GROUP MEMBERS1. Dotty Cinco2. Ma. Anna Chanese

Lescano3. Jessica Tabina4. Jerome Tumambing

TABLE OF CONTENTSI. Case Background_____________________1II. Statement of the Problem______________3III. Alternative_________________________3IV. Recommended Solution_______________3V. Answers to the case questions_____________________________4Question No. 1:________________________4Question No. 2: :_______________________4Question No. 3: :_______________________5Question No. 4: :_______________________5VI. Learning___________________________5

BACKGROUND INFORMATION

BACKGROUND OG INFORMATION

•Walt Disney Company is the world's largest park operator. In addition to the usual rides, games and food, it runs all its parks as theme parks - amusement parks that focus on a particular motif such as cartoon character or animals. Disney has five theme parks outside the United States namely: •Tokyo Disneyland, Tokyo DisneySea, Disneyland Paris, Hong Kong Disneyland and Walt Disney Studios (a movie theme park adjacent to Disneyland Paris).

BACKGROUND INFORMATION•Disney operates seven of the world's ten most attended amusement parks. Opened in Hong Kong in 2005 and in Tokyo in 1983 - which is the most attended of all parks today;•Disney is motivated to set up parks worldwide to increase its sales of goods as well as attendance to their theme parks. After lunched Hong Kong Disneyland in 2005, Disney has signed a letter of intent to create another park in Shanghai China in 2008 to attract tourist to visit Shanghai.

PROBLEM STATEMENT

1. How Walt Disney will be able to adjust to the local culture, norms, and even climate, in their operating regions.2. For the Shanghai Project, How will Disney be able to compete head to head with the thousands of other operating amusement parks in China. 

ANALYSIS OF ALTERNATIVES

For Shanghai Project

•Since more people go to city in east of China for the vacation, Disney could set up the theme park to other city in east of China; •Add Chinese culture element to the goods and building.

DETAILED RECOMMENDATION

•Conduct careful study of the potential market which includes: Risk, Behavior, Cultures, Economic conditions, Government policies and political situations, Business operations strategies

•Focus on regions that are great potential market

•Adjusting the brand to suit local taste without compromising it

•Disney needs to adjust to the climate issues by installing fireplaces, protecting waiting lines and placing a dome over the tea cup ride

ANSWER TO CASE QUESTIONS

QUESTION 1

What do you think motivated Disney to set up parks abroad and what might be the pros and cons for the Walt Disney Company. Like any other businesses, the primary goal of all for-profit organizations is to gain profit. It is inherent for any businesspeople - small scale or big scale- to expand when he sees things are doing well - the existence of a potentially sustainable market and growing demand for a product or a service. As for Disney, expansion of operations abroad meant a larger market base, hence larger profits. The presence and recognition of Disney's branding abroad also creates following for its future products/campaigns ensuring profits for the company.

QUESTION 1

Also, the creation of jobs and other indirect businesses in the host country is another notable advantage. However, like any other multinational companies, Disney had to face a lot of challenges when it expanded internationally. The management has to take a lot of failures/adjustments to ensure the sustainability of its operations abroad. For instance, the culture of the people of the host country was not carefully studied. This led to a lack of support from the locals of that host country which led to Disney's failure at the onset. Also, Disney's decision to stick to the branding worsened the locals' lack of support.

QUESTION 2

Why do you suppose Disney made no financial investment in Japan, one in $140 Million in France and one of over $300 Million in Hong Kong? The management of Disney probably projected the brand's profitability based on the perceived value of the people in Disney services/products in each country. In Japan, for example, since it has its own brand of cartoons (anime), the management may have not thought that Disney will be successful. In France and Hong Kong, on the other hand, Disney based its projections on the number of people visiting the location each year without considering the profile of these visitors. This then led to failure of expectations of profitable operations in these countries.

QUESTION 3

What factors in the external environment that contributed to Disney's success, failure and adjustments in foreign theme parks operations? Success: •Brand Popularity•They focus on the region where there is high market potential

QUESTION 3

Failure:•Not being able to analyze extensively the economic conditions of the regions;

•Not taking into consideration difference/diversity of cultures, climate, and political stability of their target regions.

QUESTION 4Should Disney set up a park in Shanghai? If so, what types of operating adjustments would it make there? Without taking in consideration that the construction is currently on going, we believe that still, Shanghai is a great location for another theme park.

China might have a negative track record of amusement parks, but China is still China. A tiger economy with a current state-based focus on promoting tourism and entertainment, Shanghai will surely attract huge number of tourists.

QUESTION 4China's demand for theme parks has been fueled by several factors, including China's growing middle class, which has money to spend but few options for leisure activity. A recent move by the Chinese central government to relax building permits for theme parks has also spurred development.

QUESTION 4

By 2020, China will outnumber the U.S. in parkgoers. Parks operated by the Shenzhen tourism company OCT Parks China already attract more than 26 million visitors a year, behind only Walt Disney Attractions, Merlin Entertainment Group, and Universal Parks and Resorts in total attendance, according to the AECOM study.

Therefore, in order to sustain the lead in the theme park industry, Disney, thru its best effort, must try adapt/incorporate more Chinese culture and/or characters to make the best out of Shanghai.

LEARNINGS

Mere statistics cannot project future profits. As for Disneyland Paris, they projected that the location, the number of tourists visiting Paris (compared to other parts of Europe) and local government's support would predict the success of the Disney brand in France. The management was not able to carefully study the culture of the people in that country. They were not able to consider how the population valued their culture which then led to its failure.