular industry and environment conditions. There are a large number of suppliers for small machines, and quite often, they may be manufactured domestically. Special simulators for leisure purposes applying proprietary technology were being developed by technology-intensive businesses such as Sega Japan and Simex Canada.

The playground management knowledge commonly called the “software in the industry has not been easily available. Leading theme park firms, such as Walt

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Disney Company, billed huge certification fees that were over 15 per cent from the revenues. Likewise, they were extremely selective in choosing joint ventures far away. Disney had an extensive marketplace analysis and partner profile analysis over three years in Europe just before finalizing the venue in France with all the joint venture spouse. Mr. Yu, director-in-charge of the Farmland project, commented:

The reason for writing this is to go for a joint venture with Walt Disney Organization. But they in some way were not thinking about Korea. Therefore we had to look it exclusively. It takes quite a while for theme park managers to develop service delivery of first class quality.

Even though Walt Disney offered a number of educational applications to train other managers inside the “Disney Management style, the know-how seemed to be too complex for the competitors to emulate.

Virtual reality (VR) was increasingly becoming a highly lucrative mass-market entertainment trend. A new entry that was due to open in July 1994 was Joypolis, a $70 mil interactive amusement park owned simply by Sega Companies, with forecasted revenues of $37 , 000, 000 per annum. Sega had ideas to open 55 such theme parks in Asia, and was negotiating with Universal Studios, California, due to its first U. S. installing of a VR theme park.

YONGIN FARMLAND

Yongin Farmland (Farmland), opened in 1976, was the first entertainment park in Korea. It absolutely was managed simply by Joong-Ang Creation Company, one of the wholly owned subsidiaries of Samsung having a mission to get a better quality of life through healthy open-air leisure activities. In addition to the Farmland management, Joong-Ang was responsible for the building routine service at all Samsung’s offices, and also maintaining two golf classes. Farmland was located about an hour south of Seoul, and was owned by the Korean language conglomerate, the Samsung Group (see Display 1). The 3, 700-acre appeal began while an agricultural center to demonstrate how tremendous mountain land could possibly be used successfully for growing food products. Mr. Lee of Joong-Ang said

At that time, there were trouble bringing up enough foodstuff for each of our country. We all created a model farm of how to work with a great abandonedmountain by building a this halloween farm and planting fresh fruit orchards. We changed the land use gradually through the years as we added entertainment components.

The Untamed Safari was opened in 1980, and the Rose Festivity, an impressive went up garden filled with 6, 000 rose bushes of 160 different varieties arranged in respect

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to various styles, opened in 1985. To provide for winter season entertainment, the Sled Slope was opened up in 1988. A major departure in the traditional theme parks was taken the moment Yongin Farmland opened a Motor-Park in late 1993.

The motor area operations sustained a loss in the 1st year of operations (see Table a couple of for the profit and reduction statement).

In November 93, Her took over as the President and Chief Executive Officer of the Joong-Ang Development Company. Prior to his assignment to Joong-Ang, Her was the CEO of Cheju Shilla, an extravagance hotel about Cheju Area in Korea. Her was credited with developing a world-class sea hotel at Cheju Shilla which in turn surpassed in customer service proven hotel restaurants such as Hotel Hilton. Since taking over the reins with the company, Her had aimed at improving the client satisfaction level at Cultivated fields, and had already been developing the plans to get Farmland’s development.

One of the major difficulties was to observe how the expansion plans intended for Farmland will match with the corporate strengths of the Samsung group. Her was aware that previous attempts simply by previous management to grow Farmland hadn’t met with the approval of the group’s Chairman. There are concerns in numerous quarters the theme park market did not in shape well with the “high-tech and the “global picture of the Samsung Group, and also that the success might be very low.

The theme park industry was still in its early stages in Korea, and had as well as of lower than two decades. Nevertheless , indications had been that the sector was growing globally, with an increase of players entering. Nevertheless, a number of the managers did not see successful growth opportunity in the amusement park industry. One of many managers in Joong-Ang explained:

Theme recreational areas may be an increasing industry globally. That does not imply that it should be so in Korea. In Korea, we job five and a half days a week and we possess annual vacation of simply four to five days and nights a year. Exactly where do Korean people have coming back theme parks? FARMLAND CONSUMERS

Traditionally, Cultivated fields focused on the local customers. Most of its customers came from around areas within just two hours’ drive (see Table 3). The economic growth in Korea had been a major driving force in sector growth (see Exhibit 2). Despite the early on stage of growth inside the Korean leisure time industry, there was six motif parks inside the Seoul place including Cultivated fields.

Most notable among these were Lotte World and Seoul Terrain. Lotte Community, started in 1989, prided itself upon having the planet’s largest indoor theme park with adjoining hotel, department store, shopping mall, folk small town and athletics centre. Commenting on Lotte’s strategy, among the managers by Lotte Universe said:

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All of us focus on a segment unlike Farmland. Seeing that we are

located down-town, we appeal to a clientele who want to visit for a short period. Typically, we get workplace people who need to relax after a hard day’s work or perhaps couples who want to spend some time in a romantic environment.

Seoul Property, located close to Seoul in Kyungkido, was also a essential competitor to Farmland. With attendance in 3. 37 million, Seoul Land rated 23rd in the “Top 60 theme theme parks worldwide. Mr. Woon, one of the managers at Seoul Land, said:

The playground has a great reputation pertaining to quality special attractions and the persons enjoy going to the area because of its fresh air, beautiful scenery, and easy get.

Despite the competition from other leisure areas, Farmland got the highest development rate within the Korean sector (Table 4). The seasons nature in the theme park industry affected each of the competitors, definitely not in the same pattern (Table 5).

PRICING

Farmland was also under-going a major difference in its pricing structure. The charges strategy in place (Table 6) was a mixture of “pay-as-you-go and “pay-one-price system. Users experienced the option of paying the admission fees and buying independent tickets intended for rides (pay-as-you-go), that were available as coupons (Big 5 for five rides). Account in the area was available fora value, which presented free entry for a 12 months. The additional option was to buy a “passport (termed as “pay-one-price) that presented admission as well as unlimited tours for one total day. The passport users were believed at 18. 4 % of the attendance in 93, and the membership holders were estimated at 75 %. Farmland planned to switch slowly but surely to the pay-one-price scheme, that has been the most common pricing scheme in the leading markets.

The prices across the major rivals were similar. In 1993, average vestibule and ride fee per head was six, 667 Won in Cultivated fields, 7, 279 Won in Lotte World, and 6th, 494 Received in Seoul Land. Idea parks as well monitored the quantity a visitor used on food, refreshments, and mementos. In 1993, average percapita expenditure about food and beverage inside the three theme parks was a couple of, 874 Received in Farmland, 2, 017 Won in Lotte World and one particular, 804 Earned in Seoul Land and merchandise revenue per household were 996, 1, 319, and 722 Won, respectively.

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OPERATIONAL ISSUES

While there was some signal that the Samsung Group would be willing to look at a proposal to get expansion in the Farmland, Her had to cope with a number of functional issues by Farmland. Based on discussions which has a number of managers and clients, Her got some idea of the various problems involved in the operation of Cultivated fields.

Transportation

A single major issue was accessibility to the park. Yongin was sixty kilometres south of Seoul, and during top hours, it took as long as two hours to push from Seoul to Cultivated fields due to targeted traffic jams. A single resident who lived very close to the Yongin area said:

Actually, it may take simply 15 minutes to operate a vehicle from my own home to Farmland. However the traffic jam is so intense that if I go to Farmland, it may take almost an hour or so of moving in the traffic. That’s one particular main reason why I have not really visited that so far.

Among the managers inside the marketing group commented on the critical nature of this difficulty:

In Korea, we all work five and a half times a week. Usually on the working days the travel and leisure time is long. Each of the house jobs have to be done only around the weekends. Given this fact, it is just to be expected that Korean language customers would not be therefore keen to travel on a On the or on a holiday in the event the traffic can be heavy.

However , many managers in Joong-Ang believed the accessibility trouble was just a temporary issue. Mr. Yu, Director of Personnel by Joong-Ang, mentioned:

Travel issues are part of our life in Korea, given the tiny land plus the large number of people. The government has plans to bring the subway up to Yongin, in which case Farmland would have a subway terminal, which will provide a lot of ease to our people.

This was echoed by one of many visitors to Farmland, who commented: I hate sitting inside my house all day long. I have to obtain out anywhere. Seoul is too crowded and I would like to go to some place to breathe a few clean air. Shorelines are shut down most of the time of year, and

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if I want to go for a lot of mountains or perhaps Pusan, it can be too far away. So , I actually don’t mind driving down to Yongin to spend a relaxed day. Let me skip the frenzy hour by leaving early on from the recreation area.

Parking

Another related concern was car parking. Farmland got ample auto parking space for approximately 8, 500 cars at one time around the 4 sides from the park. Among the managers who have conducted a comprehensive analysis in the parking space said:

Whatever we have now is far more or fewer enough for the time being. We have adequate room for about almost 8, 000 autos and at several people every car we could accommodate about 32, 000 people. Whenever we assume the lot turning over at 1 ) 7 occasions a day (at an average stay of 6 to 8 hours), we could handle a peak attendance of 52, 000. But the real problem is the seasonality. On optimum days, we might get more guests and very often people may well spend more time. If we are going to increase, this will be considered a major logjam.

Part of the expansion plan included augmenting the parking places and also providing a “Park and Ride system for tourists so that they could travel perfectly from the various car parks for the entrance.

Environmental Issues

Broadening Farmland supposed taking over more of the land mass available in the Yongin pit. A player living in the Yongin valley, who was vehemently opposed to the expansion suggestions, said:

They (Samsung) just want to expand their very own business. But they don’t realize the particular one of the complications with cutting down the trees and leveling the earth will cause potential flooding inside the surrounding area. This will destruction all our crops. How will they compensate all of us?

Organizational Masse

It was also a challenge to introduce a dynamic environment within the Farmland organization. To be able to succeed in the industry, Cultivated fields had to proceed through a major reorientation in its company style. Farmland had started customer satisfaction research recently and it was taken to the attention in the management that the customer satisfaction levels were lagging behind the main element competitor, Lotte World. As one of the marketingmanagers mentioned:

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Repeat business is very important to our survival. If we don’t gratify our customers, they won’t return and we will not have virtually any business still left. But , it is not in our Korean nature to smile in strangers. Were very serious people. So it becomes all the more difficult to get the sort of service you will see at Disneyland. Mr. Yu, who had initiated a number of alterations within the organization, recalled 1 event which in turn demonstrated the sort of organizational masse the management had to cope with:

Previously we had the head workplace at Seoul and we had been managing the Farmland by ‘remote control. ‘ I was faxing data and connaissance up and down. Although I in some way did not see that this would be the easiest method to work. I insisted that the head office had to be located where our items are and only after very much persuasion may we move to this place.

Among other things, management was likewise considering a big change in the recruitment process. Typically, Farmland had gone after the “academically best participants and learners, which was the typical practice by Samsung. The management felt that they required more services oriented persons. The administration wanted to sponsor more feminine workers, the amount of which during that time was under 25 per cent, but anticipated problems as most Korean language women ceased working after marriage. Mister. Yu stated:

I think moments are changing. For that matter, even if we have a high turnover, it can be good for all of us since fresh blood constantly brings in clean ideas and would be able to maintain some dynamism in our firm.

THE EXPERT PLAN

Based upon a detailed review (Table 8) and tentative analysis, the managementhad put together a learn plan to spend about 300 dollar million in revamping Cultivated fields. There were also suggestions of changing the identity to provide a better image of the organization. A expert plan, for the phased expenditure of about 300 dollar million us dollars over the following two years, was being developed. Everland, Green Country, and Characteristics Land were some of the names proposed pertaining to the new “mountain resort. Included in the learn plan had been:

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A waterpark to become built next to the existing theme park, at an estimated cost of US$140 million, which has a Caribbean motif.

ï‚•ï€ A Global Reasonable, a fun-fair indicative from the major countries in the world, in an estimated cost of $85 million.

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Growth of existing zoo, and parks together with a night time laser beam show and a fable fantasy garden at an estimated cost of 50 dollars million.

The funding would come mainly from the parent or guardian, Samsung Group, and also through corporate sponsorship of the other companies within the Samsung korea Group. The master program also mentioned that in the event the first period was powerful, a second phase of developing a resort community in Yongin, with luxury hotels, golf training, and holiday resort accommodations will occur. (Exact budget for subsequently was not offered by that level. ) Several managers within the company who were closely involved in developing the master program felt strongly that the amusement park expansion had not been only a priority but likewise would be a successful venture. The overall Manager with the planning group commented:

What we want to create is a vacation spot resort community and a residential

community where people may come, relax and enjoy themselves within a low-stress environment. Samsung uses more than one hundred and eighty, 000people within Korea. This will give them a location to arrive and be pleased with. There will be a great deal here for almost all members of the family because they grow.

All of us feel it is time to change from a farm-oriented brand to a brand which symbolizes our fresh mission, which is to create a enthusiasm for reliable life that is combined with the balance of characteristics. If this plan is approved, we will become the prototype destination resort community in the entire world. We have went to them all, so when we’re completed, there will not be any better!

Her wanted a thorough analysis of the theme park market to ascertain the profitability of the market. He planned to present to the chairman of the Samsung Group a clear explanation why Korean should spend money on this sector.

The Rich Ivey University of Business gratefully acknowledges the nice support in the Richard and Jean Ivey Fund in the development of this situatio as part of the RICHARD AND JEAN IVEY PAY FOR ASIAN CIRCUMSTANCE SERIES.

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Desk 1

TOP 50 AMUSEMENT/THEME THEME PARKS WORLDWIDE (1994)

Rank

one particular

three or more

some

several

on the lookout for

forty-five

forty seven

forty-eight

Park & Location

Tokyo (Japan) DISNEYLAND

MAGIC EMPIRE of Walt Disney World, California, United States

DISNEYLAND, Anaheim, California, United states of america

JAYA ANCOL DREAMLAND, Jakarta, Dalam negri

EPCOT at Walt Disney World, Florida, United States

EURO DISNEYLAND, Morne La Voltee, Portugal

YOKOHAMA (Japan) HAKKEIJIMA SEA HEAVEN, Japan

DISNEY-MGM GALLERIES, Walt The disney world resort, Florida, Usa UNIVERSAL GALLERIES FLORIDA, Orlando, Florida, United states of america

BLACKPOOL (England) PLEASURE BEACH, England

YONGIN FARMLAND, Kyonggi-Do, South Korea

GENERAL STUDIOS HOLLYWOOD, California, Usa

MARINE WORLD OF FL, Florida, United states of america

LOTTE WORLD, Seoul, South Korea

CHAPULTEPEC, Mexico City, Mexico

HUIS 10 BOSCH, Sosebo, Japan

TOSHIMAEN AMUSEMENT PARK, Tokyo, Japan

KNOTT’S BERRY FARM, Fuona Park, Cal, United States

SEA REGARDING CALIFORNIA, San Diego, California, United States BUSCH GARDENS, Tampa, California, United States

CEDAR POINT, Sandusky, Ohio, United States

SIX RED FLAGS MAGIC MOUNTAIN, Valencia, Calif, United States

SEOUL AREA, Seoul, South Korea

PARAMOUNT’S KING’S ISLAND, Kentkucky, United States

OCEAN PARK, Hong Kong

SIX RED FLAGS GREAT EXCURSION, Jackson, Nj-new jersey, United States SANTA CRUZ SEASIDE BOARDWALK, A bunch of states, United States

NAGASHIMA SPA AREA, Kuwona, Asia

TIVOLI GARDENS, Copenhagen, Denmark

SIX FLAGS OVER ARIZONA, Arlington, Arizona, United States

ALTON PODIUMS, North Staffordshire, United Kingdom

SIX FLAGS GREAT AMERICA, Gumee, Illinois, United States

PARAMOUNT CANADA’S WONDERLAND, Maple, Canada

TAKARAZUKA (Japan) FAMILY LAND

6 FLAGS OVER GEORGIA, Atlanta, United States

DE EFTELING, The Netherlands

PLAYCENTER, SÃ£o Paulo, Brazil

DUNIA FUNTASI, Jakarta, Indonesia

PARAMOUNT’S WONDERFUL AMERICA, Cal, United States

KNOTT’S CAMP SNOOPY, Bloomington, Minnesota, United States EUROPA AREA, Germany

KORAKUEN, Tokyo, Japan

PARAMOUNT’S KINGS DOMINION, Virginia, United States

SIX RED FLAGS ASTROWORLD, Harrisburg, Texas, United states of america

PLAYCENTER, SÃ£o Paulo, Brazil

BUSCH GARDENS THE OLD COUNTRY, Virginia, United States

DAKKEN, Klampenborg, Denmark

LISEBERG, Gothenburg, Sweden

TOEI UZUMASA EIGAMURA, Kyoto, Asia

BEIJING (China) ENTERTAINMENT PARK

Resource: Amusement Organization

Attendance (in millions)

16. 030

eleven. 200

10. three hundred

being unfaithful. 800

9. seven hundred

almost 8. 800

8. 737

almost 8. 000

six. 700

7. 000

6. 071

4. 600

some. 600

4. 433

5. 200

3. 902

a few. 800

3. 800

three or more. 700

3. seven-hundred

a few. 600

3. 500

three or more. 311

3. three hundred

a few. 200

3. 200

several. 100

3. 008

three or more. 000

3. 500

several. 000

2 . 900

2 . 850

2 . 796

installment payments on your 600

2 . 550

2 . 500

installment payments on your 500

2 . 500

installment payments on your 450

2 . 423

installment payments on your 400

2 . 400

2 . 500

installment payments on your 300

2 . 300

installment payments on your 200

2 . 146

installment payments on your 050

Page 12-15

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Stand 2

PROFIT AND LOSS STATEMENT FOR YONGIN FARMLAND

1991

1992

1993

(millions Korean Won)

Revenue

Net Sales

Accès

Goods

Eating places

Total

Expenditures

Recreation area Operations

Sales and Administration

Others

Total

Operating Income

Less Interest Charge

Profit/(Loss) after Interest

24, 829

a few, 255

10, 309

32, 393

35, 885

3, 684

12, 604

47, 173

35, 004

a few, 378

14, 835

55, 217

dua puluh enam, 209

8, 524

1, 215

35, 948

a couple of, 445

(1, 724)

721

33, 487

eight, 980

1, three hundred and fifty

43, 817

3, 356

(1, 100)

2, 834

40, 409

twelve, 145

1, 433

51, 987

3, 230

(3, 417)

(18)

Table three or more

TARGET SEGMENTS ” ATTENDANCE AND POPULATION INFO

Market Type

Primary homeowner market

Secondary homeowner market

Tertiary citizen market

Total

Per cent of Total

Attendance from

the market type

(%)

almost eight

Population

from the

market type

(in millions)

19. 2

13. 8

12. five

43. 5

Estimated

Current

Catch rate

(%)

nineteen. 30

7. 30

four. 10

11. 30

Projected

Population

in 2150 AD

(in millions)

20. 2

14. six

doze. 3

47. two

Note:

1 .

2 .

four.

The primary resident market is inside one hour drive from Farmland, typically within a radius up to 60 miles. The supplementary market is within one to two hours, and the tertiary market is beyond the two hour drive limit but within just driving length.

Percentage of total attendance is based on three repeat online surveys of surfers to Farmland at the begining of 1994. The estimated record rate will be based upon statistical predictions from the survey respondents. The analysis is not packed with overseas visitors, which constituted 25 per cent of the total attendance in 1993. Site visitors were typically from other Parts of asia, such as Asia and Singapore.

Web page 16

9A96M006

Table some

COMPARISON ATTENDANCE IN SEOUL LOCATION AMUSEMENT PARKS

(Figures in thousands)

1990

1991

1992

1993

Yongin Farmland

several, 786

four, 300

4, 810

five, 113

Lotte World

some, 578

some, 529

4, 605

four, 476

Seoul Land

2, 198

two, 819

two, 834

2, 648

971

1, 319

1, 236

1, 325

Children’s Grand Park

2, 107

2, 334

a couple of, 263

2, 159

Seoul Grand Recreation area

1, 356

1, 431

1, 590

1, 772

Dream Area

Table 5

EQUIVALENT MONTHLY ATTENDANCE: SEOUL PLACE THEME THEME PARKS (1993) (Figures in thousands)

Month

January

February

March

April

May

June

July

August

September

October

November

December

Farmland

641

158

one hundred ninety

844

952

801

230

392

193

270

5, 111

Lotte Universe

618

390

290

380

363

241

406

646

226

323

214

381

4, 478

Seoul Land

220

115

378

460

171

182

413

184

302

2, 647

Web page 17

9A96M006

Table 6

YONGIN FARMLAND CHARGES POLICY

(Figures in Korean Won)

Adult

Child

3, 2 hundred

2, 550

12, 1000

18, 000

2, 250

1, 150

twelve, 000

14, 000

500

7, 1000

15, 000

39, 000

thirty-one, 000

85, 1000

ninety five, 000

75, 500

eighty-five, 000

13, 500

several, 000

3, 000

29, 1000

1, eight hundred fifty

1, three hundred and fifty

1, 1000

3, 2 hundred

a few, 000

2, 500

2, 000

Admission

Specific

Group

Big 5

Passport

Membership Public

Individual

Family members 3

Family 4

Group 3

Group 4

Snowboard Sled Passport

Snow Sled Prevalent

Lawn Sled

Swimming Pool

Admission

Rides

Suspended Coaster

Main Rides (7)

Medium Rides (6)

Supplementary Rides (5)

Tertiary Tours (5)

Kiddy Voyages (3)

Pony Rides

Period Machine

Lift

Teenager

2, 700

2, 500

2, 1000

you, 700

1, 400

800

1, 700

5, 000

400.00

2, 200

2, 000

1, 700

one particular, 400

13, 000

two, 000

550

twelve, 000

eight, 000

350

Desk 7

SAMSUNG GROUP FINANCIAL HIGHLIGHTS

(in enormous amounts Korean Won)

1992

23, 680

16, 531

38, 016

your five, 089

189

Domestic Sales

Export Sales

Total Assets

Stockholder’s collateral

Go back on collateral

Staff (thousands)

Exchange Prices: Korean Won/US$: 1992: 773

1993: 808

1993

24, 609

18, 755

40, 964

five, 900

191

year 1994: 806

1994

(Projected)

twenty seven, 736

23, 578

40, 491

eight, 440

16%

206

Page 18

9A96M006

Table 8

LEISURE PATTERNS OF SOUTHERN KOREAN CONSUMERS (1994)

Question: Which can be your the majority of favoured location for a one day holiday trip? Selected Choice

Motif

Mother nature

Resort/Spa Fishing Historical place Different

Total Response:

Sex:

Male

Female

twelve, 043

twenty-two. 2%

twenty-two. 0%

your five, 354

4, 690

19. six

twenty-five. 0

twenty two. 2

21. eight

Age:

10-20

21-30

31-40

41-50

Over 50

1, 359

a couple of, 634

2, 799

one particular, 586

1, 665

41. a few

twenty-three. 2

24. 8

doze. 0

10. several

Education:

Elementary

Middleschool

Junior high

Older high

School graduate

School

719

678

840

491

4, 286

three or more, 030

Profession:

Professional

White training collar

Sales and marketing

Service industry

Farming

Manufacturing

Housewife

Student

Unemployed

264

one particular, 597

1, 794

772

two-hundred eighty-one

577

two, 582

1, 656

520

9. 9%

7. 0%

22. 6%

16. 3%

8. 4

14. 6

being unfaithful. 8

3. almost eight

22. one particular

23. a few

17. 8

18. 5

12-15. 1

26. a few

22. 5

23. zero

18. 7

installment payments on your 1

4. three or more

six. 9

13. six

twenty-four. 8

several. 7

6. your five

on the lookout for. 4

8. 1

a few. 2

twenty-two. 1

22. 7

twenty. 3

26. your five

twenty two. 9

12-15. 5

16. almost 8

15. 1

16. six

18. 1

10. 5

46. 2

doze. 2

37. four

twenty. 8

21. almost eight

22. 7

11. 0

21. being unfaithful

19. 6

23. three or more

twenty two. 9

twenty-five. 5

2 . 6th

18. 4

1 . 6th

being unfaithful. 9

6. 7

3. 6th

3. 9

7. 1

2 . 1

8. five

several. 1

18. 5

20. a couple of

24. 5

26. zero

21 years old. 7

24. several

18. 2

of sixteen. 1

15. being unfaithful

13. 3

15. almost 8

seventeen. 2

16. 7

20. four

of sixteen. 5

20. 6th

doze. 8

18. five

twenty two. 1

38. 3

doze. 2

nineteen. 0

23. your five

twenty four. 4

21. 2

31. 5

25. four

twenty-one. 9

16. a few

twenty-one. 9

six. 9

6. zero

15. 3

10. 6

nineteen. 3

8. 4

13. 8

2 . 3

17. some

12. 5

6th. 9

10. zero

on the lookout for. 2

6. being unfaithful

twelve. 9

4. you

4. 5

8. six

28. 4

twenty-three. 8

22. almost 8

21 years old. 8

15. five

twenty one. 0

22. six

twenty-two. 2

23. 5

18. 6th

nineteen. 4

16. 0

sixteen. 6

14. 0

12-15. 8

14. a few

18. 4

16. 3

Question: Normally, when you go to motif parks, how many others accompany you? Selected choice

2″3

4″5

6″10

33%

38%

13%

Issue: How various hours do you spend in a theme park?

Selected decision

0″5 hours

6″7

8″9

22%

19%

18%

10″11

18%

12″13

12%

11″20

14″15

Question: How much do you spend with the park in one day not including admission (in thousands of won)? Selected choice

0″5

5″10

10″15

15″20

20″25

25″30

30″35

35″50

19%

10%

21%

16%

Question: How can you normally arrive to the amusement park?

Chosen choice

Car

Tourbus

68%

Source: Korea Research Company.

Bus

13%

Train/subway

over 21

11%

over 16

over 55

15%

Other

Webpage 19

9A96M006

Exhibit you

SAMSUNG GROUP

The late Leader Lee Byung-Chul founded the Samsung Group in 1938. Though started as a trading firm to supply rice and agricultural goods to nearby countries, Samsung korea moved quickly into import replacement manufacturing actions such as sugars refining and textiles. In the 1960s Samsung came into electronics by simply establishing Korean Electronics that developed VCRs, integrated brake lines for tv sets and telephone exchanges, electron guns pertaining to cathode beam tubes (CRTs), and digital cameras. The eighties marked an important expansion intended for Samsung having its evolution into high-tech industry, such as semi-conductors, telecommunications, computer systems, factory motorisation systems, and aerospace. Samsung had achieved remarkable expansion (see Table 7).

The 1994 revenues were anticipated to be about US$70 billion. Samsung, with 206, 000 employees within 65 countries, had just lately reorganized the group in to four core business subgroups, Electronics, Machines, Chemicals, and Finance & Insurance, and one subgroup of independent affiliates. While the core groupings represented certain technological region, the self-employed affiliates subgroup represented a diverse mosaic that included the trading activities of the company, Korea’s highest-rated hotel, Korea’s leading paper publisher, advanced medical and analysis institutes, and cultural and welfare footings. The Joong-Ang Development Co. Ltd., the developer from the Yongin Farmland came under this kind of subgroup.

In 1987, Lee Kun-Hee, boy of the past due Lee Byung-Chul, was hired the chief of the Samsung group. Lee accelerated the pace of growth by Samsung by pursuing strongly hightechnology areas and pressed the group to change coming from a quantity-oriented company into a qualityoriented organization. Samsung’sgoal was to become one of many world’s top ten corporations by the year 2k by achieving annual revenue of US$200 billion, and by producing products of the highest quality. Service top quality and customer satisfaction become words in all Samsung’s activities and the companies in the group had been taking active part in the “quality revolution initiated by Lee.

Page 20

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Demonstrate 2

KOREA INSIDE THE 1990s

Korea, with its inhabitants of forty-four million persons, had noticed tremendous monetary growth within the 1980s and 1990s, despite the political issues. Over 15 million Koreans lived in Seoul, and along with the other five metropolitan metropolitan areas, the estate rate i visited 74. 4 per cent. Korean economic growth has frequently been named as a great “economic miraculous. The per household GNP acquired risen from US$4, 210 in 1989 to US$7, 513 in 1993. The growth rate for the second half the 1990s was expected to be eight to nine per cent. The growth with the Korean economic system was combined with an increasing prominence of large organization groups, typically referred to as “chaebol ” privately held professional conglomerates associated with a wide range of businesses. Samsung, Hyundai, Sunkyong, Daewoo, Lucky-Goldstar, and Ssangyong were some of the better noted chaebols.

Korean language weather was obviously a temperate local climate since it was in the transition zone between continental climate and semitropical maritime climate. The winter time stretched by December to midMarch when ever intense, cold dry spells alternated with spells of milder weather conditions. Temperatures dropped to -15 degrees Celsius in some places. Hefty snow was expected in the mountains. Summer time, stretching from June to early September, was warm and humid with temps rising to 35 levels Celsius with heavy showers in June and July. Mid-July to mid-August was the peak of Korean holiday season. Many festivals came together in Oct. Despite the hitting political complications, the nation was good in attracting international incidents to the nation ” one of the most prominent staying the Olympic games in Seoul in 1988. Traveler growth was steady and approximately one third of the tourists in Seoul used a travel package deal from a few travel organizations.

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