A general comment on the legal environment included insurance premiums (although the case study specifically mentions that this was not Asia's case).
These were generally very high, because of the risk they insured, and 100% coverage was mandatory in the industry (one of its particularities).
The technological environment had perhaps just as much an impact on the industry as the economic or legal ones. The most important issue was related to the hardware and software providers for amusement machinery and know-how.
The provider of hardware market, in terms of large machines, was almost an oligopoly, with very few companies providing high quality machines. As a personal opinion, in these cases it is quite likely that the price was fixed between the players at a mutually advantageous level. However, smaller machines were manufactured by a much higher number of competitors and could be manufactured domestically.
The most difficult component for the industry was related to management and know-how. Walt Disney were considered the gurus in this area, but they had extremely large licensing fees, going up to 10% of total revenues. Additionally, they were very selective about picking their partners and forming joint ventures and South Korea seemed to be nowhere on their list.
Finally, the impact of the social...
Five different market segments had been identified, but the industry seemed to cover almost any area of the demographical spectrum, ranging from senior citizens to children and to executives.
The fact that there was such a broad area of interest meant that the park's message had to reach everyone, so that customer satisfaction would be maximized. In this sense, the theme parks needed to extend their range of products and services offered as far as possible. Advertising was also a serious issue, with more than 10% of total revenues spent.
Finally, a last characteristic of the theme park industry worth mentioning is its seasonality. Holiday season would men peak sales, however, rain or bad weather would have certainly influenced demand in the respective period. Seasonality also meant that in the peak periods, workers had to be hired from other cities and be provided for, here including housing.
As such, as a general conclusion and evaluation of the industry's profitability, we may assert that the theme park industry was constantly profitable, despite initial high costs and different issue to be handled, such as strong regulations, technological issues, etc. If we look at Walt Disney's figures, generally used as an etalon, we may see a steadily increasing trend in terms of profitability.
