Disney in Hong Kong Essay
Disneyland has pride itself to be a fantasy world, a place where people (regardless of age) can escape from reality (Appendix 1 shows that fantasy world is heavily weighted in the proportion of Disney movies). With this positioning statement that applies to everyone regardless of geographic location (Chinese have dreams and can fantasize as much as Americans or Europeans), expansion into the international market may not seem to be a challenge for Walt Disney Company. However, in evaluating the past 4 years of attendance and operating figures of their newest park – Hong Kong Disneyland, it goes to show that the park performance is far from ideal. Why does the …show more content…
5.1. Plan the finances well
Based on experiences of Disneyland Paris and Tokyo, Disney should spend more time on financial planning to avoid certain mistakes. In Tokyo, Disney could have made more profit by investing equity capital instead of relying on licensing. Appendix 5.1 shows Disney’s actual licensing income of Tokyo during the last five years. The gray area shows the gap to the EBIT of the resort, indicating the lost opportunity – summing up to over 700 million U.S. Dollar just in the past 5 years (Tokyo Disney Resort was opened 1983 and returned steadily positive incomes). In Paris, poor financial planning result in huge debt and high interest payments almost leading to bankruptcy.
5.2. Seek private partners
A partnership with local authorities and Chinese government is indispensable but Disney should also seek private companies that will bring money and operational experience to the project.
We have shortlisted some potential companies that could be approached to invest in the theme park. They are namely: (1) China Eastern Airlines Corporation Limited, an airline headquartered on the grounds of Shanghai Hongqiao International Airport in Changning District, Shanghai; (2) Shanghai Electric Group Company Limited, one of the largest mechanical and equipment manufacturing