When Disney relied on licensing agreements with the Oriental Land Company to open its first foreign theme park, Tokyo Disneyland,
A)Disney was able to meet the challenge of localizing its product offerings in Japan, leading to a low-cost advantage.
B)Japanese consumer buying habits and demographics no longer posed a challenge for Disney.
C)Disney no longer needed to contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements.
D)Its licensing partner, the Oriental Land Company reaped the windfall, because the partner who bore the risk was also likely to be the biggest beneficiary from any upside gain.
E)It was Disney, not the Oriental Land Company, that reaped the windfall because of learning curve effects.

Question

Quizplus · Accepted Answer

By relying on the licensing agreement with the Oriental Land Company, Disney was able to transfer the risk of investing and operating the theme park to its partner. This allowed Disney to avoid the challenges posed by Japanese consumer habits and government restrictions, but also meant that the Oriental Land Company was the one bearing the financial risk. However, if the park was successful, the licensing partner would also benefit from any upside gain.

When Disney Relied on Licensing Agreements with the Oriental Land