Sheffield Hallam University: Six Flags Strategic Analysis Report

This report offers a comprehensive strategic analysis of Six Flags Parks, examining its background, mission, corporate social responsibility, and strategic environment. The analysis includes internal factors such as resources, organizational performance, and product evaluation, alongside external factors like political, economic, socio-cultural, technological, environmental, and legal influences. It delves into industry analysis, SWOT and TOWS analyses, business, corporate, and international strategies, providing a detailed overview of Six Flags' operations and future expansion plans. The report highlights Six Flags' core competencies, market position, and strategic approaches to navigate the competitive landscape, focusing on its expansion strategies and financial performance. This analysis is crucial for understanding Six Flags' strategic choices and its approach to the theme park industry.

School for Higher and Professional Educational (Chai Wan)
By Sheffield Hallam University
BSc (Hons) Events and Leisure Management
Six Flags Parks
Strategic Management
Individual Assignment
20 December 2018
Class: T1
Student Name: LO Man Ching
Student Number: 187004811
Student Number of UK: 28041639
Word Count:
i

Executive Summary
 Brief statement of organisation
 What their core strengths are
 Key elements of the organisation’s strategy
 Key points delivery for the strategy
 What the strategy will achieve
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Table of Contents
1 Introduction...................................................................................................................................1
2 Mission Statement.........................................................................................................................2
3 Corporate Social Responsibility....................................................................................................2
4 Strategic Analysis..........................................................................................................................3
4.1 Internal Analysis....................................................................................................................3
4.2 External Environment Analysis.............................................................................................5
4.3 Industry Environment............................................................................................................7
4.4 SWOT Analysis.....................................................................................................................8
4.5 TOWS Analysis.....................................................................................................................9
5 Business Strategy.........................................................................................................................11
6 Corporate Strategy.......................................................................................................................12
7 International Strategy...................................................................................................................12
8 Conclusion...................................................................................................................................13
9 Reference.....................................................................................................................................14
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1 Introduction
In this report, I will use practical examples to illustrate an overview of six flags parks.
For example, a description of the business and key competitors. Also, would pay
attention to its global coverage and plans it has for international expansion.
About the background of six flags, which is an operator of theme parks, but also
operate safari parks and water parks at the same time. The first park was founded by
Mr. Angus Wynne when 1961 on Texas. Although Six Flags has filed for bankruptcy
in 2009, now it has opened 19 parks around 10 countries and become the largest
regional theme park company in the world. In the old days, six flags mainly used
attractions like a stagecoach to attract the tourists, but now they have transformed and
tend to rely on extreme mobility game.
As for its business, the target person is each stakeholder in the world, whether teens,
elderly, group or individual. Six Flags has always been dedicated to catering to
people's interests, so their recreational facilities and equipment are diversified and
one-stop. For example, water attractions to thrill rides, shows, souvenir outlets, booth
game, children's areas, parades and restaurants. Such excellent management model
brings more than ten hundred million net income to the park.
Next, about the key competitors. They are usually some huge international enterprise
in the same industry. Six Flags have always regarded SeaWorld Parks &
Entertainment as the learning object and main competitor since 1959 was founded in
Florida. It is because there are conflicts in the areas they build up, such as California
and Texas. While others, Schlitterbahn and Cedar Fair have also perceived as one of
Six Flags biggest rivals, although they were founded in different years, both are
developed quite successfully, operating and having many branches till nowadays.
When Cedar Fair competes in the gaming industry, Six Flags generates $10.3 billion.
Let's talk about the last issue, according to their official website and annual report
2017, it is not difficult to discern Six Flags company mainly focused on North
America, such as United States, Mexico and Canada. However, the park intends to
expand its business and add three regions in recent years. There are Zhejiang of China,
Saudi and Dubai respectively. It estimates needs cost billion and would take a
minimum of three to four years to construct a new region theme park (Six Flags
Entertainment Corporation, 2017), (Annual Report, 2017).
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2 Mission Statement
The mission statement of Six Flags, CEO Jim Reid-Anderson think Six Flags not only
provide a place for people to entertain and relax but also committed to be the world’s
best theme park to satisfy people. In addition, Six Flags have a series of outreach
programs called Six Flags Friends which for all stakeholder. The programs are created
to merge the local tradition with communities actively, thereby connects people with
people while sparking a movement to do something meaningful. For example,
volunteerism of various non-profit organizations, giving educational and social
programs (Six Flags Entertainment Corporation, 2017). Moreover, the company’s
culture and corporate social responsibility are conducting every aspect in a
responsible, honest and ethical manner, it means Parks must ensuring the interest of
shareholders and guests transparently and consistently.
3 Corporate Social Responsibility
Corporate social responsibility is a very broad concept, but in the simple definition of
Cambridge Dictionary, it means a company should be interested in and willing to help
society and the environment as well as be concerned about the products and profits.
(Meaning of “corporate social responsibility” in the English Dictionary, n.d.) For
instance, working conditions, human rights and contribution to economic development
etc. But whatever the definition is, the aims of CSR always still to drive change
towards sustainability. As employees or representatives, both of they share a common
responsibility to protect they belong company's reputation for integrity.
Six Flags had teamed up with Hallmark Channel and event called Show Day in 2017.
Although the event seems like to celebrate the annual winter spectacular, they are
encouraging guests to carry some unworn warm or new clothes to the parks on event
day to receive 40% off theme park admission and participate in this event with free.
All clothing items will be donated to the Salvation Army to assist keep those who
need warm in the winter (Six Flags Theme Parks and Hallmark Channel Host the
World’s Largest Snowball Fight at Six Flags Holiday in the Park®, 2017).
Also, “We are committed to making all of our properties more energy efficient and
sustainable for years to come,” said by Six Flags Senior Vice President and Treasurer,
Steve Purtell. Six Flags partnership with JLL to support solar energy while when it
becomes operational, the system will exceed 20 megawatts of electricity generated. In
addition to generating electricity from most parks, it also offers a solar carport which
have integrated electric vehicle charging stations and increased security through new
closed-circuit cameras. So far, the project has been developed to more locations (Solar
Generated Electricity Coming to More Six Flags Parks, 2018).
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4 Strategic Analysis
4.1 Internal Analysis
About the internal analysis of the company, I would use the strategic management
theories of core competency to describe three aspects of Six Flags Parks. They are
company resources, performance and evaluation of the product. Core competency is a
unique ability or technology that cannot be easily imitated, it can have more than one,
also creating value, benefit for users and provide a sustained competitive advantage in
its chosen field. It usually applied in cross-industry companies like Apple, Nike or
Disneyland etc.
4.1.1.1 Resources & core competences
As we all know, Six Flags Parks have a combination of the most frightening and
advance of the thrill rides, children’s rides, choreographed shows etc. In addition to
the support money, outstanding ideas and technology are also one of the important
resources. For example, Parks are licensing agreement with DC Comics and Warner
Bros to allows get the exclusive rights of the world's greatest cartoon characters and
superheroes (Company History, n.d.). Also, according to f finance statement from
2015-2017, the net income rose from 156,727 in 2016 to 313,026 in 2017 which is a
double. (Income Statement, 2015-2017). This shows that Six Flags have been
conducting a good progress.
4.1.1.2 Organisational performance
Organizational performance can be seen from market sharing since the greater of
share, can prove that the company has more status in the market. Due to the parks
expanding actively, so it makes the dividend has increased for an eighth consecutive
year. One of the projects in the early, Six Flags acquired the lease rights to operate
five parks owned by EPR Properties. Six Flags CEO and President Jim Reid-
Anderson said, “These properties can complement our existing portfolio and provide
tremendous added value”. And in fact, upon closing of the transactions, it really
makes an additional 20 million guests within a 100-mile radius around a Six Flags
park, significantly expanding the national footprint (Six Flags Adds Five More Parks
to US Portfolio, 2018).
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4.1.1.3 Product evaluation
The Six Flags’ revenue comes from four main sources - theme park tickets, food &
merchandise, sponsorship & licensing fees and accommodation. In these
segments, theme park tickets alone accounts for roughly 55% of the company’s
revenues. Six Flags must respond to increasing costs almost every year, so the average
ticket prices of parks are usually raised in order to cope with the target of company.
We estimate this trend will continue in the coming years and passed on to the visitors.
However, the high-priced tickets still do not affect people’s desire to visit the park,
which can prove and keep the quality of all aspects of the park.
(What Is Six Flags' Fundamental Value?, 2018)
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4.2 External Environment Analysis
This part would look at a data and sources to analyse the factors below in nowadays.
The amusement park industry is a mature industry in the U.S. Also, it has been placed
throughout the country and penetration into the population is high.
4.2.1.1 Political environment
In fact, the government is trying not to interfere with the theme park since this
seriously limits the potential for management and affect the autonomy of the park.
Apart from for the necessary matters, such as the right to land development, the
problem of insurance, safety or criminal. Second, due to the government has been a
lack of management departments, so it has led some organizations to take over some
problem that no one care. For example, world green, WWF or non-profit organization.
(Katrina Brandon, Kent H. Redford, Steven Sanderson, 1998)
4.2.1.2 Economic environment
Economic factors include the rate of interest, foreign exchange, inflation, and
economic growth patterns etc. These factors would impact a company ever directly or
indirectly. Just like the Asian financial crisis of 1997, at that time, not only the prices
of all item have fallen, but the currency also depreciated. Therefore, the countries
where are not affected travel to Asia, they will benefit from it. The U.S has also faced
the most serious Global Financial Crisis in 2007–2008 which some of the influences
at the time have survived to this day.
4.2.1.3 Socio-cultural environment
These factors scrutinize the social environment, such as cultural trends and population
analytics etc. The parks have valued the culture of the guests; thus, it will decide what
kind of activities to hold based on the customs of the area. Six Flags Great America
hosts the Midwest Cheer and Dance Championship which is the seventh anniversary
so far. In addition, Six Flags Over Texas also hosts an event called Fine Arts
Celebration and Speedy Express Picnic. These activities are not age-restricted and
usually cross holidays to attract more guests (Midwest Cheer and Dance Nationals,
n.d.), (Fine Arts Celebration, n.d.).
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4.2.1.4 Technological environment
The technological innovation can be said to be a benefit for the theme park since it
would mix with the attractions or rides to increase fun and reduce the chance of
mistakes. On 2015, Six Flags mentioned 12 innovative technologies which are the
driving in the reverse direction and indoor mazes with 3-D black light experience
(Hybrid Technology And Interactive Attractions Headline Next Season's Thrills At
Six Flags, 2014). Moreover, Six Flags and Samsung partner on virtual reality roller
coasters on 2017. When rider don the Gear VR headsets, they can see the monster and
shoot them to get the point (Six Flags and Samsung Announce Renewed Collaboration
on Virtual Reality Roller Coasters, 2017).
4.2.1.5 Environmental environment
Environmental factors would be a geographical location, the climate, and weather etc.
A fatal accident on a roller coaster at Six Flags Over Texas in 2013, this matter may
cause consumers to rethink a trip to the amusement park. Or the weather is a big
problem, "lingering effects of the long, harsh winter" that extended school calendars
and shortened many spring breaks say by Six Flags Company in 2014. Only 8.2
million people went to one of Six Flags 18 parks in April, May or June. That was an
8% drop from the prior year (Egan, 2014).
4.2.1.6 Legal environment
The law affects the business environment of a country. Due to Six Flags Parks has an
accident in the past, so the IAAPA decide to establish an amusement park standard.
These standards are revision and review frequently to cooperate new technology,
therefore have been adopted by many governmental jurisdictions. Theme parks
usually perform one or more layers of independent inspection per month or half-years
(Regulations and Standards, n.d.).
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4.3 Industry Environment
In this section, I will use Porter's Five Forces to analysis Six Flags what pressure will
face and where competitive advantages exist. Specifically, the analysis considers:
industry competitors, power of suppliers and buyers, threat of substitutes and new
entrants.
The importance of competitors is the number and their ability to threaten a company.
In the above, Schlitterbahn and Cedar Fair Parks have always been rivals of Six Flags.
Although they are no longer comparable to the company, their intrinsic of quality has
not decreased and their status is still unshakable in the market. Thence, the Parks are
constantly developing to continue to compete and often costing more than $10
million.
For the threat of substitutes and new entrant, they are happening to be the opposite
answer. About the substitutes, many establishments are more accessible than theme
parks and consumers have limited time and cost. As a result, the threat of substitutes is
high, for example, “the movie, theatres, restaurants, sports events, and tourist
attractions” (Business Challenges, 2014). On the other hand, the barriers to new
entrants are high because of the main three reasons. Firstly, it needs high
concentration, competition, technology and capital (Completive Landscape, 2014).
Furthermore, the creation of new parks includes a need for up to 300 acres of land and
at last 78% of large amusement parks are controlled by four companies in the U.S
(Competitive Landscape, 2014). Therefore, it is difficult for new challengers to enter
the market.
The power of suppliers and buyers is medium or high because it has many key
amusement suppliers, such as animation, effects & shows control, games booth and
insurance services etc. However, the roller coaster manufacturers only nine companies
and these all have been supplied 72% of roller coasters to parks in the U.S. In recent
years, 2 of 9 company have ceased operations. Thus, the manufacturers have already a
consolidation and in turn less competition for parks’ business. As for the buyers, many
factors would impact on their attendance, for instance, the discount of admission,
weather, population ages or economic downturn. For this reason, theme parks have
also been obligated to incorporate attractions for various guests to stimulate their
desire to use money (Business Challenges, 2014).
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4.4 SWOT Analysis
Beyond an analysis of Six Flags’ strengths, weaknesses, opportunities, threats, this is a
one-page summary of the previous internal and external analysis. According to the
above survey, it is not difficult to find that Six Flags has become a mature and large-
scale company since it has more than 50 years of history. Although there have been
some new challenges and problems in the market, this does not pose too much threat
to Six Flags Parks.
We are seen from the table below; the strengths aspects only four point, but it makes
the park is full of attractive enough to make ends meet. For visitors those who like to
stimulate, they also choose Six Flags rather than the Disney.
As for the weaknesses, here are three points. However, the biggest problem must be
the weather factors. It is because this cannot control by anyone, it maybe lasts for a
while sometimes, or it may cause an accident. We can only consider ways to prevent
it, or practice in advance daily.
In the U.S, Six Flags is one of the four major parades, but this does not mean that the
company does not need to improve and innovate ever since. Six Flags has always been
committed to changing to meet the values and pace of the world and people. The
strongest evidence is that the construction of three regions parks (China, Saudi and
Dubai) is planned in a short time.
About the threats, I believe the race between rival operators will become more and
more intense. Regarding to the situation of government and economic, the Parks must
wait for observation and respond immediately to the incident, which is the best way to
do.
Strengths Ref Weaknesses Ref
 Maintenance for high technology
 Location of Parks
 Connection to many famous
companies, E.g.: Warner
Brothers & Samsung
 Unique, Innovative Rides
Six
Flags
Parks
Officia
l
Websit
e
 Lack of older generations
 Reliance on good weather
 Low of a price-performance
ratio of food and something
Official
Website
&
Online
review
Opportunities Ref Threats Ref
 Entrance and expand into new
international markets E.g.: China
 The growth of the Internet and
Annual
Report
&
 Government restrictions
and policies
 The “arms race” between
Online
Website
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