SeaWorld Entertainment Inc (Dissertation Introduction Sample)

SeaWorld Entertainment Inc.
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Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc371022130 \h 3Organization Overview PAGEREF _Toc371022131 \h 3Porter’s Five Forces PAGEREF _Toc371022132 \h 7Competitive rivalry PAGEREF _Toc371022133 \h 7Power of customers PAGEREF _Toc371022134 \h 8Threats of substitutes PAGEREF _Toc371022135 \h 8Threats of new entrants PAGEREF _Toc371022136 \h 9Suppliers PAGEREF _Toc371022137 \h 9SeaWorld Entertainment Inc. SWOT Analysis PAGEREF _Toc371022138 \h 10SeaWorld Entertainment corporate strategy PAGEREF _Toc371022139 \h 11Risk assessment PAGEREF _Toc371022140 \h 14Recommendations PAGEREF _Toc371022141 \h 14References PAGEREF _Toc371022142 \h 16
Executive Summary
SeaWorld Entertainment Inc. is one of the major theme park and Amusement Companies in the US. The company operates eleven theme parks in different parts of the country. Its attraction products feature marine parks, garden parks, discovery coves and amusement shows among others. The company’s products target the whole family and provide entertainment to a wide market range.
I recommend lending to the company. However collateral for any borrowed funds should be provided. If this is not possible, the company should provide a guarantee for any funds borrowed. The company should also provide assurance to raise its credit rating from B+ to the As.
My recommendation is based on the following;
* The company’s ventures are low risk, as is the general theme park industry
* The company has set a trend of increasing revenue, income and profits in the last five years.
* The company has recently listed on the New York Stocks Exchange and therefore has a stronger capital base.
* The company has good growth opportunities.
* Strong completion from other players will keep the company management active in investing in new products.
* The company has a well thought out corporate strategy and is already enacting it.
Organization Overview[Accessed from /Archives/edgar/data/1564902/000119312512515221/d448022ds1.htm#rom448022_12 on 31/10/2013]
SeaWorld Entertainment Inc. is a family entertainment company that operates several theme parks in the US. The company was started in 1959 and was initially known as Busch Entertainments. It is headquartered in Orlando Florida and owns and operates eleven theme parks in different parts of the country. Under its SeaWorld brand, the company has several marine parks in Orlando, San Diego, and San Antonio. Other theme parks owned by the company are located in Pennsylvania, Virginia, California and Texas. The company adopted the name SeaWorld Entertainment in December 2012, and was incorporated in Delaware on October 2 2009.
SeaWorld Entertainment is one of the leading theme parks in the country. The theme parks operated by the company provide guests with an educative and interactive experience while allowing them to enjoy the natural settings of the parks. The company keeps more than 67,000 species of both terrestrial and marine animals in the eleven parks that it operates. Most of the company’s theme parks feature rides and a large array of shows and interactive attractions that appeal to a large demographic audience. The company has also started to participate in media entertainment and other consumer products.
In the year ending December 2012, the company hosted more than 24 million guests in all its theme parks. Among these guests, there were more than 3 million guests from more than 55 other countries. In the same year, the company’s revenue totaled over 1.4 billion dollars. Net income for the same period was over 77 million dollars. The company reported increasing revenues and growing profit margins. This was in part due to the company’s approach to capital expenditure which is very closely regulated. This aspect of their business model, coupled with well controlled working capital management has allowed the company to report strong revenues as well as continuous and recurring cash flow. The company’s portfolio includes the following braded parks:
* SeaWorld. This is one of the most well recognized theme parks in the world. The parks feature marine animals as well as shows conducted in specially designed amphitheaters. Under this brand, the company operates theme parks in Orlando, San Antonio and San Diego. Most of these parks are ranked among the most visited entertainment spots in the country.
* Busch Gardens. These are theme parks targeting the whole family. They are designed to entertain the whole family and to immerse the guests in exciting and exotic geographic setting. The gardens feature several amusement activities such as rollercoaster, swings and picnics. The company operates Busch gardens in Tampa and Williamsburg. The Williamsburg Busch garden has been named the most beautiful garden by the National Amusement Park Historical Association for 22 consecutive years.
* Aquatica. These are branded water parks that provide premium destinations for the whole family. They feature water attractions as well as entertaining and educative presentations of marine life.
* Discovery Cove. This is a reservations only, marine day-resort located adjacent to the Orlando theme park. The resort caters for more than 1300 guests daily. It features entertaining activities such as swimming with dolphins and an underwater reef walking tour.
* Sesame place. This is a theme park based on the television show Sesame Street. The park allows parents and children to share imaginative experiences. Attractions include water slides, colorful shows and furry friends among others.
SeaWorld Entertainment Inc. completed its Initial Public Offering (IPO) in April 2013. In the IPO, the company offered 29.9 million shares of common stock at $27 per share. The stock was listed in the New York Stock Exchange. According to the company’s President and CEO, Jim Atchison, the company expects to record revenue amounting to $1.5 billion in the year 2013.
SeaWorld income statement for the last three years is as shown in table 1below. Table 2 shows the company’s cash flow for the financial year ending December 2012.[Nasdaq 2013:/markets/ipos/company/seaworld-entertainment-inc-895907-71486]
Income Statement (millions)

2012

2011

2010

Revenue

$1,423.752

$1,330.774

$1,196.103

Gross Profit

$578.684

$530.277

$424.403

Operating Income

$226.789

$144.317

$57.741

Net Income

$77.444

$19.113

$-45.464

Table SEQ Table \* ARABIC 1: SeaWorld Income Statement
Cash Flow (mil)

2012

Cash at the beginning of the year

$66.663

Net Operating Cash

$303.513

Net Investing Cash

$(204.318)

Net Financing Cash

$(120.183)

Net Change in Cash

$(20.988)

Cash at end of the year

$45.675

Table SEQ Table \* ARABIC 2: Cash flow for the year 2012
The company is rated as a low to medium risk venture.
In the first quarter of 2013, the company reported a 12% increase in revenue compared to the previous year’s first quarter. The total revenue for the trading period was 238 million dollars. Although the company did not record a profit during this trading period, the net loss decreased by over 5 million dollars compared to the same trading period in 2012. Total revenue per capita/per guest also increased by 10%.
According to the Wall Street Journal’s market watch, the company has recorded a continuous rise in its gross income for the last five years. Sales and revenue have also recorded a similar trend. (Market Watch 2013)[Wall Street Journal Market Watch: /investing/stock/seas/financials]
Porter’s Five Forces[Pierson M, 2011]
Competitive rivalry
The US theme park industry is made up of five major players. These are: Six Flags, Cedar Fair, SeaWorld Entertainment, Disney Parks and Resort, and Universal Parks and Resorts. All of these organizations try to stay ahead of the others by introducing new and unique experiences in their portfolio. There is great competition and rivalry between the players in this industry. Direct competition can be seen in places like Orlando where Universal’s Orlando resort, Sea World Orlando and Walt Disney World compete directly against each other. There is great rivalry and completion in the pricing of tickets for the parks. Most of the prices are in the same range with as little as a $10 difference between all three theme park prices.
Competing operators also compete for sponsorships from companies such as Coca-Cola in order to discount their ticket prices. They come up with creative ways to run promotional campaigns. For example a theme park operator can partner with a consumer company such as Coca-Cola, so that when a guest takes a can of coke to the ticket office, they get a discount on the ticket price. Great competition is also witnessed in the use of new technology and introduction of new attractions. For example when Disney World introduced the ‘Fastpass’ system to reduce guest waiting time, many other theme parks were quick to follow with their own versions of the same. When Harry Porter was introduced by Universal Parks and Resorts, many consumers were eager to see if other theme park operators would introduce a new attraction. Soon after, Walt Disney World announced the expansion of its Magic kingdom theme park.
New entertainments, resort offerings, amusements and other attractions are introduced every year by theme park companies to attract customers to their parks. There is great rivalry between the industry players striving to remain relevan...