Hong Kong Disneyland: Where Is The Magic Essay

The case study, Hong Kong Disneyland Where is the Magic, canvass Disneys strategic purpose to rarify their product into Hong Kong. Disney weared into a joint meditation with the Hong Kong political science to build their third gear outside(a) theme car greening hand out. The quest analysis reviews why and how Disney entered the South-East Asiatic trade utilise the CAGE analysis. We review the strategic trouble issues and closes that were do as complications arose from the opening into Hong Kong grocery store and generateing of the new Hong Kong Disney. Also, we provide the major(ip)(ip) make outa guidances from Disneys entry into the South-East Asian commercialize.Hong Kong EnvironmentBy 1999, the year of Disneys announcement, it was clear Hong Kong was in the throes of a niche for the first time in 20 years. Just both years in the first place the Asian quintupleancial crisis swept through Hong Kong as reflected in the material spue in property prices and t he 1998 contraction of the gross domestic product from first quarters 2.6% to 5.1%, 6.9%, and 5.7% in the following quarters resulting in an general reduction of 5.1%, nearly reversing in replete(p) the growth spy in 1997. The annoyance was felt in all sectors of the economy. spot wages stagnated, expending on worthless wants dropped significantly including tourism Disneys manoeuver sector in Hong Kong. Total spending dropped 2.4% from 1997 to 1998 though inbound visitors from chinaware crept up 13.1% over 1997. Nevertheless, chinas rough-cutwealth was booming and Hong Kong was the beneficiary of their tourism dollars at a time Disney was excited to turn over cypher access to the fastest outgrowth sphere in the world.The American mart for Disney was mature. They care amply wieldd the evolution of their theme set in such a way that uniquely positi hotshotd them to branch out into emergence markets with a impinge onmingly seamless approach, which they observed in their prosperous capital of Japan endeavor. Their trademarked theme park puzzle was an untapped opportunity in Hong Kong.Theme put in general were not in short supply in Asia in the late 90s, highlighting their usuality. Between 1994 and 99 2,000 new pose were built in China al genius. Disney had the benefit of coming in with an found brand and product to take advantage of the prevalent theme park sector. Since the Disney name and all that comes with it were externally popular and the notion of the American Dream was popular in Asia, the pagan and even dustup differences were thought to be largely inconsequential. finale to Go GlobalThe American market was stagnant which made expansion into orbicular markets an attractive option. Disney has great success operating(a) as a holiday stopping point so setting up store in a large city abroad fil take with tourists would create a great authority market. One of Disneys boasted strengths was their ability to create a skilful and magical place, where their leaf nodes can relive sensitive memories and become inspired. Disney has been very productive utilize architecture, landscaping, costumes, music, entertainment, draw pokers, merchandise and food to create exotic, queen regnant tale the like, and adventurous atmospheres within one theme park at the comparable time.The parks in America were passing well managed and organized in which the guest routes end-to-end the park were pre-determined and the staff had been strictly trained. The political party was confident with local research and calld expertise they could easily conform for Chinese horticulture differences and arrive homogeneous success as capital of Japan Disney. The political party planned to make a fewer modifications to Disneys current caution trend to meet local expectations, such as architecture and menu items.Disney did not see ocean Park as a serious competitor and therefore made few changes to their marketing pla n. The park was established in 1977, and was marketed as a nature-centered park though performance was described as lackluster and not high-pressure ample where advertising and product development were concerned. Disney priced tickets at nearly double the price of marine Parks tickets and gave little inducement to travel agents for tickets booked.Target Hong KongAfter two vastly different attends opening international Disney parks, an ownership conjecture into an Asian bucolic was a given. Tokyo Disneyland had been extremely successful from day one with little petition for cultural assimilation Disney was ready to open their own park in Asia. In the early 2000s Hong Kong was showing signs of recuperation from the recession. In 2004, the economy experienced an 8.1% summation in GDP and in join on in local consumer spending and confidence. That alike year the region also true an enormous number of tourists a year, round 21.8 million visitors with 12.45 from of impo rtland China. With the expansion of the Individual land Scheme (IVS) the growing presence of the Chinese visitors could be counted on. It was a known particular that the Chinese enjoyed visiting theme parks from the massive number built passim the mainland in the 90s. However, the only attraction park in the region was bonny outdated and was no longer viewed as a main attraction. The regions political science was interested in association Disney in a joint sham which would ease any(prenominal) of the financial concerns of company expansion. With the growing presence of Chinese tourists, one contribute competitor, and involvement of the regional government Hong Kong was a very attractive market opportunity.Joint Venture Decision entryway foreign markets is accomplished via three major approaches export/import, licensing, and/or foreign enthronisation. Disney had experience with all methods prior to entering Hong Kong with varying degrees of success. They have exported produc ts throughout the world, employ a licensing approach to enter Japan, and a direct investment approach to enter France/Europe.In deciding the entry expressive style to Hong Kong, prehistorical experiences may have contributed to selecting joint berth as the best entry mode to Hong Kong. The overwhelming success of Tokyo Disneyland suggests licensing is not the best strategy. Disney was not able to fully capitalize on the success of Tokyo Disneyland. They only collected licensing fees, thus wanting out on the opportunity to call forth revenues by limiting their stake to notwithstanding licensing fees. The success of this entity was at least part due to the aspirational quality of American culture exhibited by the Japanese.Further analysis of one-time(prenominal) market entry experience suggested direct investment may not be the best option either. Disney chose direct investment when entering the European market be a controlling shareholder in the Euro Disney entity. Eur o Disney found itself saddled with large debt attempt to survive. Unlike the Japanese experience, the French believed Disney was practicing cultural imperialism through its operation. Needless to say the French do not share the same aspirational quality of American culture as the Japanese.In olfactory perceptioning to Hong Kong, Disney had to look at these early(prenominal) experiences to find a cheerful medium between the success of Tokyo and the less successful entry to Europe. thus a joint proceed with the government of Hong Kong was born. This entry mode allows Disney to share much than risk, unlike Euro Disney, but also eviscerate a greater benefit in the event Hong Kong proves to be as successful as Tokyo Disneyland. The joint meditation setup with the Hong Kong government should, in speculation at least, allow Disney to avoid the cultural missteps of Euro Disney while making entry unlined and paving the way to greater profits.Having selected a joint venture as the entry method, was their entry successful? The price to enter the park was nearly double the competition. not necessarily a problem until you look at survey results showing 70% of respondents expected a lower rise to power price. Coupled with a poor delegating structure for travel agents, Disney was off to a rough start once the park candid.Even in the lead the park opened there were problems. Public criticism was order at the nature of the joint venture operating the park as a private entity with public funding was not well-received. Fire ant colonies were found throughout the property. Testing of fire influence displays led to complaints from force field residents and local officials. In response, Disney refused to use a less noisy system used in other Disney properties as they argued they were following local regulations. This inflexible approach led to animosity between the company and locals. Additionally, packs of raging dogs were using the park as a location to sco ur for food leading(a) to visitor safety concerns.Attempting to learn from their experience in France, Disney endeavored to integrate local springer and practices into park design including using feng shui. However, the decision to offer sharks fin soup caused another problem. Local conservationists argued this was a status symbol and not a local custom. They pointed to the competition not crack this delicacy as a nice example. Once the park opened, there were shape up issues. Reaching park capacity, turning batch away and long queues were unforeseen operating(a) issues resulting in further headaches for Disney. Despite sounding to their past for guidance, taken as a whole, Disneys initial entry into Hong Kong was not very successful.Lessons LearnedDisney has numerous lessons to be knowledgeable from the opening of the Hong Kong theme park, some of which were available to them before making the Hong Kong decision based on their moves into other countries. The common theme a mong these lessons is that Disney needed to better recognize the context of their business venture before starting, throughout the implementation process and post opening. In the case of Disney and Hong Kong, the relevant context includes competition, supporting industries, the cultural setting, and understanding the goat customers wants and measurement of satisfaction.The first lesson the Walt Disney Company learned while expanding into Hong Kong is to understand pricing structure. Their main competitor, Ocean Park was more aggressive in sales on mainland China by offering better committee rates to travel agents. The university study showed expectations for enceinte pricing leadd would be in the range of HK$200 HK$300 while the real(a) price was HK$295 on weekdays and HK$350 on weekends. This pushed potential guests out of the Disney market to lower priced Ocean Park.The second lesson learned from the Hong Kong Disney expansion is a better understanding of the overall flush Kong theme park marketplace. Disney seemed to be conflict back. They were not acting proactively towards employee union work conditions, green initiatives, animal rights activists and the Disney Hunters who brought to light insensate labor practices. Disney spent a lot of time repairing its reputation from marketplace issues quite than projecting the Disney image to potential guests.The third lesson learned is an operational issue. Disney should have had smaller more manageable openings, leading to larger crowds. Opening the park to maximum line for a charity event was dire but created only downside risk to Disney operations. They saw quickly they could not handle the crowds in every aspect. After the fact they essentially blamed their customers believing the problems stemmed from a lack of understanding the flexible click system.The last lesson learned is for Disney to be more local in all regards. First, hire local high level managers to waiver parts of the operat ion. This could have avoided several issues like the Chinese New Year ticketing problem, management turnover, inspections and catering menu options. Also, the Hong Kong people workings on the project would not have felt they were being forced to manage to the Disney policies.In summary, Disneys strategic decision to enter into the Hong Kong market via joint venture with the government was a logical decision. Tapping into the China market, home to the worlds most populated country and a fast growing economy, throw away Kong Disneyland seem destined for success. However, as with past international expansions Disney faced a whirlwind of cultural, stinting and management issues that tainted the original visual sense to spread Disney magic into South-East Asian market