Theme Park Industry on the Gold Coast
The external environment of the theme park industry on the Gold Coast plays a significant role in determining if the industry is profitable. According to Hubbard, Rice and Beamish (2008), the external environment is the factors outside the organisation that influence strategy and is made up of two environments; the macro-environment and the industry environment. The macro-environment includes the general factors that affect growth of an industry, whereas an analysis of the industry environment determines the profitability of an industry. An analysis of the Gold Coast theme park industry environment will determine the industry’s profitability by analysing the strength of the following five forces; the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, power of substitutes, and the intensity of industry rivals (Hubbard, Rice & Beamish 2008; Porter 1980). Due to the strength of these forces being quite low, the analysis of theme park industry on the Gold Coast indicates a profitable industry.
The threat of new entrants into the Gold Coast theme park industry is determined by the strength of the barriers to entry as well as the expected retaliation. Such a barrier to entry is product differentiation which means that ‘established firms have brand identification and customer loyalties, which stem from past advertising, customer service, product differences, or simply being the first into an industry’ (Porter 1980, 9). Therefore, for a new firm wanting to enter the Gold Coast theme park industry would need to invest in building a brand name as a way of trying to overcome existing customer loyalties to the other theme parks. This would require large capital requirements for up-front advertising which would be unrecoverable and along with the unknown brand name would indicate a significant barrier to entry (Hubbard, Rice & Beaming 2008).
The low threat of new entrants is also strengthened by the fact that all the theme parks on the Gold
The threat of new entrants into the Gold Coast theme park industry is determined by the strength of the barriers to entry as well as the expected retaliation. Such a barrier to entry is product differentiation which means that ‘established firms have brand identification and customer loyalties, which stem from past advertising, customer service, product differences, or simply being the first into an industry’ (Porter 1980, 9). Therefore, for a new firm wanting to enter the Gold Coast theme park industry would need to invest in building a brand name as a way of trying to overcome existing customer loyalties to the other theme parks. This would require large capital requirements for up-front advertising which would be unrecoverable and along with the unknown brand name would indicate a significant barrier to entry (Hubbard, Rice & Beaming 2008).
The low threat of new entrants is also strengthened by the fact that all the theme parks on the Gold