case study of the Asian Disney market

 case study of the Asian Disney market

Abstract

This paper looks keenly into the case study of the Asian Disney market. The article explores the strategic issues, challenges, and in-routes to the Asian market. The paper defines distinctively how the Disney Company handled its problems and service delivery in order to meet the market demands.

The paper gives an in-depth analysis using the Decision Matrix Analysis

Disney’s expansion to Asia posed a myriad of cultural challenges which the company executives had to make tight and carefully thought decisions in order to exploit the potential growth market fully. In this paper, we use the Decision Matrix Analysis to analyze the possible challenges posed by Disneyland entering the Asian market. According to Park et al. (2009), a Decision Matrix is a chart flow that enables the individual(S) to systematically identify, analyze, and rate the strengths of types of information. The following are the cultural challenges posed by Disney’s expansion to Hong Kong and China mainland:

• The company’s decision to include shark fin soup in its delicacies angered the environmentalists; therefore, they had to remove it from the menu.
• The Park experienced a mass influx of visitors to Hong Kong in the New Year 2006 that was not foreseen by the company authority, which led to negative coverage on the media since some visitors were turned away.
• The Asian people are loyal to their local business attractions. They preferred local attractions; Everland theme Park and Ocean Park. These parks had more visitors compared to Hong Kong Disney Park.
• The language barrier, Disney needed to be culturally sensitive. Therefore, the management announced that the Park would be a trilingual having; English, Cantonese, and Mandarin.

A scale of 1 to 5 will be used to grade the challenges in the Decision Matrix Analysis.

These variables are culturally influenced by the above-stated challenges. They include; language, large numbers of visitors, food, and loyalty.

Table 1.

Decision Matrix Analysis table on the challenges of Disney expansion to the Asian market.

Scoring:   5= high

3=medium

1=low

How were the challenges you choose differently than the difficulties of euro Disney?

The challenges faced in Euro Disney are slightly different from the Asian Disney due to the prominent cultural and demand markets. This paper tries to highlight how different the two were.

Disney euro faced opposition from French communists and intellectuals, and a theater director Ariane, said it was a cultural Chernobyl. The farmers also protested as part of the contract, which was signed did not give profit to the farmers selling their lands. The farmers were unwilling to get off their productive areas, which they had known as their source of income. The French citizens as well did not understand why Euro Disney banned wine in its restaurants, the company softened their stance on banning wine in their restaurants and gave in to the demands of the locals. Whereas Disney Asia, specifically Shanghai Theme Park, which had included shark fin soup in their menu, faced opposition from the environmentalist. Shanghai Park was forced to remove it from their list after complaints.

The language barrier by the workers in Disney Euro also raised issues among the French nationals. The pronunciation of some French words can be such a task. Non-French citizens had problems pronouncing aspirated “h.” Euro Disney sourced some of its staff from around Europe. For instance, the Renault Car Company was angered by a receptionist who, when welcoming people, used the word “Audi,” which is a German brand car. Renault thought that the receptionist was advertising for this company, whereby the Renault car company partly sponsored the building of Euro Disney. Whereas in the Asian market, the Disney theme park resort to using English, Cantonese, and Mandarin languages, respectively, to break the language barrier. The language barrier seemed to affect the Euro Disney theme park, mostly.

The company set strict grooming behavior, which, according to the French, it was against the individual’s liberty. Several potential workers opted not to work at Euro Disney since they were not willing to change their grooming aspects. Although it should be noted that other people went for interviews. The labor movement protested against such rules and tabled its presentation to the ministry of labor. The French citizens were not impressed by this issue. Hofstede (1984) says that cultures are significant determinants in the business industry.  In the Asian market, Disney theme parks experienced a different challenge, and the customers tended to be loyal to the local theme parks. For instance, in Hong Kong, the two local parks received a higher number of visitors compared to Disney Hong Kong Park.

What role does culture play in the location choice of Disney theme parks?

Culture defines people’s believes and traditions. According to Ankara and Proverbs (2005), when a new company is establishing itself in a new environment, it should consider aspects such as material culture, cultural preferences, the language is spoken, social organization, ethics and values, and religion. Disney park management from the case study went for a metropolitan place; with the diversity of cultures, it can attract customers. Culturally the Asians are loyal to local parks; therefore, Disney parks prefer urban areas. A metropolitan area offers a wide range of customers, and in such places, rarely would the community complain about the degrading of its culture.

Why was the Disney Shanghai Park controversial?

The Disney shanghai park was controversial in the following ways. Firstly, it was feared to limit the progress of the Hong Kong park. The Hong Kong Park was developing not yet to reach its potential, and a Shanghai Park would take its customers. It was predicted that the Shanghai Park would otherwise deepen the financial woes of the Hong Kong Park given that Shanghai Park will attract several people from mainland China.

Secondly, Disneyland Shanghai was built the size of Disneyland Hong Kong thrice. Therefore, it was made with many facilities that exceed the Hong Kong one, which implies customers will experience multiple services from a single place. Also, its capacity can allow it to hold multitudes of people who, in turn, will raise reasonable profits. The Shanghai park capacity can keep visitors who travel in large numbers. Thus it will attract more visitors denting any hopes for the already financially sinking Hong Kong Park.

Moreover, visitors from China mainland will prefer shanghai Disneyland to Hong Kong Disneyland since there are no visa issues while crossing borders. This will result in large numbers of visitors trooping to Shanghai Park, who want to avoid cross border torrid checks.

What were the risks and benefits of the project?

Risks

China mainland was a potential market, although not yet tested. The city of Shanghai was a potential market with a quality population. The city was well connected, employing transport with the nearby towns offering a good number of potential customers. The market, although had previously faced by economic go slow, the Disney management was upbeat that it would work, therefore taking that risk.

There was already an established Universal Studios new theme Park that would offer stiff competition. Despite the imminent competition, Disneyland went ahead with its plans to develop the Park. They took the risk that as much as there’s another company, there is a chance of prosperity and selling itself in the market.

Benefits

After the completion of Disneyland Shanghai, it is estimated that it created more than fifty thousand jobs. The job creation helped revive the Chinese economy that was struggling. Through job creation, it improved the livelihoods of the workers and their dependents.

It stabilized the Chinese economy. People were enthusiastic that tickets were sold for the two weeks some months early before the official opening of the Park, also a hundred thousand people shopped from the malls despite not officially opened. The earnings from Disneyland were shared according to the agreed percentages and were used to finance other government projects helping the government not to go into debt.

Conclusion.

In conclusion, business requires determination and constant efforts to realize success. Despite the challenges and other barriers that the Disneyland Company foresaw, it still made efforts to enter the Asian market. According to Jonathan and Fred (2018), the fact that some of the theme parks in the Asian market are struggling there is the confidence that they can grow due to the rise of the middle class, thus making it a prime market for such businesses. The Asian market also provides ready clients thanks to its robust population in recent years.

References

Ankrah, N. A., Proverbs, D., Antwi, A., & Debrah, Y. (2005). The influence of organizational culture on contractor performance. In Proceedings of the CIB W (Vol. 92, pp. 373-381).

Hofstede, G. (1984). Culture’s consequences: International differences in work-related values (Vol. 5). Sage.

Luthans, F., & Doh, J. P. (2018). International Management: Culture, strategy, and behavior. New York: McGraw-Hill.

Park, H. Y., Falcone, G., & Teodoriu, C. (2009). Decision matrix for liquid loading in gas wells for cost/benefit analyses of lifting options. Journal of natural gas science and engineering, 1(3), 72-83.