Introduction
Company Background
Hong Kong Ocean Park is a renowned theme park in operation for over four decades. The company is known for its ocean-themed attractions and entertainment, and it is one of the major tourist attractions in Hong Kong. The park is situated in Wong Chuk Hang and Nam Long Shan in the Southern District of Hong Kong. As a mission, they are dedicated to ensuring that every one of their guests has a wonderful time at our theme park resort while encouraging an appreciation for and commitment to environmental stewardship and lifelong learning (Ocean Park Hong Kong, 2018). The park consists of two areas, The Summit and The Waterfront, which feature various attractions, animal shows, rides and restaurants. Some popular attractions include the Polar Adventure, the Atoll Reef, the Aqua City, the Marine World and the Rainforest (Albayrak et al., 2021). The company’s business model is based on providing visitors with an immersive and memorable experience through a wide range of entertainment options, from roller coasters and water rides to animal encounters and live shows. This business model exemplifies the experience economy, where companies create and sell experiences rather than just products.
Throughout its history, the company has significantly invested in attractions, facilities, and services to continuously improve its offerings and keep pace with changing customer expectations. The company also strongly focuses on sustainability and has implemented several initiatives to reduce its environmental impact and promote conservation. The company has also established strong partnerships with organizations in the industry, such as the Hong Kong Jockey Club, which has been instrumental in expanding its reach and strengthening its reputation (Yeung et l., 2019). The theme park has been consistently ranked as one of the most popular tourist attractions in Hong Kong, drawing millions of visitors annually from around the world. The company’s strong reputation and established brand make it well-positioned to launch a new product, such as the horse riding theme park, and to be successful in a competitive market.
New Product Idea
The Hong Kong Ocean Park company plans to launch a new product, of retired horse riding theme park, in partnership with the Hong Kong Jockey Club. This new venture aims to allow visitors to experience the thrill of horse riding in a unique and exciting way. The horse-riding theme park allows Hong Kong Ocean Park to diversify its product offerings and tap into new market segments. This new idea represents a diversification strategy for Hong Kong Ocean Park. Diversification is a strategy in which a company expands into new products or markets to reduce its overall risk and dependence on a single product or market (Oladimeji & Udosen, 2019). By introducing a new product, such as a horse-riding theme park, Hong Kong Ocean Park can tap into new market segments and revenue streams, thereby reducing its overall risk and dependence on its existing ocean-themed attractions.
This diversification strategy is a way for Hong Kong Ocean Park to mitigate risks such as seasonal fluctuations in tourism and economic downturns, which can significantly impact the company’s revenue. By expanding into new products or markets, the company can spread these risks across different areas and reduce its overall vulnerability. The new idea also aligns with the Ansoff matrix framework, a strategic planning tool that helps companies identify growth opportunities by analyzing their product, market, and business development options (Naim, 2021). In this case, Hong Kong Ocean Park is using the Market Development strategy, which aims to expand the market for existing products to new markets. The introduction of the horse riding theme park represents a way for the company to expand its market by appealing to new segments of customers in a new country.
Target Segment
The target segment of Hong Kong Ocean Park company for the new horse riding theme park is composed of adventure-seekers, horse enthusiasts, and families with children. Keane and colleagues describe adventure-seekers as individuals seeking new and exciting experiences and willing to try new activities (Keane et al., 2020). In this case, they might be interested in horseback riding. Horse enthusiasts are passionate about horses and horseback riding and eager to experience the thrill of horseback riding in a unique and exciting environment. Families with children are an essential target segment as they look for fun and educational activities they can enjoy together.
This target segment can be segmented further into different sub-segments based on demographics, psychographics, and behaviors. For example, we can differentiate between active and outdoorsy adventure-seekers and those who are thrill-seekers or between horse enthusiasts who are experienced and new to horseback riding. The segments can also be differentiated based on age, income level, and location. It is important to note that the target segment is not limited to the groups mentioned above and that other segments can be targeted as well. For example, the theme park could also target corporate groups looking for team-building activities or special events like equestrian competitions.
Target Market
The new horse-riding theme park in the Hong Kong Ocean Park company is targeting the theme park and horseback riding market, specifically in Asian countries like China, Japan and South Korea. This market comprises individuals and families looking for unique and exciting experiences that they can enjoy together. The theme park market is highly competitive, with many companies vying for customers’ attention and spending. The new horse-riding theme park aims to differentiate itself from competitors by providing an authentic and immersive experience unique in its use of retired racing horses and horses from other sources. This differentiates it from other horse riding activities, where horses are often not a racing background. The park also aims to appeal to a wide range of customers, including adventure-seekers, horse enthusiasts, and families with children, by providing a range of activities and experiences that cater to different interests and preferences.
Target Country
A target country for this venture could be china. China currently has a thriving horse riding industry, and there is potential for the Hong Kong Ocean Park to tap into this market. China is also a large country with many people interested in horse riding (Witte, 2021). The competitive advantage for Hong Kong Ocean Park over other facilities in China is that, because Hong Kong Ocean Park is a theme park, it will be able to attract a broader range of visitors than traditional horse riding facilities. This will include tourists who are not interested in horse racing and those who are interested in visiting a theme park but do not want to participate in horse racing. Again, the idea of using retired racing horses, rather than horses from other sources, is to tap into the interest in horse riding already in China. For Hong Kong, it would be easier for the company to bring in their retired horses under the China horse importation policy (Zhang, 2019). They could also acquire those living in retirement facilities in China, and it would be a relatively easy task for Hong Kong Ocean Park to acquire access to these horses. This gives the park an edge over other horse riding facilities in China since it offers a more comprehensive experience.
Nonmarket Force
The term “nonmarket forces” refers to external influences on economic variables that are not a part of the market mechanism (Mercille & Murphy, 2019). Markets and specific other societal structures and organizations would be disordered without forces such as those used by alternative pricing models. On the other hand, PESTEL is an acronym for Political, Economic, Social, Technological, Environmental and Legal factors that may affect a business or organization (Pan et al., 2019). In this context, PESTEL introduces the idea of nonmarket forces that may affect the Hong Kong Ocean park, which is planning to launch a Horse riding theme park out of Hong Kong. Nonmarket forces can refer to anything that is not under the control of the market, such as government regulations, public opinion, or technological advances.
PESTEL
In the case of the Hong Kong Ocean Park company and the new horse-riding theme park, the macro-environment includes a range of factors that can impact the new venture’s success. Political factors such as government regulations, trade policies, and foreign relations can affect the ease of doing business and the availability of resources (Kütük & Nguyen, 2019). Economic factors such as GDP, inflation, and consumer spending can affect the demand for the product. Social factors such as cultural norms, consumer attitudes, and population demographics can affect customer preferences and purchasing decisions. Technological factors such as technological advancements, internet penetration, and digital communication can affect how customers interact with the product and access information about it. Environmental factors such as climate change, sustainability and conservation can affect the company’s reputation and operations. Finally, Legal factors such as safety regulations, intellectual property laws, and labor laws can affect the company’s ability to operate and protect its assets.
PESTEL (Legal)
One of the most sought-after places for FDI is China, a huge country with enormous economic potential. However, despite the “soft-landing” of the Chinese economy and rising anti-globalization sentiment, international enterprises continue to confront several difficulties (Froese et al., 2019). The legal forces that could impact the competitive and financial situation of Hong Kong Ocean Park’s proposed Horse Riding theme park in China include the nation’s environmental protection regulations and intellectual property laws. The park may be subject to fines or other legal sanctions if it violates any environmental regulations, including those related to the protection of endangered species. The IP laws in China can also impact the park’s ability to protect its intellectual property, including trademarks and trade secrets. The park may need to negotiate licenses for using its intellectual property with any partners it selects for the project.
China has joined all the significant treaties to safeguard intellectual property rights. Government laws, administrative procedures, and decrees have also provided protection of intellectual property law in the fields of brand, patent, and copyright, in the domestic context (Cheng, 2019). In order to launch a new product in China, the company would need to comply with a host of government regulations, including approval from the State Administration for Industry and Commerce (SAIC). To be cleared by SAIC, companies must provide information on the product, submit samples for testing, and sign a confidentiality agreement (Guo et al., 2019). In order to operate in China, the company would need to obtain a local business license from the municipality where it intends to do business and comply with a host of other regulations, including tax laws.
PESTEL (Environment)
The environmental forces that could impact the competitive and financial situation because of the new product include economic forces, such as the cost of labor, the cost of materials, customer needs, and public opinion. These environmental forces arise because the new product could affect the existing industry structure and consumer demand. From research exploring the entrance of Volvo into the China market, Zhu averts that nonmarket forces are significant to the competitive situation and financial situation of a company (Zhu, 2020). For example, if the new product is seen as a threat to existing products or brands, competitors may attempt to block the market entry for the company. Whenever this happens, it triggers resistance from companies that are currently dominant in the market. For example, if the new product is cheaper than the existing products, then the dominant companies could lose business to the new company.
On the other hand, if the new product is more expensive, the dominant companies could charge a higher price and maintain their market share. In either case, the company would have to respond by altering its strategies or products. The company could be prepared for the social forces by creating a marketing strategy that appeals to Chinese audiences, developing new products specific to the Chinese market, or partnering with a Chinese company. The new product can also have social forces specific to the Chinese market. For example, if the new product is related to traditional Chinese culture, it could be a popular choice in the Chinese market. In this case, the company would have to respond by marketing the product in a way that is compatible with Chinese culture, developing new products related to Chinese culture, or partnering with a Chinese company.
PESTEL (Social)
Two contemporary examples of social forces that could impact the competitive and financial situation of Hong Kong Ocean Park’s new Horse Riding theme park in China are the growth of the middle class and increasing tourism. Looking at the growing middle class in China, this group of people has increased spending power, which is directed towards leisure activities such as theme parks (Sicular et al., 2022). This could cause a surge in demand for the Horse Riding theme park and other theme parks in China. Tourism is also proliferating in China, and this growth is expected to continue for the foreseeable future. Zhang and Zhang posit that the Chinese government has put effort into exporting Chinese culture and making China among the top tourist stops in the world (Zhang & Zhang, 2021). This could cause a rise in demand for visiting the Horse Riding theme park. The Hong Kong Ocean Park could prepare for the social forces by strategically positioning the theme park to capitalize on these trends. They could also focus on developing unique attractions that appeal to the middle class and tourists to maintain customer loyalty. In addition, the park could develop marketing campaigns that target these groups of people. Finally, Hong Kong Ocean Park could prepare for the social forces by having a solid financial foundation and by being able to withstand any unexpected fluctuations in demand.
Strategic Approach
When formulating their marketing plan, organizations consider the competitive landscape, the needs of their target audience, and the strengths of their offerings to come up with innovative ways to differentiate themselves from the competition (Nomura Research Institute, 2018). This is accomplished through tactical lobbying, often known as a “nonmarket strategy,” in which the company works to influence the formation of laws and regulations beneficial to its operations. One of the best ways for a company to secure a favorable strategy is by following the 4I Baron’s nonmarket strategy framework, whose pillars are issue, institution, interest and information. The issue pillar focuses on the company’s competitive issues, while the institution pillar deals with how the company can best respond to those issues. The interest and information pillars focus on how the company can best access and use relevant information to improve its competitive position (Romann, 2020). It is, therefore, essential for the Hong Kong Ocean Park to be careful while preparing how to approach the PESTEL factors that it faces,
The Hong Kong, Ocean Park Company should develop a legal strategy that includes understanding the laws and regulations that may affect its operations, such as business regulations, labor laws, and taxes (Chan & Kwok, 2021). The company should also develop a system to ensure compliance with all applicable laws and regulations and to monitor and update policies and procedures accordingly. This strategy should include preparing for and responding to any legal challenges that may arise. On the other hand, to manage environmental influences, the Hong Kong Ocean Park Company should develop an environmental strategy that includes understanding the local environment, assessing the impact of its operations on the environment, and developing plans to minimize harm. The company should also implement a system to monitor and report on its environmental performance, and to update policies and procedures as needed. Finally, for social influences, the Hong Kong Ocean Park Company should develop a social strategy that includes understanding the community’s needs and concerns, assessing the impact of its operations on the community, and developing plans to mitigate negative impacts. The company should also implement a system to monitor and report on its social performance and to update policies and procedures as needed.
The company should take approximately six months to develop and implement their market entry strategy. After the strategy is developed, implementing changes may take 1-2 months. The company should periodically review and update its environmental, social, and legal strategies as necessary. Implementation should take six months and an extra six months dedicated to observing and tracking the pilot strategy—the cost associated with developing and implementing this strategy will be $5,000. Annual updates to the strategy may cost $1,500. Total costs throughout the strategy are estimated to be $7,500. This cost analysis is preliminary and may change as the strategy is developed.
Conclusion
In conclusion, implementing a Horse Riding Theme Park by Hong Kong Ocean Park is a significant venture that must consider the implications of nonmarket forces. The company must understand the dynamics of the market in order to price its tickets and attract riders effectively. Additionally, the park must carefully consider various factors, such as the quality of horses, infrastructure, and safety, to ensure the park is thriving. The implementation of this theme park will be significantly affected by nonmarket forces, and it will be a trying moment for the company.
The benefits of developing and implementing a response strategy include improved environmental, social, and legal compliance, decreased environmental impact, and strengthened relationships with local communities. Improved environmental compliance will result in reduced fines or penalties from government regulators. Improved social performance may lead to increased community support and goodwill, leading to increased tourism. Stronger relationships with local communities may lead to a better understanding of the community’s needs and concerns and improved communication between the company and the community. Developing and implementing this social strategy will positively impact the company’s performance and its relationships with stakeholders.
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