Assignment Chapter: 04 & 05

Submitted To:

Mr. MD Humayan KabirCourse Teacher Intermediate Financial Accounting

Submitted By:

Shadman Sakib KhaliliStudent ID. 1264MBA Program 1st Batch

May 10, 2014

Department of Finance & BankingJahangirnagar UniversityDhaka, Bangladesh

What Do You Think Motivated Disney To Set Up Parks Abroad,and What Might Be The Pros And Cons From The Standpoint Of The Walt Disney Company?

The Walt Disney Company has always looked for ways to reach a broad audience. In the theme park division of the company this means providing services that eliminate (or at least try to) the worries of every day stresses. This being said one of the main reasons Disney Theme Parks were opened abroad were for the convenience of family that could not afford the expense of flying to the U.S to enjoy the Magic of Disney.  Opening a theme park abroad brought with it a variety of Pros. One being mentioned above.  It has also had it share of Cons one of the biggest being foriegn government red tape with regulations,safety, copyrights, and many many more.  The pros definately out weigh the cons or why else would they continue to open theme parks

What do you think motivated Disney to set up parks abroad and what might be the pros and cons from the standpoint of the Walt Disney Company?

Increasing market shares may have been one of the prime motivation of Disney. Aside from this, they will acquire greater profit. However, there is also the possibility that the host country may not support Disneyland as greatly due to cultural clashes especially if it was not properly researched and this will lead to losses instead of the forecasted profit.

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?

It was Disney's first time expanding outside the US and so they were hesitant on taking on the risk. Instead, they assisted in the planning and charged royalties. The success of Tokyo Disneyland gave them the needed confidence for Disneyland Paris. Their main interest however was tapping into Asia and with the additional motive to make peace with China, they were willing to invest a greater amount in Disneyland Hong Kong.

What factors in the external environment have contributed to Disney's success, failure, and adjustments in foreign theme park operations?

The Japanese adapt well to the US culture so it was a good idea to replicate Disneyland California for Tokyo Disneyland.Paris has the largest population, is the most visited European country, and has the largest consumers of Disney products. But the problem arose because it somehow threatened the preservation of the French culture and the winter season drops sales so they struggled to adapt to the needs of the French.

Lastly, Hong Kong is the most visited country in Asia as the largest tourist destination with 10 million visitors per year with better infrastructure than mainland China. It also paved the way for an alliance with China.

Should Disney setup a park in Shanghai? If so, what types of operating adjustments might it make there?

It seems that it would not be as beneficial for Disney to set up another theme park in Shanghai. It may hamper their relationship with Hong Kong since it may reduce their visitors for Hong Kong Disneyland. Also, since China is a communist country, it may be hard to penetrate. Benefits of setting up a Disney Channel or taking advantage of the 2008 olympics is only short-term and because of the one-child policy, there aren't so many kids who will enjoy Disneyland.