Six Flags Entertainment Corporation Analysis

This assignment requires a comprehensive analysis of Six Flags Entertainment Corporation. Students must examine the company's strategic marketing, competitive position within the theme park industry, and its current turnaround plan. The analysis should incorporate insights from CEO interviews, financial reports (including debt-to-equity ratio), and industry trends. Additionally, students need to consider factors like socio-cultural influences on theme park attendance and the impact of technology on the amusement park experience.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student:
Name of the University:
Author Note:

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Amusement/ Theme Park
The Amusement Parks offers leisure facilities like shows, water rides, themed
exhibits, mechanical rides, refreshment stands along with other attractions. They represent a
major portion of the business in the United States and helps in generation of revenue of
around $15.4 dollars. However, the Amusement Park Industry in recent times faced decline
in revenue and attendance in the period of economic recession (McC1ung, 2012). This
industry also heavily relies on declining demographic. The essay thus focuses on corporate
strategy, business strategy and operational tactical strategy of Six Flags that is a major
operator of theme park. There is also a SWOT analysis done on the Six Flags Entertainment
Corporation. The essay also provides an example of Ferrari World Abu Dhabi that is an
amusement park located on Yas Island in Abu Dhabi, United Arab Emirates
Entertainment Industry
The entertainment industry is gradually gaining a prominence and thereby
investments in entertainment projects have been undertaken. Ferrari World in Abu Dhabi is
one such amusement park built for the purpose of entertainment. The emergence of Six Flags
has also been reason for a similar purpose. Six Flags also known as an amusement park
corporation is a part of the entertainment industry and takes up measures for ensuring
maximum entertainment to the visitors. The company however maintains thrill parks, water
parks, family entertainment centre and theme parks for the purpose of entertaining maximum
number of people.
Corporate Strategy
Six Flags also known as Six Flags Entertainment Corporation is responsible for the
operation of major theme park. In addition, the organization also takes initiative in operating
water and safari parks. The organization thus maintains six major regional parks around

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United States and one park in Canada and Mexico respectively (Sixflags.com, 2017). This is
quite similar to Ferrari World in Abu Dhabi, an amusement part in the United Arab Emirates.
The parks offered by Six Flags are a combination of state of the art children ride, thrill ride,
concessions and choreographed shows. The company has recently emerged from the state if
bankruptcy through implementation of new management followed by a retrenchment
strategy.
Mission
The mission statement of the company represents the reason for its existence. The
mission of the company thus focuses on surrounding the finest ride of the world with
entertainment from field of theatre, sports, music, television and film (About Six Flags Over
Texas | Six Flags Over Texas, 2017). Thus, it is an operator of amusement park whose focus
is primarily on thrilling and new rides mostly surrounded by characters, activities and shows.
Objectives:
The company has adopted various short term and long-term objectives that it plans to
accomplish over the coming two years. The short term goals include of Six Flag included
development of the sports bars, opening of cafes, ensuring new attractions at every park. Six
Flags aims to open bars not only equipped with drinks and food but also make twenty-two
flat screen television available for playing a variety of sports around the world (Six Flags'
New CEO Outlines Strategy, 2017). The organization also undertakes opening of cafes that
contained healthier options. To be in a position like to Ferrari World Abu Dhabi, Six Flags
have undertaken major renovations and have made certain expansions for enhancing its
portfolio. The long-term goals of the company are also worth a mention. The company has
applied for a licensing deal with Meraas Leisure and Entertainment of Emirates for creation
of a park in Dubai that would carry the name of Six Flag. The company also went into

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agreement with Riverside Investment Group that will enable the trademark of the company
licensed in six of the parks in China slated for opening.
Business Strategy Formulation
Six Flags in order to move forward with its mission focuses in four major areas
(Marketrealist.com. 2017). This includes, undertaking investment in the process of
innovation, ensuring transition to a brand that is regional and change in the pricing of tickets.
Six flag have its operations in markets that are geographically diverse. Thus, to ensure
flexibility for responding to local conditions, the park considered as a separate entity
controlled by a general manager. A locally appointed management team consists of senior
personnel responsible for maintenance and operations, human resource, marketing and
promotion, finance and merchandizing. The management team of the individual park also
takes up the task of ticket sales, community relations, local advertising and training and
hiring of personnel. The general manager of each park reports to the regional executive vice
president of the company who then directly reports to the CEO of the company. The company
also has an Executive Vice President who holds the responsibility of in-park and retail
spending in all the parks. However, the Six Flag parks remain open daily including memorial
as well as Labor Day. The parks also remain in operation not only during weekends but also
during peak season while keeping pace with themed events.
Six Flag faces limited direct competition that proves to be beneficial for the park.
Higher capital investment, longer developed lead timing and the restrictions of the zone gave
the degree of protection against the newly emerged competitive theme park. The management
however estimates the cost to be around $200 million with a minimum period of two years
for constructing a new regional theme park similar to Six Flags. This business strategy

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adopted by the company has not only helped it in regaining its position but also ensure having
a competitive advantage.
However, for ensuring successful implementation of business strategy there should be
an abundance cash flow and access to finance otherwise it will not be possible for Six Flags
to undertake necessary expansion by implementing high tech attractions for quenching the
visitors craving. Six Flags must ensure that the rides of the parks develop the concept of
intellectual property or IP which is able to touch the riders not only at physical level but also
at the emotional level. Attractions based on IP are part of ever flowing cycle. The success of
the business strategy of Six Flag also depends on the help it receives from its international
partners in strengthening its bottom line which implies that the theme park does not invest
money on exchange of the any licensing deal with a local developer. The local develop on the
other hand operates and builds a theme park based on the specifications put forward by the
company representing theme park by paying a licensing fee that might be a flat fee or a
revenue percentage or both. These deals not only ensure a risk free cash flow to Six Flags but
also enable the company to expand its brand to the newer markets. There is no point closing
the parks for several months during certain periods. Six Flags as a part of its business strategy
thus ensures that the theme parks have locations where the mild weather allows operations
round the world. However, in this regard the company can ensure building facilities that are
weather proof and which have the capability of staying open in conditions which are less
ideal. Moreover, to implement a business strategy successfully and generate huge revenue the
theme park must compete as a vacation destination with facilities of transport, hotels, dining
facilities, entertainment and shopping. Thus, the more facilities a theme park is able to
provide in addition to the quality time at the park for meeting the needs of the visitors, the
more money Six Flags will make. However, parks that are unable to offer such amenities
losses the money to other businesses. This leads to lesser cash flow for company operating

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the theme park for engaging in activities related to capital expansion. Thus, successful
implementation of business strategy ensures necessary undertaking of certain initiatives by
Six Flags.
Research and Development Strategy
The focus on innovation investment is the research and development strategy. According to
this strategy, since it emergence from bankruptcy, the company has heavily made investments
in the development of new products and rides. According to specific figures, the company
devoted 6 percent of its capital to modernization (Blake Jones, 2017). These figures
represented about 9 percent of its revenue. The company undertook sixteen major innovations
added to eighteen parks of Six Flag. The innovations of the company however categorized
into innovative show technologies, world record-breaking rides, and historic theme park
transformations.
Financial Strategy:
The expenses of Six Flags have dropped to 61% after its emergence from bankruptcy. The
actual figures of the drop in expenses were around $81,628,000 from $84, 219,000 within a
gap of a year from 2013 to 2014. Similar to other amusement parks like Ferrari World in Abu
Dhabi, Six Flags have also initiated fixed set of expenses (Bandopadhyaya, Callahan, & Shin,
2012). The company has also saved considerably on the variable cost for products sold
outside tickets that includes souvenirs, drink and food. The expenses on these products
reduced to $ 1.7 million within a year’s gap that is between the early parts of 2013 to 2014.
Operations Strategy:
Six Flag focused on transitioning from a national brand to regional brand. Most of
visitors of Six Flag parks originate within a range of 150 miles. Therefore, the company

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implemented an operations strategy that helped in targeting the local guests to the local parks
(Moore, 2016). This approach was different from the approach initially adopted by the
company prior to its bankruptcy. The replacement marketing campaign of Six Flags inspired
the regional and local residents to pay a visit to the park by promoting through local
television, cinema, radio and digital media. Six Flags emphasized on social media campaigns
through first person video posts. There has also been development of the local twitter and
face book pages. There were also new contest and competitions in the park. The shift in
marketing has therefore coincided with local marketing acquisition and social media platform
for promotion of the park.
Competitive Strategy
To capture market position similar to Ferrari World, Six Flags plans to provide
massive discounts on the admission fees. Coupons often found on the sides of cola cans that
show directly in the kiosks of the park that helps them in getting major discounts
(Bandopadhyaya, Callahan, & Shin, 2012). The recent investor report of the company has
highlighted that the local promotional coupons that had offerings on buying one and getting
one free reduced. This had led to an increase in admissions per capita. The company also
pushed the seasonal passes with the prediction that it will not only help in the generation of
more revenue annually but will also increase the flow of cash compared to the number of
visitors on a single day, help in building recurring revenue and help in utilizing excess
capacity even during the periods of off-peak. Thus, incentives on the seasonal passes have
resulted in increasing the season pass proliferation by 18%.
Corporate Governance

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The Board of Directors at Six Flag consists of seven members. Of them, Jim Reid
Anderson and Usman Nabi are employees at Six Flags while the rest of the directors ensure
board experience related to investment consulting, foodservice, entertainment, private equity,
casinos and tobacco industry (Levitt, 2014).
Executive Leadership
Leadership also represents corporate governance. At Six Flags, leadership represents
the various posts held by the different leaders. Lance Balk is a member of the general counsel
whereas Marshall Barber is the chief financial officer (Investors.sixflags.com, 2017). Kathy
Aslin is the senior vice president human resource whereas Danielle Bernthal holds the
position of senior vice president, assistant general counsel and corporate strategist. Tom Iven
and David McKillips hold the post of senior vice president along with looking after the
United States park operations and in park service respectively. However, the international
park operations looked upon by John Odum while Brett Petit looks after the sales and
marketing. Stephen R. Purtell holds the position of investor relation and treasurer while
Leonard Russ is responsible for strategic planning and analysis (Investors.sixflags.com,
2017).
Operational Tactical Strategy
Operational tactical planning refers to the process of creation of linkage between
strategic objective and goals to the tactical goals and objectives (Vieyra & Vieyra, 2014). The
strategy is undertaken by a company for describing success, success conditions and helps in
explaining what portion of strategic plan needs to be put to operation during given period of
operation.

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The Six Flag introduced the concept of Halloween Town for which there has been
substantial change undertaken. This strategy was a huge success with over 9600 attendants.
Six flag thus ensured the following steps to make the event a successful one:
Targeting Families Solely:
The new concept introduced especially targeted the families as they have tendency to
spend 25% more on food and entertainment.
Stopping the Arms Race:
Instead of concentrating on the tallest, scariest and the fastest rides the company now
focused more on entertainment factors that are family friendly and includes mainly water
rides and costumed characters. In addition, the company also focused on the play area for the
toddlers.
Introduction of Pocket Friendly Entertainment:
Six flags tried to give its audience a mini Disney experience through the new concept
of Halloween Town and a price much cheaper compared to the other Halloween attractions.
Discarding the Concept of Mr. Six:
Six Flags discarded the concept of Mr. Six and he is not to be found in any of the
advertisements related to the Halloween town.
The company also tried to introduce the concept of ‘Don’t burn mom’. Through this
strategy, the company focuses on introduction of not only family friendly ride but also street
entertainment. The company also introduced more tweety birds thereby enabling children to
take picture with them. This strategy enabled the company to earn accolades from most of the

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sectors. This tactical strategy has helped the company to revive its position which was to
some extent lost due to bankruptcy.
Retrenchment Strategy
The retrenchment strategy adopted by Six Flag involved preparing the amusement parks
for getting a thematic makeover (Investors.sixflags.com, 2017). Six Flags aims at an
extensive process of changing the names of the parks and at the same time ensure a makeover
that is thematic after its emergence from bankruptcy.
Turnaround Strategy
As a part of the turnaround plan, the chief executive of Six Flags adopted objectives for
increasing the corporate sponsorships, improving customer services and make the amusement
park more appealing for the families (Macarthur, 2017). Thus, to bounce back and be in a
position similar to Ferrari World, the focus was on turning Six Flags in to a business that
focused on brining more people and getting them spend some quality time at the park.
Moreover, the plans were on for setting up the marketing of parks.
Financial Leverage
The theme park industry has a capital-intensive nature therefore companies
responsible for aggressively financing growth with debt will necessarily possess a higher
ratio to debt to equity. During the year, 2014, the debt to equity ratio was 4.0. This reflected
that the company is financing the operations quite aggressively with the debt capital
(marketrealist.com, 2015). However, the debt ratio for a capital-intensive industry standing at
two is quite normal.
Situation Analysis –SWOT analysis

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The determination of situation analysis of Six Flag is through identification of
strengths, weakness opportunities and threats. Similar to the Ferrari World, the strength of
Six Flag lay in:
i. The parks placement
ii. The introduction of innovative rides
iii. Generation of the theme aspect along with maintenance of rides with higher
technology (Levitt, 2014).
iv. Cost advantage
v. Leverage of assets
vi. Effectiveness in communication
vii. Increase of online presence
viii. Presence of strong management team
ix. Presence of brand equity that is Strong
x. Presence of a strong financial position
xi. Ensures reputation Management
The weakness factors represents:
i. The parks dependency on good weather
ii. Existence of seasonality in various parks
iii. Ensuring gauging of price.

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iv. The theme parks lacked appeal towards the older generation
v. Indulged in a process where hiring of employees took place in every season.
vi. Presence of a competitive market
vii. Implementation of the taxes
Opportunities of Six Flags represent:
i. Entrance into the newer growing markets
ii. Enhanced growth on the internet and mobile media.
iii. The increased presence in the global markets
iv. The company’s presence in the growing economy
Threats to these theme parks represent:
i. Race amongst rival operators.
ii. Government restrictions and policies that pose hindrance in operation of the park.
iii. Threat in the labor market due to the seasonal employees.
iv. Increase in the cost of the labor
v. Presence of external business risk
Industry Analysis
The industry analysis is done with the help of Porter which portrays the key pressures
that a particular firm faces in the industry where there is existence of competitive advantage.
The industry analysis done based on various factors that includes, bargaining power of
suppliers, the threats faced from the new entrants, threat of the substitutes, bargaining power

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of the buyers and industry rivalry (Lillestol, Timothy, & Goodman, 2015). Thus, the
bargaining power of suppliers is quite high in case of Six Flags. However, Six Flags faces
lower threat from the new entrants. As far as substitutes are concerned, it is quite high
although the buyers possess medium bargaining powers. Further, Six Flags also faces higher
industry rivalry.
Organizational Analysis
The organizational analysis is the PEST analysis that puts forward a framework for
better understanding of the macroeconomic industry of the organization that is part of the
amusement park industry. These however include political, economic, social and
technological aspects. The political aspect implies that the regulation act of the government
has negative influence on the net profits of the theme parks. The consideration of the
economic factors of the amusement park industry shows a growth in revenue between 2.2 to
5.3 percent. The social factors represent the demographics on which a theme park is
dependent (Strelets, 2012). This demographic represented by teenagers in the age group of
ten to nineteen. Thus, any change in the demographics will directly affect the attendance in
the park. However, as far as technology is concerned amusement parks focuses on utilization
of technology based on three areas that are cost cutting, seasonal updates and overall guests
experience (Köhler, 2013).
Conclusion
The essay ends with a note that Six Flags is the largest operator of theme park with a
mission that aims at providing unique experience to its customers. After its emergence from
bankruptcy, the company has not only embraced regional strategy but has also opted for new
innovative rides. The company has also focused on social media marketing locally and
enhanced the sale of seasonal pass tickets. Through the essay, one can also see that on the
financial front, the company has witnessed substantial growth.

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Referencing
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