Disney Theme Park in Shanghai: Methods to Enter Chinese Market
Walt Disney is going to open a theme park in Shanghai, China. Please read below two links for more information: 1. Barboza, D. & Barnes, B. (2011). Disney Plans Lavish Park in Shanghai. New York Times . Retrieved from: http://www(dot)nytimes(dot)com/2011/04/08/business/media/08disney.html?pagewa nted=all&_r=0 2. http://disneyparks(dot)disney(dot)go(dot)com/blog/tag/shanghai/ You are required to write a 5 page paper on this topic, which includes below information: 1. What method does Disney use to enter Chinese Market? 2. Which trade theory best explains Disney’s international strategy? 3. Evaluate environmental constraints which can influence Disney’s operation in Shanghai, China. 4. Are there any special issues (i.e. Finance, Accounting, Taxation, Marketing, International Staffing and Labor issues) that Disney needs to consider for its business in Shanghai, China. 5. Does Disney have any advantages with its business in China? 6. How will the new Disney Park in China impact local environment, entertainment business, and local labor market. You should have prepared an outline with associated references from the Internet and Touro Library Databases, such as EBSCO multi- search, integrating the concepts (Integrate your thoughts as you write What method does Disney use to enter Chinese Market? 2. Which trade theory best explains Disney’s international strategy? 3. Evaluate environmental constraints which can influence Disney’s operation in Shanghai, China. 4. Are there any special issues (i.e. Finance, Accounting, Taxation, Marketing, International Staffing and Labor issues) that Disney needs to consider for its business in Shanghai, China. 5. Does Disney have any advantages with its business in China? 6. How will the new Disney Park in China impact local environment, entertainment business, and local labor market. You should have prepared an outline with associated references from the Internet and Library Databases, such as EBSCO multi- search, integrating the concepts
Disney Theme park in Shanghai
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Introduction
The Walt Disney Company based in the United States is a diversified international mass media and entertainment multinational. Disney established its brand in the animation business before growing into live-action films creation and theme parks. Disney theme parks offer a set of entertainment attractions and other events for enjoyment to huge number of people. The massive number of Japanese tourists who were visiting Disney theme parks in America prompted Disney to consider international diversification of its theme parks. Disney has since opened Tokyo Disney, Hong Kong Disneyland, and Disneyland Paris (Glover & Earnhart, 2016).
Disney methods to enter Chinese market
Entry into the China market can rely on the government kindness and association. The China government maintains a list of restricted, unrestricted industries and a five-year plan that show areas that require development. Preliminary efforts by Disney to enter China market were futile because as a media company it fell into the restricted class. The Hong Kong Disneyland had limited success both as an entry point into the China market and as a profitable park. Disney devised a creative method of gaining entry into China market by starting Disney English, a chain of English schools for children. The education industry in China falls in the unrestricted category and it is easy to get required authorizations. The success of Disney English through expansion of its school chain in different cities acted as a medium of for Disney to penetrate into the China market as a media company. Furthermore, Disney English aided in building relationship with the government that proved successful through rapid growth of entertainment, parks, and authorization throughout the country (Barboza & Barnes, 2011).
Global Strategic Rivalry Theory
Global strategic rivalry theory centers on multinational companies and their attempts to achieve competitive edge in the international marketplace. The theory argues that firms to counter global competition in their industries should develop competitive advantages. Firms can establish sustainable competitive advantages by creating entry barriers in their industries that prevent new firms from entering into the industry or a new market. Firms competing in the international marketplace can utilize various methods to obtain a sustainable competitive advantage. These methods include possessing advancing in research and development, attaining economies of scope, forming strategic alliances, joint ventures, and having extensive experience in the industry. Walt Disney parks and resorts face domestic competition from various corporations, such as Six Flags, SeaWorld, and Universal theme parks. The theme parks receive million of guests annually and operate in various countries across the world. Disney has established competitive advantage against its competitors by diversifying its operation into new markets. The formation of joint ventures with international markets has facilitated Disney to achieve sustainable competitive advantages in the global marketplace. Disney formed a joint venture with the Hong Kong government that facilitated creation of Hong Kong Disneyland. Furthermore, Shanghai Disneyland is a joint venture between Disney and state owned corporations. Disney owns global research and development labs that engage best technology university like Carnegie Mellon and Swiss Federal institute of technology Zurich to perform research and development for its parks and resorts division. The research and development labs provide Disney with latest technologies that position the company as a trendsetter in the media industry. Moreover, wide experience of Disney in the media and entertainment industry grants the company with sustainable competitive advantage and create entry barriers to its global market (Francová & BrevenÃková, 2012).
Environmental constraints
Disney operation in Shanghai, China would be influenced by several environmental constraints. China has policies that stipulate that both local and foreign enterprises should function under government control that is relatively dissimilar from the European countries. Furthermore, government owns the land in China, but companies can utilize it. However, government policy stipulate that if a company buy a land it should utilize it completely and should not leave free land for future developments. Competition in the Chinese theme park industry has been increasing rapidly with Suzhou theme park and Jingjiang amusement park being good choice for visitors in Shanghai. Furthermore, Wanda group has unveiled its plan to build 15 multi-billion dollar theme parks across China by 2020. Wanda group move to establish theme parks tailored to Chinese culture would present strong competition to Disney. Culture would have a significant effect on Disney because most of Chinese people do not speak English and ...