Business 10th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell

Exercise 9

Walt Disney around the Globe
Mickey Mouse has been a beloved American icon since the 1930s. The success of this and other Disney characters helped to build Disney theme parks; first in Anaheim, California, in 1955 and then in Orlando, Florida, 16 years later. For decades, tourists from all over the globe traveled in droves to California or Florida to experience the "happiest place on earth." What could be more natural for Disney than to introduce Mickey around the globe with international parks?
Disneyland first opened on the international front in Tokyo, Japan, in 1983. Ten years later, Disney brought the magic to Paris, France. Finally, in 2005, Disneyland opened its gates in Hong Kong, China. Global expansion is tricky for any business. There are many challenges to overcome, such as economic, legal, political, social, and cultural barriers. While Mickey may be recognized and loved around the world, this does not mean that duplicating American parks in other countries will be a success.
Perhaps the greatest challenge for Disney when entering new international markets has been how to handle cultural differences. Euro Disney (later renamed Disneyland Resort Paris) opened near Paris, France, in 1992 to fanfare and problems. Many well-known French citizens and labor unions vocally opposed the park because they felt that it was wrong to allow a symbol of American culture to become a focal point in France. Attendance for the first three years was well below expectations, causing grave financial difficulties. Finally, in 1995, the park experienced a turnaround. Financial restructuring helped the park achieve profitability. New attractions, lower admission prices, renaming the park as Disneyland Paris, and a marketing campaign increased attendance. The park, now the number-one tourist attraction in Europe with nearly 15 million visitors per year, continues to expand in anticipation of future growth. The theme park has attracted more than 250 million visitors in its 20-year history.
Having learned from its experience in France, The Walt Disney Company entered its venture in Hong Kong with an eye to embracing and honoring local culture. The company had learned to be sensitive to cultural variations in events, trends, and cuisine. The parks must embrace local culture while staying true to the Disney message. To this end, Disney hired a feng shui consultant to assist with the layout of the Hong Kong park. The fourth floor was eliminated at all hotels because of the cultural belief that the number four is bad luck. One of the Hong Kong Disneyland ballrooms measures 888 square meters because eight signifies wealth in Chinese culture. Even with this attention to detail, Hong Kong Disneyland's first years have been rough, with attendance far below projections and protestors raising cultural and social objections. A major complaint among guests has been that the park is small. Over the next decade, the company plans to invest half a billion dollars in expansion efforts. Disney is also building another theme park in Shanghai, China. This park will be two to three times as large as Hong Kong Disney and is set to be completed in 2016.
While some locals continue to protest Disney's presence, there are benefits to allowing a global company like Disney to enter foreign markets. Disney theme parks attract both local and global tourists, which can be a major stimulus to the local economy. For example, Hong Kong expects that Hong Kong Disneyland will bring more than 50,000 jobs to the city between 2005 and 2025. Experts predict that the park will bring $19 billion (U.S.) to the local economy during the park's first 40 years. It is likely that, with expansion and further refinement, Hong Kong Disneyland will be a success in the long run. Problems in France and Hong Kong have not deterred The Walt Disney Company from further global expansion. Hopefully, the company has learned that it must pay close attention to cultural and social variances in global markets in order to succeed. 87
What led The Walt Disney Company to believe that its theme parks would be successful internationally?