Hong kong disney land - Essay Example

One of the most essential entry approaches for Disney is to work with foreign governments where they want to open theme parks because the latter can provide various kinds of incentives. France, Japan, and Hong Kong all provided different incentives to attract Disney into opening its theme parks in its countries. France offered $1 billion worth of various incentives (“Case Study,” n.d.), while Hong Kong paid for more than 80% of the $2.9 billion initial expenditures of the Hong Kong Disney project (Einhorn & Balfour, 2009).

Furthermore, it helps Disney that the foreign country is a partner in the venture because the risks are distributed and the country can provide cultural knowledge and skills that Disney may lack. For instance, in Hong Kong, the government holds 57% share in the joint venture (Einhorn & Balfour, 2009). As a business partner, the government reduces risks on the part of Disney, wherein losses were distributed between it and the government (Einhorn & Balfour, 2009). The government also offers expertise in local market knowledge to Disney, thereby providing real-time, relevant knowledge to Disney, so that it can properly adapt its marketing mix to local markets (“Case Study,” n.d.).

In addition, the government can provide the infrastructures needed for expanding the theme park. Hong Kong Disney wants to expand its park, and right now, it is waiting for the government to finance part of the expansion (Einhorn & Balfour, 2009). Hence, Disney reaps diverse economic, social, and cultural advantages in working with governments as partners. As for Hong Kong Disney, the Chinese apparently had problems understanding and applying international norms of behavior. China is a large market with different dialects and cultural norms.

Disneyland imposes universal cultural rules and guidelines, which the Mainland Chinese, for instance, cannot easily follow, such as not spitting and urinating in its areas and not smoking in prohibited locations (Ren, 2013, p.42). Some of the Chinese cannot understand these international norms of behavior because they clash with their local cultural norms. In other words, what may seem international might be tremendously conflicting with local habits and practices (i.e. Many Mainland Chinese do not think that spitting anywhere and urinating in public areas are supposed to be unethical or unlawful).

In addition, it is critical for Hong Kong Disney to help the Chinese understand international norms of behavior because Disney aims for universal brand equity. Disney seeks to have a strong global brand, where entertainment is attained through an appeal to magic and the international connection of people across cultures (Tuleja, 2009, p.142). Disney wants tourists, whatever Disney theme park they might be in, to feel that Disney is in each location, which means that expectations across theme parks in terms of norms and practices must be standardized to reduce negative surprises and negative brand associations.

Disney has a large stake, thus, in standardizing international norms of behavior for the benefit of its brand and its notion of international markets. After discussing international norms, the next points to be discussed are two issues in Hong Kong Disney’s current operation, primarily falling revenues and expansion funding issues. At present, Hong Kong Disney’s revenues are not stellar. Hong Kong Disneyland's numbers have been disappointing. It sold 4.27 million tickets in 2007, which dropped from 5