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CASE STUDY: HONG KONG DISNEYLAND

Table of Contents
1.0

Introduction.................................................................................................2

2.0

Question 3...................................................................................................3

3.0

Conclusion and recommendations..............................................................9

INTERNATIONAL BUSINESS INB780

CASE STUDY: HONG KONG DISNEYLAND

1.0 Introduction
The Walt Disney Company is an American organization firmly related to Mickey
Mouse and world-celebrated amusement parks. Hong Kong Disneyland was the Walt
Disney Company's third worldwide amusement park outside America, after Tokyo and
Paris. Sufficiently intriguing, both the Hong Kong and Paris amusement parks had its
boss supplanted in under a couple of months after the recreation centres opening, if
these corporate moves were definitely not characteristic. In September 2006, the Hong
Kong amusement park reported it had missed its first year participation focus of 5.6
million. Frequently censured as the littlest Disneyland on the planet, the Hong Kong
amusement park had been tipped as a "going stone" for the American organization's
entrance into territory China. On the off chance that it was without a doubt to serve as a
model for another Disneyland in China, it would be basic for the administration of
Hong Kong Disneyland to think of recuperation arrange and realign its technique to
enhance its picture, support participation and convey its income target.

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CASE STUDY: HONG KONG DISNEYLAND

2.0 Question 3
What are some of the challenges Disney HK will face in implementing these
strategies? Suggest methods of dealing with these challenges.
Hong Kong Disneyland is the third theme part of Disney and part of
internationalization. From the experiences of Disney, it has shown that Disney has to
choose the right product to enter the right location of country or site at the right time
with or without any local adaptation. It is exceptionally urgent for Disney extension in
Asia particularly in Hong Kong due to the past business encounters with Japan and
Paris, made Disney did a considerable measure of systems in entering Hong Kong
market.
The challenges Disney HK will face:
Environments

Challenges
Government control In China, both domestic and foreign companies
have to operate under governmental control, which is quite different from

Political

the western counties. The international theme parks in China have a lot of
issues to do with government. However, the inefficiencies of a laissezfaire approach can also affect the marketing strategies of Hong Kong

Legal

Disneyland.
Piracy policy Disney was combating with copyright infringement and
protecting its image. The Chinese government has revised its Trademark
Law, Patent Law, and Copyright Law. The enforcement measures are less
than effective, and pirated American consumer goods, including Mickey
Mouse products, are openly sold to millions of Chinese. However, the
enforcement of the legal system in China was not fully utilized and made
Hong Kong was listed on United States International Privacy watch list.
Land policy The land in China is always belonging to government, but
companies can use it. The policy is if the companies paid the rent, it
should be used totally. There should not be free land for future ideas.
A long-standing smoking ban policy Smoking was only allowed in
restricted areas outside the main stream of traffic. The widen use of

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CASE STUDY: HONG KONG DISNEYLAND

cigarettes among Mainland Chinese; this will reflect Disneys policy.


Limited entrance to Hong Kong The Guangdong government has
pledged to ease visa application (the quota of two-way permits from 1,500
Mainland tourists) for Mainlanders travelling to the SAR.
Language barrier Culture has a significance impact on the lifecycle of
a theme park. Hong Kong has been critiqued for their weakening English
ability and insufficient Mandarin skills. Most employees are local people.
Because of lacking in understanding and communicating in English and
other languages, most employees are not well in delivering what they
should. They are able to guide visitors from the entire world, especially
those from China who are not familiar with Disneyland.
Blend of American and Hong Kong culture From the survey on Hong
Kong Disneyland project, it was shown that 34.8% of respondents were
not willing to blend American and Hong Kong culture, because of
Chinese culture has their own identity in local and international markets.
Lack of social networks Hong Kong Disneyland will not contact local
suppliers directly; instead it will cooperate with local companies.
Cultural

Crowd management and maintaining cleanliness in the park Too


crowd in Disney, cleanliness in the park cannot maintain it well. This can
distract tourists.
Quality concept To instil the quality service concept among its locally
recruited employees.
Food different Negative publicity plagued the Hong Kong theme park
in its preparation leading up to the opening. Green groups asked the park
to ban shark's fin soup from the resort's wedding banquet menu.
Consumer behaviour Chinese consumer behaviour will affect also.
Although we know Chinese people have more free time to pursue
entertainment, as their traditional mind, they are not willing to spend more
than one days in Disneyland, instead they prefer have a trip outside of
city. But in US, when people visited there, usually people spend three
days there to have more fun. Obviously, the US Disneylands three day

Economic

trip is not suitable for Chinese consumers.


Economic system In history, China has been practiced command
economic system which is the government centralized control and

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CASE STUDY: HONG KONG DISNEYLAND

regulates in resources.
High capital intensive investment - Land price in Hong Kong and
Disneys troubled consumer product and film business it was too risky
for Disney to finance the project by its own capital.
Competitive industry Competition in Chinese theme park industry is
getting increasingly furious. Not only in terms of an increasing number of
theme parks and other amusement parks, but also relative to other uses of
leisure time such as movies and internet bar. Moreover, the competition of
space and accessibility has never stopped.
Environmental issues The loss of a green belt, pollution caused by the
project, the threat to the endangered nepenthes (i.e. pitcher plants), white
Environment

dolphins and the loss of a probable historical site. The expense and natural
effect brought on by digging and transfer of the debased mud at the Cheoy
Lee shipyard that is essential before recovery work for the Disney site can
initiate.

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CASE STUDY: HONG KONG DISNEYLAND

The methods of dealing with these challenges:


Environments

Methods
Partnership with government From the experiences ownerships with
Tokyo Disneyland and European Disney, Disney took initiative to try out
the third model for Hong Kong Disneyland. They made partnership with
the government to guarantee uninterrupted financial and gain government
support to the construction of the project and in the parks initial years of

Political

operation. Disney joint ventured with local government to construct and


operation. A fair deal for the government to provide a HK$5.6 billion lowinterest loan for the project and HK$13.6 billion for reclamation and
infrastructure works.
Supports from local government In all Disney international
operations, support from the local government is critical to the Disney
Company.
Intellectual rights Hong Kong has improved its intellectual rights
protection; the United States has removed Hong Kong from its
international piracy watch list in February 1999.
Open Door Policy After joining WTO, China becomes one of the most
favourable countries to attract FDI. China practiced open door policy to

Legal

attract more foreign direct investments especially Disney into the markets.
The Chinas government has strived to privatize its giant state-owned
enterprises and opening more sectors to foreign competition.
Agreement with SAR The SAR government had negotiated with
Guangdong officials with a view to increasing the quota of two-way
permits from 1,500 to 2,000 daily for Mainland tourists to visit Hong

Cultural

Kong.
A unique service standard and practice A Disney University in Hong
Kong would be established to provide on-job training and professional
development for each theme park employees. Disney has focused on the
establishment of Disneys management practice and motto, starting with
hiring, training and development of its cast members. This is because of
this can reduce prejudice toward the Mainlanders.
Increase awareness of language Hong Kong needs to patch up its

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CASE STUDY: HONG KONG DISNEYLAND

instructive framework to prepare more skilled bilingual individuals. The


government had emphasized the people in Hong Kong to learn and
communicate well in English, Cantonese, and either Mandarin or other
Chinese dialect. They are not only excellent performers but also master
Chinese, Cantonese and English. They are able to guide visitors from the
entire world, especially those from China who are not familiar with
Disneyland. Hong Kong Disneyland is positioned as a family
entertainment resort for both overseas and Mainland visitors. Signs and
restaurant menus must be in English as well as in Chinese.
Combination of Chinese culture and American Hong Kong
Disneyland tries to combine Chinese culture into the American theme
park, such as the Chinese Gazebo and Mickeys Chinese gown. For
example, costume on Mickey can be changed to Chinese Tang costume.
And also Chinese food will appear in Hong Kong Disneyland. Response
to the influence of American culture upon Hong Kong was mixed.
Maintain cleanliness in the park Disney has to display its expertise in
maintaining a clean and orderly environment in the park with high volume
of tourists.
High capital intensive Due to high capital intensive investment in
Hong Kong Disneyland, the government as the largest shareholder with
57% share of profits, Disney needs to joint venture with the government
to gain continuous financial and government supports to the construction
of the project.
Maximize its returns on operations DisneyQuest as an extra source of
Economic

revenues and a big advertisement of Disneys brand in addition to being a


testing ground for new rides and features. This can misuse the tremendous
capability of its brand image to upgrade the company's general execution.
the low cost of
Resources Resources in China save lot for Hong Kong Disneyland,
such as lower human resources cost and lower infrastructure cost. It is
wise to cooperate local company as one of strategies in Hong Kong

Environment

Disneyland.
Preventions In reply to the environmental issue, Hong Kong
Disneyland can follow the measures in United States California

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CASE STUDY: HONG KONG DISNEYLAND

Disneyland to use environmental friendly firework. For example, it can


use compressed air instead of gunpowder to lift fireworks so as to reduce
emission of ground level smoke. Also, it is suggested that the length of
time for the firework displays be shortened to reduce the amount of
pollutants released. By the way, the Hong Kong Disneyland should carry
out environmental impact assessment before any construction work in the
future, to minimize the negative impact on the environment. During
reclamation, nets can be put into the sea to block the flow of mud water
and stone so as to prevent the contaminated water from destroying the
habitat of sea creatures. Furthermore, it should finish the reclamation as
soon as possible to reduce the duration for water pollution.

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CASE STUDY: HONG KONG DISNEYLAND

3.0 Conclusion and recommendations


Conclusion
Hong Kong Disneyland is a dreamland for many youngsters. It fails to improve its
tourism industry effectively and Hong Kong peoples dream cannot be realized since it
started with a series of problems. With a shaky base, it is quite difficult to attract more
guests to come if existing problems remained. These prove that Disneyland is being a
white elephant at this moment. As a result, it is very important for the Hong Kong
Disneyland to improve its cooperation with the government and the public. And, raise
its competitiveness in the future in order to survive in Hong Kong.
Recommendations
Hong Kong Disneyland should divert its targeted tourists from Mainland Chinese to
high-end foreigners by launching more advertisements overseas. So the Hong Kong
Disneyland can be better known among the world. As a new Disneyland will be built in
mainland in the future, Hong Kong Disneyland cannot rely greatly on Mainland
Chinese. It should expand its range all over the world.
Language and society procedures are created taking into account aggressive strengths
view. At the point when Disneyland chose to go into Hong Kong market, it must adjust
Hong Kong environment. Firstly, Disneyland must be worthy through same dialect
Hong Kong individuals utilized. On the off chance that Hong Kong individuals did not
comprehend the dialect in Disneyland, they cannot encounter the quintessence of
Disneyland. Furthermore, the way of life aided Hong Kong Disneyland turn out to be
more acquainted with neighbourhood individuals; accordingly it can get more focused
powers.
With government support, Hong Kong Disneyland got more capable than other
amusement parks or carnivals. Promotion and advertisement Hong Kong Disneyland to
get more piece of the overall industry than different contenders. Albeit different
contenders must have their own procedures which may influence the entire business,

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CASE STUDY: HONG KONG DISNEYLAND

Hong Kong Disneyland built up these methodologies which could struggle with others
and adjust the variable business sector.
In order to return the magic back to Disney in Chinese Market, it has to add in more
effort from management. First of all, staffs are the best sales force and must be well
managed otherwise employees morale is threatened. In order to recover and build up a
strong intellectual capital, a proper reward system should implement to increase
motivation. A good working environment should be provided and flexibility built into
working practices. It is important to increase employees relationship in order to ensure
they share the same values as Hong Kong Disneyland and provide the best visitor
experience. Moreover, employer branding can also attract and retain human capital, this
directly relate to HKDLs corporate social responsibility planning as CSR (Corporate
Social Responsibility) directly affects the image of the company.

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