Six Flags Entertainment Corporation Overview
Six Flags - which was founded in 1961 - is the world’s largest regional entertainment theme park operator that operates in theme and water parks Business. The company operates 18 parks across North America, 16 parks in the United States, one in Mexico City and one in Montreal, Canada - compared to 29 theme parks in 2006 - and generated $1.1 billion in revenue. For more than 50 years, Six Flags theme, water and zoological parks offer complete family-oriented entertainment experience from industry-leading thrill rides to water attractions, themed areas, children's areas, parades, concerts and shows, restaurants, games and merchandise outlets. Six ...view middle of the document...
Another strategy that was adopted by Six Flags and positively associated to the company success is licensing strategy. The long-term licensing agreement with DC Comics and Warner Bros. Consumer Products that allows the company to market its parks through them.
However, there were many factors that affect Six Flags business performance: Six Flags Business is seasonal business where 85% of park attendance occurs in the second and third quarters of the year, the business competition was very high especially with the strong competitors in recreation facilities and the outdoor theme parks where weather is affecting the business. Six Flags was earning profits till 1998, after that the net losses affected the company and its market share price dropped drastically. The long term debt had increased that weakened Six Flags financial position.
2005 & 2006 Strategy & Operations
Six Flags had a weak competitive position in its theme and water parks resulting in poor performance, sales were down and profits were becoming losses. Six Flags shareholders through Daniel Snyder decided to step in and stop the bleeding by the turnaround strategy which is part of retrenchment strategies.
The major competitor of Six Flags is the Walt Disney Company. In 2003, Disney’s amusement parks had a combined attendance of almost 97 million and revenues of U.S. $6.4 billion. Six Flags is the second largest theme park operator in the United States. Approximately 44 million people visit the company’s 32 North American parks each year, and in 2003 Six Flags had revenues of US $1.2 billion. More than half of Six Flags sales are attributable to gate receipts, with the remainder coming from merchandise and food. Six Flags has a competitive edge over its competitors in terms of accessibility - in the mid-2000 - approximately 98 percent of the U.S. population lived within an eight-hour drive of a Six Flags location.
The mission of Six Flags was inappropriate and not providing a unifying theme and it was “a collection of individual amusement parks”. It is clear that the new young management looked at the mission and objectives of Six Flags and clarified what they want to accomplish in the future. The end result was that Six Flags management chooses strategies that incorporate clear objectives and a mission statement.
The organizational structure for this Six Flags is the SBU Structure. In this type of structure, each SBU is headed by a group of executives different from the others and these executives report to the head of corporate. Each SBU operates as an independent profit center with their own profit/loss responsibility and they are all organized internally. One of the largest advantages of using this type of structure is that it facilitates the complex set of operations used in running an amusement and entertainment park. It significantly reduces the overload of information and allows the process of communication within the company to grow and expand.
The new Six Flags management...