When organizations make location decisions $($see Chapter $8),$ being near competitors $($clustering$)$ is often seen as a plus. Here in Orlando, the capital of theme parks, we take our cluster very seriously. After all, the parks are the main economic drivers and top employers. Disney$$s $5$ parks employ some $77,000$cast members.$$ Universal Studios parks another $28,000,$ and SeaWorld has $22,100.$ Then there is Legoland, Gator Land, and others.

Riders on the Expedition Everest roller coaster at Walt Disney World$$s Animal Kingdom park.

When the Universal Epic Universe theme park opens next year, it will add $750$ acres populated by Harry Potter, Donkey Kong and dragons to the company$$s Central Florida resort, which now includes $3$ theme parks: Universal Studios, Islands of Adventure, and Volcano Bay Water Park.

Less than $10$ miles down the road is Walt Disney World, the biggest part of Disney$$s most important profit engine, and the stuff of dreams for tens of millions of visitors a year. Its $5$ parks include: Magic Kingdom, Animal Kingdom, Epcot, Hollywood Studios, and Typhoon Lagoon Water Park.

The competition is intense, writes The Wall Street Journal $($April $13-14,2024).$ To understand the stakes for both companies, consider this: A common vacation itinerary includes $3-4$ days at Disney World and $1-2$ days at Universal. If Universal can now persuade families to spend one more day at its parks instead of at Disney, it could nab hundreds of millions of dollars in annual revenue. A family of four visiting Disney World for a $5-$day, $4-$night stay with Park Hopper tickets, a quick$-$service dining plan and a room in a moderate$-$tier hotel would spend upward of $$5,000,$ not counting the cost of souvenirs or add$-$ons such as the Genie$+$ line$-$skipping service. Shortening the Disney leg by even a day would trim hundreds of dollars from their spending at the company$$s parks and resorts.

When Walt Disney World opened in $1971,$ about $5$ years after the death of the company$$s namesake founder, adult admission cost $$3\mathrm{.}50.$ Visitors could roam Magic Kingdom$$the only theme park on the property at the time$$and take in dozens of free attractions and performances.

Attendance has since snowballed. Universal$$s first theme park first opened in $1990.$ Islands of Adventure now attracts more than $11$ million visitors a year, while Universal Studios has about $10\mathrm{.}8$ million guests. Disney$$s Magic Kingdom, which has more than $17$ million annual visitors, has long been the world$$s most$-$visited theme park.

Why is clustering important in theme parks?

Describe a different cluster, one close to your college or home.

What is the EOQ?

Why is important for controlling costs?

What factors would you consider for locating a retail store?