Hong Kong Disneyland

Company Background
Founded in 1923 by Walt Disney
Disney’s business portfolio:
1. Studio Entertainment
2. Parks and Resorts
3. Consumer Products
4. Media Networks
Core mission: providing quality entertainment
 Tokyo Disney Resort
• Disney opened its first non- U.S. park in Tokyo, Japan in 15 April1983
• Cost US$1.4 billion
• Joint venture between Mitsui and Keisei
• Financed by Oriental Land Co. to minimize the risk
• Disney was as licenser and designer
• Received US$100 million royalty
• Support and attendance
 Disney Resort Paris
• France was the largest consumer for Disney products
• It also named Euro Disney
• Came in operation in 1992 after a long negotiation
• Problems:
- cost overrun
- No profit
- Loss-US$190million
 Disney Resort Paris (cont’d)
Root of problems:
• Primary language is French
• Recruitment and training process are not well
• Dress code
• Disney policy of banning alcoholic beverages
 Why Hongkong?
• The Chinese economy was booming.
• Some believed the Chinese want to come to Disney because it is American.
• China’s infrastructure and currency conversion was a problem.
• Hongkong had infrastructure as well as a reputation.
• A gateway to China
 Hong Kong Tourism Industry
• Tourism is the fastest growing of the Four Pillar Industries in Hong Kong.
• The industry is relatively labor intensive and thus is an important driver for
generating jobs.
• Between 2000 and 2009, 28.4% of the new jobs created were in the tourism
sector.
 Hongkong’s Local Attractions
• Victoria Peak
• Repulse Bay
• Statue Square
• Open-air Markets
• Government House
• Ocean Park
 Hong Kong’s Disneyland

• Disney initiated a conversation with the HKSAR government in Aug 1998

• Initially planned to simply run the park on a management fee and Licensing
contract basis
• Created 18,400 jobs and was expected to increase 35,800 in 20 yrs
• 3.4 million visitors attracted to the park
• Over a period of 40 years, it was forecast that HKD would generate an
economic benefit equivalent to KH $ 148 billion
 The Concluded Deal
• After a year of negotiation the final contract was signed in December of
1999
• Hong Kong International Theme Park Limited(HKITP) , The joint venture
formed between Disney and the Hong Kong government in Dec 1999
• While Government developed the infrastructure, Disney provided master
planning, real estate development, production development
• Disney also set up a wholly owned subsidiary, Hong Kong Disneyland
Management Limited, to manage HKD on behalf of HKITP
 A Rocky Start
• 4 weeks prior to the official opening, HKD invited 30,000 selected
individuals per day to visit the park to test the rides and other attractions.
• The firs problem noticed was that capacity limit of 30,000 visitors may have
been to high
• The park faced another problem when inspectors from the Hygiene
department were asked to remove their badges and caps .
Operations

Product Marketing
Offerings

HR Local Cultural
Management Responsiveness
 Problems

Lunar
New Year

Negative
Publicity
Customer Working
Complaint Conditions
 HKD Response
• Ticket discounts for local customers (HK$ 50 / US$ 6.41)
• Ticket express package
• 50,000 taxi drivers were invited to HKD free of charge in given time
• 50% discount to 3 family members or friends of taxi drivers
• “ One day trip Guide ’’ in Mandarin
• Launching free to air channel and endorsing the brand by local celebs
• Local TVC, Testimonials, Enticing scene from inside HKD
 Question 1
How could HKD steer through the cultural minefield to ensure Hong Kong
Disneyland’s Success ?
Apply cultural tradition, like Fengshui and ceremonial attributes in their operations.
For example:
- Traditional ceremony in new construction
- “8” for size metrics, based on lucky number in Chinese culture
Cast members should proficiently using English, Cantonese, and Mandarin.
Wide variety of foods (American, European, and Chinese foods)
 Question 2
How well had disney achieved its goal of translating its strategic assets
to the chinese cultural context ?
• They had excellently translated strategic assets to Chinese cultural context
-local famous artist
-usin fengshui master consulting
 Question 3
What could HKD do to ensure a successfull outcome along the lines of
Tokyo Disney and avoid the type of embarassment experienced with
Disneyland Paris?
- Learn the Chinese cultural context, also customer needs and wants
- Apply Chinese cultural concept in their assets
 Question 4
What could the company do to rescue the park from the onslaught of
continuing negative publicity ?

Using new promotion: Collaboration with travel agent:

• Pricing strategy • Proactive and collaborative with
• Taxi driver free of charge Chinese travel agents

• One-day trip guide • Fixed data ticket to open-ended

ticket system