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Hong Kong Disneyland

Essay by   •  March 18, 2013  •  Case Study  •  2,052 Words (9 Pages)  •  1,525 Views

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The purpose of this paper is to analyze the Walt Disney Company and their expansion into the Hong Kong market with the theme park named Hong Kong Disneyland (HKD). The Walt Disney Company was found in 1923 by Walt Disney. The company was founded on the bases of an entertainment experience for people of all ages starting out with short films and then moving into full length motion pictures. Since those humble times Disney has grown into a worldwide organization and is made up of four major areas. Consisting of studio entertainment, consumer products, media networks and parks and resorts.

In 2005 only two of the these four major areas were turning a profit, media networks and parks and resorts. At this time Disney had only four theme parks throughout the world. The original park, Disneyland Resort, opened in 1955 in Anaheim, Ca. The second park opened almost twenty years later in Lake Buena Vista, Fl and was named Walt Disney World Resort. In 1983 Walt Disney opened its first international theme park called Tokyo Disney Resort. This park was so successful that if promoted Disney to open a second international park in Paris called Disneyland Resort Paris, which opened in 1992. However it took until 1995 for this park to turn a profit which leads into the opening of Hong Kong Disneyland in 2005.

The Chinese overall were very excited about the new Disney park heading into their country. Both saw the new park as a way to increase revenue and tourism, and more importantly, Disney saw Hong Kong as a gateway into China. They were able to use the Chinese government as a way to get involved with the community and immerse itself into the culture. However, like many new business ventures things did not go smoothly as anticipated. During the first year the crisis over the Lunar New Year happened decreasing the parks attendance and revenues took a down turn. This simple lapse in communication affected the company tremendously and gave HKD a bad name.

With complaints rising about the lack of activity in the park along with mistreatment of guest by staff members the attendance started to decline and the guest started to speak out against HKD. The characters and performers started to speak out as well. Disney executives realizing they not only needed to boost sales but also the morale of the entire park. In an attempt to boost attendance at HKD they adjusted their pricing and incorporated a new promotion with the local taxi drivers, so as to create word of mouth advertising. They also work with local TV stations and travel agencies in promoting the park, Through all the negative publicity that was received that first year HKD was able to overcome those initial mistakes allowing for a promising future and hopefully learning from past mistakes.

Disney's Strengths and Weaknesses:

The strengths that Disney possess as it relates to Hong Kong Disneyland is that once the park opened the government became the largest stakeholder, potential for other countries to fly in and visit the parks, HKD has the lowest ticket price of all parks, the staff speaks different languages including English, Chinese and Cantonese, they also took into account the Chinese beliefs and traditions (Bhagat, Kashlak & Phatak, 2009, p. 152-156). Another strength that played a significant role in the success of the park was taking into account the beliefs and traditions of the Chinese.

The one weakness that delayed the initial success of the park was the lower than expected amount of visitors. This was due to the fact that the park was built in a small space which led to overcrowding, few rides and attractions only 22 - 18 fewer than the other Disney theme parks, the food poisoning case and the fiasco with the lunar New Year (Bhagat, Kashlak & Phatak, 2009, p. 155-158).

During the lunar New Year HKD failed to take into account the two days following the holiday were public holidays in mainland China therefore there was an influx of visitors on these days and the park could not handle them all. They were forced to close the gates leaving thousands of people upset and eventually causing a riot outside the park.

Disney's Opportunities and Threats:

Disney has a few opportunities that they will be able to take advantage of with the opening of HKD. There is a growing population in Hong Kong and China, this is also a place that Hong Kong, China and the Asian world would visit over and over again. The interest would continue to grow due to the population in children that would continue to grow over the years.

Along with any success and opportunities comes threats. The biggest threat to HKD would be the already established local attraction Ocean Park. Ocean Park is rated as one to the top ten amusement parks in the world by Forbes magazine and essentially was the only thing going in Hong Kong as the only amusement park in the area. Other threats HKD faced were the down turn of the economy, negative reviews and the conservative Chinese people.

Analysis of Disney's Corporate Strategy:

Disney's corporate strategy for HKD is to provide family oriented, entertainment at an affordable price. Disney and its theme parks symbolizes happiness with the goal of providing an experience of fantasies like no other park in the world. This is the same premise used for HKD. One of the main strategies employed by HKD was to offer this amazing experience for an affordable price. The price for a one day ticket in HKD was $295 which is equal to $38 in the United States. There were also special offers to visitors daily which included special rates for certain occasions, discounted rates for children and senior citizens and special packaging through travel agencies on their website. HKD also limited the number of tickets that are able to be bought



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