PMAS-Arid Agriculture University

Rawalpindi
UNIVERSITY INSTITUTE OF MANAGEMENT SCIENCES

Assignment No. 1

Submitted by: Kiran Taj Kayani

Subject: International Business
Submitted to: Hafiza Amtul Hafeez
Arid No.: 16-Arid-4054
Section: C
Submission Date: April 10, 2019
 DISNEY CASE STUDY
Question No. 1:
What are some characteristics o multinational enterprises that are displayed by Walt Disney?
Answer:
MULTINATIONAL ENTERPRISES:
A multinational enterprises (MIVE) is a company that is headquartered in one country
but has operation in one or more other countries.
CHARACTERISTICS OF MNE’S:
 Operating a sales organization, manufacturing plant, distribution center.
 Licensed business or subsidiary in at least two countries.
 Earning an estimated 25-45% of revenue from foreign market.
 Having common ownership , resources and global strategies.
 Direct investment base in several countries.
 Giant size
WALT DISNEY:
The Walt Disney company, commonly known as Walt Disney or simply Disney, is an American
diversified multinational mass media and entertainment conglomerate headquartered at the Walt Disney studies
in Burbank, California.
CHARACTERISTICS OF MNE DISPLAYED BY WALT DISNEY:
 It has two headquarters one in California and other in united states
 It has operations in many countries such as UK, Germany, Belgium, Netherlands, Italy/ Spain, France
and many more.
 It has many subsidiaries such as Walt Disney studies, Disney channel, ESPN,
 Disney Parks, Disney stores, Disney interactive, MARVEL etc.
 It earns a good revenue in the foreign market
 They have activities in many countries . These activities includes parks, production of toys, instrument
from other places etc.
 They have common ownership, resources and global strategies.

Question No. 2:

Why did Disney take an ownership position in the firm rather than simply licensing some
other firm to build and operate a park and setting for royalty on all sales?

Answer:
 Walt Disney has good strategies that are very helpful and beneficial for them. Disney took an
ownership position in the firm rather than simply licensing some other firm to build and operate the park and
setting or leasing some other firm to build and operate park would not be beneficial gain less profit if the
company were to be productive .

Secondly the other firm would have more acces to the operations of the company as compared to
Disney, so Disney decided to take ownership position in the firm by have ownership, Disney can have access to
operation and benefits and they can make dicisions of the company.

Question No. 3:

What way did Euro Disney reflect the strategic philosophy of Walt Disney as a multinational
enterprise?

Answer:

One way in which Euro Disney reflects the strategic philosophy of the company as an MNE is that
Disney is willing to modify the park to meet the preferences of local visitors by catering to their markets. Euro
Disney is not identical to Disneyland in California. The focus on European roots and culture is now an integral
part of the park. In addition, notice how the company used an international approach to funding the project. The
monies were not all raised in France. The government helped, but so did banks, private investors, and Disney
itself. And when the operation ran into trouble, the company was willing to recon-figure its arrangement and
give up some ownership and some revenue in order to get things back on an even keel.

Question No. 4:

Did Disney management conduct an external environmental analysis before going forward
with Euro Disney? Explain.

Answer:

Yes, Disney management conduct an external environmental analysis before going forward with
Euro Disney. Three amusement parks is 150 million dollars were opened between 1988 and 1990 which were
unsuccessful. But Walt Disney decided to open Europe's first Disneyland in 1992. Disney management was
worried about Euro Disneyland that it would be too small to handle large number of crowd. Disney's US parks
were successful and company was gaining profits from them. But Euro Disneyland's case was different. The
Walt Disney was to receive 10% Euro Disney's administration fees, 5% of food and merchandise and 49% of all
profits for investment and operation management. Disney management conducted external environmental
analysis. The location of the park was thoroughly researched, number of people that could be attracted, amount
of money that could be gained from them was also calculated. Distance was also kept in mind while calculating
how many people can visist the park and how far the park would be from different countries. France and Spain
were best location options as both would boost up the economy. France was to provide considerable incentives.
So, France was choosen as the site for the Euro Disneyland.