A Successful Global Strategy

A Successful spheric StrategyExecutive SummaryThis Report outlines how Walt Disney did boomingly in worldwide dodging. We found that the root issues include the need to expand into late markets and/or industries. We used a Porters Five Forces analysis to develop the alternatives. The alternatives that we proposed were to expand orbiculately and enter the China makret. We analysed how the alternatives fit with Disneys corporate culture if the alternative would leave behind a competitive proceeds. Upon the completion of our analysis, we recommend that Disney should expand globally in order to capitalise on unrealised markets in order to slake its root issues.1. IntroductionThe Walt Disney Company, besides known simply asDisney, is the largest media and enjoyment compile in the world. (http//m oney.cnn.com) The Walt Disney Company, together with its subsidiaries and affiliates, is a leading(a) diversified international family entertainment and media enterprise with four bus iness segments Media Ne devilrks, which includes the callers television and Internet functionings place and Resorts that featuring the companys question lays,cruise line, and former(a) travel-related assets Studio Entertainment, which includes the companys film, recording label, and theatrical divisions and Consumer Products, which produces toys, clothing, and other selling based upon Disney-owned properties. (http//corporate.disney.go.com)A strategic analysis of The Walt Disney Company give be conducted to explore the globalisation aspects of strategy within the organisation. Relevant theoretical examples and existential information volition be used to assess the viability of Disneys current global strategy and recommendations al petty(a) be make if any appropriate changes should be considered. The Five Forces Model go forth be used in the hide to analyse the competitive advantage of Disney.The Walt Disney Companys objective is to be one of the worlds leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The Companys primary financial goals argon to maximize earnings and cash flow, and to allocate capital profitably toward harvest-home initiatives that will drive long-term shareholder value. (http//corporate.disney.go.com) It is influenced Disneys strategy towards making the company practices globally. The following findings will analyse how Disney using taken a global approach in order to expand the business and will highlight areas of gain and apply them into theoretical frameworks. And the issue will generally focus on the plan of building a new Disneyland in ingrain China2. Findings2.1 Current StrategyThe current strategy of Disney is in general depends or influenced by their mission statement that book of factsed above Be one of the worlds leading producers and providers The success of Disney is obvious, but how and why it was able to achievethat success is not as plain. The biggest strength of Disney as acompany, is really the firms share of mind and it is overly thecompanys strongest competitive advantage, or its economic moat. Toillustrate this, each one of us, by and by earreach the name Disney willautomatically have something in mind an animated film, perhaps, or acharacter, or a stand greenness. No matter what that is, the association is or so uniformly a very positive one One of entertainment, imagination, andperhaps a family setting. In contrast, the mention of Columbia Picturesor Universal Studios will not evoke the same sign of response.However, their main global strategy is really in public eyeball building another idea greens in strike China. The Chinese government has approved plans for the Walt Disney Company to build a home park in Shanghai, its first in mainland China. (http//news.bbc.co.uk)According to the Disney Annual Report (2009), they will remain focus on advancing their str ategies objective of building the Companys carriage as a leader in the creation of high gauge branded content and making Disney an even more prominent and successful provider of entertainment globally.2.2 outside(a) composition and expansionAccording to sour grass De Wit and Ron Meyer (2004), international composition is an international firm operates in two or more countries. When a firm starts up value adding activities in yet another country, it is called internationalisation. Disney is actually doing this to meet their goals. In 2005, Disney has opened the one-fifth theme park and it is located in Hong Kong China. It can see that thither is a trend of Disney wants to do business in China. Disney has won compliment to build a theme park in Shanghai after nearly 20 years of courting the Chinese government.l International ScopeAs eachone knows China is one of the fastest-growing economies in the world, is a long potential market for any strange brand aiming to expand abro ad. Shanghai, arguably the most international and diverse city in China. It will forego Disneyland to utilise the largest tourism resources in Eastern China for example sightsee spots, tourism theme. On the other transcend, the world recession and other difficulties in the industry, Disneyland hasnt been doing well in recent years. Seeking a more bankable market is essential, and it is estimated that Shanghai Disneyland will attract 30 million visitors every year. (http//business.globaltimes.cn)l International distributionThe international composition of firm too depends on how it has distributed its value-adding activities across the countries selected. In some firms, all national subsidiaries exile out similar activates and are of comparable size. For example RD, and production concentrated only in few countries. (Porter, 1986) At the moment, Disney and build 5 theme park in the world and they distributed in different part of the world. The pagan differences will affect h ow Disney works for the business. Mention about how to establish the foreign subsidiary, firm can work independently or joint gamble with local player or foreign partner. This could refer to the theme park as a joint venture company the cost of inputs, the investment funds is not just for theme park, the park also includes a mannikin of capital costs, land costs, environmental costs, part of the regional transport infrastructure costs, relocation costs. And the joint venture partner for Shanghai Disney is the State-owned enterprises Lujiazui Group. (http//www.chinafinancialdaily.com)2.3 Porters five forces framework of DisneyDisney has a favourable marco-environment. Its microenvironment will be examined using Porters five forces illustration (Porter, 1980). This model seeks to measure the competitiveness of a company by savoir-faire to five forces competitive rivalry buyers suppliers potential entrants and substitutes.In the case of Disney, most of the major things bought such as the rides and buildings are one-off purchase. The suppliers that affect daily operation are food and beverage, fireworks etc. All these are replaceable and will not directly affected Disney competitive advantage. Secondly, the bargaining power of buyer is determined by the concentration of buyers and how much customers can impose atmospheric pressure on volumes and margins. Lets take Hong Kong Disneyland as an example their customers have comparatively low bargaining power because the theme park is differentiated in its industry. So the threats from buyers are low. There is a direct competitor for Hong Kong Disneyland, Ocean Park. most(prenominal) teenagers will prefer Ocean Park as the entry hire for Disneyland is almost US$24 more than Ocean Park. That is why Hong Kong Disneyland has steady lost money since opening in 2005 (http//www.businessweek.com)However, there is a dilemma happen to Disney there will be a greatest threat or opportunities for Disneyland overall as menti on above, the proposals for the second Disneyland in China. This new Disneyland will be eight times bigger than the one in Hong Kong (Subler, 2008). So Disney faces a same brand competitor within Asia and competing in the same market. And the substitutes would affected by other leisure and retail industries. It is because in China, shop normally close at 10pm rather than 5/6pm in western countries. Customers might have other alternatives instead of theme park.Overall, the microenvironment analysed by Porters five forces has revealed that Disney has a competitive environment.2.4 Localisation or Globalisation?When the Hong Kong Disneyland was below pull, it was reported that the design plan of this park had been reviewed by Feng Shui experts to bring prosperity and good luck. Now, Disney will set up its second theme park in China. Will Shanghai Disneyland contain more Chinese features? Should Disney bond to internationalised and standardised route or positively adopt the localisat ion strategy?According to the report from The Times (http//business.timesonline.co.uk), Disney said that Shanghai Disneyland will be a fantastic world with Chinese characteristics, including the Chinese food and the suggestions from Feng Shui experts in the design of the park.To address this possibility, the spokesman of Disney made this official statement Shanghai will feature a Magic-Kingdom style, in keeping with its cousins in Asia, the U.S. and France. It will also have Chinese characteristics as a part of the localization movement that is a part of the deal.3. ConclusionAfter analysing the Walt Disney case, the current strategy for Disney is cosmos one of the leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. And other strategy is made looking forward to build the sixth theme park in Shanghai China. They will need to consider how they work successfully in order to avoid making the same dislocate of Hong Kong Disneyland. Though it is not a big mistake, the issue they need to mend would be how they operate the new Disneyland. Would they stick the Chinese feature in the theme park? Is localisation or globalisation better causal agent for the new Disneyland? Also, the Porters five force Model has shown that Disney has a competitive advantage to the microenvironment. No matter how they operate, the Walt Disney still has a high reputation in everyone heart.4. RecommendationIn order to make a better improvement for Disney in doing business globally, there are several points I would like to focus on and help Disney works efficiently. The managers of Disney are believed to have made up their minds between globalisation and localisation. But like the saying Disneylands construction will not be stopped if there is space for imagination, numerous guesses will haunt Shanghai Disneyland before it is finished.I would say localisation is not a bad thing. Disne y should integrate the Chinese features into Shanghai Disneyland. Even the theme park can be called Disney Oriental Park. However, on the other hand for using the idea of globalisation, the special cultural characteristics would makes Disney become what it is. And too umpteen local elements may exert negative influence upon its attraction power.Therefore, both localisation and globalisation should focus on transferring the cultural elements into something needed by the industry chain.Also, for even more expansion, as everyone knows, the size of Hong Kong Disneyland and Paris Disneyland is relatively small comparing to other Disneyland. They still have room for merely expansion. Such as Hong Kong, it is a right decision to expand the theme park further for the preparing of new opening of Shanghai Disneyland. Once they expand, they would not lose the competitive ability against the rival or internal competitors.Therefore, in my opinion, Disney has successful expand globally in order to capitalise on unrealised markets in order to alleviate its root issues. But there are still unforeseeable potential for Disney. So in picayune term, a carefully formulated brand strategy will be the key for Disneylands China dream to come true.5. ReferencesThe Walt Disney Company Fiscal grade 2009 Annual Financial ReportBob De Wit and Ron Meyer (2004) Strategy, Process, Contentm Context, An international perspective, third Edition, South-Western Cengage LearningPorter, M.E. (1980)Competitive Strategy, Free Press, New York, 1980.Company Overview http//corporate.disney.go.com/corporate/overview.html (Accessed 10th Feb 2010)why Disney wants DreamWorks http//money.cnn.com/2009/02/09/news/companies/disney_dreamworks.fortune/?postversion=2009020914 (Accessed 21st Feb 2010)Disneyland approved for Shanghai http//news.bbc.co.uk/1/hi/8341570.stm (Accessed nineteenth Feb 2010)Shanghai Disneyland on the Way http//www.gotoread.com/mag/13136/sarticle_32571.html (Accessed seventeenth Feb 201 0)Hong Kong Disneylands Future Is in Danger http//www.businessweek.com/globalbiz/content/mar2009/gb20090317_923737.htm (Accessed 22nd Feb 2010)Mickey Mouse prepared to be Shanghaied as China opens up http//business.timesonline.co.uk/tol/business/industry_sectors/leisure/article3498733.ece (Accessed 15th Feb 2010)Disney Shanghai to gamble? http//www.chinafinancialdaily.com/financial/news/2009/12/10/11836/interpretation-of-the-disney-shanghai-suction-gold-journey-tourists-spend-about-600-yuan-per-capita-1.html (Accessed 15th Feb 2010)Subler J. (2008), Shanghai applies to build its own Disneland mayor, Reutoers, Online News 6th March 2008 Available from http//www.reuters.com (Accessed 17th Feb 2010)