The Walt Disney Company, with three major theme parks in the United State, one in Japan and

one in Europe, was the world's largest theme park

chain as measured by revenues. Time Warner's Six Flags Corporation was the second largest, with seven parks in the United States and plans to
expand into China and other Far East countries. Paramount and Anheuser-Busch were other conglomerates that owned theme parks. In 1994, total
attendance for the world's top 50 theme parks, found in 15 countries, was about 222 million, a growth of 5 percent over 1993. The 23 parks in the
top 50 situated in the United States accounted for 47 percent of the total attendance; the six parks in Florida represented 20 percent of total
attendance. Exhibit 1 shows some details of the top 10 theme parks.

Asian Parks constituted 33 percent of the total worldwide attendance, with Japan's eight parks representing 19 percent. Tokyo Disneyland (TDL),
which opened 1983 as a joint venture with the Oriental Land Company (OLC), was the worldwide leader. Its success set off a wave of theme park
development in Asia, OLC and Disney had agreed to open a second Japanese theme park in 2001, Tokyo Disney Sea, which would be comparable
to TDL in size. Theme parks were also becoming increasingly popular in other parts of Asia. Asia's largest water park (Ocean Park) was in Hong
Kong, and Indonesia was the site of Dreamland, which comprised a theme park (Dunia Fantasi), a waterpark complex, an oceanarium, a golf
course, a beach and several hotels. The industry considered China to be a major growth market. Beijing Amusement Park, started in 1981, reported
that between WO and 1993 its revenues increased by over 2,000 percent and earnings before interest and taxes by 200 percent.

Theme parks required an initial investment, typically ranging from U.S $5(f million to U.S. $3 billion; in addition, many parks periodically added
new attractions or renovated existing ones to draw repeat customers. Parks typically reinvested much of their profit in expansion or upgrades. The
industry exhibited significant economies of scale and #pope. Increasingly, individual parks were becoming larger to generate more operating
revenues. Also, companies were expanding to multiple parks to take advantage of their knowledge of theme park management. Admission fees,
which ranged from U.S. $5 to U.S $50 depending on the park's reputatation and location, constituted over 60 percent of a theme park's revenue;
most of the balance came from food, beverage, and merchandise sales. The Walt Disney Company's financial profile was generally used as a
benchmark within the industry. Its theme park revenues were U.S. $2.042 billion in 1988 and U.S $3.4 billion in 1993. For those two years,
respectively, operating income had been U.S. $565 million and U.S. $747 million and return on equity 17 percent and 25 percent. Most of the
operating expenses for theme parks (about 75 percent were for personnel).

Customer satisfaction was a critical issue in theme park management. Successful park managers promoted their properties heavily and used
marketing research extensively to gain an understanding of their customers. To reach diverse groups of customers, parks emphasized the beauty of
their facilities and the range of entertainment and food services offered. Theme park managers worked with
 tour operators and government tourist promotion boards to draw tourists to their parks. Theme parks spent about 10 percent ot in annual
revenues on advertising using such means as television,

Cases in Strategic Management EXHIBIT 1

The World's 10 Largest Theme Parks

Rank Park Name Location Attendance Size Open Summary

1. Tokyo Tokyo 15,509 25.0 1983 Concept: "Magic and Dream," 6 subtheme zone, 39 attractions, 37
Disneyland Japan food and beverage outlets, 39 merchandise outlets

2. Disneyland Los Angeles, USA 14, 100 22.5 1955 World's first family- oriented theme park, 50 attractions, 1 1 food and
beverage outlets, 64 merchandise outlets
3. Magic Orlando, USA 12,900 12.0 1971 Similar to Disneyland, 7 subtheme zones, 36 attractions, 30 food and
Kingdom beverage outlets, merchandise outlets
4. EPCOT Orlando 10,700 28,2 1982 Future world showcase, 30 food and beverage outlets,
Center USA merchandise outlets
5, EuroDisney Paris, France 10,700 16.5 1992 Family-oriented theme park, 5 subtheme zones, 29 attractions,
29 food and beverage outlets, merchandise outlets
6. MGM Studio Orlando 9,500 13.0 1989 Movie and TV program-based theme park, 1 1 food and beverage
USA outlets, 18 merchandise outlets
7. Universal Los Angeles, 8,000 55.0 1990 Movie and TV program-based theme park, 10 attractions, food and
Studios USA beverage outlets, 6 merchandise outlets
8. Everland Kyonggi-Do 7,300 30.0 1976 Family-oriented theme park, 5 subtheme zones, 45 attractions, 27
(Farmland) Province, South food and beverage outlets, 29 merchandise outlets
Korea
9. Blackpool Blackpool UK 7,200 5.1 1896 Beachside amusement park, free admission, 80 attractions, food
Pleasure Beach and beverage outlets, merchandise outlets
10. Yokohama Yokohama, Japan 6,000 7,2 ',993 Man-made island park, 12 attractions and aquarium, 14 food and
Hakkeijima Sea beverage outlets, 50 merchandise outlets, lodge and marina
Paradise
As of December 1994, as measured by annual attendance.
Attendance numbers are annual figures given in thousands.
Sizes are given in hectares; a hectare comprises 10,000 square meters or about 25 acres. The data refer to the developed area of each site.

Source: Amusement Business, International Association of Amusement Parks.

radio newspaper, yellow page (telephone book) and direct-mail advertisements, jind family and group discounts. Because television advertising was an
excellent visual medium to capture a park's excitement, some parks expended a major portion of their advertising budget for television promotion.
The seasonal and intermittent nature of the business put a lot of strain on theme park managers. Attendance at theme parks peaked in the spring and
summer and during school holidays. Even in the holiday season, bad weather could adversely affect attendance. During peak periods the requirement for
employees shot up; quite often management had to find employees beyond the local area and provide housing for them. The sudden surge in demand
often choked the service systems such as transportation and building management.

KOREA
The Republic of Korea (South Korea) was a 100,000-square kilometer, mountainous, democratic republic which occupied the southern portion of the
Korean peninsula in eastern Asia and numerous small islands. Russia and, more important, China shared boarders with the communist Democratic
People's Republic of Korea (North Korea). The southern Japanese island of Kyushu was about 200 kilometers from South Korea across the Korea Strait
and the heavily populated east coast of China was about 500 kilometers west across the Yellow Sea. South Korea separated from North Korea in 1948
during me"afterniath of World War II. From 1950 to 1953, the two Koreas fought a bitter civil war that ended in a stalemate with the signing of an
armistice. The border separating the two Korean states, which roughly followed the 38th parallel just north of the South Korean capital city of Seoul, was
a particularly tense region. It was heavily defended because the two countries constantly threatened to resume hostilities. "Incidents" were common;
technically, the two countries were still at war because they had never signed a peace treaty.

South Korea consisted of nine provinces (eight mainland and one island) which were further divided into_6_8 cities (shi), 136 counties (gwn), and six
metropolitan cities. Exhibit 2 shows a map. In keeping with the fact that only 22 percent of South Korea was arable, the country had an urbanization rate
of 74.4 percent. The population of the metropolitan cities were Seoul, 10 million; Pusan, 3.8 million;