International Business Marketing: Hong Kong Disneyland - Case Study Example

Hong Kong Disneyland Executive Summary Disney with its ambitious goal to expand internationally as a theme park and to portray amazing heritage of creativity, fantasy and imagination, was able to find its way in Paris, Japan and Hong Kong. However successful in Japan, it was less successful in Paris and was not that very promising in performance during its first year of operation in Hong Kong due to negative publicity. Of all these things that happened to Disney in its quest to expand internationally as a theme park, it is very interesting to study its problems and analyze its economy and marketing activities. In doing so, it is very important to recall the past experiences of Disneyland especially to what happened in Paris, Japan and Hong Kong. In Paris, with a higher set up cost and a mediocre performance of Disney during initial years, the park was unable to report a profit until 1995. Its mediocre performance was partly due to the resistance of the French to American cultural imperialism. In fact, the recruitment process and training programs for its staffs were initially not well adapted to the French business culture. In Japan, the idea of Tokyo Disney Resort was most successful because it was well received by the Japanese. This was due to the Japanese’s interest in western culture and Asian love of fantasy and costume. Disney was able to learn from its past mistakes or experiences in France. And thus, it wanted to do well in Hong Kong while taking into consideration some principles learned from France. However, as showed in its first year of operation in Hong Kong, it was able to gain negative publicity instead. It was the other way around of what it expected to happen. After all those experiences of failures in the past, the Hong Kong Disney (HKD) should have now been gaining success. However, why such negative publicity was prevailing instead of a straightforward success? Was there anything that the HKD was not able to take into consideration prior to starting its operation? This case analysis determines some probable problems encountered by HKD in its first year of operation and why such negative publicity was obtained. Prior to understanding the problems encountered by HKD, it is worthwhile to discuss first the economy of Hong Kong and its other neighboring areas. It will also help to take a look at the marketing practices initiated by HKD within its first year of operation. Economy The mere reason why HKD was developed was the idea that Hong Kong is a rapidly expanding country when it comes to money growth and various financial opportunities. Hong Kong is also a gateway to mainland China and a tourist destination. China is economically growing and the good thing, its population is significantly higher. HKD will never be realized in the first place if the economy of Hong Kong and neighboring areas were not properly taken into account. The better economy must be ensured to be able to promote HKD effectively and perpetuate its vibrant dominance when it comes to modernized and high quality entertainment. The economy cannot be just set aside and without taking it into consideration. Good economic status is very crucial to survival of one’s business to survive and continuously grow. SWOT Analysis (Economic Aspect) The strength of HKD is Hong Kong’s tourism industry. This alone can definitely help HKD survive amidst the constantly changing global economy. Hong Kong is a blend of East/West of Chinese roofs and British colonial heritage, ultramodern sophistication and ancient traditions. Tourism is one of the major pillows of the Hong Kong economy. Due to high influx of visitors and since Hong Kong is a tourist destination, the capacity limit of 30, 000 visitors of HKD may have been too high. In this regard, HKD might as well have tried to consider this as an obvious weakness of their design to cater and reach target number of visitors. The mainland China can be the biggest source of visitors. This alone is a great opportunity for HKD to reach its target visitors for the year. Due to its negative publicity, this alone can stand as threat to HKD. In addition, since Hong Kong is a tourist destination, visitors might as well learn to be satisfied with Hong Kong’s local attractions and ocean park. These alone can absolutely stand as threats to HKD’s goal of obtaining the target number of visitors. Marketing As prestigious as it really is, HKD have to be very dynamic when it comes to its product, price, place and promotion so as to hit its target number of visitors. HKD has unique product to offer. In this regard its brand name can be sold by itself knowing that Disneyland already had gained positive reputation in the USA and Japan. The product itself would mean fun and entertainment and in this case, it can highly be recognized for family bonding and other special occasions or related celebrations. Its functionality is infinite for everyday will mean new sets of visitors that are willing to be entertained and be accommodated. There is no problem with the pricing structure of HKD. In fact, from time to time, it can easily adjust its price for the sole purpose of recognition and promotion. Its price can easily be justified since HKD is the only one company trying to impress the public with its unique entertainment and as a unique park. Thus, HKD can have strong control over the price. Hong Kong is a strategic location to where HKD shall distribute its services offered. Hong Kong is a gateway of HKD as far as promotion of its products to neighboring areas is concerned. In every marketing activity, it is very essential to focus on the company’s promotional activities. Promotion is very important in a sense that it can greatly have a direct impact on product recognition by customers and competitors. Promotion is one way of giving recognition to product that in some extent will help product to promote itself in the long run. HKD’s promotion was entirely not bad at all. It was in fact part of modern approach that was initiated to promote its services. The online bookings of tickets were in fact modern. SWOT Analysis (Marketing) One of the strengths in the marketing strategy of HKD was its use of celebrities to educate the public or information dissemination. Not only that, HKD learned to tie up with other business group so as to continue its growth by continuous flow of products. Moreover, the use of media like television and magazine added to the promotion of the products. The obvious weakness of HKD in its marketing strategy was its failure to forecast future events. Like from its first operation, it failed to forecast that burgeoning of people was to take place. The event marked as first time impression basis. For some it was a mistake to try HKD and for some, it gave them an idea that they will never come again. It bred dissatisfaction among visitors that obviously must had been the best endorsers to their friends back home. However, how can dissatisfied people suggest to a friend the product or services that they did not enjoy? The obvious opportunity of HKD was the acceptance of Asian people of western culture and Asian love of fantasy and costume (Richard Ivey School of Business, p2). Just like in Japan, the acceptance of HKD in Hong Kong was entirely the same and Asian people did not care about issues concerning Americanization of culture. In this light, HKD must have tried to seize this opportunity by forecasting in advance. The threat of HKD would be now the existence of its negative publicity. This can hinder the promotional aspects of the company. Those barely satisfied people will continue to grow in number and will stand as living proof. They can tell their friends about their experience in HKD. Furthermore, the HKD was continuously facing issues such as low park attendance, limited attractiveness, long queues and disgruntled employees and guests accounts of rude treatments. These are all forms of negative publicity. With all of these negative things experienced by HKD, there is one thing that the company might have been overlooked. HKD must have also focused more on marketing research. This alone can make it as a market-driven company trying to stand a cut above the other company. The following are some criteria of a market-driven company (Kuada, 2002, p. 2). 1. Customer orientation 2. Competitor orientation 3. Interfunctional co-ordination The mistake of HKD was that somehow it failed to satisfy these three criteria. HKD was only partially gaining intimate insight into customers’ needs. The claims of limited attractions in HKD by customers was one indicator that HKD was not able to think ahead that people will be looking for more attractions and that it is important to design everything that is unique, fascinating and extra ordinary. This alone will fall to failure of HKD to apply interfunctional co-ordination that it has to show higher degree of co-ordinated utilization of company resources to create higher customer satisfaction. HKD must also have been oriented that Hong Kong is a tourist attraction that at some point, some people will only be contented to go somewhere in its part rather than joining the long queues at HKD. “Geographical dispersion of the members of a group allows networks to provide the basis for the development of both regional and international business organization” (Casson & Cox, 1993, p.47). This is partially true in the case of HKD. It was able to prevent the same thing that happened in France. However, it also failed to move quite advance knowing that people in Asia are open to American culture. This alone has now provided basis of set of actions for Disney on what actions to take for future development. “Prahalad and Doz (1987) designed the Integration-Responsiveness framework. They proposed that businesses are subject to varying degrees of economic, competitive, and technological pressures which drive those organizations toward different internationalization strategies. Specifically, they suggest that global strategies correspond with high pressures for global integration and low pressures for local responsiveness; multifocal approaches are associated with simultaneous pressures for global integration and local responsiveness” (Keida, 2000, p.2). In the case of HKD, local responsiveness unlike in France was never been a problem since Asian people have quiet good acceptance when it comes to American culture. However since there was only low pressure implemented for local responsiveness, HKD was not able to plan ahead of time and without further knowing that its service might be in danger, since there was a strong positive local acceptance of its service in the first place. What happened to Hong Kong Disney was a case of failure to satisfy visitors which was very essential in soliciting strong and effective promotion activity from one person to another. What this company can positively do now is to continue its promotion and enhance customer orientation, competitor orientation and interfunctional co-ordination. It is not too late though. References Casson, M., Cox, H. (1993). International Business Networks: Theory and History. Business and Economic History, 22(1), 42-53. Retrieved from Academic Search Premier database. Kedia, B. (2000). International Business Strategies, Decision-making Theories, and Leadership Styles: An…Retrieved July 13, 2009, from All Business: A DB Company Web site: (http://www.allbusiness.com/human-resources/employee-development-problem-solving/719446-1.html. Kuada, J. (2002). International Market Analysis: Theories and Methods. Retrieved July 14, 2009, from Business. Auc Web site: https://www.business.aau.dk/ivo/present/MSc/8th_semester/2004/Int.%20Market%20Research.2002.pdf . Richard Ivey School of Business (2007). Hong Kong Disneyland. Ivey Management Services. Read More