Discuss About The Configuring Value For Competitive Advantage.
Competitive advantages allow an organisation to produce services or goods of equal values in a more fashionable at lower prices. Competitive advantages allow the company to generate sales or gain superior margins compared to the industry competitors (Grant 2017). Moreover, competencies of an organisation are the combination of unique skill and technology that makes distinct customers value. Resources and capabilities of the organisations provide core competencies of the organisation that is a strategic capability. In this study, Disneyland Singapore organisation is chosen to show the core competencies and strengths that can help the organisation to execute and create a value-adding strategy so that the organisation can earn returns and gain strategic competitiveness.
Disneyland Park is located in California, the USA and it is a fairy tale theme park with Disney characters. This theme park was opened in the year 1955 and it was designed and supervised by Walt Disney. The owner of this park is The Walt Disney Company. After the opening of this park, Disneyland Park has undergone major renovations and expansions (Disneyland.disney.go.com 2018). This theme park is the largest cumulative attendance and it has Disneyland Resort.
Value chain analysis is the practical application to understanding internal organisational activities. The main goal of value chain analysis is to identify the activities the most valuable activity to the organisation.
Firm infrastructure: Disneyland Park has total consolidated revenue of 52,500 million and fiscal report of 2016 of Disneyland stated that this park earned 16,160 million in a year. This figure was increased by 7% from 2015. Total operating income of Disneyland in 2016 was 14,800 million and resort earned almost 3000 million. Compared to 2015, this figure was increased by 14% (Disneyinstitute.com 2018). In the year 2016, Disney Company invested 1,890 million in order to expand the new systems, attractions, cruise ships, infrastructure and capital improvements. Disneyland has six resorts and parks around the world and these are managed in three ways, partial ownership and sole property and licensing.
Human resource: Disney recruits the employees based on the basic qualifications and seven values of Disney are ‘honesty, balance, diversity, openness, respect, integrity and courage’ (Disneyinstitute.com 2018). Disney Company has guidelines for the employees regarding clothing and behaviour. In addition, Disney has its learning school named Disney University. New employees need to do the course called ‘Disney Traditions’. Disney Company asks the full-time employees to take the classes in order to teach the new employees about skills, knowledge and trends (Disneyland.disney.go.com 2018). Disney wants that the employees must follow the staff loyalty and Disney offers rewards packages, medical benefits, accident, insurance, laundry services, overtime payment and costumes.
Technology: Disney’s technology department is very significant. Through innovative and creative techniques, Disneyland gives lifetime experience and moments for the guests. Resorts and parks have numerous utilisation of the technology and guests can customise their trip to Disney Resorts through online reservation. Disneyland has its R&D department and this department tries to develop better ways to provide entertainment to the guests. In order to bring innovation, Disneyland uses technology to provide exciting and new experiences for the guests, for example, 7D technology.
Procurement: Walt Disney Company has good relations with the suppliers; therefore, the company gets lowest price offers with highest quality products. As stated by Mudambi and Puck (2016), procurement is the support activities where the organisation can establish the greatest savings. Capital expenditure of domestic and international resort and park of Disney takes up 70% of the total expenditure. Disney has diverse business lines and it has own business strategies. Disney could not utilise the standardisation as its primary strategy for supply chain and procurement. Disney uses optimum standard level of cost efficiency.
Inbound logistics: Disneyland Park and resort takes the best customer experience strategy and its inbound logistics are unusual to conventional companies. Disneyland has sustainable suppliers for the construction of cruise, hotels and restaurant. This organisation always focuses to provide best experiences to the guests. Animation technologies and other technologies are used to bring the characters of Disney into a theme park. Continuously developing technology provides the customer real experience. Experts in the field are working ion Disneyland and their responsibilities bring qualities and happiness to the visitors (Oi 2016).
Operations: Operations within Disneyland are associated with the construction and maintenance. The major activities are related to the construction of rides, adding new technologies and repairing of the attractions. The operations process in Disneyland park and resorts are related to the creating events and trips to the visitors. In autumn, Disneyland organises the special parade and music concerts for the customers. The executives in Disneyland provide services like a hotel, food, cruise, attraction rides and restaurant.
Outbound logistics: Outbound logistics process is related to the process to get the products to the customers (King 2016). Outbound logistics are part of the manufacturing companies; Disneyland does not do outbound logistics.
Marketing and sales: Disneyland wants to do the synergy of all services to bring the profit and high revenue. Disneyland does consumer merchandise and content marketing in order to attract the customers. Disneyland makes rides, restaurant, attractive themes and hotels all are based on Disney characters. For example, Tokyo Disney introduced the character of Finding Nemo. Walt Disney Company uses the social media tool to attract the customers and Disney official Facebook page has more than 55 million likes, the Twitter page has 6 million followers and the Instagram page has 8 million followers. In YouTube, Disneyland has more than 2 million subscribers. Disneyland has its ‘BuzzFeed’ website and Disney Park Blog where they put content on Disney (Dekker 2016). Since, 2012, Disney has been providing fairytale wedding in Disney Parks.
Services: As Disneyland provides entertainment, it can be considered as Service Company. Disneyland always tries to develop the guests stay and as mentioned on the Disneyland website, it provides 56 types of services, like umbrella rentals, laundry services and child care services.
The core competency of Disneyland is leadership as the leaders’ values and vision helps the organisation to thrive. In addition, leaders in Disneyland take care of operation and sustain the objectives of the organisation. Another core competency and strength of organisation Disneyland is employee engagement, the management makes possible to create a workforce that demonstrates engagement consistently. Services of Disneyland are exceptional as it is architected from processes and systems that are controlled by skilled executives (Stabell and Fjeldstad 2018). Disney brand is the emotion of the customers and Disney brand is inspiring that offers and spreads beautiful and strong values.
Conclusion
The values of Disneyland come from the synergy of all elements and departments within the firm and it is trying to provide the best entertainment for the visitors. Technologies and human resources mix here together in order to provide better service of entertainment. The employees are trained and they smile whenever they offer services to the guests. Marketing of Disneyland is based on content mainly and they create a trend on television and internet through ticket sales every year. On the other side, Disneyland tries to reduce the redundant expenses. Continuing with the theme park business, the rides are not cheap; therefore, Disneyland is trying to provide that the ticket price must be worthwhile. Therefore, it can be deduced that Disneyland uses the resources and capabilities to produce differentiation with innovation. The competitive strategy of Disneyland is differentiation and innovation, not the low-cost leadership.
Disneyland has been increasing its revenue slowly through expanding the business and its differentiation is based on technologies and innovation. Walt Disney Company has its R&D department to come up with new strategies and attraction. Disneyland is famous for frequent planning and it can lead them to trouble. The same level of planning leads to the no FastPass selection in Disneyland. In addition, Disneyland has been facing the issue of website malfunction and the users find the sign of 404 entry. Moreover, Disneyland has been faced the issue of lack of standardising rules for the guests and the employees. Disneyland can face the issue from the competitors as in Asian countries, many others theme parks are opening, like Universal Studio, Everland and Seoul Land.
Disneyland can take the strategy of service development as it has been always the intensive strategic growth of the organisation. For example, with the releasing of the new move, Disneyland can come up with new merchandise and attraction ride on Disneyland theme parks. Disneyland’s organisational structure must be helpful in order to effective management of service development. In addition, Disneyland has its R&D team that works for innovation of the theme park. In addition, Disneyland can take the strategy of market penetration as it can enable the organisation to increase the sales of existing services. Aggressive advertising can increase the revenues as Disneyland already has a strong brand resonance that can attract the customers.
Reference List
Dekker, H.C., 2016. Value chain analysis in inter-firm relationships: a field study. Management accounting research, 14(1), pp.1-23.
Disneyinstitute.com. 2018. Our Core Competencies | Business Results & Corporate Practices | Disney Institute. [online] Available at: https://disneyinstitute.com/about/our-core-competencies/ [Accessed 15 Apr. 2018].
Disneyland Resort. 2018. Disneyland® Official Site. [online] Available at: https://disneyland.disney.go.com/ [Accessed 15 Apr. 2018].
Grant, R.M., 2017. The resource-based theory of competitive advantage: implications for strategy formulation. Abingdon: Routledge.
Kaplinsky, R., 2014. Globalisation and equalisation: What can be learned from value chain analysis?. Journal of development studies, 37(2), pp.117-146.
King, M.J., 2016. Disneyland and Walt Disney World: Traditional values in the futuristic form. The Journal of Popular Culture, 15(1), pp.116-140.
Mudambi, R. and Puck, J., 2016. A global value chain analysis of the ‘regional strategy’perspective. Journal of Management Studies, 53(6), pp.1076-1093.
Oi, W.Y., 2016. A Disneyland dilemma: Two-part tariffs for a Mickey Mouse monopoly. The Quarterly Journal of Economics, 85(1), pp.77-96.
Samsatli, S., Samsatli, N.J. and Shah, N., 2015. BVCM: a comprehensive and flexible toolkit for whole system biomass value chain analysis and optimisation–mathematical formulation. Applied Energy, 147, pp.131-160.
Stabell, C.B. and Fjeldstad, D., 2018. Configuring value for competitive advantage: on chains, shops, and networks. Strategic management journal, pp.413-437
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