Business Plan :Theme Park

August 14, 2017 | Author: Ankit Gupta | Category: Expense, Taxes, Retail, Emergency, Investing
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Submitted by Anubhuti Gupta Kanika Vashishta Pankaj Sharma Rimpy Elahabadi Soumya Gupta Surya Kant Jena



ACKNOWLEDGEMENT The fact that we have been able to prepare this project report is due to help n support of many sources. We could not have achieved anything without those sources. First of all we would like to express our enormous gratitude to our entrepreneurship professor Mr. Sumanta Sharma for his continuous encouragement and guidance throughout the project. His way of thinking and converting ideas into something concrete helped us a lot. He was always there to encourage us, whenever we were down and looking for some support. He helped us to think in right direction and gave us his precious time in spite of having very busy schedule. We thank him for his timely guidance and the pains he took to make us complete this project report. We are also thankful to our parents who were a constant source of inspiration to us. Thankyou


CONTENTS Executive Summary Company Overview • • • •

4 5-6

Nature of business Mission Statement Company Goals and Objectives Legal form of ownership

Industry Analysis Market Place Analysis

7-8 9-10

•Target Market/Customer Base •Characteristics of the target market: - Demographic profile (age, income, sex, education) - Business customer (industry, size, purchaser) - Geographic parameters •Market segmentation •Customer buying habits •Swot analysis

Market Plan

11-12 •

Product/Service description

Pricing policy/objectives/methods

Promotion strategies

Sales forecast

Legal Environment


Staff requirement

Flow chart

Operational Plan


Key Management Personnel 18 Financial Plan

1619 •

Initial set-up cost



Payback period

Risks and Contingencies




3-yr P&L 3-yr Balance Sheet 3-yr Cash Flow Other support docs

EXECUTIVE SUMMARY Carnival of Joy (C.O.J), will establish a quality theme amusement park in Gurgaon, Haryana, to present Indian culture to the Indians and the world The park is designed to create a quality culture experience for families and customers of all ages. It will offer its customers an attractive, economical and fun-filled facility for their entertainment and enjoyment. The forerunner to the Carnival of Joy is the 4-D animated shows of mythological characters like Hanuman, Ganesha, Krishna and Ramayana which brings more advanced technology of animations and hi-tech rides into the business. Our business model is based on the Synergy of retail and entertainment. As we will have strategic alliances with different shopping malls and food providers, so that our customers can shop from different outlets like Pantaloons, Westside,Lifestyle,Shopper’s stop,PVR and satisfy their hunger with the help of food court ,that will include Mc Donalds,Pizza Hut, Punjabi by nature, Café coffee day, and KFC It will generate Tickets for rides and theatre = 60% – Shopping = 20% – Food outlets = 20% The Carnival of Joy will be located on 70 acres with an additional five acres dedicated for parking. The area will be completely fenced and have a single-entry admission for all as the primary revenue source. Customers will not be allowed to bring their own food or drink into the park but will have access to a variety of food and drink concessions at a fair price. Whereas the other amusement parks just provide fun rides to children, we would provide the rides as secondary to some theme stories on characters of mythology from our culture. It is not only about children but also families who can spend their time in shopping and leisure. The park will also encourage tourism as it depicts the country’s heritage culture to the world. C.O.J has engaged leading experts to help plan and develop the park. Senior management has been a member of the Indian Amusement Park Association for 25 years and has attended all of their conventions to learn about the latest product technology, water safety training, marketing and operational issues. In its first year, the


Company believes it will attract 1,025 daily weekday customers and 3,333 daily weekend customers, with sales forecast (worst case) of 18 crores and best case (30 crores) by next year.


COMPANY OVERVIEW Name & logo of the business


The C.O.J is a private company and will be opening a theme amusement park-Carnival of joy. The amusement industry in India is growing at the rate of 25% and close to Rs 2500- Rs 3000 crore was invested in the Indian market last year. This figure is expected to double in the next three years. There are over 150 theme parks across the country today and 6-7 parks are expected in 2007. The park will fulfill the family recreational and entertainment needs for a full day at a reasonable price. Within the targeted 25 mile radius, the population numbers more than 2.9 million people. In addition to the recreational and entertainment value of the park, C.O.J will Also provide new jobs in as well as youth activities and programs for its residents. Furthermore, management believes that there is a resurgence of the pro-active healthy theme amusement park for customer.

Mission Statement “To provide customers a quality, family-oriented hi-tech amusement park while giving a pleasant, safe, enjoyable entertainment facility that exemplifies pride in ownership and pride in facility, not only to the residents but also tourists.”


Company Goals and Objectives: C.O.J will be a profitable and growing business. To accomplish this, the Company will: • Bid for acquiring commercial plot in Haryana Retain consultants for C.O.J n the following areas: - Feasibility Study - Ride engineering and manufacturing - Park Operational Management Consultants - Builder - Property Management - Hydraulic design and engineering • Initiate marketing plans to facilitate an advertising program prior to opening • The development of an overall radio, TV, and direct mail program will be completed in the first quarter of 2007. • Regulate growth of the company in such a manner to not exceed cash flow Establish a working relationship with Board of Directors with operational and property management consultants • Hire staff to handle day-to-day activities at the water park including a general manager, maintenance supervisor, marketing director and the necessary lifeguards. • Establish a Gurgaon Committee to maintain good relations with the residents and the City. Upon opening the park, the Company in its first year will: o Attract 1025 daily weekday customers o Attract 3,333 daily weekend customers • Build a staff of s full-time professional employees and up to 40 parttime Employees. • Grow 2008revenues to 30 crores • Grow the annual number of customers each year • Develop a reputation that will exceed competitors in every area • Achieve excellent customer loyalty by placing strong emphasis in the areas of outstanding service and support • Maintain an experienced and professionally trained staff of full-time and part-time

Legal Form of Ownership: The COJ will be privately capitalized for Rs 18 Crore.It will be registered with the registrar of company one factor is a must: The CMD owns controlling stock. And there are sound provisions for both ownership and management succession. The biggest asset a private company has is stability and long-term thinking.


INDUSTRY ANALYSIS Given the surge in India's middle classes, the family entertainment and amusement sector of the India economy holds out promise for investors, both domestic and foreign. • As at the start of 2001, this industry incorporated an investment of Rs. 1,000 crore (1 crore = 10 million). • Between 2001-04, the industry is expected to grow three-fold in terms of both number of parks and total investment intake. • Between 2001 and 2005, an estimated 400 new parks in this category are expected to be built all over India. • However, as at the start of 2001, there were no rules specific to the development of amusement parks. Businesses wanting to enter this sector had to get as many as 19 renewable no-objection certificates annually. • There is no legally defined requirement of area for amusement parks in India. But, the general norm is that a population centre of six million people can be served with an a park covering an area of 40-60 acres • Foreign direct investment (FDI) in India's amusement parks sector is inhibited by low gate fees (currently varying between Rs 30-250 per person. In some parks, such as Essel World and Water Kingdom (85 acres) in Mumbai, the gate fee is on the higher side but most games (expect the water games) are covered by it. In contrast, Calcutta's Nicco Park (40 acres) has a relatively low gate fee but many of the games are separately charged. • Foreign companies reportedly interested in the Indian amusement parks market include Universal Studios, Time Warner and Disney. • According to the Indian Association of Amusement Parks and Industries, a park can be profitable if revenues from gate collections and other sources (such as food, toy memorabilia sales) reach a 50:50 ratio. However, in Essel World and Water Kingdom in Mumbai, the ratio still stands at 70:30 in favor of gate collections. •


Entry Barriers The primary barrier to the company is controlled by four factors: 1. Cost of land 2. Location proximity of available land to the market area 3. General community support for the amusement park. 4. Permit process that includes environmental impact, traffic and sound studies that could become a three to five year process from the time the site is identified. The likelihood of an additional amusement park locating in an area that is already covered marketing wise is remote at best.

Market Share: The market share for theme amusement park will be dependent upon the effectiveness of the marketing plans and customer databases. Essel world and Calcutta's Nicco Park both have a customer base for Water Park sales. C.O.J has a customer base through rides, movies and shopping complex and a limited database from the same facility. The advantage for the first three years will favor our competition. C.O.J intends to level the playing field with an aggressive advertising and promotion budget


MARKETPLACE ANALYSIS Target Market/ Customer base There is a surge in India's middle class and increasing disposable incomes, the family entertainment and amusement sector of the Indian economy. The leisure market has a current consumer size of 30 million people and is growing at a rate of 10-12 percent per annum. The developments planned now are incorporating an element of fun and avenues where the whole family can spend time together. With increasing disposable income and with surplus time for recreation, Indians are spending more on amusement activities. Also, Indians are now traveling abroad with increasing frequency and experiencing quality entertainment and leisure facilities there. The target market will include: • Children and teenagers • Families • Tourists • Business customers Characteristics of target market: • Children and teenagers • Families • Tourists The demographics, age and income characteristics of the guests, follow attraction mix, and vice versa. All age groups, and includes both male and female. Geographic location: Near Delhi, NCR Characteristics of target market: • Business customers • Retail and food industry • Both small scale and large scale

Customer buying habits: Amusement park business is highly dependent on weather conditions; it will have lowest sales in rainy season. Also in season time there will be higher sales on weekends rather than on weekdays. It will also not follow a regular buying pattern, as it is a leisure activity. The average expenditure of the target customer is approximately in range of Rs 25000 above/ month.


COMPETITIVE STRATEGY – Whereas the other amusement parks just provide fun rides to children, we would provide the rides as secondary to some theme stories on characters of mythology from our culture, with latest technology such as 4-D effect. – It is not only about children but also families who can spend their time in shopping and leisure. – The park will also encourage tourism as it depicts the country’s heritage culture to the world.

SWOT ANALYSIS: Strengths • •

Entertainment for complete family under one roof Booming entertainment & retail industry in India

Weaknesses • •

High maintenance cost Bargaining power of suppliers affecting the ticket cost/profits

Opportunities • •

Learn more about local culture & customs Integrate local culture into theme park

Threats • •

Weather conditions Competition



Jungle Roller coaster Spinning Ladoos Ramayana land Lotus pool Giant chakra


Splash Sanjeevni mountain Thunder dolphin Garuda (Columbus) Go – karting Jet tower

MOVIES - Hanuman - My friend Ganesha - Baby Krishna - Jungle book - Ramayana

PROMOTION Positive publicity through press releases and other media related activities covering newspaper advertising, Tie ups with schools and travel agencies, radio, direct mail referral, brochures, gift passes, Road shows, Internet and web site and more • PRICING - Tickets – The ticket cost from 10 A.M to 3 P.M • Adult = Rs. 500, Children (below 12 years) = Rs. 250


The ticket cost from 3 P.M to 7 P.M • Adult = Rs 250, Children (below 12 years) = Rs. 125 – The ticket cost from 7 P.M to 10 P.M • Adult = Rs 165, Children (below 12 years)= Rs. 85 • PRICING – Strategic tie-ups

Punjabi by Nature

Many more…….. – Shopping and food: • The shops will pay the land rent and 60% of the promotional charges.

Sales Forecast The Company believes it can achieve significant sales in the next twelve months by reaching its customer targets.

• SALES FORECAST – Best Forecast: 30 Crore / year – Worst Forecast: 18 Crore / year


OPERATIONAL PLAN LEGAL ENTITIES AND LICENCES REQUIRED 1. Legal Structure – The COJ will be privately capitalized for Rs 18 Crore.It will be registered with the registrar of company. A Board of Directors will be chosen based on their financial capabilities, professional experience and a strong understanding of business and property management. 2. Location – The Company will operate out of the Carnival of Joy Amusement park in Gurgaon, Davoda across 70 acre. Business office at DLF. 3. Intellectual Property – COJ intends on maintaining a website at to market its services. No other proprietary intellectual property is owned at this time. How to apply for approval If one has a feasible proposal for setting up an amusement park, rush your application in the enclosed format to the Directorate of Tourism, Haryana for approval. The application shall be made in quadruplicate. Documents to be enclosed with the application Project report establishing the feasibility of the proposed centre and describing the amenities to be provided at the centre. Suitability of the proposed project site. This will be based on accessibility and basic infrastructure like water supply, electricity and other communication facilities. Permit from the local authority with copy of the approved plan and proof of ownership of land. Ownership details: i. Name and business antecedents of the promoters ii. Proposed ownership structure. iii. Estimated cost of the project and the manner in which it is proposed to raise funds to meet the cost. A detailed site sketch showing the location of the project with respect to the nearest major transportation network.


Application fee Your application should be accompanied by a fee of Rs. 5000/- for an amusement park in the form of a Demand Draft favouring the Director, Department of Tourism, Government of Haryana. The fee is not refundable whether the project is approved or not. Project appraisal •

Every project will be meticulously appraised by the special committee constituted for the purpose. • Financial incentives offered to approved projects • Investment subsidy limited to 10% subject to a ceiling of Rs. 10 lakhs. • Support to avail loans from state financial corporations. • Concession in electricity charges. • Guidance and publicity support from the State Government Entertainment tax by Haryana government – 30%.All equipment will have to be certified by BIS before being installed, for safety.


Amusement exterior, employees Arrive, Customer valet Actions park

Physical Evidence

Employee Actions Face-to-face


Phone Contact Line of

Enter at ticket counter Gatekeeper greets, valet takes car

Go inside the park

Check out the rides

Security staff verifies the ticket and checks for security

For early booking of tickets, and checks for any theft or loss


Valet Parks Car Enter Data for records




Line of

Automated machines for re-checking the tickets

Work with security surveillance by closed circuit TV

Operates the rides


Staff requirement • Management: 8 Members • Supervisors: 6 Members • Executives: 35 Members • Part- Time Employee: 40 Members • Others: 300 Members The Company’s management team is well balanced in talents and experience and is supported by a highly qualified Board of Advisors.

Suppliers: • Adlabs-For animated studios • HI-tech-For rides equipments • Malls:The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd, Pantaloon. • Specialty Stores: Chains such as the Times Group's music chain Planet M, ITC’s Will’s lifestyle are focusing on specific market segments and have established themselves strongly in their sectors. • Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc. Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, are K Raheja's Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop!, Westside, globus • Convenience Stores: These are relatively small stores 400-2,000 sq. feet. They stock a limited range of highturnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.


Key Management Personnel MD President VP- Park

HeadSecurity & Transport

Head- Mark & Sales


Supervisor Security

Marketing Exe.


Sales Exe.


Supervisor Transport

Head- PR

Important duties of Management in Carnival of Joy - Assist in development of business plan

PR Exe.

Head- IT & Movies

Supervisor IT Supervisor Games Supervisor Theaters

- Development of marketing strategy and plan - Development of operating strategy and plan - Development of operating budget - Management of staff recruitment - Interviewing, hiring and placement - Staff training - Development of policies and procedures - Implementation of marketing plan - Park opening and start up plan events and actual operations - Monitoring and controlling of budgets - Cash control systems - Work with security surveillance by closed circuit TV Heritage Investments will provide asset management and property management for C.O.J and will be responsible for the following duties: - Payroll - Accounts Payable - Providing tax information to the Accountant


- Coordinating with operational management regarding safety, insurance issues, and staffing Directors. Responsibilities Park will be evaluated by their Board of Directors. They will be responsible for recommendations to the operational director, the property management of company and the investors in the C.O.J. The recommendations of the board will follow the outline below: • Review income expense with the park recommendations to maximize the net income. • Review operational procedures that include safety, staffing, training, and new revenue sources. • Review the marketing plan recommendations and assist the operational managers in selecting their target income and an overview of what they would recommend to increase the number of admissions to the park. • Ticket pricing. • Concessions with comments on quality of food, pricing of food sales, selection of menu and any additions or deletions to the food concession menu. • Review locker income and equipment sales and make recommendations on how to improve net income food concessions. • Review the country store operations, gross income, sale items, and make recommendations to add or delete sale items that are carried by the general store. • Review all cash control, computer programs, and reporting procedures. • Review physical plant and make recommendations for improvements and additional attractions. • Review insurance and safety issues with the park to include evaluation of each park component with regard to the number of injuries or incidents with the park operations. • Maintenance review will include all maintenance performed on the facility plus the additional supplies used from the maintenance department. • Review the park components and make recommendations on additional attractions that would be beneficial to the increase in park gross revenues. • Any attractions added to the park will be coordinated with the marketing arm of the water park in order to optimize advertising potential. • Review the security communications and general park appearance. Board of Directors will review all financial data at the end of the year. • The financial evaluation will review all aspects of the park and make recommendations for expenditure; decrease in expense and increase in revenue plus the potential for selling the property should be reviewed every year. • The sale of the Park will be determined by the Board of Directors and approved by the partners of C.O.J • The primary function of the Board of Directors is to recommend Operation Strategies and Revenue Increases


Compensation-Overview • Presidents’ 30,00,000/- (Annually) • VP’s: Rs. 20,00,000/- (Annually) • Head of Departments: Rs. 11,00,000/- (Annually) • Executives: Rs. 2,16,000/- (Annually) • Supervisors: Rs. 1,80,000/- (Annually) • Others: As per contract (Approx. Rs. 2500/- to Rs. 3500/- pm)


FINANCIAL PLAN The Company is seeking a 20 crores bank loan to execute this business plan. C.O.J intends to use these funds to develop and build out the amusement park. Remaining funds will be used for sales, marketing and staffing expense. Ownership of the Company is providing 18 crores in capital. The loan to value (LTV) ratio on the bank loan is 42.85%. The loan will be amortized over twenty years. However, the ownership intends to retire the loan in ten years. The loan will provide for additional voluntary principal payments of up to 5% of the original loan amount annually


Total cost – 200 cr. Raw material-40cr Labors-30cr Direct expenses (Wage, freightinward, etc)-50cr Factory overhead (salary,electricity bill,telephone exp,machine repair, factory insurance,etc.)- 38cr. Administration and Selling and Distribution Overheads (Salaries, sales promotion, training, staff welfare, legal fees, consulting fees, etc.) – 42cr

BREAK EVEN ANALYSIS • • • • • • • •

Break even point is the sales volume at which revenue equal cost i.e., no profit no loss). Break even = fixed cost*100/contribution Contribution=100-% of variable cost to sale Sales- 300cr Variable cost-120cr Fixed cost-60cr Contribution=100-120/300=9.6 Break even=60*100*/9.6=625cr


Payback (period) method is the exact amount of time required for a firm to recover is initial investment in a project as calculated from cash inflows. PB=investment/constant annual cash flow PB=1000cr/200=5yr


RISKS AND CONTINGENCIES There are unseen risks to all the amusement parks and carnival rides. Thousands of injury and accidents happen at carnival rides and amusement park rides. An amusement park accident can happen from poor construction plans, defective construction of the ride, from an employee error, bad training and even negligence. Safety devices can and do fail also causing amusement ride accidents. Fear is the stock in trade of many theme parks, where children and adults relish the thought of being scared to death by gravity-defying rides. But the fright is all in fun. Visitors leave their real world worries at the gate. Behind the scenes, however, park managers are aware of all the threats that could keep the good times from rolling. And they have prepared contingency plans for each. For a theme park, the range of potential disasters is large. Natural disasters, such as sudden storms, tornadoes, hurricanes, floods, and earthquakes, represent one aspect of the threatscape. Mechanical problems, such as when a fast-moving roller coaster malfunctions, leaving children stranded upside-down, are another. Other threats include fires or a bomb scare that could cause panic and a stampede. Even an emergency at a nearby factory could create problems, resulting in the need to evacuate tens of thousands of visitors from the park. Whatever the emergency, any financial effects can have long-term ramifications because, given the amusement industry's seasonal nature, lost business days are not easily recouped. Even worse, damage to a facility's reputation could be fatal. To keep an amusement park from becoming a house of horrors, management needs to develop a comprehensive contingency plan, which in the industry is referred to as an emergency response or emergency action plan. As with any other industry's plan, the goal is to set out how the staff should respond to an event in an efficient and professional manner while minimizing the impact to the business operation. In most facilities, the security, safety, risk, or loss prevention manager reports directly to the general manager, ensure that he or she always has the ear of the facility's executives. Their assistance and input is critical to the completion and success of the plan. Getting amusementfacility managers to buy in to security is not difficult, however. Because the industry is so unforgiving, safety and emergency planning are considered even before the facility is built; everyone, from the owners and developers on down, understands that these issues must be addressed to create a successful venture. Threat assessment: The first step in creating an emergency response plan is to conduct a threat assessment. Managers from across the enterprise should be involved in this process, including the head of the food service department and the director of maintenance. The threat assessment starts with the obvious threats to a business such as fire, robbery, and power outage. Depending on geographic location, threats such as earthquakes, tornadoes, and flooding may also be considered.


Nearby businesses and existing infrastructure must be taken into account as well. An airport, chemical factory, or nuclear power plant in the vicinity presents risks that must be factored into the assessment. Train tracks or a highway frequented by tractor-trailers even several miles from the park may also present danger from hazardous materials spills. In addition, like other businesses that attract enormous crowds, theme parks must consider crimes such as kidnappings, shootings, and fights. When It "Rains" on Parade What you might do to make the crowd safer: • • •

• •

Limit the speed of motorized vehicles in your parade to 10 mph. Restrict drivers (including clowns on bicycles or unicycles) from weaving or swerving towards the crowd. Forbid throwing of candies, toys, trinkets or other items into the crowd, or only permit entrants walking along the curb to hand out such items, to prevent small children from running onto the parade route. Require that animals be under control at all times: those riding on floats must be tethered to the float; experienced equestrians must handle horses. Bar fireworks, starter pistols and canon; moderate the level of amplified sound effects and music, which can startle animals or drivers.

What you might do to make entrants safer: • • • • • • • •

Limit the length, height and width of floats to dimensions that accommodate the route's street widths, turns, bridge clearances and overhanging branches. Require all decorations be fire retardant. Insist that each float carry a fire extinguisher. Require that floats carrying people to have secured handrails that riders must grasp at all times, and that no one extend arms or legs beyond the edges of the float. Prohibit anyone in the parade from using alcohol or drugs prior or during the event and from smoking anywhere near floats or costumes in the staging area or during the event. Require that vehicles be in good mechanical condition. Specify there must be two unimpeded, quick exits from the vehicle for the driver. Monitor weather conditions and make adjustments as needed.

Races that may run wild What you might do to level the playing field: • • •

Find out what laws pertain to your event and make certain that you follow the laws' intent. Verify that there is handicapped parking and how close it is to the event entrance. Make certain the terrain between parking space and entrance is accessible: smooth pavement, ramps or elevators.


• •

Require handicapped-accessible bathroom facilities. Set up registration tables at a height convenient for those seated or standing.

What you might do to make the marathon route safer: • • •

Work with a local runners club to map out the best route for your competition. Publicize the route well in advance and publish/post a map of the route with start and end times on the day before the race. Enlist the help of local law enforcement to block streets intersecting with the route and to direct traffic elsewhere and clear the route of all parked vehicles the night before the event. Assign a lead vehicle to proceed the front runners by and eighth of a mile and a "sweep" vehicle to trail the last runners by the same distance.

What you might do to improve safety in a high-risk event. • • • • •

Decide whether or not the event is worth the risks. Prepare for how you will respond should the risks materialize and whom you can call on for help. Develop a set of criteria for when to postpone or cancel the event. Provide onsite medical care, as well as procedures for transporting people to offsite care. Require appropriate personal protective equipment be worn and competitors to train for a specified length of time or to a specified level for the event.


APPENDICES 1. Application format for approval of amusement parks 1. Name of the centre....................................................... 2. Name of promoters......................................................................... (a note giving details of business antecedents may be enclosed) 3. Complete postal address of promoters.......................................... 4. Status of owners /promoters............................................................ whether a company yes/no(if yes a copy of the Memorandum& articles should be furnished) or b. Partnership firm yes/no(if yes , a copy of partnership deed and certificate of registration under the Partnership Act should be furnished) or c. Proprietory concern yes/no (if yes, give name and address of the of the proprietor/s)........................................................................................................ 5. Location of the site ........................................ 6. Details of the site: a Area............................................................................ b. Title................................................................................................................. Whether outright purchase yes/no(if yes, a copy of the registered sale deed should be furnished) Or on lease yes/no( if yes, a copy of the registered lease deed should be furnished) c. whether the required land use permit for the construction of the Centre on it has been obtained. yes/no(if yes a copy of the certificates from the concerned local authorities should be furnished) d. Distance from railway station........................................................................ e. Distance from airport...................................................................................... f. Distance from main shopping centre............................................................. 7. Details of proposed Amusement park/ Recreation centre/Exclusive handicrafts emporium ( A copy of the project/feasibility report should be furnished) a. Facilities Provided ....................................................................... b. Blue prints of the sketch plans of the project ( A complete set duly signed by the architect /engineer should be furnished including site plan, plan elevation and sections of the building ...................................................................................................


8. Proposed capital structure a. Total estimated cost i. Equity Rs.......................ii Loan Rs. ................................................... b. Equity capital so far raised Rs.......................................................... c.i. Sources from which loan is proposed to be raised...................... ii. Present position of loan..................................................................... 9. Application fee (A demand draft for Rs.5000/- for Amusement Park, Rs. 2000/- for Recreation Centre , and Rs. 1000/- for Exclusive Handicrafts Emporium, drawn in favour of the Director, Department of Tourism, Government of Kerala, Park View, Thiruvananthapuram to be enclosed with the application.) Place date

Signature Full name & designation of the applicant

2. The Walt Disney Company-a case study The Walt Disney Company was funded in 1922, and has became a world leader in family entertainment. Today, the company is operating on a multinational level, and has over 58,000 employees world wide, and over 189,000 share holders. What are the factors that contributed to the company's successes and failures on its way towards becoming the World's largest family entertaining company? I would like to answer the stated question by analyzing the following four factors;  (1) Disney's industry in relation toPorter's Five-Forces Model,  (2) the strengths and the weaknesses and the opportunities and the threats that the company is facing (a SWOT analysis),  (3) the corporate-level strategy and finally, financial trend for the years 1989 through 1991. In addition, I would like to deliberate on the strategic changes and tactical changes that are needed to be made at the Walt Disney Company. Porter's-Five-Forces Model focuses on the external environment that the company has to be able to cope with. The first force to be discussed is the threat of new entrants. Since the Disney company has been able to find a very distinctive niche in the industry, the entrance barriers are relatively high. The company has been able to grow over a long period of time, and has developed from within the departments of Research and development, marketing, and finance. By relying on past experience, company officials know to a large extent what the target customer wants. As Disney pretty much dominates the family entertainment market, it will be very difficult for such a new organization to develop brand recognition/identification, and product differentiation. Disney has focused of market diversification for years and the company covers a wide array of products and services. Being a market leader has made it possible for the company to practice effective economies of scale in production. For example, over 500,000 copies of the


Videocassette "Pinocchio" was sold in only two months, and has 20-30 million visitors to its theme parks every year. In addition, extremely large amounts of capital investment is required for new entrants into the industry. The capital requirements are extremely high. For instance, Disney spent USD3.6 billion in its European theme park (Euro Disneyland). Only very large companies can meet such large capital requirement. Lastly, the government policy towards the industry appears to be very favorable. The French government invested USD 1.2 billion (40%) in Euro Disneyland, provided public transportation facilities, provided a large tax relief (from 18.6% to 7%) on the cost of goods sold. The bargaining power of customers is high in the service and in the entertainment industry. Since a large number of customers are needed to make Disney's operations run smoothly, the customers have certain powers. For instance, if the price on a particular home video is too high, customers may be reluctant to spending the money needed to purchase the product. Another example is the entrance fee charged at Disney's theme parks. It is stated in the case that the maximum amount of money that customers are willing to pay is USD 33. Furthermore, the entertainment industry does not save the buyer money. Instead it is designed in a way that it will make the buyer spend more. A majority of Disney's product mix focuses on intangible returns on the buyer's money. The case that some customers may not realize that they are getting such a return may increase the bargaining power of the customers. The bargaining power of suppliers is moderate. As the Disney company is operating in a highly differentiated and unique industry with high switching costs associated with operations, the suppliers are dominated by a few companies and is most probably very concentrated. However, Disney is a unique and important customer of many of the suppliers. Furthermore, the size of the company may certainly be a great advantage. By being able to order large volumes of unique products from unique suppliers, will create a dependency relationship in the industry. The threat of substitute products or services is moderate to low. Obviously, other cartoon figures, theme parks, and movies can penetrate the market in which Disney is operating in, but I do not believe that this is representing a significant threat. The Disney company has already placed price ceilings on many of its product lines, and should be able to compete with new competitors. However, the threat alone of new entrants into the market requires Disney to hedge against such risk by concurrently upgrading products and services. . External opportunities should be recognized, analyzed, and responded to in a very early stage. The Disney company is facing several external opportunities, however, presently I believe that the external threats facing the company are out-numbering the opportunities. Opportunities includes the following; Positive government attitudes towards its operations, Barriers of entry are significant, and the entertainment industry itself. Legal and legislative forces are usually identified as being negative external factors to a company. Ironically, in Disney's case, the French government contributed greatly in the Euro Disneyworld project. The French government invested over USD 1.2 billion in the project, built communication facilities, and gave Disney tax relief's on cost of goods sold accounts. In


addition, since the barriers of entry into the highly specialized industry in which Disney is operating, competition will find it difficult to penetrate the company's highly diversified product/service mix. Furthermore, large initial capital investments are required to enter the industry.

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CASH FLOW STATEMENTS FOR THREE YEARS Cash Flow Statement for the year ended on April 2007 A B


Particulars Net profit ADD- Adjustments preliminary exp Cash from operating activities Creditors Provision for taxation Stocks Debtor

Amts Rs.

Amts Rs. 794 656 400 180 200 1830

Cash from Investing Activities Purchase of Land and Buildings Purchase of Plants and Machines

2500 1010 -3510


Cash from Financing Activities Raised loans from Banks



Net Cash inflow/ outflow Add- opening cash balance

-30 780

Closing cash balance


Cash Flow Statement for the year ended on April 2008 Particulars Net profit ADD- Adjustments preliminary exp Cash from operating activities Creditors Provision for taxation Stocks Debtor Cash from Investing Activities Purchase of Land and Buildings Purchase of Plants and Machines

Amts Rs.

Amts Rs. 852 1229 467 300 250 268 650


2650 1030 -3680

Cash from Financing Activities Raised loans from Banks Net Cash inflow/ outflow Add- opening cash balance


1650 150 380


Closing cash balance


Cash Flow Statement for the year ended on April 2009 Particulars Net profit ADD- Adjustments preliminary exp Cash from operating activities Creditors Provision for taxation Stocks Debtor Cash from Investing Activities Purchase of Land and Buildings Purchase of Plants and Machines

Amts Rs.

Amts Rs. 1096 423 700 600 360 268 600


2650 1030 -3680

Cash from Financing Activities Raised loans from Banks



Net Cash inflow/ outflow Add- opening cash balance

281 380

Closing cash balance




Trading and Profit and Loss Account of COJ for the year ending on April first Year 2007 (All figure in 00,000) TO PURCHASE LESS- RETURN TO WAGES TO FRIEGHT INWARD

1000 100

900 150 50



3000 200

2100 3200

To Salaries To Sale Promotion TO Advertisement TO Computer Maintenance To Employee Uniform TO Legal Fees TO Insurance TO Rent Paid TO Staff Welfare To Telephone Expenses To Interest on Loans TO Repair To Training TO Real Estate Tax To Preliminary Expenses To Income Tax To Net Profit

2000 500 500

200 100 75 5 10 24 100 300 150 100 35 10 10 7 100 180 794



BY Gross Profits By Rent received

2100 100



Trading and Profit and Loss Account of COJ for the year ending on April first Year 2008 (2nd year) to opening stock



1100 110


(All figure in 00,000) 990 165 55


2400 550 600




2580 3790

To Salaries To Sale Promotion TO Advertisement TO Computer Maintenance To Employee Uniform TO Legal Fees TO Insurance TO Rent Paid TO Staff Welfare To Telephone Expenses To Interest on Loans To discount To depreciation To Repair To Printing & Stationary To Training TO Real Estate Tax To Preliminary Expenses To Income Tax To Net Profit

200 110 100 12 10 24 120 200 190 110 50 110 150 15 50 10 7 130 250 852


BY Gross Profits By Rent received

2580 120

2700 2700



Trading and Profit and Loss Account of COJ for the year ending on 3rd Year April, 2009 to opening stock



1210 121


(All figure in 00,000) 1089 165 60



4060 268

3014 4328

To Salaries To Sale Promotion TO Advertisement TO Computer Maintenance To Employee Uniform TO Legal Fees TO Insurance TO Rent Paid TO Staff Welfare To Telephone Expenses To Interest on Loans To discount To depreciation To Repair To Printing & Stationary To Training TO Real Estate Tax To Preliminary Expenses To Income Tax To Net Profit

2680 660 720

200 130 120 12 10 24 120 200 190 110 50 110 170 25 60 10 7 130 360 1096 3134 3134


BY Gross Profits By Rent received

3014 120




Balance Sheet of COJ as on first Year 2007 Liabilities

Amt. Rs


Amt. RS

Share Capital Authorised share capital

Amt. RS

Amt. Rs

fixed assets 100000000

Lands & Buildings Plants and Machines

2500 1010

3510 100000000

Reseves and Surplus Net Profit General Reserve

Investments 794 1200

1994 Secured Loans IDBI BANKS (Mortages [email protected]%) ICICI BANKS (Mortages [email protected]%) Unsecured Loans


Current Assets & Advance Stocks






Cash at Banks Cash in Hands

300 35

Current Liabilites & Provision Creditor Provision for taxation



Miscellaneous Expenses 400 938


Preliminary Expenses




Balance Sheet of COJ as on second Year 2008 Liabilities

Amt. Rs


Amt. RS

Share Capital Authorised share capital

Amt. RS

Amt. Rs

fixed assets 100000000

Lands & Buildings Plants and Machines furniture

2650 1030 50 3730


Reseves and Surplus Net Profit General Reserve




852 1400

2252 Secured Loans IDBI BANKS (Mortages [email protected]%) ICICI BANKS (Mortages [email protected]%) Unsecured Loans


Current Assets & Advance Stocks






Cash at Banks Cash in Hands

430 100 1448

Current Liabilites & Provision Creditor Provision for taxation Proposed Dividend

Miscellaneous Expenses 300 1040 323

Preliminary Expenses





Balance Sheet of COJ as on third Year 2009 Liabilities

Amt. Rs

Amt. RS

Share Capital Authorised share capital


Amt. RS

Amt. Rs

fixed assets 100000000

Lands & Buildings Plants and Machines furniture Motor Vehicle

2650 1030 70 400 4150


Reseves and Surplus Net Profit General Reserve



1096 1540

2636 Secured Loans IDBI BANKS (Mortages [email protected]%) ICICI BANKS (Mortages [email protected]%) Unsecured Loans


Current Assets & Advance Stocks






Cash at Banks Cash in Hands

530 131

Current Liabilites & Provision Creditor Provision for taxation Proposed Dividend



Miscellaneous Expenses 250 1340 323 6479

Preliminary Expenses




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