Report on

Title: Disneyland in Hong Kong

Course: BUS690 # 02, Fall- 2019

Submitted To

Dr. Jashim Uddin Ahmed

Professor, Department of Management, SBE

Submitted By

Khandoker Ashrak Ashekin 1635115060

Hafsa Mahjabeen 1715137660
Mayisha Alamgir 1735096060
Hr Mitu Chowdhury 1715293660
Mohammad Ibrahim Adham 1521077660

School of Business and Economics

North South University

Date of Submission: 29/11/2019

Introduction
Hong Kong Disneyland also known as HK Disneyland or HKDL is a theme park located on
reclaimed land in Penny's Bay, Lantau Island. It is located inside the Hong Kong Disneyland
Resort and it is owned and managed by Hong Kong International Theme Parks. It is the largest
theme park in Hong Kong, followed by Ocean Park Hong Kong. Hong Kong Disneyland was
opened to visitors on Monday, 12 September 2005 at 13:00 HKT. Disney attempted to avoid
problems of cultural backlash by incorporating Chinese culture, customs, and traditions when
designing and building the resort, including adherence to the rules of feng shui. The park
attracted 5.2 million visitors in its first year, below its target of 5.6 million. Visitor numbers fell
20% in the second year to 4 million, inciting criticisms from local legislators. However, the park
attendance jumped by 8% in the third year, attracting a total of 4.5 million visitors in 2007. In
2009, the park attendance again increased by 2% to 4.8 million visitors. The attendance
continued to surge and received 5.23 million guests in the 2009/2010 fiscal year. Since the
opening of Hong Kong Disneyland, the theme park has hosted over 25 million guests. Hong
Kong Disneyland currently occupies 27.5 hectares (68 acres) and hosts 6 million to 7 million
visitors annually. The park capacity will increase to handle up to 10 million visitors annually over
a 15-year expansion period.

Overview
Walt Disney has been pre-eminent in the field of entertainment for more than nine decades.
Started as humble cartoon studio in the 1920’s to today’s global corporation. The Walt Disney
company continues to provide quality entertainment for every member of the family across the
world.
Disney started to focus its business to parks and resorts by opening its first theme park in
Anaheim, Southern California in 1955. From there it started one of the most aggressive
business strategies anybody has ever seen at that time. Disney used its differentiation strategy
in industry wide market. It was using two-pronged approach by expanding existing parks while
simultaneously entering new territories. This become trademark of Disney’s tactic in global
profitability. It opened its second theme park just in fifteen years in Florida and was looking at
the horizon outside of United States of America. As follows it opened its first overseas theme
park in Tokyo, Japan in 1983 which brought a huge profit as the Japanese economy was
boosting in 1980. From there Disney turned its focus on Europe and opens next theme park just
outside of Paris in 1989. From there Disney turns towards Asia and in 1990 its representative
approached Hong Kong. However over here Disney was facing some problems. As different
countries have different regulation, culture and expectation Disney needed to adapt its strategy
of business to make a success on overseas market. Thus, they followed three steps very
closely, Expand the leading high growth position, Deliver solution & insights and Drive
efficiencies. As the politics, Economic, Environment, Social, Technology etc. of Hong Kong are
all different from US and European market so they needed to adapt their strategy.
Although the details of negotiation between Disney and Hong Kong Government was not
disclosed but it was known that Disney had received a substantial subsidy. However, there were
still oppression against Disney theme park because of its enormous environmental cost and its
work practices. There were strong market barriers and public opposition against Disney in Hong
Kong. Therefore, Disney had to take steps by adapting their strategy by local culture adaption
and Green challenge.
From this overview it can be seen that for global expansion three verse are very important,
Demographic Factors to create business opportunity & well operation in new country or place.
New Strategy need to be implied based on different business operation and well verse with
Local Culture.

Key Problems of Disney in Hong Kong

Public criticism
The Disney management style drew substantial public criticism as early as the pre- opening
stage. The Disney theme park in Hong Kong was viewed as one of the most important
government projects undertaken to boost the economy of Hong Kong after the Asian financial
crisis. People impressed by the Government’s announcement about Disney project. they warmly
welcome Disney to Hong Kong as they thought that it will have a great impact on their tourism
and it will create more employment opportunities. The Walt Disney company expressed a strong
commitment and responsibility towards conservation of natural resources in 1950 but the theme
park development had enormous environmental costs, which drew public criticism. The fact that
the park was operated as a private company- by the Hong Kong international Theme Park Ltd.-
using public funding against public assent. Several incidents occurred within the two months
prior to the September opening, attacking criticism from local artists, journalists and paving the
way for the park’s fist public apology. Firstly, a Financial Times Journalist criticized Hong Kong
Disneyland’s management style, calling Disney’s first theme park in China “the scariest place
after North Korea.” Then, a month before the official opening, local artist Daniel Wu visited
Disneyland for his film purpose and complained to the media about the arrogant and
disrespectful attitudes of the staffs.
Public criticism can turn public against the theme park. If the people of a country turn against a
government project, the project cannot be successful. Government has to ensure the economic,
political, social, environmental benefits for the country people. Here, the government of Hong
Kong sacrificing the environment of the country and it can cost high for the government.

Lack of industrial relations awareness and conflict resolution skills

After the theme park opened, the park’s character performers complained that they were
overworked and unpaid. Also, someone told that they work more than 12 hours with inadequate
break time which causing injuries, joint and muscle strain. The vice president of Entertainment
Lauren Jordan talked to their side. The character performers and stag performers used to get
the same salaries. But the character performers performed daily parade and meet visitors rather
than perform on stage. The entry salaries of the former averaged about US$1153 per month
compared to US$1409 per month for the latter. Around the same time, Hong Kong’s standard
newspaper reported that a newly formed Hong Kong Disneyland staff union was airing
grievances about staff treatment at the theme park. The Union accused Disneyland
management of not affording the union accused Disneyland full recognition, further suggesting
that the Hong Kong management did not have the same level of industrial relations awareness
and conflict resolution skills.
This is a serious problem because employees are the resources of an organization. If the
people of an organization are not satisfied with the authority, they cannot perform well. They
cannot consider the organization to their own. Hong Kong Disneyland’s staffs were not satisfied
with the authority. So, the Disneyland could not perform well.
High Price
The major weakness that took away from the initial success of Hong Kong Disneyland was the
issue of pricing. Asians are enormously price-sensitive and efficient in seeking out bargains and
finding substitutes or alternatives. The admission, rides and hotel prices or Euro Disney were
set beyond the affordable range of the target middle class French audience. Hong Kong
Disneyland had planned to charge an admission fee of HK$680, but given China’s highly
fragmented market, it was suggested that this would be too expensive for the average visitor.
Euro Disney did not have a good strategic pricing which led to a drastic effect on their
profitability. Hong Kong Disneyland followed in their footsteps and ended up having the same
issue as Euro Disney.
Competition from Ocean Park
Once upon a time, Ocean Park ruled the Hong Kong amusement park landscape alone. When it
opened in 1977, it was the city’s grand darling of theme parks with its quirky array of marine life,
thrilling spills and, yes, a cable car. But then one day Hong Kong Disneyland had arrived – and
the battle for business began in earnest.

Over the course of their short joint history, the competition between Disneyland and Ocean Park
has, on the surface, increased exponentially. Just months after the arrival of Disneyland, Ocean
Park launched a six-year Master Redevelopment Plan, which has seen the Wong Chuk Hang
park add the Ocean Express funicular railway, open the theme areas Thrill Mountain and The
Rainforest, and unveil an epic Frank Gehry-designed aquarium. In turn, Disneyland has swelled
with Tomorrowland, the iconic Disney boat ride and Toy Story Land. The expansions have been
regular and significant, each adding fuel to the comparative fire.

On July 13, Ocean Park launches Polar Adventure, a new Arctic and sub-Antarctic themed area
home to penguins, walruses, seals and a rollercoaster. A day later, Disneyland returns fire,
launching Grizzly Gulch, a new ‘land’ featuring rides based on the story of the 19th century gold
rush, combining its latest coaster with the water-based Geyser Gulch and a themed show.

So there is a major rivalry between Ocean Park and Disneyland. But Ocean Park gets more
visitors who are price sensitive since Hong Kong Disneyland is too expensive.

Disturbance of locally endemic and endangered species

A rare bird species named White-bellied Sea Eagle is nested in the woodlands of Lantau Island.
Scientists and environmentalists argued that the noise created by the park’s construction
process and proposed firework displays would disturb and drive away this natural resident.
According to the government’s Civil Engineering Department that disturbance could be reduced
by controlling construction practices and maximizing the distance between nesting sites and the
theme park.
Environmental costs generate high level of toxic chemical
The water below the Cheoy Lee Shipyard is much polluted because of the high amount of
chemical substances. If the work is continued without any action, the amount of contamination
will increase, it also hampered the ecosystem. It also poisons for human being & chines white
dolphin. The Hong Kong Legislative Assembly has consciously excluded the cost of site
remedies from the cost benefit analysis presented. According to the Legco only told that the
project could generate HK$148 billion in economic benefits over 40 years. At the time Lego
approved the results, the government was still unable to access the site to check the land for
pollutants as compensation negotiations were underway with the yard operator. The cleaning
costs required for this 19-hectare portion of the proposed park have never been properly
determined. Friends of the world have demanded that the site be used by the US Puget Sound
Nepal Shipyard for politicization to be astronomical.
Environmental cost –gouging & dumping during the reclamation of marine land: Three
consequences
The volatility will be increased, the transparency of the water may be decreased, thereby
reducing the sun's light penetration. In other words, the decrease of primary biomass production
with on the basis of the marine food chain. Excessive toxic in water will prevent filter feeding of
plants that need clean water to survival, the cause of the death of the surrounding coral reefs &
ever sensitive intertidal zone. The fine particles will be mixed with surface mucus and absorbed
into the fats. As a result, the film will make breathing impossible, the surrounding fish species
will become close and cause slow death.

Recommendations
Effective Price Strategy

For the Asian Customer price issue plays an important role, they always think what they can get
in return of they paid, in this situation with the most popular competitor Ocean park, asking more
price is a kind of wrong idea to get customer, as Disneyland asking ticket on HK$680 ,Whether
Ocean Park is giving it on HK$435. In order to be competitive in the market price should be
better which can catch the customer in first attempt.

Understanding Customer needs

First of all the maker of Disneyland Hong Kong should study china, its culture , what they need,
what they expect, then they should customize what they can give and they can introduce, in
Chinese protective media , Disney characters are very much less known as Hong Kong tourists
cannot be the only profit making people for The Disneyland, rather mainland china people are
the main source of income.
In an interview Hong Kong Disneyland’s managing director Bill Ernest said, “If you haven’t
grown up with the brand, its characters and themes, you’re not quite sure what you’re walking
into,”, who stressed the park is working hard to learn what Chinese want.
First, they need to know what their customers need then they can make a plan to go through.
Development of Community Relation
In the case study, the park does wrong thing primarily in the environmental issue to local people
without any solutions. This is a serious fail because they are the first community that create the
negative wave of public opinion and damage the Disney Park’s image. Therefore, the company
needs to treat nicely and precisely to these important “neighbors”. To local men, who directly
receive negative effect from the park, the Disney Company should pay them compensation for
medical and material damage. To other local communities, the company should commit to offer
them jobs, international training programs, minimize the waste and greenhouse emission.
Although Hong Kong Disneyland did promote its image to the world especially the mainland
China, the park needs to guarantee that those sources of information can actually reach its
potential customer. Let take China‘s censorship on media for a visible example, according to the
Chinese Human Rights Defenders (2007) , Communist Party of China (CPC) has always
“controlled all the traditional news media (print media, radio and TV)” and strictly banned the
internet medium, independent news and information with foreign participation. Therefore, the
Disney Company needs to consider and examine carefully about the feasibility of right
information and medium toward every different countries or customers.
Understanding Environmental value
Disneyland should do something to improve smoke that the fireworks produce as like the
California Disney uses environmentally friendly fireworks. This means they use “compressed air
to launch the pyrotechnics for fireworks as an alternative to gunpowder” the company should
send newsletter to local communities, who live around the Disney project and guarantee them
with benefit packages. Local people contribute such an important role in the success of the park
because they share similar region with us. It means that the Hong Kong Disneyland ‘s activities
do effect on their livings even in directly or indirectly way. In addition, respecting the
environment contributes much on the way Hong Kong Disneyland presents themselves as a
good business.
Eliminate industrial toxic producing- Go green
First of all, they should take necessary steps to stop producing all kinds of toxic and chemicals.
Besides, the Disney park should organize programs linked to environmental topic such as green
training course for employees, increase quantity of classified garbage and propagate visitors to
apply 3R principle (Reduce, reuse, recycle) etc. All of these green strategies should be brought
to customers through media. The park should hold a press conference and invite local
authorities, journalists and representatives from broadcast channels to bring customers image
of a green Hong Kong Disneyland.

Conclusion
In general, the Hong Kong Disneyland seems to improve slower and slower due to the
inefficient management of both Hong Kong government and the Disney Company. All it needs is
to be more active in promote itself not only in domestic but international markets. In detail, the
Disney Park would take an inward look to the mainland China because of its vast potential. In
order to be surviving in the future, Hong Kong Disneyland must try harder in the upgraded
project, expansive decision and communication strategies before the great launching of the
Shanghai Disneyland.