Introduction
The full name of the world-famous Disney is the Walt Disney Company, named after its founder Walt Disney.
It is a large international company with its headquarter in Burbank of America. Its main business covers entertainment program production, theme parks, toys, books, computer games, and media networks. Today’s Disney is engaged not only in the animation film industry but also in many industries as Disney watch, Disney decorations, Disney dirndl, Disney bag, Disney fitting, Disney stuffed toy, Disney electronic product and so on. Because most people grew up with Disney animated films, all industries Disney invested were prize by customers and won fruitful business valves.
Different Financial Investment Methods in the Overseas Theme Park
Tokyo Disneyland
Tokyo Disney is the most visited theme park in the world. Also, it is the only Disney park does not own by the Walt Disney Company. Actually, in the early 1970s, the Japanese had proposed a joint venture plan with Disney Company but the plan had not be accepted due to two major reasons. The reasons are as follows: The first reason is that it is a tremendous gamble for the Walt Disney Company to place Disneyland in Japan. It was the first time theme park outsides the United States and there is huge cultural differences between east and west so they do not know whether the Japanese can adopt American culture well.
Meanwhile, Japan is a developed country. There are plenty of amusement parks and they would be potential competitors for Disney. Moreover, the consideration of capital operation is also a key problem for the Walt Disney Company. According to James(2003), the cost of constructing a theme park in the capital will be very high that it will generally be more than a hundred million dollars and it will cost over 7 years before returning cost. While the Walt Disney Company has just completed the construction of the Orlando Disneyland in Florida simultaneously.
Therefore, the company was facing a shortage of funds that it is impossible for the company to collect so much money to build the theme park. Above all these reasons, the Disney company rejected to make a joint venture in Japan but signed a contract with three Japanese companies called Mitsui property Corporation, Chiba Prefecture government, and Keisei Electric Railway Co., Ltd respectively. (Eisner and Schwartz (1998, p245)) Under this contract, Disney can have 10% of the admission merchandise and food income of Tokyo Disney as the royalties each year.
The only thing Disney needs to do is providing the master planning, design manufacturing, and training services during the construction. All the construction coasted more than 650 million dollars. But all of these premiums would be paid by OLC companies. The Disney company just needs to undertake the least risk and it can get a considerable profit by making licensing.
Paris Disneyland
Disney wanted to gain in on the profit and quickly invested in Paris which was considered the most tourist density area in Europe and the French are the largest European consumers of Disney Products.
Moreover, Disney gets so much help from the 2011French government. However, Disney decided to invest only $140 million to take 49-percent ownership because there are some problems that occurred before Disney signed an agreement with the French government. This is because people believed that the park would contribute to the destruction of French culture. So we believe that there will be more risk to investing more amount than $140 million. On the other hand, because of the help of the French government, there will be investors who want to buy the shares and make an investment.
Disney Theme Park in Hong Kong
Disney also saw a theme park in Hong Kong as a way to improve its relationship with and business opportunities in mainland China. Therefore Disney and Hong Kong government negotiated for nearly a year. The final agreement is for a joint venture: Hong Kong International Theme Park owned 57 percent by the Hong Kong Government and 43 percent by Disney. And because of this agreement, Disney got a chance to invest over $300 million in Hong Kong.
External Environment
Disney in Japan
Culture Factors of Success
First, after the world war, Japanese culture has worship and identity of American culture(Ding&Zhao,2009). A lot of Japanese have a sense of admiration and identity toward American culture, and what Disney represents is typical American culture. In this situation, there is no big obstacle for Disney to enter the Japanese market. Secondly, the Japanese advocate collectivism. This cultural characteristic of advocating group activity greatly promoted consumption; bring a lot of profit to Disney. Thirdly, Tokyo is the first oversea organization for Disney in Asia.
Its foreign culture full of mystery and has a strong attraction and appeal to Japan, which laid a strong foundation for Disney to develop overseas markets.
Disney Theme Park in Paris
The Conflict between Two Different Languages
The language is English at the beginning in the park, but French people always think French is the most beautiful language in the world, while English belongs to the people in low class. Therefore, asking the employees and tourists to use English in the park led to dissatisfaction and difficult communication.
Different Food Culture Caused Trouble
Disney policy of serving no alcohol in the park, since reversed caused astonishment in a country where a glass of wine for lunch is a given. Paris Disney has a lower profit from food and drink than other Disney, which is mainly because it thinks it wrong that Europeans don’t pay attention to their breakfast. Actually, French people are accustomed to having dinner with wine, which is regarded as a necessity in daily life.
Legal Factors
Disney neglects that the related French labor regulations are the main reason resulting in a higher salary in Europe than America.
There is a difference between French laborer law and American laborer law. In America, because of the seasonality of Disney theme park, the supervisors adopt the system of working per week and year to arrange the employees, make the employee’s distribution and management more flexible, meeting the customers’ requirements in the rush hour as well as lining with economic principles. However, this flexibility is not allowed in the French laborer law.
Adjustments
In October 1994, the former Euro Disney changed its name to Disneyland Paris, and now to Disneyland Resort Paris.
By 1995, Disneyland Paris started to attract more visitors and what began as a near failure for the Walt Disney Company has become more successful. In 1995, regulations of no alcohol are canceled. Food and fashion offerings changed. They opened with restaurants providing French-style food service, but we found that customers wanted self-service like in the US parks.
Disney in Hong Kong
Culture Factor
Most of the Chinese people don’t know much about this Disney, these cartoon animals, stories and themes, and Disney just decorate the cartoon animals in Chinese style blindly.
In Hong Kong, they only considered Chinese style in the park design, study so-called Chinese Feng Shui, actually they just know the surface of Chinese culture(Kingdoms,2006). Before knowing these and take disregarding Chinese consumption culture characteristics, just launch a strong marketing strategy, failure is inevitable.
Competitive Factors
Compared to Disney, Hong Kong Ocean Park is more popular with the local people and the Chinese mainland. It has more items in the park and more attractive to the tourists, thus it snitches many customers from Disney, which Disney cannot do anything but lose money.
Adjustments
Hong Kong Disney put forward a local plan according to its issues. it redesigns its products to the tourists in terms of Chinese culture. It can basically solve the cultural problems as well as the biggest problems in Disney before. In addition, Hong Kong Disney reset the prices for the tourists, which can make the park become various and greatly meet the tourists’ demands. Furthermore, Hong Kong Disney changed its marketing methods, making sure it can communicate with its tourists effectively.
Disney improves their marketing ways through more advertisements, movies, and slogans, helping the tourists know Disney culture better. After the adjustments, the customers know better about the Disney culture and show great interest to come to Disney. In addition, the number of customers is growing because of the increasing of Chinese mainland people and more items opened. In 2013, Hong Kong Disney begin to gain profit for the first time, the net profit is HKD 109 million.
New Disneyland in Shanghai
Geographic location To be establishing a new Disney theme park in Shanghai that will be a profit program.
Since the Hong Kong Disney theme park operation five years, that there are 45% of the tourist income from the mainland of China(Weiqu, 2012), and there are many potential tourists was limited by the laissez-passer to Hong Kong and most of the mainland of china tourist must spend a lot of time on the way when they come to Hong Kong, this reasons will lose a lot of customers that they cannot come to the Hong Kong Disney. As we know, China had a large amount of the population in the world, and most of the Chinese were interest in the foreign culture, undoubtedly the china market will be bigger than anyone Disney park in the world.
And the Shanghai geography advantage is very clear, most of the Chinese area under 3 hours to Shanghai by plane. That will be attracted most of the china tourists to come to Disney.
Complimentary Market
Shanghai Disneyland theme park and the existing Hong Kong Disneyland can be complementary. Secretary for Commerce and Economic Development Rita Lau (2009)said the two parks could even cooperate with each other in the future to tap the Chinese market. It can reduce risks. More importantly, the Chinese economy is growing fast and the Chinese market, with its huge potential, will be big enough to sustain two Disneyland theme parks.
In present, Pudong’s new gross domestic product amounts to an estimated RMB370 billion (US$53. 98 billion), roughly equal to that of Slovenia. Its GDP per capita is therefore around US$16,938. And the transportation is very convenient and developed transport.
Conclusion
After all our discussion, when to set up a Disney oversea, the advantages overweight the disadvantage, and from the international business theory, to set up the Disney park oversea can expand sales, acquire resources and minimize the risk.
Of course, when the business expanding, Disney had faced many problems in the operating, but these experiences make Disney operating become better to deal with the problems in the future. According to the experience before, to set up a Disney abroad is a good choice, and to have many experiences before, Disney must be had some adjustments when they are set up the park in a different country.
Recommendations
From France and the Japan Disney park, Disney should learn some experience from these two places. From these two cases, the main problems that it is culture shock.
In France, they did not give most respect and blend in the Disney theme park, but in the Japan Disney, the Disney park had a response the Japanese culture, to blend some of the Japanese cultures inside, to reduce some conflict in the park, that’s the reasons why Japan Disney park. So, the Shanghai Disney park, can learn some experience from the Japan Disney, especially from the culture, like the language, respect the Chinese living habits, follow the local people’s activity to make some change.
References
- Ding. YP&Zhao. P, 2009, Dishinikuawenhuaguanli, Science & Technology Information 1th 2009.
- Eisner, M and Schwartz, T (1998). ‘European Disney’, work in progress, pp. 244–245.
- James, K, 2003, Marketing mistake and success, viewed at 4th April, Kingdoms,2006, Fengshui in Hong Kong Disneyland, viewed 1st April, 2013, Magic,2012 Hong Kong Disneyland, viewed 1st April, 2013, http://www.hongkongdisneyland.com.cn/hkdl/zh_CN>.
- Rita Lau(2009), Disneyland parks in Hong Kong, Shanghai can be complementary: official, 1st April 2013.
- Weiqu, (2012), the percentage of the mainland of china tourist visited the Hong Kong Disney, Available at: http://news. cntv.cn/20120211/102324.shtml, Accessed at 20 March 2012.
