Managerial Economics - Disney World - Case Study Example

Mickey Mouse Monopoly: Disney Walt Disney or commonly known as Disney World is a major recreational source having four main theme parks. Other than these, it contains water parks, golf courses, sports complex and a race track. It started on October 1, 1971 with a mission to capture the market in a whole more specifically, to recover the lose in market due to other theme parks like Six Flags etc. Back to history, Disneyland was the first theme park located in Anaheim, California. Being the unique in market it played the role as monopolistic business with attendance of around 134,300.

But, in this world of competition no one remains alone to grasp. Soon, competition came up and Disneyland started to lose its market. Same tragedy with Disney World too! Though main objective of it is to regain the market, along with it several other parks like Universal Studios, SeaWorld, and Discovery Cove etc. came into existence offering various amusements facilities. Major attraction of Universal Studios are shows and ride whereas, SeaWorld is a chain of marine mammal parks. Discovery Cove gives the opportunity to the guests to interact more closely with mammal animals.

Apart from those, Kennedy Space Center provides the unique chance to tour NASA's launch and landing facilities. Disney World paved the way for the other theme parks and made the Orlando a popular tourist place for entertainment. It's true that after the introduction of other parks, market of Disney has slowed down somewhat but, it has another important goal too, and that is recreation which has direct relation with business profit. From amusement perspective all are working in hand to keep Orlando livelier and brighter and so, to Disney World too.

Today attendance of each Disneyland is varying from 10,000,000 to 20,000,000.The Starbucks EffectStarbucks cafes have given coffee a new cachet and their success has helped all the coffee distributors in United States. A chain of innovation has been set by Starbucks' creativity in once sleepy industry. Best example is Kraft's Maxwell House. On bottom line where only 3% coffee was sold at premium rate ten years ago, today it is 40%. Reasons for this may be innovation in product itself or way it's delivered, finally it is effect of Starbucks.

Yogurt is good example for this. By the 1980s, yogurt had lost its status as an exotic, healthful product. But between 1991 and 1994, Dannon introduced a spree of innovations, including crunch-top packaging and pop-out spoons, raising both its market share and its average price. Dannon has increased its profit margin by five percentage points between 1990 and 1997.The Starbucks effect can be taken to an extreme. As a result of focusing too much on the super premium end and letting the main brands drift the private label, the cachet of spaghetti sauce and facial tissues has eroded in recent years.

Unilever failed to capitalize on the cachet of its super premium Five Brothers brand by under investing in Ragu, which for some time had been a premium product. ConclusionThe Starbucks sets an example for quality product. At the same time it shows one must focus on building cachet for the entire category otherwise one can expect earnings to take a fall.