3.21 service operation management
duty13
Sample4AS21.pdf
Rollercoaster rides Golfing Spashparks camping retail shopping fine dining
Services provided
Company Introduction
Disney World Florida opened in 1971 (Smith, 2010)
Florida
58 million visitors in 2019 (lange, 2019)
Services provided
Service concept Service processes
Organising Idea: Manufacturing fun
Service concept: Providing a magical family fun experience through customer friendly packages
catered to all
Services recieved
Epoct Magic Kingdom Disney’s Hollywood studios Disney’s animal kingdom Restaurant’s & Dining Golfing Water parks
Car parking Security Uniformed entertainment staff Disney Merchandise stores Cinemas Hotels Toilets
Customer expierence Outcomes
Enjoyable rides Clean facilities Pleasant staff Consistent entertainment Euphoria from seeing characters Variety of food available Family friendly environment
Good food Magnitude of rides used Pleasant stay Everlasting memories Will recommend to friends Utility
High
Low
Low High
Process variety
Volume
"Complexity"
"Simplicity" "commodity"
"capability"
Increasing process definition
Decreasing unit costs
Aim of this study
Pareto Analysis (Gathered from independent study)
"To identify the operational management issues occuring within Disney World Florida's service concpet and provide viable reccomedations on how to improve each component that will lead
to higher sales and profit growth"
Problem 1Problem 1
Cause Effect
Longer Que times
(Liliana, 2016)
Procedures People
Environment Equipment
Under capacity of Disney characters in density areas Visitor Forecast planning
procedures failing
Imperfect flick card system
Delayed que text messaging to visitors
Small que area's for park visitors leading to
overcrowding
Incorrect placing of dining areas and shopping malls
Front of desk enabling too many walk in's of families
Not enough security to police que lengths
Digital Que equipment failure
Signs misguiding visitors
Signs not being clearly visible
Customers
Departure
Interview with Disney Princess at Disney World
"Disney World Florida Que lengths always stems down to over capacity of the park"
"Excutives push for more visitors so Disney can profit from higher volumes, however this dampens Disney worlds service as a result"
"So we hire more staff but it takes months to train them with our protocls and Disney pronouns"
(Ariel, 2018)
The average young person attention span has reduced from 12 to 8 seconds since 2000, Therefore, customers tendency to que for Disney worlds services reduces creating a potential loss to sales in younger
auidences (Microsoft, 2015)
Average que length 45 minutes
(R, 2014)
There is a correlation between over capacity of theme parks and lengthy que times, the process may lead Disney worlds operational
costs to rise (Ahmadi, 1997)
Not having crowd management protocols in place increases the likelihood of theme park casualties, creating a tremendous risk of
service failure (HSE, n.d.)
How this damages Disney world service concept?
Solutions to long que lengths
Increase digital entertainment services within the queue's themselves as guests may become less uncomfortable or anxious
towards queuing for a period of time
1.
2. Introduce smartphone app to notify guests guests on que lengths and highly congested areas to help reduce foot traffic at rides, fine
dining and other services provided
3. Increase the deployment of Disney World charecters to high density areas to reverting guests from joining que's whilst providing
entertainment
Decision matrix tool
Criteria Description
1.
2.
3.
Weight (out of 100 points):
Minimum Desired Score (1/10):
Total
Increase digital que entertainmentc services
Introduce smartphone app
Deploy more Disney characters to dense areas
Increase revenue and profits
Increase customer loyalty and satisfaction
Reduce customer wait time
45 20 35
20 12.5 15
100
25 15 1815 18 Deploy more Disney characters to
dense areas
18
19
13 8
1418 51
39
58
Reccomendation
Disney World deploys the personnel of Disney characters to high-density areas as this will likely reduce the
duration of que times as more guests will revert from joining the que of a ride to enjoy the service provided by
uniformed entertainment. This will then enable higher utility to ride goers through the experience of the ride
and lower wait times.
Cost benifit analysis of the reccomednation
Costs Benefits Cost of hiring new staff = $0
Costs of internal que management equipment
= $100,000 (Barriers direct, n.d.)
Cost of training staff = $15.61 per hour (Pay scale, 2019)
$15.61 X 70 hours of training = $1092.7
$1092.7 X 3000 staff members = $3,278,100 + $100,000
Total costs = $3,378,100
Save $1 billion dollars invested in R&D for developing a Disney app platform (Walt
Disney, 2020)
Estimated increase in sales of 10% per day
$11.9 million turnover per day (Lango, 2021)
New sales revenue per day = $13,090,000 X (365 = $4.77bn)
Plus $1 billion dollars saved
Total revenue: $5.77bn
Problem 2Problem 2
Disney World Florida struggle with unsatisfied guests as the precieved quality does not match up to the product
quality given the excessive prices dampens service performance and create external failure costs such as loss
of repeat business
Precived service quality issue Factors influencing preception
Prices
Ideal
Intolerable
Unacceptable
Acceptable
More than Acceptable
Adapted from (Johnston, 1995)
Root cause and resreach
Root cause Research
Disney Worlds pricing model sees the price of individual day passes exceeds £83 in peak periods (Disney Holidays, 2021).
The price point excludes the additional fees for the additional services provided being hotels, dining and merchandise which
are positioned above retail with one-night stays priced at £635 (Disney holidays, 2021)
This creates inclusivity issues as the pricing models are primarily targeted catered to families that have large
amounts of disposable income.
The price sentiment points out clear discrepancies to the deliverance of their overall service concept to provide
packages that are ‘catered to all’
High prices 1.
2. Incapability to produce correct project financing
25% 'Price Hikes' leads to businesses losing customers on a permanent basis (Conover, 1984)
Customers for attitudes to prices based upon the service quality of all deliverables, Therefore all of Disney Worlds
services are stretched to be continuously productive (Conover, 1984)
High prices creates a 'substitution effect' whereby consumers will seek out substitute goods to Disney Worlds
service creating a loss of sales (Conover, 1984)
In the US, Disney Worlds largest market the Gini Coefficient has risen 0.42 from 0.36 suggesting the US is
continuously experiencing income inequality (Statista, 2020)
Source:...
Solutions to high price levels
Create a subsection in the Disney World website for guests with a low level of disposable income to book unused or cancelled Disney
experiences at a fraction of the price
1.
2. Create a new period of every year whereby all of Disney Worlds
prices are 50% cheaper for all services provided
3. Create more services to provide to increase the service experience for guests and match customers perceived quality
Decision matrix tool
Criteria Description
1.
2.
3.
Weight (out of 100 points):
Minimum Desired Score (1/10):
Total
Increase digital que entertainmentc services
Slash prices by 50% for one period
Increase services provided to enhance guest experience's
Increase revenue and profits
Prevent losing a customer
Increase in perceived service
quality
30 30 40
10 15 18
100
10 12 12
17
12
13 10
2022 54
40
34
Create low cost subsection in website
Create a subsection service on Disney Worlds website to advertise the cancelled bookings and provide them at a low price, through this strategy Disney World can distribute both unused rooms as well as cancelled bookings to potential visitors prepared to place a last-minute booking for a low cost.
Further reinforcing the service concept that Disney world manufactures fun through providing inclusive packages catered for all.
*Operational managers can utilise benchmarking to deem the projects viability after 6 months
Reccomended solution
Cost benifit analysis of the reccomednation
Costs Benefits
Cost of hiring new staff = $0
Cost of website redevelopment= $75,000 (Britton, n.d.)
CBenchmark team = $750,000
Average executive salary = $150,000 X team of 5 (Glassdoor, n.d.)
total costs = $825,000
Last-minute booking.com increases sales conversions rates by over 50% (Wns, 2018)
Disney World has over 50 million google searches every month
Assume 1% conversion rate to store = 500,000 visitors
Increase of 50% sales conversion = 250,000
X $109 for a day pass = $27,250,000 in sales per month
Estimated total revenue = $27,250,000
Thank you
References
• Ahmadi, R., 1997. Managing Capacity and Flow at Theme Parks. Operations Research, [online] 45(1), pp.1-13. Available at: <http://faculty.smcm.edu/acjamieson/f12/ThemeParkManagement.pdf>.
• Ariel, 2018. What It's Like To Be A Disney Cast Member. [video] Available at: <https://youtu.be/eRxjcwwHeT0>.
• Barriersdirect.co.uk. n.d. Crowd Control Barriers | Safety Barriers | Barriers Direct. [online] Available at: <https://www.barriersdirect.co.uk/queue-management-c1119/crowd-control-barriers-c1006> [Accessed 20 April 2021].
• Britton, N., n.d. How Much Does It Cost to Redesign a Website? - Thrive Design. [online] Thrive Design. Available at: <https://thrive.design/how-much-does-it-cost-to-redesign-a-website/>.
• Conover, J., 1984. Price Effects on Consumer Behavior: a Status Report. Advances in Consumer Research, [online] 11, pp.633-635. Available at: <https://www.acrwebsite.org/volumes/6321/volumes/v11/NA-11>.
• Disneyholidays.co.uk. 2021. Disney World Tickets | Orlando, Florida | Walt Disney World® Official Site. [online] Available at: <https://www.disneyholidays.co.uk/walt-disney-world/tickets/?utm_medium=referral&utm_source=disneyworld.co.uk&utm_campaign=generic&utm_content=redirect> [Accessed 21 April 2021].
• Ekpenyong, E. and Udoh, N., 2011. ANALYSIS OF MULTI-SERVER SINGLE QUEUE. Pakistan Journal of Statistics and Operation Research, [online] 7(2), p.183. Available at: <https://www.researchgate.net/publication/233967097_Analysis_of_Multi-server_single_Queue_System_with_Multiple_Phases>.
• Glassdoor. n.d. Walt Disney Company Executive Director Salaries. [online] Available at: <https://www.glassdoor.com/Salary/Walt-Disney-Company-Executive-Director-Salaries-E717_D_KO20,38.htm> [Accessed 20 April 2021].
• Hse.gov.uk. n.d. Event safety - Crowd-management - Assess crowd safety risks and identify hazards. [online] Available at: <https://www.hse.gov.uk/event-safety/crowd-management-assess.htm> [Accessed 19 April 2021].
• Johnston, R., 1995. The zone of tolerance. International Journal of Service Industry Management, [online] 6(2), pp.46-61. Available at: <https://www.ingentaconnect.com/content/mcb/085/1995/00000006/00000002/art00004>.
• Lange, D., 2019. Attendance At Amusement And Theme Parks Worldwide By Facility In 2019. Parks and outdoors. [online] Statista. Available at: <https://www.statista.com/statistics/194247/worldwide-attendance-at-theme-and-amusement-parks/>.
• Lango, L., 2021. Disney’s Comeback Story Is Its Most Compelling Narrative Yet. [Blog] Investors Place, Available at: <https://finance.yahoo.com/news/disney-comeback-story-most-compelling-202804420.html>.
• Liliana, L., 2016. A new model of Ishikawa diagram for quality assessment. IOP Conference Series: Materials Science and Engineering, [online] 161, p.012099. Available at: <https://iopscience.iop.org/article/10.1088/1757-899X/161/1/012099>.
• Microsoft, 2015. Attention spans. Consumer Insights, Microsoft Canada. [online] Toronto. Available at: <http://www.prc.za.com/wp-content/uploads/2016/11/2015-Attention-Spans-Report-Microsoft.pdf>.
• Payscale.com. 2019. Disney World Hourly Pay | PayScale. [online] Available at: <https://www.payscale.com/research/US/Employer=Disney_World/Hourly_Rate>.
• R, G., 2014. how long are ride queues at Disney in July?. [Blog] Orlando Travel Forum, Available at: <https://www.tripadvisor.co.uk/ShowTopic-g34515-i19-k6533607-How_long_are_ride_queue_s_at_disney_in_July-Orlando_Florida.html> [Accessed 21 April 2021].
• Smith, T., 2010. This Day in History: Walt Disney World Resort Officially Opens – 1971. [Blog] Walt Disney World Resort, Available at: <https://disneyparks.disney.go.com/blog/2010/10/this-day-in-history-walt-disney-world-resort-officially-opens-1971/>.
• Statista, 2020. Household income in the U.S. - shares of quintiles 1970-2019. [online] US Census Bureau, p.37. Available at: <https://www-statista-com.proxy.library.dmu.ac.uk/statistics/203247/shares-of-household-income-of-quintiles-in-the-us/>.
• Walt Disney, 2020. Disney Investor Day 2020. [video] Available at <https://thewaltdisneycompany.com/disney-investor-day-2020/>.
• Wns.com. 2018. Case Study: lastminute.com Increases Sales Conversion Rates by Over 50 Percent. [online] Available at: <https://www.wns.com/insights/case-studies/casestudydetail/178/increased-sales-conversion-rates-by-over50-percent-for-lastminute>.
Appendicies
Figure 1: Pareto Analysis (Gathered from independent study)
Figure 2: Attendance at amusement and theme parks worldwide by facility in 2019
