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Africa Disneyland

Prepared by: Yasmine Hanafy Noha Kawanna Heba fouad Hanaa Othman

Company Overview
Since its founding in 1923, The Walt Disney Company and its affiliated companies have remained faithful to their commitment to produce unparalleled entertainment experiences based on the rich legacy of quality creative content and exceptional storytelling. The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products.

1st Pillar : Setting Objectives :

1- Disney mission, vision, corporate, business & global strategy, objectives


Vision statement: Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world."

Mission statement: To be one of the world's leading producers and providers of entertainment and information. Corporate strategy: Growth by Related Diversification (Entertainment and Media)

The Walt Disney Corporate Strategy, Business Development and Technology Group is a sort of secret weapon for the Walt Disney Company. This low-profile organization works exclusively for the Disney Corporation and handles strategy assignments in multiple business arenas (almost like Disneys personal consulting company). In addition to corporate strategy, the department covers M&A, strategic alliances, corporate business development, IP management and technology standards. It also aids various business units on their strategy when the issues are large enough to merit corporate attention. The planning group employs only 20 professionals who are divided into smaller teams to handle individual company needs and tasks, which can vary depending on the issues the company is facing at the time.

Business strategy: (competitive strategy): differentiation by introducing unique entertainment facilities. Global strategy: Regiocentric view. The international group comprised three geographical divisions: Latin America, Europe, and Asia-pacific.

Objectives: The Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The company's primary financial goals are to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value.

The companys approach: Disneys Approach to Leadership Excellence Disney leaders across the globe continue to emulate the inspirational style of one man Walt Disney. Walt effectively demonstrated that the actions of one leader, multiplied by the actions of many, can re-shape a culture and an organization. Long term strategy: Market penetration and market growth

SWOT Analysis Strengths


It is the largest media and entertainment company in the world. It has become one of the biggest Hollywood studios. Disney Company owns 11 theme parks and several channels. Innovative ideas. Ability to realize mistakes and to change. It is among the popular brand names in the world. Disney holds US$ 62.497 billion of assets. Popular characters. High brand awareness among the people. Walt Disney was ranked 8th in the Top 100 Global Brands. Proper inventory management.

Weaknesses
High operating cost. Culture imperialism. Euro Disney first- years failure. The $1.8 billion park has only 16 attractions. Religious culture differences. Poor management. Disney has been blamed of having sexual implication or references concealed in some of their animated movies, including The Lion King, The Little Mermaid, Aladdin, Who Framed Roger Rabbit, and Disneys original releases of The Rescuers. High investment with high risk involved. Limited range of target audience mainly Children.

Opportunities
Move into different segments. Taking First Mover Advantage. Attract around 300 million customers from all over the MENA Region, Africa, and Mediterranean countries. High demand for the foreign currency that the FDI will provide in Egypt during the current circumstances. This will lead the Egyptian government to introduce more concession concerning taxation and decision making. Reduction in operating costs (cheap labor in Egypt, unemployment). Integrate local culture into theme park.

Threats
Security Threats due to political instability in Egypt. The possibility of the application Islamic Shariaa. Employee retention and dissatisfaction. High competition in Media Industry. Social and ethnic groups. Government policies. Recession. High prices. Unskilled workers.

2nd Pillar : Environment Scanning

PESTEL analysis of the macro-

environment

Political conditions:
It determines the political ideology prevalent in the country whether socialism, capitalism or mixed and their reflection on the market type : planned, open or mixed market. There is Political Instability since the Egyptian Revolution against Mubaraks regime. However, after 30 years he left the country to the SCAF & it may change the political ideology of the country and as a result the economic ideology will be changed according to the coming political party.

Economic Conditions: Variables such as, GDP & GNP, unit labor cost, and personal consumption expenditure that influence a firms ability to do business and the kinds of economic system, open, command or mixed. GDP: It has annual GDP of 1.9% during the financial year 2010/2011, in comparison with the previous financial year 2009/2010. This is as a result of deceleration of all economic activity sectors that has accompanied the Egyptian Revolution on the 25th of January 2011. (Central Bank of EgyptPublication 2011)

Unemployment: Unemployment rate has reached 11.8% during end of June 2011, in comparison with 11.9% by the end of March 2011. Infrastructure: In the past half a century, Egypt has experienced remarkable progress in the provision of infrastructure in all areas, including transportation, telecommunication, power generation, and water and sanitation. Judging from an international perspective, Egypt has achieved an infrastructure status that closely corresponds to what could be expected given its national income level. The present infrastructure status is the result of decades of purposeful investment. In the past 15 years, however, a worrisome trend has emerged: Infrastructure investment has suffered a substantial decline, which may be at odds with the countrys goals of raising economic growth.

Investment and Trade Issues: Investment Law: On May 11, 1997, Egypt's new Investment Incentives and Guarantees Law (Law No. 8 of 1997), which repeals and replaces Investment Law No. 230 of 1989, was legislated. Tax Incentives: Law No. 8 of 1997 grants the projects working under its rubric a tax holiday that includes provisions of interest to investors. Profits on projects and shareholder shares are exempted from the tax on industrial and commercial profits and from the corporate tax for a period of five years starting from the first fiscal year following the beginning of production or activity. The exemption may be extended to ten years for projects established in new industrial zones, new urban communities, remote around those projects financed by the Social Fund for Development.

Trade Agreements: Egypt is not a signatory to any free trade agreement. Egypt, however, has been negotiating with the European Union (EU) to realize a free trade agreement which will replace the earlier agreement concluded in 1977 that gave Egyptian industrial products free access to the European market. Negotiations have focused on the abolition of quotas on oil, textiles and other manufactured products and a relaxation of restrictions on agricultural produce. Customs: Egypt has complex tariff and non-tariff barriers. The latter include: a banned import list, quality control inspection standards, prior approval list, quotas, Egyptian selling prices imposed on imported goods for customs valuation purposes and government procurement practices. Tariffs range from 5 percent to 55 percent, with certain rare exceptions such as automobiles (up to 135 percent).

Financial Variables: such as currency value rate, interest rates, inflation rates, and taxation. Inflation: Headline CPI published by the Central Agency for Public Mobilization and Statistics on March 10, 2012, increased by 0.67 percent (m/m) in February following a 0.15 percent (m/m) inch up in January, bringing the annual rate to 9.19 percent in February from 8.60 percent in the previous month. Currency: the Egyptian pound has depreciated in order to maintain the Egyptian exports. Egyptian exchange rate in 2012 is US$=5.85 L.E. Interest Rate: Central Bank of Egypt holds Interest Rate at 8.25% August 2011.

Technological: The ICT sector has had a Leading role in the Egyptian revolution. Blogs have increased public awareness concerning freedom and citizens right since the early 2000s. Social networking websites like the Face book (8.8 million users, September 2011) and Twitter were the main sparks of the revolution. An increasing number of Egyptians also use the internet to follow the latest videos, news and all the materials broadcasted on television. This was in line the booming mobile internet (7.29 million users, 2010) and increasing use of smart phones.

Environmental factors: Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.

Legal factors: The main laws governing foreign investment are the Capital Market Law of 1992, as amended to increase stock market regulation in 1998; the Investment Incentives and Guarantees Law of 1997, establishing the regime for free trade zones (FTZs); and a series of laws in 1998 setting conditions for private (including foreign) participation in public banks, insurance, maritime transport, electricity distribution, and telecommunications.

Legal factors: Depending on their size, location, and other characteristics, new projects financed with foreign capital are exempt from taxation for five to ten years; in addition, payments of interest on foreign loans are not taxable and investors are exempt from certain customs duties. There is one basic condition for approval: the project must be on an approved list in the fields of industrialization, mining, energy, tourism, transportation, reclamation and cultivation of barren land, or animal husbandry. Applications must be made to the General Authority for Arab Investment and the Free Zones, which consists of the minister of state for Arab and foreign economic cooperation and seven other members. The bidding process for contracts has been made more transparent, but Egyptian bids have preference up to 15% above foreign bids.

The Demographic of the MENA Region:

The MENA Region is one the most threaded regions of population doubling rate. Also, There is a race between economic development and population growth. The population of the MENA region at its least extent is about 381 million people, about 6% of the total world population. At its greatest extent, its population is roughly 523 million. 36 percent of the total MENA population is less than 15 years of age.

3rd Pillar : Mode of Entry

Africa Disney Mode of entry


The importance of the location decision (e.g., the sequence of where to take your product/service first). With a global strategy you need to select new locations that are most similar to where you have been successful in the past. Successful companies can get into trouble basing future success too heavily on past performance without making appropriate adjustments for the new country and culture. The importance of mode of entry: each mode may be more appropriate under different circumstances; the choice regarding mode of entry can strongly influence the success of international expansion.

Entry Strategies
High JV
(with company currently operating within the country)

Low Low Control Required Investment High

Disneys Performance
J J

The hereunder capital structure belongs to ( Disney paris ) and we suggest to complete a joint venture in egypt with Sawiras or Ahmed bahgat group .
Euro Disney Capital Structure

Individual Shareholders 43,6%

Walt Disney Co. 39,1%

Prince Alwaleed 17,3%


30

Market Entry Mechanisms Joint Ventures/Alliances


Conditions favoring joint ventures/alliances
Similar to sole ownership plus: cultural distance is large Government restrictions on foreign ownership Local company can provide complementary skills Local knowledge, resources, distribution, brand name, etc.

Advantages
Overcome ownership restrictions and cultural distance Combines resources of two companies, potential for learning Viewed as insider Reduces investment

Disadvantages
Difficulties in managing j/v Dilution of management control Greater risk (than export, license) Partner may become competitor; potential for knowledge spillovers

4th pillar : Customization , Marketing Mix

Socio-cultural aspects:
The MENA region population which are estimated as 6% of the world population is characterized with the Islamic traditions (they are religious), big families and care about owning fancy materials and products. Staff shall be conservatives from tattoos, piercings and closing. Staff shall also speak the three main languages spoken in the Region: English, French and Spanish.

The Marketing Mix :


Product : The products are the Theme Park experience and entertainment and the various Disney products sold inside. Include: well known hotels for ex: four seasons , intercontinental and movenpick Restaurants: like Chilis, Fridays and Roastry Also fast foods like KFC and MAC Cafes: Starbucks and Costa Also giftshops and all facilities anyone may need like pharmacies all of these are just beside luxury Disney land touch in all different shows and rides and more than someone can dream.

Product : We decided to enter with four cities from our Floridas Walt Disney world: 1- Magic kingdom: is for kids probably Entertainment at Magic Kingdom theme park includes parades, musical stage shows, spectacular nighttime fireworks performances and the chance to meet princes, princesses, heroes and popular Disney Characters. 2-MGM studios for adventurers: Attractions at Disney's Hollywood Studios theme park , centered on stardom and spectacle, include high-speed rides, high-octane stunt shows and hilarious live performances 3- Epcot: Entertainment at Epcot theme park continues day and night. See live shows, concerts, Character meet and greets, acrobats, fireworks, musicians, mimes, dancers, drummers, comedians and a talking turtle named Crush. 4- Animal kingdom: Entertainment at Disney's Animal Kingdom theme park includes elaborate parades, performances that feature nearly 20 species of birds and big-as-Broadway musical-stage shows and Disney Character meet and greets.

Promotion: It has already accepted the new spirit of cooperation to promote its products. It has joint deals with the leading travel operators, competitions in the regional and national press, discount schemes for its frequent customers and television, radio and press advertising. Also moving shows in the most crowded areas in each country of our targets like: UAE , KSA , KUWAIT , JORDAN , TUNISIA ,ALGERIA beside some of the Mediterranean countries like: TURKEY , ITALY AND GREECE. Also some African countries. What do you think of this guys? Shows should include original Disney characters plus one of national characters in Egypt FOR EXAMPLE: BAKKAR IN KSA : fulla While the show is presented some of pharonic dressed people will give people who are watching discount coupons to attract them and their friends. For African Countries there are the characters of the African countries: Bino and Fino, it's Nigerian educational animated cartoons that reflect the African Culture.

PLACE:

The new place in Cairo (capital of Egypt with the moderate weather and the flat space for construction) is Kattameya. It is surrounded with multinational Universities and schools and high class compounds. It is also near the airport.

References http://www.unctad.org/Sections/wcmu/docs/site_ieb _2011d09_en.pdf http://www.nationsencyclopedia.com/Africa/EgyptFOREIGN-INVESTMENT.html http://econ.worldbank.org/external/default/main?pag ePK=64165259&theSitePK=469372&piPK=6416542 1&menuPK=64166322&entityID=000158349_20100 113082503 http://www.infoprod.co.il/country/egypt2f.htm