#36 Disney in Shanghai
Disney has recently announced that it’s plans to open a theme park in Shanghai’s Pudong area have received a nod from the Chinese government. It’s clear that a market as large and dynamic as the Chinese must be mouthwatering to Disney, but….! Not only are there countless stories of US-based multinationals who have found the Chinese market to be very difficult to enter, but there is also Disney’s own less than successful attempt at building and operating a theme park in Hong Kong. There, numbers for visitors are still significantly below the original plans. Similar to the bumpy ride Disney’s had in Paris, France the problems were homegrown and mainly due to Disney’s inability to respond to local customs and tastes. If the lesson has been learned remains to be seen in Shanghai.
April 13, 2010 @ 6:23 pm
Although international readiness and foreign market selection are both relevant to this case, I’ve chosen to focus on the standardization vs. adaptation aspect of the case which will be Disney’s next important step before the opening in 2012. Disney will now have to find the right balance between the marketing mix and the overall strategy. The case mentions Disney’s inability to respond to local customs and tastes, which was the case with the Disneyland in Paris. While the first international Disney theme park in Tokyo could be totally standardized, due to the Japanese fascination for the American culture, Disney quickly realized that its second international theme park in Paris would be a lot more complicated. Shortly before the opening of the Euro Disneyland, Marne-La-Vallee (1992) wrote in the Times that it would not be a French adaptation of the company’s parks in California and Florida. Euro Disney would be the familiar all-American park that somehow landed in Paris. The attractions would not presume to explain Europe to Europe; instead they would celebrate America the bland and beautiful, and reinvent it, Disney-style.
Joynt and Morton (2000) suggested several capabilities, which can roughly be summarized into two steps that enable a firm to incorporate and focus on global activities appropriately and also to separate and adapt local activities effectively. Determining the core of the business is the first step. When Disney created the first theme park in Anaheim in 1955 he did it in order to provide a clean, safe and fun experience for families. This core value remains the same through out all the Disney theme parks around the world. The next step is to determine where consistency is important and where flexibility should be allowed in order to honor local customs, if necessary. Payne et al. (1999) described how Disney attempted to imbue the park with a European flavor, e.g. some characters had their roots in European mythology, Cinderella lived in a French Inn, Snow White lived in a Bavarian Village, etc. After opening in Paris they experienced a big cultural difference as the French were complaining that no alcohol was being served in the theme parks. This was simply because serving alcohol was against the company’s core value: a clean, safe and fun experience for families. Eventually, Disney had to respond to the French’s local demands, but alcohol is still not served in other Disney theme parks (Joynt & Morton, 2000). Disney also had problems with its HR management practices which were too American and too personally focused and the fact that half of the managers were imported, and the rest were trained at oversea locations, caused a weaker understanding of the local market (Payne et al., 1999).
Apparently Disney has learned something from its mistakes with Euro Disneyland. According to Macartney (2009) the multinational corporation should have stated that the Shanghai Park will be a Magic Kingdom with Chinese characteristics, which includes Chinese food, a ban on characters wearing green caps which is a sign of an unfaithful spouse in China, and feng shui experts ensuring everything is placed to bring good luck and prosperity.
One can only assume that by opening a second Disneyland in China the company should be familiar with the Chinese market and culture and have learned from their previous mistakes. However, time will show whether Disneyland Shanghai will become “The Happiest Place On Earth”.
References:
Joynt, P., & Morton, B. (2000) The Global HR Manager: Creating the seamless organisation. Exeter, UK: CIPD
Macartney, J. (2009). China approves Disney theme park after decade of negotiations. The Times Online. Retrieved from http://www.timesonline.co.uk/tol/news/world/asia/article6902338.ece
Marne-La-Vallee, R. (1992). Voila! Disney Invades Europe. Will the French Resist? The Times. Retrieved from http://www.time.com/time/magazine/article/0,9171,975357-1,00.html
Payne, A., Christopher, M., Clark, M., & Peck, H. (1999) Relationship Marketing for Competitive Advantage: Winning and Keeping Customers. Oxford, UK: Butterworth-Heinemann