Location Analysis : Legoland Malaysia Location analysis is an important decision and should not be taken lightly. The physical location of business functions is an important part in the supply chain strategy of any company. Many companies such as Hard Rock, Universal Studios, Disneyland and Lego are expanding their business to Asian Countries such as Malaysia, Hong Kong and Singapore.
There are a few reasons why these businesses are investing outside of their home countries include: improved market access, reduced operating costs, sources of raw materials, consolidated operations, development of new product lines, improved productivity, develop new technologies, improved labor force access and reducing the risk. This report will discuss about the location decision of Legoland Parks in Johor Bahru, Malaysia. Legoland Malaysia is set to open by late 2012 in Johor Bahru at Nusajaya, Iskandar Malaysia Economi
...c Region.
This will also be the first Legoland Theme Park in Asia and sixth in the world after Denmark, Britain, California, Florida and Germany. The massive 76-acre (31 hectare) project is brought together by IDR Resorts and UK based company, Merlin Entertainment costing a RM750 million joint venture. Merlin Entertainment will design and operate the park which will be the centerpiece of a 145-acre integrated complex with a gross floor area of 5. 5 million square feet that will include a lifestyle retail center, offices, hotels, serviced apartments and residential units.
Basically there are five factors of the location decision for Legoland to expand its business in Malaysia namely the transportation factors, the availability of labor, the market situation, Malaysia’s government policy and facility in the local community. The reason Johor been chosen is to complement the Universal Studio Singapore,
since Singapore is just next to Johor. Easy access between Johor and Singapore using highways will attract visitors from Singapore.
According to the plan, other than highways there will be a MRT station that is planned to open next to the theme park connecting Singapore and Johor. The available factors of road facilities and highways connecting all the states of Malaysia up to Thailand is one of the factor Legoland expand its business in Malaysia. This is because the road is a major network to investors to facilitate the production process, construction process, and also access to the public or visitors. Labor is very important to any business for the production and operation process.
Since Malaysia labor rate is among the cheapest among Asian countries and unemployment rate of 3%, as at January 2012, it becomes one of the factor Legoland chose Malaysia to expand their business. There is no saturation of theme parks in this region, so there is still lot of growth for theme park development. LEGOLAND Malaysia will play a significant role as a major tourism destination for the region and is currently working to establish strategic alliances with several business partners in bringing both foreign & domestic tourists.
In terms of facility and strategic location, LEGOLAND Malaysia will be the centerpiece of Medini Lifestyle (formerly known as “Medini North”), the lifestyle and entertainment hub in Medini Iskandar Malaysia, which will also feature lifestyle retail mall, commercial developments, office buildings and hospital. The government body is responsible for attracting investors to invest in Malaysia. The body is responsible for promoting the economy of a country as a major destination for investors to invest.
Other than the
responsibility to attract investors, support and government involvement is also another important factor. With the involvement of Temasek Holdings and Khazanah Nasional Bhd embark on two projects within Medini, the 650-hectare township development within the Iskandar Development Region in South Johor. It is clear that partnerships, alongside the government's increased involvement in the private sector, are crucial to the success of Iskandar Malaysia and a reason for Legoland to expand its business in Johor, Malaysia.
