SeaWorld is one of the most popular organizations with a zoological orientation in the world. It is a marine mammal park as well as a theme park inspiring the national as well as global citizens for animal welfare issues. Along with the mammal park, the animal theme parks and the oceanariums are wholly owned by SeaWorld Entertainment. The exhibitions of the animals and all the attractions are aimed to enhance the education on the conservation efforts of the wildlife which are suffering from various kinds of injuries and are sick. The rescue and rehabilitation efforts are deployed in such a way that the animals can get ready to go to the wild. The SeaWorld team has successfully rescued and helped more than 27,000 animals all over the world in last 50 years (SeaWorld Entertainment, Inc. - company overview, 2016).The organization has built a strong portfolio of a diverse range of destination and theme parks on a regional basis. Every kind of theme park provides different kinds of rides and attractions. The revenue generation of the organization and the theme parks are dependent on the attendance of the visitors. The spending of the visitors is composed of the admission fees as well as the expenses inside the theme parks for attaining different kinds of experiences. As per the Annual Report of 2015, the admissions contributed around 62% and the spending in food, merchandise etc. contributed around 38% of the cumulative revenue. It has been explained in the report (SeaWorld Entertainment Annual Report 2015, 2015), a roadmap has been created for the stabilization of the sustainable growth of the organization. The roadmap consists of the factors as mentioned below: -
Thus, with consistent effort and strategic planning, SeaWorld has emerged as a global leader in the animal welfare and the allied industry of entertainment.
As per the approval of the legislature of California, the export and performances of orca has been banned. The entertainment shows were popularized by the world renowned theme parks like SeaWorld and it the state bill backed by the Democrats ended all such shows. As a result of the bill, the export of such aquatic mammals was also stopped from the USA (Offord, 2016). There are various reasons and incidents that led to such ban. The organization faced serious criticism from various agencies because of the relatively bad treatment the killer whales receive in the facilities. On a similar line, organizations like PETA claims that SeaWorld should release the killer whales as the natural behavior of the aquatic mammals are restricted in the theme parks. (BBC, 2016). Another point of great concern is that the killer whales or orcas living in captivity have a much lower span of life as compared to those in the wild. Moreover, the signification of the collapsed dorsal fins is quite evident in case of the orcas in captivity. This is also not observed in case of the orcas living in the wild. Thus, the artificial environment proves to be detrimental to the orcas living in the theme parks. Moreover, many loopholes were observed in the investigation of the USDA in SeaWorld marine park facilities and came to the conclusion that some of the important standard procedures of the Animal Welfare Act were not followed there. Therefore, it emerged as a central issue of concern for the organizations and activists trying for the conservation of the orcas. Safety concern and unusual behavior of the captivated orcas came to the limelight when a SeaWorld Trainer named Dawn Brancheu was killed by an orca named Tilikum in 2010. (Trait, 2016) Thus, there are various issues involving the captivated orcas or killer whales in SeaWorld. The main opposing argument is the denial of letting the creatures to live in their very own natural habitat.
The key external change drivers affecting SeaWorld as an organization are:
SeaWorld is going to have a limited effect on its business from these drivers. This is first because the firm had anticipated these events well in advance and taken appropriate measures to shift their focus of business elsewhere. This reflects in their abandonment of marine park-related projects centered on dolphin and orca shows. Political drivers are not pro-actively influencing SeaWorld as they have anticipated the passage of the bill well in advance and taken steps to stay in compliance of the law. They even contended that they are ready to leave orcas back in to their natural habitat, however they won’t survive then. Therefore it can be concluded that SeaWorld is negligibly affected by political drivers. They have several other species of sea-animals in particular and animals in general that they display in their parks and removal of just the orcas isn’t really going to hurt their top-line or bottom-line. Economic drivers are impacting SeaWorld in a considerable manner considering that the footfalls of tourists are going to get affected as more and more people get to know about the removal of orca shows and displays in the underwater parks. However, this is only potentially true as of date and the real picture will emerge only in due course of time. Like it was said in the previous paragraph, the potential impact on either the top-line or the bottom-line is likely to be minimal. Even in terms of new projects announced regarding orcas, their cessation was well thought of by SeaWorld and they got ample time to divest their funds and divert their attention elsewhere. Social drivers have been strong and pressuring with the animal rights activists and organizations such as PETA raising their voice and concerns against the plight of orcas and dolphins habituating in captivity in marine parks such as SeaWorld. The impact of social drivers on SeaWorld has been low as the firm had already stopped catching orcas from the wild and all the orca population in their parks had been the result of in-house breeding. The issue of dolphins, however, remains unclear. SeaWorld has a strong stance on the issue of the orcas and dolphins regarding their shifting back to the wild habitat, with them being sure that they will not be able to survive at all. Most stakeholders seem to agree to this assertion and that gives SeaWorld the time to wrap up its orca breeding and display activities.
SeaWorld is in a comfortable business situation owing to its proactive anticipation of the series of events. The opposition regarding seeking survival of orcas and dolphins is directed at animal welfare per se and not towards SeaWorld as the firm agrees in principle to the spirit of animal welfare (Tait, 2016). Looking from the perspective of Porter’s Five Forces analysis, the bargaining power of suppliers doesn’t change. Suppliers in case of SeaWorld are the animals’ catchers and the park technology and infrastructure providers. Because of stopping of the shows of killer whales, there is negligible effect on the balance of bargaining power between SeaWorld and its suppliers (Offord, 2016). From the perspective of bargaining power of buyers, who are the national and international tourists in this case, the power of buyers in bargaining is going to increase. This is because orcas shows used to be a favorite tourist attraction in SeaWorld’s parks and it is now going to take additional effort for SeaWorld to retain tourist footfalls and sustain growth in endorsement of its marine parks. For many tourists, orcas shows were the sole reason to visit these marine parks and shell out hefty ticket prices. It could prove difficult for SeaWorld to both retain these tourists as well as command a high ticket price from them. From the viewpoint of threat of substitutes, there is little risk for SeaWorld as there aren’t too many worthy competitors of the firm. If at all, service substitution will be created by SeaWorld itself, or there will be customer/tourist attrition in absence of that, leading to the destruction of an existing market for SeaWorld. Regarding threat of new entrants, there is again low risk for Sea World as this industry is monopolistic or oligopolistic at best. SeaWorld is a market leader in its industry and it’s not at all easy for another player to start from scratch and then match SeaWorld’s value propositions in a quick span of time. Regarding industry rivalry, the risk is high as tourists enjoying orcas shows may move to an allied industry such as wildlife safari or deep sea diving in order to satiate their entertainment and recreational appetite. Thus it can be concluded that Sea World faces high risk element only on the forces of bargaining power of buyers and industry rivalry.
Considering the high risk based forces of bargaining power of buyers and industry rivalry as detailed in the Porter’s analysis as well as a high risk in the economic factor of the PEST analysis, SeaWorld needs to devise a strategy to counter these risks. SeaWorld has already announced the stopping of orcas shows across its range of marine parks. It has also contended that leaving these killer whales back in to the wild habitat would certainly mean that they would not survive. The firm has also stopped all its new projects involving orcas whales and their displays and shows. This suggests that SeaWorld is on the right track and needs to top these acts with a strategy for future course of action. SeaWorld needs to find newer ways of attracting and retaining tourists in to its marine parks, given that its flagship show has been shelved. The firm could consider building display shows from the existing species of animals habituating at the marine parks. With a species count of more than 800, there is a high probability that SeaWorld will be able to attract and retain tourists by designing, marketing and conducting other kinds of marine shows. However, the firm needs to keep in mind the realm of ethics and the set of prevailing laws while designing any such new proposition. Alternatively, SeaWorld can look to diversify its existing business segments based on the analysis of industry rivalry force in the porter’s analysis. This means that the firm could consider venturing in to an allied industry such as sea safari or snorkeling to ensure the tourists seeking adventure stick with it one way or the other. Steps such as the above can ensure that SeaWorld counters all the 3 risk elements in one go – it can opt to implement both the alternatives detailed above and ensure that buyers stay with it along with the balance of power restored and maintained. By venturing in to allied industries that could act as a potential threat to the business, SeaWorld would get an opportunity to effectively leverage upon its brand value while mitigating its various risk elements. These 2 steps would also mitigate the effect of external economic change as detailed in the PEST analysis and ensure steady footfalls in to the marine parks of SeaWorld. Setting up allied industries and bringing them up for business could take some time, however brand SeaWorld is too strong to let the allied industries take too much of time before being business ready. Lastly, SeaWorld would do well to assess the value of its experiences based on the Porter’s value chain framework and align its organizational processes accordingly.
Looking ahead, SeaWorld can implement the strategic recommendations outlined and mitigate its risk factors. Leaving the orcas story behind would be the right way to proceed as it gradually becomes a matter of the past. It would be of special importance for SeaWorld to consider whether, when and how it would like to venture in to the allied industries as outlined before. The controversy is short-lived as the firm takes ample countermeasures to mitigate the risks associated and bury the story to death. SeaWorld has an ample variety of species to retain footfalls of tourists from round the globe. It would just be a matter of sometime before the firm regains its way back to normalcy in business operations. From the value chain perspective of Porter, SeaWorld stands in a good position as customers are willing to buy its experiences not just based on the value of those experiences per se, but also on the brand value of the firm and the relationship they share with it.
SeaWorld did well to clear its stance to its stake-holders right from the forefront. By announcing stopping of orcas shows in its marine parks and stalling projects involving orcas in to its future, the firm retained its market reputation and is poised well for growth in to the future. It just needs to carve out a clear strategy to counter the 3 risk factors as determined from the PEST and the Porter’s analyses. Once the strategy is successfully implemented and gives the desired results, SeaWorld’s business would be back to normal. In fact, the strategy could well become the path for the firm to develop its future course of growth.
BBC (2010) BBC news - SeaWorld trainer dies in killer whale attack in Orlando. Available at: http://news.bbc.co.uk/2/hi/8535618.stm (Accessed: 5 December 2016). BBC (2016) SeaWorld to stop breeding orcas following controversy. Available at: http://www.bbc.com/news/world-us-canada-35829477 (Accessed: 5 December 2016). Offord, J. (2016) Killer whale performances set to be banned in California. Available at: http://www.ibtimes.co.uk/killer-whale-performances-set-be-banned-california-1578375 (Accessed: 5 December 2016). Parks, S. and Entertainment (2016) SeaWorld entertainment, Inc. - company overview. Available at: http://www.seaworldinvestors.com/company-overview/default.aspx (Accessed: 5 December 2016). Parks, S. and Entertainment (2016) SeaWorld entertainment, Inc. - investor relations. Available at: http://www.seaworldinvestors.com/investor-relations/default.aspx (Accessed: 5 December 2016). SeaWorld Entertainment Annual Report 2015 (2015) Available at: http://s1.q4cdn.com/392447382/files/OAR/2015/2015-SEAS-Annual-Report.pdf.pdf (Accessed: 5 December 2016). SeaWorld entertainment, Inc. - company overview (2016) Available at: http://www.seaworldinvestors.com/company-overview/default.aspx (Accessed: 5 December 2016). Tait, R. (2016) Activists angry after SeaWorld killer whale Tilikum who drowned US trainer believed to be close to death. Available at: http://www.telegraph.co.uk/news/earth/wildlife/12188318/Killer-whale-that-drowned-US-trainer-badly-ill.html (Accessed: 5 December 2016).
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