Case Study Analysis Hong Kong Disneyland 1

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 1


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 centre’s 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.



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

Political

Government control – In China, both domestic and foreign companies

have to operate under governmental control, which is quite different from

the western counties. The international theme parks in China have a lot of

issues to do with government. However, the inefficiencies of a laissez-

faire approach can also affect the marketing strategies of Hong Kong

Disneyland.

Legal 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 State’s 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

cigarettes among Mainland Chinese; this will reflect Disney’s 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.

Cultural

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.

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 Disneyland’s three day

trip is not suitable for Chinese consumers.



Economic

Economic system – In history, China has been practiced command

economic system which is the government centralized control and

regulates in resources.

High capital intensive investment - Land price in Hong Kong and

Disney’s 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.

Environment

Environmental issues – The loss of a green belt, pollution caused by the

project, the threat to the endangered nepenthes (i.e. pitcher plants), white

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.



The methods of dealing with these challenges:

Environments Methods

Political

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 park’s initial years of

operation. Disney joint ventured with local government to construct and

operation. A fair deal for the government to provide a HK$5.6 billion low-

interest 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.

Legal

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

attract more foreign direct investments especially Disney into the markets.

The China’s 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

Kong.

Cultural 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 Disney’s 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

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 Mickey’s 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.

Economic

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

revenues and a big advertisement of Disney’s 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

Disneyland.



Environment

Preventions – In reply to the environmental issue, Hong Kong

Disneyland can follow the measures in United States California

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.



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 people’s 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,



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 employee’s 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 HKDL’s corporate social responsibility planning as CSR (Corporate

Social Responsibility) directly affects the image of the company.


Case Study Analysis Hong Kong Disneyland 1

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