Disneyland Expansion: South America

Disneyland Expansion: South America
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Disney has expanded rapidly to international markets where it has establishment amusement parks in various destinations, and evidence suggests that there are numerous reasons why it can choose South America as one of its destinations. To start with, South America is a wonderful location since there are no competitive pressures in form of amusement parks that are present in this region. As a developing region, South America offers wonderful opportunities of increasing total advertisement revenues with the expansion of pay-TV market. Brazil is one of the countries where pay-TV subscribers has expanded significantly. Furthermore, the middle class has expended and it has a huge demand for services offered by DirecTV where people can subscribe to watch channels in the pay-TV. Second, there numerous cities in South America that have become favorite tourist destinations and this implies that it can be an added advantage for Disney to expand to this region. Third, the cost of labor in South America is lower compared to most other regions across the world. Therefore, Disney can create employment opportunities in this region by opening amusement parks. This paper examines Disney’s expansions to South America and it focuses on both regional and country-specific attributes.[Trefis Team. “Disney Has Ample Opportunity For Emerging Markets Expansion.” Forbes. (2012). /sites/greatspeculations/2012/09/26/disney-has-ample-opportunity-for-emerging-markets-expansion/#99417463f6c4]
South American countries such as Brazil, Chile Uruguay, Argentina, Columbia, and Peru have experienced a relatively stable political environment, which offers a good opportunity for Disney to invest in the region. In Brazil for instance, the political risk of establishing a business is very low and this has played an instrumental role in the growth of the economy. Other countries that have a low index of political risk include Argentina, Colombia and Peru. Apart from Argentina that has a high inflation rate of 25.7%, the rest of the countries have relatively stable rate of inflation, which is below 4%. It is also important to note that all the mentioned countries had a positive economic growth in the year 2007. John Paul Rathbone says that a decline in inflation as well as interest rates is what has influenced growth in investment and consumption. The same conditions have also been experienced in Columbia, which makes both countries as potential venues of establishing an amusement park. However, some of the factors that negatively affected economic performance in other South American nations include elections pressures in Argentina, mining strike in Chile, and floods in Peru. Nevertheless, these factors have already passed and the Capital Economics which tracks GDP performance in Latin America says that economic growth is expected to expand at a three-year high of more than 3%.[John Paul Rathbone. “Growth is back in South America.” Financial Times. (29 September 2017). /content/37cd7d8c-a4e5-11e7-9e4f-7f5e6a7c98a2]
Another important factor is that economic growth and stability across South America has played an instrumental role in the significant increase in the number of visitors who travel to various destinations in the region. Latin America’s $6 trillion economy, which had peaked in 2013 at 6% begun to face trouble, and the economy started to face downhill in 2015. However, this has changed because of changes in policy implementations, end in electoral pressures, and increase in foreign trade. Evidence indicates that economic stability in Chile contributed to a growth in disposable income and an increase in the number of people who visit the country to 6.4 million visitors. Economic policies implemented by President Mauricio Macri of Argentina are expected to lower poverty levels among lower income communities through job creation. Furthermore, the end in presidential elections in Columbia and Brazil will result to stability, which will attract both domestic and international investment, which will ultimately result to economic growth. Currently, visitors who are travelling to various destinations in South America have increased tremendously. Chile, Uruguay, Argentina, and Brazil registered 6.4, 3.0, 2.4, and 6.5 million visitors respectively in 2007. Economic stability, reduced levels of crimes, and an improvement in living conditions, which make the country safer for tourists to visit, have motivated the growth in the number of visitors. There have also been reports that because of the positive economic outlook across the South American region, Disney has already started plans to build a theme park in Columbia. Although the deal is yet to be agreed, a headline in one of the press releases said, “New Columbia Resources would be developing a project worth $10 million to build a water reservoir of 920,000m3 near the Walt Disney’s new theme park in Columbia.”[ibid] [Munarriz, Rick. “Disney's Next Theme Park: Colombia?” (7 May 2016). /investing/general/2016/05/07/disneys-next-theme-park-colombia.aspx]
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