Global Management - Disneyland Amusement Park in India - Case Study Example

Global management Introduction India as a country welcomes the new Disneyland amusement park. The park is uniquely designed under the influence of the Indian cultures and its fork tales. Now visitors have a chance to enjoy services the same as those visiting Disneyland. This park indicates how India as an economy has grown in strength. The launching of this park comes in response to the reluctance of Walt Disney Company to open an amusement park in India. This memorable park in India elicits ideas that India has grown in its economy, technology and other aspects. The theme park, on the other hand, concentrates on India’s culture (Williams, 2004). One of the features of the park includes a theme inspired by movie. The movie allows visitors to experience the influence of a character Kila; the Villain in the movie. The movie relates to a scene where Kila a “ghost” haunts a house. Another very important attraction in the park is the attraction representing “wrath of gods”. Some of the attractions in this category is experiencing seeing Indian Mythological characters (Williams, 2004). Visitors further get a chance to experience a river ride inspired by the discovery of a dinosaur. 1.1. India The country lies on the south of Asia. In comparison with its neighbouring countries, India is the largest in terms of landscape and population. The country has a population of up to 1.2 billion. The country has a long history from their ancient age to its relations with Britain. At present, India’s GDP has tremendously improved. It has improved its communication, its infrastructure, Agriculture and Educational sector. India as an economic giant in Asia has the status of the fastest growing economy in the region (Khilnani, 1999). The country has improved on almost all sectors of the economy. These improvements have made the country develop to the state of owning nuclear weapons and having the third largest army in the world. 2. PESTEL Analysis of India 2.1 Political India’s political analysis has an influence on investors and business transactions. The political class of the country as well as the political aspects of the country has influenced the economy of the country. The political class has been instrumental in the development of policies. Such policies have been able to promote the creation of various reform fronts. The country has transformed its economic reforms through the transformation of capital restrictions for investors. The government has projected that a slight change in the capital restriction would attract foreign investors. Another of such acts of transformation includes the privatization of various organizations. Privatization has seen a change in the management of falling economic giants in the country (WorldBank, 2013). With this influences, the country has witnessed an increase of their economy to a scale of 8, 8% spanning from 2003 to 2007. This tremendous change in the economy has seen the improvement of the infrastructure of the country, power supply and communication. Transacting business now than ever has improved in India. Investors now have a chance to enjoy the improvement of infrastructure, increased power supply for production and the improvement of the communication infrastructure. . 2.2. Economics In order for one to start, a venture in foreign nation’s there is need for the analysis of the economic condition of the country of interest. Individuals need to understand the state of economy of the interested country. Therefore, for investors wishing to transact business transactions it is imperative for them to understand the economic condition of the country. World Bank details on the ease of doing business in Asia, India ranks a head of its neighbours, China and Russia. By the year, 2012 to 2013 India had registered an economic growth of up to 5%. This value is on the negative side as related to previous values (Bhagwati and Chakravarty, 2012). Such a negative slope comes because of aspects such as a weakening industrial growth. The country even has tightened its monetary policy to cater for such downward movement. The government of India had to design several strategies to meet the downward flow. The measures the government took include increasing the price of a liter of diesel. A further observation reveals that the country has a foreign deficit of 4.6% to the GDP of the country. Another varies important aspect is the current downward trend of the value of Rupee in the market (Bhagwati and Chakravarty, 2012). Despite all of the above influences, India prepares to witness positive economic improvement in the year 2013-14. According to statistics, there has been a 5% improvement in the economy of India. The country further expects to register a 3.3% growth for the coming years. This growth relates to the projected growth of consumption expenditure. Another important aspect is the expected improvements in exports. 2.3. Socio and cultural Analysis The socio economic improvements of India include the improvement of health, improvement in education, modernization, improvement of the status of women and housing. Other socio economic improvements in India relate to the improvement of the distribution channels of services and goods. Further, there have been tremendous improvements on the literacy levels of the people. Since its independence, India has made vast efforts in improving its socio economic status (C.I. A, n.d.). The country has an expansive geographical location. Despite this the country has been able to improve its socio economic status to some level. India’s fast progress in terms of development relates to certain influences. 2.4. Technology According to Czinkota & Ronkainen (2013), Indian companies have made investments in new technologies. This has improved their communication networks and transactions. However, there are various negative influences affecting its adoption in the country. Such influences include the readiness of organizations to change their method of transactions. Other influence includes the lack of capacity for organizations to make transformations and low funding (Ravindra et al., 2009). Most organizations in the region focus on expansion than on technological improvements. For foreign organizations, technology would of benefits. It is a recommendation for any organization wishing to invest in the country to offer cloud-computing services. The service still at its infancy would be of assistance for marketing organization products. The use of social media in marketing will be phenomena in India in the coming years. Such a platform will improve organizations ability to meet the needs of a wider audience (Warner, 2014). Another important growth for the country is the growth of mobile use and its application. 2.5. Environmental Issues There has been a change in lifestyles in India. The country’s middle class has been growing at a tremendous level. This means that there is an increase in the number of consumers. On the other hand, industries have to increase their production to meet demand. This therefore means that there might be an environmental degradation at the production phase. Such activities will have an influence of water points, climate and even on energy sources (Hillabrant and Rhoades, 2004). The other problem that arises in relation to environment includes the influence of waste on the environment. Consumers in India have been instrumental in degrading the environment (Mandar, 2006). As if the government would be assistance in conversation, they have been unable to manage waste disposal completely. There have been public outcries from citizens on the need to have a better lifestyle. Of great concern is the pollution of rivers by domestic discharge and industrial waste chemicals disposal (Mandar, 2006). This has had an impact on aquatic life and even livelihoods. The public reaction to such industries include protests, boycott of products, willingness to pay more to green companies and lawsuits. 2.6. Legal Analysis There are legal implications in doing business in India. These legal aspects border on legal barriers that prescribe business transactions within the region. In some instances, investors as well as business owners require assurance from the government while conducting business. Investors, on the other hand, face stiff challenges in performing their duties due to several factors. Some of these factors include the lack of zoning regulations (Hillabrant and Rhoades, 2004). The country does not have effective commercial code. It is also important to note that such barriers include unregulated tax policies effective in discouraging investment. The legal implications to the country border on lack of capital. The legal aspect of the state involves the courts, judiciary and its procedures. Government policy is another important for India. Such policies have been effective in offering collaborations between foreign investors and Indigenous organizations (Hillabrant and Rhoades, 2004). 3. SWOT Analysis of Disney Corporation 3.1Strength. The strength of Disney Corporation that would assist it meet market demands in India include; its brand strength. The company has a unique brand that has made it a leading agent all over the globe. On the other hand, the company has been a leading brand in content creation all over the globe. Disney influence to India would beneficial with its digital library programming. The digital library has some important feature in providing information to visitors and users of its products. The company’s strength additionally, includes its ability to make strong revenues (Calderon et al 2001). The company has been effective in cutting its costs through its HBO and Turner affiliates. It has cable networks that have been instrumental in reaching wider demographics. The company has better advertising prices. Another strengthening feature for the organization includes its 38 parks as well as wildlife marines. The company has been instrumental in providing finance to banking and insurance firms (Calderon et al 2001). Further Disney strength relates to its Sony branch. The Sony brand has been of assistance in the production of entertainment instruments, which assists in provision of revenue. 3.2 Weaknesss On the global scene, India’s strength relates to its global leader status. On the negative side, investing in India has the risk of disruption because of religious tensions (Torstar et al., 2012). In relation to weaknesses that might affect Disney Corporation’s operations in India, the following factors influence its operations. The weakness includes the reduction of the advertisement market in regions like India. The country has many advertising organization and Disney will face a stiff challenge. On the other hand, the global economic conditions had an impact on the performance of the corporation. This influence has made the organization lose millions of dollars that affects their profit margins (Calderon et al 2001). Additionally, while entering a market like India the corporation might have to cut its costs, which might influence costs of production. 3.3. Opportunities For Disney Corporation, India might be a perfect venue for setting up parks and other business opportunities. India’s growing economy provides a field to Disney Corporation to sell their products. Its youthful population would yield vast revenue for the organization in the long run (Calderon et al 2001). In relation to opportunities present in the country, India has a lot of sectors open for investment. Opportunities are open to investors wishing to promote energy generation and education. The country provides opportunities for importing and exporting companies. 3.4. Threats In a country like India, Disney faces many challenges. In relation to threats, high poverty rates might influence company’s returns (Khare, 2013). On the other hand, global recessions have an impact on organizations transacting in India. Further the exchange rates of the global market influences industries in the country. In relation to risks, investors entering the Indian market face the risk of political decisions. Disney Corporation faces threats from competitors who produce similar products in India. On the other hand, the firm’s introduction of parks in India, might suffer losses due to cultural issues (Calderon et al 2001). Other threat to the organization includes the influence of politics and threats from terrorism. 4.1. Market Entry in India Information by the C.I.A and other authorities speculate that the current inroads of multinationals to India will continue for long. However, with this entry, most organizations are unable to maintain profitable margin thus fall outs occur. Organization can penetrate in the market of the country in various ways. However, the essential element for such entry needs to empower local operations. On the other hand, multinationals or foreign organizations need to invest in local talents of citizens (C.I. A, n.d.). This entry especially for a UK company would include contractual agreements, partnerships, setting up offices, entering into joint ventures, and share or creation of subsidiary. Joint Ventures are the best strategy for foreign companies without a base in the country. The advantage of such relationships includes the separation of the firm into legal as well as limited liability status. The other advantage relates to the benefits of having an Indian partner. Further companies might enjoy the services of FDI to certain sectors. Additionally joint ventures are able to influence Tax structuring (Abhiman, 1999). In relation to licensing and franchising, Disney Corporation uses brand-licensing strategy in India. The company has been effective in franchising its brand using character licensing. The company also uses its park in marketing its unique cultural representation. The company employs its Mickey Mouse characters and the Donald duck features in advertising. On the other hand, the organization has franchised its products by providing a publishing network. With over 700 million collections of children books, Disney has been able to gain a commendable financial muscle. Another important feature includes Disney retail chain that operates over the entire region (Calderon et al., 2001). Recommendations Walt Disney entered the Indian market through a joint venture with Modi Enterprises. However, this agreement only became apparent for a 10-year period. Modi enterprises did not wish to continue operation due to some aspects of Disney operations. Disney Corporation therefore needs to form agreements with local players for sustainability. On the other hand, India has a huge population with diverse cultures. This means that Disney needs to market its products using different language and cultural norms. It is a recommendation that Disney work with retail outlets in order to market products effectively. Further, the company needs to develop strong relationships with local firms for sustainability. References Abhiman, D. 1999. Socio- Economic Development in India : A Regional Analysis. Journal of Development and society. 28 (2). pp. 313-45. Bhagwati, J and Chakravarty, S. 2012. Contributions to Indian Economic Analysis: A survey. New York: Columbia University. C.I. A, n.d. The world Factbook. [Online] [accessed 1st July 2014]. Available: https://www.cia.gov/library/publications/the-world-factbook/index.html Hillabrant,W. & Rhoades, M. 2004. Overcoming Challenges to Business and Economic Development in Indian Country. The urban institute Journal. 21 (7), pp 32-45. Khare, M. 2013. Foreign Direct Investment in Indian Retail Sector- A SWOT Analysis. AISECT University Journal. [Online] 2(4), [accessed 1st July 2014]. Available: http://www.aisectuniversity.ac.in/Anushandhan4/10.pdf Khilnani, S.1999. The idea of India. India: Penguin Books Mandar P. 2006. Sustainability & Enviromental Issues For Indian Industries. Green Purchasing Network India. E2KM Group. [Online] [Accessed 1st July 2014]. Available from: http://www.igpn.org/workshop/india_0701/pdf/Mandar_PuneUniv1.pdf Ravindra, H, Dholakia, A, Bazaz, B, and Prasoon, A. 2009. Trends in Technical Progress in India- Analysis of Input- Output Tables from 1968 to 2003. Research and publications. Indian InstituteofManagement[online][accessed1stJuly2014].Available: http://www.iimahd.ernet.in/publications/data/2009-11-02Dholakia.pdf Williams, S. 2004 "Complementary perspectives on contemporary tourism." In: Ritzer, G, and Liska, A. ed. Tourism: Critical Concepts in the Social Sciences. London: Routledge Czinkota, M. R., & Ronkainen, I. A. 2013). International marketing. Mason, OH: South-Western Cengage Learning. Warner, M, 2014. Culture and management in Asia. Cambridge. Cambridge University Press. WorldBank. 2013. Doing Business 2014, Economic Profile: India. The International Bank for Reconstruction and Development. [Online] [Accessed 1st July 2014]. Available from: http://www.doingbusiness.org/data/exploreeconomies/india/~/media/giawb/doing%20business/documents/profiles/country/IND.pdf Calderon, J, Delgado, S, Oliveira, A and, Paiz, J. 2001. Analysis of the Walt Disney Company. Report by Valanium Analysts[Accessed 2nd July 2014] Available: http://web.mit.edu/wysockip/www/535/MIT2001/Disney.pdf Read More