Disney Theme Parks Essay

Regarding profitability, Disney is more profitable, as compared with Universal. This is because when the operating costs and expenses are subtracted from the Theme Parks revenue, Disney registers a profit of 5,798 million while Universal's profit is 2, 384 million (Munarriz, 2017). Measurement of efficiency was determined by Operating Expense Ratio. The ratios, computed using the ratio of operating cost to operating gross income showed Universal as having 1.283 while Disney had 2.17 (Staff, n.d.). Therefore, Disney is the most efficient company. Universal has a higher return on assets because it has a lower amortization and depreciation. The Fixed Asset Turnover of Universal is higher as compared with that of Disney, and Universal invests in infrastructure at a higher rate.

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Disney should not ignore Universal because Disney has an advantage of early entry into the market, and therefore Universal trails are not enough reason for ignoring it. (Foxnews, 2018) Also, because Universal was able to capture a significant market share in Disney's target segment of teen and adult market. This is an indication that indeed Universal is a force to reckon with, and Disney should not ignore it. Universal can, therefore, catch up with Disney because of the uncertainty of the market trends caused by a massive change in the factors affection consumer behavior. One of is technological advancement and innovation (Watercutter, 2017). Consumer behavior is no longer determined by the reputation of a company as much as it is affected by innovation and cutting-edge technologies that are unique and appealing. Although Universal is growing pretty fast, Disney has got a bigger competitive advantage in the sense that it enjoys a wider market share and economies of scale. The fact that it was established before Universal is an advantage because it had ample time to market itself and create customer trust and confidence.

References

Munarriz, R. (2017, January 28). Disney World and Universal Gear Up for a Theme-Park War. Retrieved March 09, 2018, from http://www.foxbusiness.com/markets/disney-world-and-universal-gear-up-for-a-theme-park-war.

Staff, M. (n.d.). Disney summons the force for its largest expansion. Retrieved March 09, 2018, from https://www.marketplace.org/2015/12/28/business/its-largest-expansion-ever-disney-summons-force

Universal Theme Parks hike ticket prices, following Disney resorts. (2018, February 24). Retrieved March 09, 2018, from http://www. Foxnews.com/2018/02/24/universal-theme-parks-hike-ticket-prices-following-Disney-resorts.html.

War of the theme parks! Disney to build Star Wars theme park to compete with Universal. (n.d.). Retrieved March 09, 2018, from http://fortune.com/video/2015/08/20/war-of-the-theme-parks-disney-to-build-star-wars-theme-park-to-compete-with-universal/

Watercutter, A. (2017, July 15). Disney's Star Wars Theme Park Attraction Is the Next Worldbuilding Frontier. Retrieved March 09, 2018, from https://www.wired.com/story/disney-star-wars-theme-park-d23