Introduction
Hong Kong Ocean Park is the biggest park of attractions and entertainment in southeastern Asia. Being marine-themed, the park‘s average attendance is approximately 4 million per year. Several factors promoted to the process of the park’s redevelopment, such as the close competition by Hong Kong’s Disney Land and Asia’s financial crisis. In that context, the park is facing several challenges that are in need for through consideration and analysis. This paper analyzes the Ocean Park case study, in the context of strategy management and resource-based view providing an overview of the latter, and a series of recommendations based on that analysis.
The Case’s Problem Statement
In analyzing the challenges that Hong King Open Park (HKOP) are facing, overview of the resource-based theory is essential. In Rangone (1999), reviewing the resource-based theory, it was stated that “the long-term competitiveness of a company depends on its endowment of resources that differentiate it from its competitors, that are durable and, that are difficult to imitate and substitute”. (Rangone 1999) Accordingly, the resources that can bring competitive advantage were identified as “capabilities that the firm owns or has access to, and complementary resources developed through interaction in business relationships.”(Eng 2005)
According to the case study, the challenges were presented as following:
- Human Resource Management – This challenge represent the lack of a strategic resource valuable to the company, where “competitive advantage in business networks are not only limited to structural differences but also include intangible resources such as access to skills and technology through business relationships” (Eng 2005)
- Pricing Strategy- Could not be considered as a lack of resource, rather than an attempt to establish a competitive pricing level.
- Financial – The financial burden in form of the loans can put additional disadvantage in the HKOP Disney competition. The loans could be considered as a lack of a resource, which in turn determines the performance issue.
- Image-related Issues – The image and the brand of the company is included under the “valuable resources” term, which are contributing to competitive advantage..
- Decision Time- this is timeframe for the decisions to be made and implemented, rather than a resource.
Literature
The competitive advantage of the company can be relied on the existence of one or more of resources that are not available to the competitors. “If a resource possessed by a firm is also possessed by several of its competitors (no heterogeneity), this resource cannot contribute to competitive advantage. Heterogeneity is the required condition for obtaining at least temporary competitive advantage.” (Rivard, Raymond & Verreault, 2005). Thus, the advantage can be in identifying and exploiting different sets of resources. In that sense different resources does not necessarily mean “other resources”, rather than “certain characteristics such as their social complexity, the causal ambiguity surrounding how they work, or the unique historical conditions under which they were accumulated make it difficult for competitors to obtain the same, or substitute, resources” (Crook et al, 2008). In that matter the reliance on the resource-based approach is more beneficial compared to industrial organization perspective, being dynamic and focusing “on adapting the environment to the firm through resource accumulation and capabilities development as a means for sustaining competitive advantage.”(Eng, 2005). In taking advantage of that theory the company should identify the strategic consistency of its resources, where its value “measures its potential ability to generate and sustain a firm’s long-term competitive advantage” (Rangone, 1999).
Recommendations
It could be seen that competing with Disney Park using similar resources will prove useless as it will not result in any competitive advantage. Financially more superior, Disney Park will be allowed to promote unbeatable pricing categories. In that sense the resources in which the companies differ-the branding and themed direction, can be used a resource that can set a competitive advantage that will help setting the strategy for (HKOP). The company should exploit the exclusiveness of the marine themed attractions and set their strategy accordingly, developing attractions and facilities that enforce the company’s brand. In the same way as Disney’s general success is contributed to the existent set of characters created in their works. HKOP is in need for a powerful character with a subsequent set of merchandizes that will be used in promoting the company’s image.
Regarding HR management, the company is certainly lacking in that division, thus in the context of resource-based view the company’s role is in “building the human capital pool and stimulating the kinds of human behaviour that actually constitute an advantage.”(Boxall &Steenveld, 1999) This can be achieved by focusing on long term employment where the company should offer benefit packages that will promote to the employees’ commitment at first place, which within the corporation brand should create an image and a reputation that will make the recruitment process easier.
Conclusion
The main idea of resource-based view within the context of the presented case study is to emphasize the role of assessing the company’s own resources which will contribute to competitive advantage. Resources that do not fall into that category should not be paid the same attention when developing a long term strategy for the company. In that sense, in the case of Hong Kong Ocean Park, the role of that resource is taken by the theme of the park which retains the company’s brand.
References
Rangone, A. 1999, ‘A resource-based approach to strategy analysis in small-medium sized enterprises’, Small Business Economics, vol. 12, no. 3, pp. 233-248.
Teck-Yong, E. 2005, ‘An empirical analysis of the influence of cross-relational impacts of strategy analysis on relationship performance in a business network context’, Journal of Strategic Marketing, vol. 13, no. 3, pp. 219 – 237.
FRANCISCO, J., E ACEDO; CARMEN, CARMEN, B. & JOSE LUIS, G. 2006, ‘THE RESOURCE-BASED THEORY: DISSEMINATION AND MAIN TRENDS’, Strategic Management Journal, vol. 27, pp. 621-636.
NEWBERT, S.L. 2007, ‘EMPIRICAL RESEARCH ON THE RESOURCE-BASED VIEW OF THE FIRM: AN ASSESSMENT AND SUGGESTIONS FOR FUTURE RESEARCH’, Strategic Management Journal, vol. 28, pp. 121–146.
CROOK, R.T., KETCHEN, D.J. & COMBS, J.G.S.Y.T. 2008, ‘STRATEGIC RESOURCES AND PERFORMANCE: A META-ANALYSIS’, Strategic Management Journal, vol. 29, pp. 1141–1154.
Rivard, S., Raymond, L. & Verreault, D. 2006, ‘Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance’, The Journal of Strategic Information Systems, vol. 15, no. 1, pp. 29-50.
Banay, S. 2006, World’s Most Popular Amusement Parks,Forbes.com.
BOXALL, P. & STEENEVELD, M. 1999, ‘Human resource strategy and competitive advantage: A longitudinal study of engineering consultancies’, Journal of Management Studie, vol. 36, no. 4, pp. 443-463.