MEMORANDUM

To: Prof. Alfredo D. Carlos, Jr.

From: Greje R. Abangan Subject: Disneyland Abroad Date: Friday, March 22, 2013

Q1: What motivated Disney to set up parks abroad, and what might be the pros and cons from the standpoint of the Walt Disney Corporation? 1. Walt Disney Company was motivated to set up theme parks abroad because of the success of the US theme parks. They are taking these as business opportunities. Because their resorts attracted a lot of foreign travelers, they have considered tapping into the global market, which would mean more profits and creating a more global company. The pros from the standpoint of the Walt Disney Company would be more profit opportunities, gaining global product and differentiation, and a better way in diversifying the Walt Disney brand. The cons from the standpoint of the Walt Disney Company would be research and development capital expenditure, politico-legal risks in other countries, and cultural problems with other countries. It has also had it share of Cons one of the biggest being foreign government red tape with regulations, safety, copyrights, and many more. The pros definitely out weigh the cons or why else would they continue to open theme parks. a. Pros: i. Sales Expansion ii. Resource Acquisition iii. Risk Minimization b. Cons i. There are cultural factors which will inhibit the company from conducting business. For example, Paris was concerned that Disney was ruining their culture with American products and ideology ii. There are geographic influences to see where to place the park and where it would be profitable. Also, which area is closer to the population of the area and mass transportation. iii. Competition of amusement parks. iv. Political and legal drawbacks of certain countries Q2: Why do you suppose Disney decided to take no ownership in the Japanese operation and only a minority in France? 2. Disney made no financial investment in Japan because it was the first theme park for Disney outside the United States. Disney knows it was a tremendous gamble to place their theme park in Japan. It has also been known that a Sanrio Theme Park would be a great competition, with a

greater influence and following Japan. This has never been done before and there is a tremendous amount of risks in this venture. This allowed the Oriental Land Company to create the park in Japan and instead paid royalties to Disney. a. Disney wanted to gain in on the profit and quickly in Paris which was considered the most tourist dense area in Europe and France being the largest European consumer of Disney Merchandise. b. Disney quickly saw the potential of making more profit by seeing how the theme park in Japan was doing very well. Also, they were surprised by how the Japanese enjoyed the every aspect of the Disney Experience, accepting the English Language and American food in the park. Many investors and offers of government support made way in making the funds available in developing the European Disney Land. Q3: Other than the points mentioned in the case, what other operating adjustments might be necessary to assure success of the foreign operations? Disney had numerous successes throughout Japan because the people enjoyed grasping the real thing The exact replica and aura of the Disneyland in America. However, in Paris, there was a conflict amongst the people in France because they were afraid of the theme park decimating their culture and language. To deal with this Disney adjusted by catering to French tastes, Disney learned that alcohol was the culture of France and needed to eliminate the ban of Alcoholic drinks to draw more people. Disney also was fortunate to have the French government to create a railway to link all of Europe to the magical kingdom. Factors in the External Environment that Contributed to Disneys Success: Current popularity Disney has with movies, television shows, and products. Focus on regions that are great potential markets. Paris central location enables a large population to drive there easily.

Factors in the External Environment that Contributed to Disneys Failure: Not adjusting to the foreign culture Not adjusting to societal norms. Disneyland Paris put a no alcohol policy in the park. Not adjusting to preparing for the environment climate, all Disneys American parks are in warm climate and climates in foreign regions were too cold to attract many visitors to the park during winter. -END-

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Greje R. Abangan Business Management Student