This is somehow a form of advertisement for people to buy their products and even to attract more and more consumers. Opening another theme park in a different country would also contribute to the survival of the company should their theme park in the United States lower in sales. On the other hand, for the cons, one is concerning the cultural factors that may hinder the company from doing business in other countries. A good example would be the concerns in Paris. They feared that putting up a Disney Theme Park in their country might destroy their own culture. Another con would probably be the area where the park would be best put up.
In other words, which area the theme park should be placed that would be profitable. Transportation is another factor as well as competition from other theme parks abroad. 2. Why do you suppose Disney made no financial investment in Japan, one of $140 million in France, and then one of over $300 million in Hong Kong? Disney made no financial investment in Japan because they were considering the risks of building one. They probably think that it might not be as profitable or that putting up a Disney Theme Park in Japan would outweigh the cons than the benefits.
Paris, like what was mentioned in the case, is the most visited European City and the French are the largest European consumers of Disney Products. This is the reason why Disney invested in Paris. Also they were getting a lot of support from the country's government. And with their help, they would be able to get investors. According to the case, the reason why Disney invested only $140 million to take 49% of the ownership in a $5 billion worth of operation was due to the problems they have encountered before, which is the fear of France's culture to be destroyed.
So what Disney did was to add attractions that would cater to French tastes and agreeing to make French the first language in the park. Aside from France, Disney also invested in Hong Kong. The case states that Disney is interested in Asia since it accounts for about half the world's population and is becoming affluent enough that more people can afford to take trips and pay for leisure activities. They chose Hong Kong not only for their infrastructure, but also because it is Asia's largest tourist destination.
In addition, the families that live in Hong Kong are those with higher family incomes than mainland Chinese cities. Soon after, the two agreed to a joint venture that included 57% ownership by the Hong Kong government and the remaining by Disney. 3. What factors in the external environment have contributed to Disney's success, failure, and adjustments in foreign them park operations? There are many factors in the external environment that contributed both to Disney's success and failure.
For the factors that contributed to the success, one would probably be Disney's already popular reputation, which helped them in entering the global market easily. Another is their strategy of focusing on countries that would ensure and give them better business opportunities. Another factor to be considered is the government support they are getting. As for the factors that contributed to their failure, one that is mentioned in the case is that they encounter problems concerning the culture of other countries.
Another example would be the almost downfall of Euro Disney when their shares went down to 39% and the general public to 36%. This is probably due to the high prices and their no-alcohol policy. Another factor that contributed to their failure is the climate. Some countries were just too cold to attract visitors. 4. Should Disney set up a park in Shanghai? If so, what types of operating adjustments might it make there? It is not advisable for Disney to put up a theme park in Shanghai. One of the major reasons is competition.
The case states that China has built more than 2000 amusement parks, ranging from lavish to shoddy. Although most of them have not done well, putting up a Disney Theme Park would not necessarily mean that it would eliminate its competitors. In addition, China's one child per family policy may hinder the success of Disney. The visitors of Disney Theme Parks are mostly children, and if the number is lacking, it would also probably mean lack of visitors. Another reason is that if Disney puts up a theme park in Shanghai, there would be few customers since there is also a Disney theme park in Hong Kong.