10543224 Pestele / Swot Analysis Report

Executive summary

Dreamworld Australia is an amusement park located in Gold Coast, Queensland. The park opened in 1981 and is now one of the largest tourist attractions in Australia. As a marketing consultant for Dreamworld Australia, it is important to gain a solid understanding of the tourism industry in Australia to help develop a well-informed business strategy for a new product launch.

The report discusses the PESTELE analysis, which identifies the main external factors that influence an organization's decision-making. These factors include political, economic, sociocultural, technological, environmental, and legal factors. This analysis was conducted on the tourism industry as a whole however Dreamworld has been used to demonstrate the effects these factors have on a company when introducing a new product to the market.

This report also demonstrates the effects of direct and indirect competitors within a market and incorporates the use of a SWOT analysis conducted on Dreamworld to show how companies can identify strengths and weaknesses of themselves and opposition to provide a competitive edge in the market.

Based from the outcomes of the PESTELE analysis on the Australian tourism industry and the SWOT analysis conducted on Dreamworld, two new products were suggested to be introduced to Dreamworld based on well informed research. The first addition is a festival ground in the Dreamworld park and the second was a metaverse room ran by green energy.

Overall, a thorough analysis of the Australian tourism industry is crucial for developing a successful business strategy for Dreamworld Australia's new product launch. Understanding current trends, consumer behaviour, and the competitive landscape can help the company position itself effectively and drive growth in a challenging and constantly evolving industry.

Mission, Key Goals and Core Customer Groups

Queensland is home to many of Australia’s leading theme parks that generate tourism within our borders. Dreamworld is one of these theme parks which features a variety of roller coaster rides, as well as an attached water park by the name of WhiteWater World. These theme parks are co-located at the Dreamworld Theme Park and are both owned by the Ardent Leisure group.

Dreamworld’s core business structure is to provide an exciting and magical environment for tourists to get lost in whilst being entertained by themed rollercoasters, water slides, wildlife and entertainers all in one spot to accommodate for people of all ages. Our vision is to be Australia’s most loved theme park, and our team are totally committed to our mission “to create happy memories that last a lifetime” by living by our team values which are great service, fun and celebration, efficiency and innovation, and safety and quality (Employment, 2023). Dreamworld have a responsibility to ensure the safety of its guests, employees, and the local community, and therefor safety is also a key goal for the company to achieve.

Dreamworld opened to the public in December 1981 which means it’s been open for over 31 years, and as of today it has more than 40 attractions in the park. Dreamworld attracts approximately one million guests annually and has a team of over 1200 individuals who perform a variety of roles such as operating rides, lifeguarding, engineering, entertaining, taking care of animals and many more (About Dreamworld, 2023). Dreamworlds target audience are mostly families with young children but the variety of amazing attractions also appeal to customers of all ages to come and indulge in the fun. However, they are also in the market for targeting visitors aged 18 and under all the way up to visitors who are 40 or older.

PESTELE Analysis

The PESTELE framework identifies the main 6 external factors that shape and influence an organisation and are used to help them make informed decisions to gain future benefits. In addition, Peterdy (2023) explains that a PESTELE analysis is a widely used strategic tool to assess the business environment where a company operates. The owners of Dreamworld, Ardent Leisure Group, would conduct a PESTELE analysis on the tourism sector in the Australian marketplace to identify information that will allow them to make stronger decisions for the future.

Political

The political factor refers to the aspect of control the government has over the industry. This may include legislation or policies put in place by the law that the industry has to follow. These rules can greatly impact the success of the industry and have a massive influence on the numbers. During the COVID-19 pandemic Queensland passed a law to shut its borders to tourists therefor diminishing the tourism industry. According to Lynch (2020), Tuesday will signify 250 days since the police started inspecting every passenger who disembarks at domestic airports and setting up roadblocks. This data shows that the flow of tourist has been put to a halt which means company’s operating within this industry would have lost their main customer groups, showing how the political factor can greatly affect their business.

Economical

The economic factor refers to factors such as inflation, exchange rates, customer confidence, cost of living etc, that have a direct effect on the industry. These topics can each greatly influence tourism as they are key factors on deciding whether a family or person can afford to treat themselves if they have a high consumer confidence with the current economic environment. McDonald (2022) reports that for the period of March 2021 to March 2022, the "trimmed mean" increased by 3.7% and the "weighted median" increased by 3.2%, which is lower than the "all groups CPI" increase of 5.1%. What this indicates is that the cost of living is increasing at 5.1% which is a larger inflation rate than usual. The situation described is leading to a surge in travel-related expenses and reducing the buying power of travellers, as noted in the Travel, Tourism & Hospitality report (2023). This will reduce the amount of tourism negatively affecting companies such as Dreamworld.

Sociocultural

The social factor refers to the social environment of the market such as trends and demographics. These factors combine to create opportunities for the industry to break into new areas of the market by creating a new product that appeals to a new range of customers. According to Siguaw and Enz (2016), changes in consumer preferences towards more immersive and interactive experiences have prompted theme parks to invest in new technologies and attractions in order to remain competitive. This suggests companies may need to adapt to changing trends in order to keep their target audience satisfied and attract new visitors. Adapting to these factors would help give them a competitive edge in a changing industry.

Technological

The technological factor refers to new advances in technology and equipment that can improve production techniques, communication and marketing within the industry’s operating environment. Through the advancements in technology house sharing is becoming much more mainstream within the tourism industry. Through the use of easy to access online websites and apps it creates an easy and safe platform for customers to use. As per the Technology Disruptors in Tourism report (2019), 41% of participants in a previous study concurred that utilizing sharing economy accommodation increases their travel frequency, mainly due to the social aspects associated with it. By using improved technology to open new ways of travel increases the flow of tourists benefitting companies in this field.

Environmental

The environmental factors are areas that are concerned with the external environment such as the use of raw materials, the pollution created and the effects on climate change. With growing concerns for the environment in modern concern this factor plays a huge role on consumer decision processes. Prideaux (2018) highlights that environmental degradation and pollution, particularly in coastal and marine areas, can have adverse effects on the tourism industry by diminishing the quality of the natural surroundings and harming the attractiveness of tourism destinations. In order for companies to keep tourists happy they must prove they are contributing to the environment in the best way possible maintaining their position as a positive role model to the public.

Legal

The legal factors refer to how the law may affect the way a business operates. This is important for the industry to understand as it provides guidelines on what is legal and what isn’t in order for the industry to be successful. Buckley et al. (2014) provide an example stating that alterations made to health and safety laws and regulations can affect the operations and safety of tourism businesses, such as theme parks. Especially following the casualties suffered at Dreamworld in 2016 legal ramifications on the health and safety sector of this industry has become a number one priority to protect riders and have them being confident in their safety.

Ethical

The ethical factors refer to ethical manners and norms the industry uses when producing and operating their product for the public. These practices carry great responsibility on the reputation of the industry as to how they represent their corporate social responsibility. Carson and Kerr (2018) conducted a study on ethical tourism practices in Indigenous tourism in Australia, exploring issues such as cultural appropriation, economic advantages for Indigenous communities, and the necessity for greater Indigenous involvement and control in the tourism industry, as exemplified by their research. They found that while Indigenous tourism has the potential to provide economic and social benefits to Indigenous communities, there are challenges that tourism practices are respectful and faithful. Raising the standards and becoming culturally and ethically responsible are incredibly important to encourage participation from more backgrounds increasing the amount of tourism within the industry.

Competitive Environment

Direct Competitors

Direct competition refers to companies that provide the same product or service as you, while indirect competition pertains to businesses that offer different products or services, but can still potentially fulfill the same need and achieve the same goal as your company (Keenan, 2019). Dreamworld’s direct competitors include other large theme parks such as Movie World, Sea World and Wet n Wild. All these theme parks offer the same products such as rollercoasters, waterslides, pools, shows and food services. Some examples of indirect competitors would include Australian Outback Spectacular, Slingshot Gold Coast, and iFLY. These would be classed as indirect competitors as they target the same audience however, they produce slightly different products that still aim to create entertainment and happiness for customers.

Market Share

SWOT Analysis

A SWOT analysis is typically conducted by a team of stakeholders involved in a business or project and is used to identify areas of improvement or to develop strategic marketing moves. The analysis evaluates the strengths, weaknesses, opportunities and threats of the business or project. To create a successful approach to entering a new market, once the SWOT analysis has been conducted it is important to analyse the results in a systematic manner to create a strategic plan.

The most critical strengths, weaknesses, opportunities and threats must be highlighted, organised into short- and long-term factors and then ranked on what has the highest impact or outcome on the business. Now the critical issues have been ranked and organised into categories goals, objectives and strategies can be implemented to address these areas. This can include allocating resources such as finances, personnel, technology, and infrastructure, in execution of the plans. As the plans are coming into effect it is important to monitor them and make adjustments necessary to ensure results are reached. After the plan is in full action it is key to evaluate the results against the previous goals set throughout the process.

For example, one of Dreamworld’s opportunities is having a large area of land available for expansion and the construction of new rides and entertainment. This gives them the chance to expand when a new trend of market begins to take off giving them a competitive edge in the industry over competitors who don’t have the immediate facilities to capitalise on an opportunity. From analysing this strength by conducting a SWOT analysis on Dreamworld stakeholders can target areas they see the most potential to benefit from in the future. They may also conduct an analysis on a direct competitor in an attempt to highlight their threats and weaknesses to try and establish a plan to capitalise on these specific areas.

SWOT ANALYSIS

STRENGTHS

• large variety of entertainment to suit everybody
• dreamworld has built a well known brand in the industry
• they are located in a popular tourist destination
• dreamworld provide its own accommodation facilitate
• skilled and experienced management team with a great track record

OPPORTUNITIES

• sheer size and capacity to expand for a crowing market
• can enter new markets attracting families or international visitors
• leverage the use of technology to virtually enhance visitor experiences
• collaborate with other tourism related business to create package deals
• growing demand for interactive experiences
• Increasing interest in eco friendliness and sustainable practices

WEAKNESSES

• suffers reputation of deaths from malfunction on water slide
• dreamworlds marketing have been limited when compared to its direct competitors
• dreamworld revenue is highly dependent on tourism which can be affected by various factors
• limited attraction during winter as entertainment facilities are suited for warmer conditions
• high operational and park running costs

THREATS

• major local competitors in same market
• loss of business due to economic factors
• natural disasters such as bush fires or floods can affect park operations
• health concerns during the global pandemic forcing the park to shut down completely
• changing consumer preferences and expectations
• new regulations and safety rules integrated by the law

Brand Extension

Brand extension is a marketing strategy that uses a pre-established brand name to introduce new products or services to appeal in a different product category. This strategy allows companies to capitalise on their brand recognition and customer loyalty and expand into new areas to promote and sell their products.

A recommendation for a brand extension for Dreamworld would be to capitalise on their opportunity to increase their size and add a functioning festival ground located on the site. As sociocultural trends in music festivals are growing interest, consumer willingness to pay for unique experiences such as seeing professional artists from all over the world perform live for them are a massive potential target audience. Dreamworld could seize that opportunity to diversify its brand into this area and add another dimension to its package. As Dreamworld strengths include its established brand and infrastructure, this allows them to leverage their brand name and provides a competitive edge over the likes of new festival grounds to attract customers and artists that want to perform on a big stage. Dreamworlds vision is to be the leading entertainment destination in Australia, providing memorable experiences that exceed customer expectations. The addition of a festival ground complies with the company’s vision and adds an extra tier of entertainment within the park.

Another recommendation for a brand extension at Dreamworld would be the addition of a metaverse zone that runs on green energy. A metaverse room is a virtual reality environment where people can interact with each other and objects through technology. This capitalises on the technological advancements that is a growing factor in the economy. Incorporating this may attract the likes of new visitors such as tech-savvy individuals and gamers. The use of green energy such as solar or wind power reduces Dreamworlds environmental impact and showcases its commitment to sustainability. That factor as well may contribute to this zone attracting environmental enthusiasts adding even more target audiences to the total. This extension also complies with the opportunity of leveraging the use of technology to virtually enhance the visitor’s experience. The opportunity to provide visitors with such a unique experience leaving them feeling like they’re in a magical world complies with Dreamworlds mission which is to create happy memories that last a lifetime.