Summary of the Case and Result
The Walt Disney Company, home to Mickey Mouse, Donald Duck and other iconic characters, has a stellar reputation in many parts of the world for its family-friendly entertainment offerings. The company’s parks and resorts division operates theme parks in five global locations, including a recent $1.8billion park in Hong Kong. Disney’s fabled studio entertainment unit has an illustrious history in both animation and live-action features. More recently, Disney has enjoyed massive hits with live-action features. These include pirates of the Caribbean and its sequels as well as classic American fare such as the TV show High School Musical. Despite high worldwide awareness level of the Disney brand, as of 2006 only 25 percent of the company’s revenues came from outside the United States. Historically, the Disney team has created products at its headquarters in Burbank, California and then exported them to the rest of the world. Now, as the company targets China, India, South Korea, and other emerging markets, it is departing from its “one size fits all” approach. One factor driving the strategy change: the first-year visitor count in Hong Kong fell short of the target figure of 5.6 million people. This prompted company executives to step up efforts to educate the Chinese about Mickey Mouse, Donald Duck, and other Disney characters. In Hong Kong, Disney officials were slow to recognize that Chinese vacationers who live on the mainland often book package tours. Tour operators choose restaurants, shopping opportunities and other destination that generate the highest fees and commission. In 2009, amidst the global economic downturn, ongoing challenges at Hong Kong Disneyland, Disney’s Parks and Resorts division announced plans for a new $3.6 billion park in Shanghai. Shanghai Disneyland is an important element in Disney’s strategy for penetrating the local market. However, the proposal does not address Disney’s need for increased media...
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