Introduction

Disney cartoons are widely known all over the world and every inch of population
from the baby boomers to new millennial generation. The Walt Disney Company
which was commonly known as Disney until now is the tycoon of entertainment
corporations in the world. Founded by an entertainments genius, Walt Disney and
his partner Ray O and was established in October 16, 1923. Headquartered in
Burbank, California, Disneys main operating units are studio entertainment, theme
parks and resorts, media networks, and consumer products.
With the mission is to be one of the worlds leading producers and providers of
entertainment and information, Disney put itself as the world's top 20 most valuable
brands in 2014 (The Forbes Ranking). The company makes much of its money from
broadcasting and cable ventures as well as from its successful theme parks and
resorts. [1]
Unlike Tokyo Disneyland Resort and Paris Disneyland Resort, the Hong Kong
Disneyland Resort was built by Disney in partnership with the Government of Hong
Kong and was formally announced in November 1999 and officially opened on
September 12, 2005. This resort consists of one theme park, two hotels and retail,
dining and entertainment facilitieson Lantau Island.
Disney invested US$316 million (HK$2.45 billion) for a 43 per cent equity stake in
the project. The Hong Kong government invested US$2.9 billion (HK$23 billion) for a
57% equity stake. Although Disney has a 43% stake in HKITP (the company formed
between Disney and the Hong Kong Government) it does not have any ownership of
the land. The nightmare story in Paris wasa lesson learned for Disney Company
when they decided to open Hong Kong Disneyland Resort.

This research paper applies the principles of globalization theory to Disneys

successful adaptation in Hong Kong which we believe many angleshave been
studied to make it a success story. We will answer two questions with related to the
above issue which based on the article Hong Kong Disneyland by Beatrice S.
Leung, Yim-Yu Wong and Andre M. Everett.

Question 3
What are the key challenges Disney Hong Kong will face in implementing these
strategies? Suggest methods of dealing with these challenges.
In answering this question, we are looking at five (5) main areas which were
highlighted in this article.
Pursing the cautious and growth ownership model
First area is related with the challenges in pursing the cautious and growth
ownership model. Hong Kong Disneyland is assumed to bring benefits to Hong Kong
in the future. This theme park is expected to attract millions of tourists, create
thousands of jobs opportunities, extend and improved the quality of life particularly in
Lantau Island, and enhance Hong Kong's international image. However this not
comes with zero single challenge. Being traumatic about the failure in euro, as a
largest entertainment company, the key challenge Disney face is this company need
to display its expertise in the managing and marketing of its big brand in order to
make the theme park a success.
To overcome this challenge, Disney takes a different approach for Hong Kong resort,
unlike Tokyo Disneyland Resort and Paris Disneyland Resort, the Hong Kong
Disneyland Resort was built by Disney in partnership with the Government of Hong
Kong. As summary, Disney learnt its lesson and refined its internationalisation
approach for its Hong Kong resort which then reflected in positive and high revenue
for the company.

For us, in dealing with the international business, a company should always cautious
in avoiding over-investing while maintaining a solid share and control over the
project.
Sensitivity to Community Concerns and Work Place Issues
The disaster in Euro Disney was led by Disney itself where they disregarded some of
the most important cultural aspects such as cultural differences and management
issues. The Disney was too obsessed in its insistence on the American Disney style
which they believed this style adored and be accepted all over the world. The
lessons learned from this euro story can apply to any country around the globe. For
example, the Walt Disney Company failed to properly understand the eating habits of
the Europeans. The lesson learned is Disney should understand the eating habits of
people in their suggested new location and near that country.
In the case of community concerns, Disney should taking into consideration local
attitudes. Good example in the case of euro, Europeans prefer a few longer holidays
rather than short breaks which also attribute to the seasonal attendance by
Europeans. In this case, there were not a lot of people during the non-vocational
months. As compare to American style, they usually would take their children out of
school to go on holidays, thus for us study on the new location should also covers
their culture and behaviour of the place and nearby from the big area such as peak
season of vacation to a little thing such as their meal preferences.
The strategy of differentiation
Other challenge for Disney is to maintain the quality service concept among its
locally recruited employees. This was the main challenge with related to human

resources as Disney did not have any experience in China or Asia. The work culture
and tourist interest might be different as they faced in Paris Disneyland Resort. As a
result, Disney decided to renowned quality service and efficiency by creating a
standard and unique Disney look and Disney smile. This article also proposed to
have a Disney University in Hong Kong to provide on-the-job training and
professional development for each theme park employee.
Strategic alliance with the Hong Kong government
Disney must be more sensitive to the political environment and avoid irritating the
Chinese government. In this article, writer suggested that to smoothen the opening
of Hong Kong Disneyland Resort,Hong Kong government may act as the
intermediary to channel critical issues and concerns for Disney to reposition its
overall expansion strategy and to make tactical adjustment while marching into the
Chinese market.
Adaptations to Hong Kong and the Chinese environment
Euro Disney failed on many faces. Lacked understanding of the local culture is one
of the reason due to this factor plays a crucial role in doing business especially when
entering the foreign market. Thus, adaptations to the local environment are very
important for Disney. In the case of Euro, misunderstanding European breakfast
norms and built a small restaurant 350 serving seats for around 2,500 visitors lead to
the restaurant were bombarded with breakfast eaters.
As for Hong Kong, Disneyland need to lose their long-standing smoking ban policy
and allowed to smoke in restricted areas as mainland Chinese wide use ofcigarettes.

In this case, Disney must be flexible about the rules on smoking in the Hong Kong
theme park.
Another challenge stated in this article is related to crowd management and
maintaining cleanliness in the park. Hong Kong Resort is expected to receive crowd
from mainland China. The huge population of mainland and their norm to do a
vacation during short break will lead to huge visitor-flow during peak season. Thus,
Disney not only need to be good handling crowd but also has to display its expertise
in maintaining a clean and orderly environment in the park with a high volume of
tourists.

Question 4
Since Disney Hong Kong has been implemented, what are the current challenges
faced especially with the Shanghai Disney?
Disneyland has learnt that a successful story in their previous resort is not a simple
duplication of the original version and different location might lead to different level of
acceptance for their resort. By now, there are five Disneyland located in California,
Florida, Tokyo, Paris and Hong Kong. From three overseas Disneyland, Tokyo
Disneyland proved to be a great success, while France and Hong Kong Disneyland
keep on losing money[2].
According to Misia research in their article Disney, China And The Challenges Of
Global Strategy For Media Companies, Disney can make an outstanding story from
Shanghai new location. With China now the worlds second largest cinema market,
and with Chinese Video On Demand services going into overdrive buying up rights to
Hollywood produced content, the Chinese consumer is rapidly maturing into a
willingness to pay for premium experiences such as multiplexes and expensive
theme parks. The research also revealed that the peak admission prices for the
Shanghai Disney Resort are almost 20% of the average monthly wage in China.
Despite the expected positive cash flow from the opening of Disney Shanghai, there
are challenges which need to be addressed. The answer to the above question will
be divided into four main factors that were highlighted in the previous articles and
research done by local and international business analysts and writers. The four
factors include rivals which focus on international rivals and domestic rivals, political
challenge, crowds and the price of the entrance fees for Shanghai Disney.

Rivals
As the opening of the US$5.5 billion Shanghai Disneyland Park, Disney has own
challenges in related to rivals.Given the huge population of China with huge
resources and expected visitor, thus, about 2,500 parks are planned in China. These
include Japanese brand Hello Kitty, and popular cartoon character which already
build a "Dwarf Empire" in Yunnan.
A part from that Disney also facing domestic rivals including competitor
fromHaichang Ocean Park Holdings, which plans to open the nation's biggest marine
park in 2017, and billionaire developer Wang Jianlin's Dalian Wanda Group, which
aims to unveil 15 in China by 2020 and five overseas.Disney also need to compete
with cartoon characters from Chinese cartoons such as Boonie Bears or Pleasant
Goat and Big Big Wolf which more close to Chinese children heart.
As the number of competing theme parks in China is increasing rapidly, it is
expected to become even harder to win the hearts of Chinese children. This also
gives alternatives to Chinese parent to choose the best and affordable park that
value for their money.It is indeed a main challenge for Disney to set high sandard of
theme park or at least at par with others competitor. Disney need to plan a effective
competitor strategy in order to takle this challenge.
Political
Political challenge also had highlighted in many of the research that was done
previously. China's attitude to Disney is uncertain, reflecting a clash between
nationalistic sentiment and the desire for American-style consumption among the
growing middle class. The people of China are doubtful of the idea being western
with the concerns over Chinese children becoming disinterested in the countrys own

culture. Both politicians and business owners to restrict its westernizing influence in
many areaby the people of China. There is the case where Disneys recent childrens
blockbuster Zootopia was accused by a national newspaper of infiltrating Chinese
society with western values.
One more good example stated in the above article is DisneyLife, Disneys on
demand content subscription application was blocked in China in April after a mere 5
months of operations, at the request of regulators reflecting the challenges of
operating in the Chinese marketplace where the demands of consumers come up
against conflicting political imperatives.They have high nationalistic sentiments which
expose Disney to offer Chinese style of entertainment. This challenge may lead to
Disney being away from their originality.
Crowd
Disney holds out big hopes for the Shanghai Disneyland due to the size of mainland
population. The population of China currently estimated at 1.38billion and 24.1
million from the total population are in Shanghai. Due to this, Disney estimates that
330 million people live within a three hours radius of Shanghai, providing a huge
audience who could come for overnight or day visits. Many investment analysts also
say the park could become Disneys most profitable in the world, drawing on the
popularity for Disney characters in China and also booming demand for world-class
entertainment from increasingly affluent Chinese consumers.
Managing crowd might be a greater challenge to Disney as they need to well plan
their infrastructure and increase their level of efficiency in services for example
queuing system. On the other hand, unlike Japanese, Chinese is high intensity to
become uncivilized (manner problems) which might lead to vandalism. According to

Disney, their theme parks are 'where dreams come true,' but not for the visitors who
had visited Shanghai Disney.
Shanghai Disney not celebrating it first anniversary yet, but negative feedbacks has
cycles around main media and media social. According to recent video footage that
was highlighted in dailymail.com, a lot of nightmare manners revealed. In the said
YouTube clip, an American-Chinese man called Disney Dwayne takes a tour of the
new theme park and points out all of the aspects that he was shocked by during his
two-day visit. They included a woman helping a young boy to urinate in a public
place, an electrical socket ripped from a wall and children freely playing in an offlimits display area. Photos posted to Chinese social media network Weibo also show
trash left behind in the courtyard, vandalism to a light post and recently planted
flower beds that have been walked over.
Price
A high price for tickets, restaurants, shops and hotels in Shanghai Disney isa greater
challenge for Disney to success in this new location.Most of the analyst says that the
parks ticket prices are actually the cheapest of the six Disney resorts worldwide, but
also the most expensive as a percentage of average income of local residents.
A standard single day ticket for Shanghai Disneyland will cost 370 yuan ($56), while
a peak-day ticket for festival, holiday periods, and weekends cost 499 yuan
($76). The park will offer a 25 percent discount for the disabled, elderly patrons over
the age of 65, and children between 1 and 1.4 meters in height. Children under a
meter high enter for free.
The fees as stated above are relatively cheaper as compared to Hong Kong which
its standard entrance fees is $69.The high fees statement came from nitizen of

social media however is contradict with the survey finding, according to a survey
conducted by the Shanghai Consumer Council, the less one earns, the more one is
fond of Disneyland.In the survey, more than 86% of the people whose annual income
is between $7,660 and $10,700 expressed interest in the park, whereas 78% of
people who earn over $15,300 a year showed fondness for Disneyland [7].

Conclusion/Suggestion
Looking at the strategic location, infrastructure and accessibility, Hong Kong should
have no reason not to success. The park however did not a successful as Tokyo
Disneyland Resort due to several factors that Disney need to analyse in their future
plan. In general, the Hong Kong Disneyland seems to improve slower and slower
due to the inefficient management of both Hong Kong government and the Disney
Company.
Some researchers said that all it needs for Hong Kong Disneyland is to be more
active in promotion not only in domestic but international markets. The market
indeed is huge covering not only mainland China but also country nearby.
Shanghai Disneyland creates a different story line for Disney which challenges
include managing Chinese crowd and unattractive fees. Even though Hong Kong
and Shanghai are under a same flag, their attitudes toward Disneyland theme park
are differences in many ways. To overcome the challenge faced, Disney is struggling
to build theme parks that are more focused on Chinese culture and history.
In order to be surviving in the future, Disney must try harder by analysing the new
location in many angle and possibilities. This includes in the upgraded project,
expansive decision and communication strategies.

References
[1]How much money does Disney Make? shttps://www.reference.com/businessfinance/much-money-disney-make-4d60716cfd0aaa8a
[2] Matusitz, Jonathan. "Disneyland Paris: a case analysis demonstrating how
glocalization works." Journal of Strategic Marketing 18.3 (2010): 223-237.
[3] Taylor, Richard, and Terry Stevens. "An American adventure in Europe: an
analysis of the performance of Euro Disneyland (1992-1994)." Managing Leisure 1.1
(1995): 28-42.
[4] WenheYue, The Fretful Euro Disneyland. International Journal of Marketing
Studies, 1.2 (2009); 87-91
[5] The Walt Disney Company, https://thewaltdisneycompany.com

[6] Annual Fact Book 2011, http://cdn.media.ir.thewaltdisneycompany.com

[7] How the 55 billion Shanghai Disneyland plans to compete with local,
http://www.dnaindia.com/world

[8] Crowds, Prices To Challenge Shanghai Disney After Festive Opening, Doug
Young, June 2016, Forbes Asia.http://www.forbes.com

[9] How Disney made sure Shanghai Disneyland doesnt put off Chinese visitors,
July 2016, Asia Travel, http://www.scmp.com

[10] Tourists crowd, trash Shanghai Disneyland weeks before opening, Matt Mauney,
May 2016, Orlando Sentinel

[11] Food prices at Shanghai Disneyland give early visitors heartburn, Yingzhi Yang
and Nicole Liu, Los Angeles Times, May 2015, http://www.latimes.com