Walt Disney Parks and Resorts

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Walt Disney Co. faced the challenge of building a theme park in Europe. Disney's mode of entry in Japan had been licensing. However, the firm chose direct investment in its European theme park, owning 49% with the remaining 51% held publicly. Besides the mode of entry, another important element in Disney's decision was exactly where in Europe to locate. There are many factors in the site selection decision, and a company carefully must define and evaluate the criteria for choosing a location. Global marketing strategist considers the geographical scale, cultural differences, language, and overall perspective needs; more particular decision criterion should focus specifically on the country, type of industry, the company and the product or services. In today’s growing diverse society it only makes since to take the global approach to marketing when determining strategies to gain market entrance. Walt Disney used these different marketing platforms to establish contact with different market segments capturing all ages both children and adult. This is just one of the many reasons why they are so successful today. This case introduces strategies that Walt Disney took to gain entry into different markets specifically entrant to: Tokyo, Hong Kong and Paris. This case also describes the many challenges that were faced by the company and the uniqueness’s of each towards each entry area. Aside from the entry barriers or the differences between the markets “culture, economic situations” Walt Disney brought new opportunities (employment, market opportunities for local economy, new tourists) to the countries that they conducted business with. Walt Disney has a very strong product offering (branding), quality culture climate, and provided part-time and full time jobs to the local economy. What were the lessons learned from previous entry opportunities: 1. Timing is everything – balance entrance with economic offsets 2. No risk equals low revenue returns

3. Be careful what you agree to
4. Minimized the design changes to reduce construction costs Country Specific:

Local Economy
-Loss of Jobs 6% Unemployment
-Removal of British Colonial – decrease in tourist activity -Foreign exchanges – reduction of revenue going into the country - Hong Kong Government

Agreed to conditions of JV:
-Royalties 5%
-Base (2% Gross revenues) and Variable (2-8% EBITDA) Management fees ---Refused free land to US
---Expressed demand for paying taxes on profits
---Intense negotiations

Competition
-Ocean Park.
---Attracts 35,000 people a day

Culture - Not reviewed in case

Politics
-Govt. needs away for bringing back the visitor to the country, but yet are no working with Walt Disney, to make the venture profitable.

Barriers to Entry:
-Construction - Project split into two phases – two theme parks and sets of hotel resorts ---Phase I
Infrastructure Costs
-HK$13.6 billion
-Land Premium’s - HK$4 billion
---Phase II
Expansion - project 2014

Company – Walt Disney
-Limitation on demands for agreement
-Free land
-Tax immunity

Product or services
-Fraud duplications of merchandise – negative impact on sales -Distribution methods for services
-Disney films – Beijing Govt. involvement “quite censorship”.

Cost analysis
-Debs of the projected were dependant upon multiple levels of fall out monies: -Tourists – increased visitation – estimated projections suggest requirements for high tourists activity -Locals – their spending habits

-Would the agreement pay the dividends
http://manzanosbusinessblog.blogspot.com/2009/02/entry-modes-in-forein-markets.html The Walt Disney Company was one of those many American organizations to expand on foreign soil. Its first foreign venture proved to be so successful that the decision was made to further expand abroad. This next foreign expansion experience, named Euro Disneyland did not prove to be the successful venture that had been anticipated by its creators. Disney reported $36.1 billion...
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