Module # 1 SLP
Dr. Suzanne Peterson
The way in which Disney decides to make their entry makes all the difference. Disney must be able to detect changes in the market and also predict the ways in which their competitors are planning their own strategies. Disney can either choose to be left behind in the market, or reap the profits.
In the past they experimented with Tokyo Disneyland. They were interested in going international with their theme parks and chose to do it in . I believe this was a good idea, however a poor strategic plan. Disney, for reasons of uncertainty opted for a licensing deal with . Good job getting in with very little financial risk, however, Tokyo Disneyland is doing great and now instead of an ally, WDC has competition . WDC is also limited on marketing strategies; they have little say in the company, which could be costly down the road.
Next WDC set their sights on France and Euro Disney. Learning from their mistake in , they decided to invest $140 million dollars for a 39% equity stake. This was a much better deal than , because now they have a say in the decision making process. In addition, they will have centralized control with a reduced duplication of efforts. On the other hand, their global approach to strategic planning means they have to wait to reap profits and royalties. In addition, Disney failed to observe that was very keen to their alcoholic beverages. WDC also failed to take into account the well known fact that is adamant about not letting other countries elbow their way into their business ventures, thus profits were not what were anticipated.
WDC finally got it right in . They invested over $300 million for a 43% equity stake. Seeing as the Chinese government put up the other $2.9 Billion dollars in low interest loans. It seems they learned from their mistakes. I believe the company is has a transnational entry mode. They realize they must tailor the themes, and alter policies that will fit the cultures of the local people. According to an article called Mickey stumbles at the Border, “The company has long tried to micromanage foreign operations out of , instead of letting local managers operate autonomously”. Well the managers are still not autonomous, but they are now being encouraged to work outside their boarders and coordinate certain efforts. This will allow the managers to receive a lot more input from each foreign country, and they will be able to tailor to their demographic needs more efficiently.
In conclusion, Disney has learned from their mistakes and seems to have found the right entry modes based upon the proper analysis of the cultures and traditions that affect the local culture, environment, economy, and political structure. It seems that for the time being, The Walt Disney Corporation prefers the joint venture entry mode due to the fact that they can still have a say in how things operate while reaping the profits as well. Not a bad deal!
Mickey Stumbles at the Border
Forbes; ; Jun 12, 2000;