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GLOBAL BUSINESS STRATEGY: A CASE STUDY ON Managerial Is

DISNEY CORPORATION
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Introduction Economics and Fin
This is a report on Disney Corporation and its global business strategy in the international market. The global (http://businessessays.net/cate
business strategy of Disney will be investigated, and studied, in order to ferret out valuable lessons to be learned and- nance/)
from the successes and failures of Disney expansions to the global market. Firstly, it will be discussed on the Entrepreneurship
rationales of Disney expanding to international market. Then, the methods or strategies used by Disney in expanding (http://businessessays.net/cate
to the foreign countries will be articulated. It can be seen that Disney is becoming more aggressive and comfortable
Human Resources Manage
to participate in the foreign expansion, in terms of ownership of the business venture to a foreign market. Then,
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based on the historical development of Disney Corporations in the global market, the rights and wrongs; or the
resources-management/)
successes and failures of Disney Corporation in the international market will be discussed. After discussing and
studying the historical successes and failures of Disney Corporation in the global market, various lessons on International Bus
managing business across the globe will be discussed. These lessons are worth being paid serious attentions by (http://businessessays.net/cate
business managers wishing to expand their businesses to the global market in the future. business/)
Managing Information Sy
Reasons Disney Expand to Global Market (http://businessessays.net/cate
information-system/)
There are many reasons that Disney Corporation wish to expand to the global market. Consistent with the theory, to
expand to international market is bene cial because it will enhance market share for Disney, enhance brand Marketing Managem
reputation for Disney, increase revenue, and generate growth for the business (Grif n et. al., 2007), tap into bigger (http://businessessays.net/cate
market (in the international context), and to diversify the businesses geographically (Lasserre, 2003). All these are management/)
rationales leading Disney to expand to the international context. Besides, it is also reasonable to believe that Disney Operation Managem
indeed wishes to expand to the international market to duplicate its success in the foreign countries. The existing (http://businessessays.net/cate
market (i.e., in United States) may already saturated and offer limited growth opportunities for Disney (Britt, 1990). management/)
Thus, Disney may as well decide to expand to other countries to bring the business to greater heights.
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Methods Employed to Conduct Global Business (http://businessessays.net/cate

behaviours/)

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There are many methods can be used to expand to global market; among these methods include licensing, Project Managem
franchising, contractual strategies, strategic partnership and direct or indirect exporting. There are different (http://businessessays.net/cate
methods employed by Disney to expand to the international market. Firstly, Disney expanded to Japan through management/)
licensing – the very fact that the management of Disney will only provide consultancy and advisory roles – Re ective Wr
overseeing the Disney park construction and to receive royalty income from its partner in Japan (namely, Oriental (http://businessessays.net/cate
Land Company). However, such method is regretted as Disney in Japan is proven a great success later. Then, in writing/)
expanding to France, Disney decided to participate more fully in park’s ownership and pro ts – through a joint
Research Method for Bus
venture with other investors on the company’s stocks listed in European Stock Exchange. Under the joint venture,
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Disney owned only 49% of the venture to France. Besides, a partnership and collaboration with the French
of-research-proposal/)
government is also performed, whereby Disney received several assistance and incentives provided by the French
government in opening the Disney park in France. Similarly, equity partnership with the local government of Hong Strategic Managem
Kong is made in the venture into Disneyland Hong Kong. In this venture, Disney corporations hold an equity stake of (http://businessessays.net/cate
only 43%. Overall, it can be seen that Disney is more comfortable to participate on deeply to global expansion and management/)
venture. At rst, the company use licensing methods to expand to Japan, but the company later rely more on equity Tourism Managem
partnership and some sort of strategic alliances with the local governments to enter to different countries. (http://businessessays.net/cate

Right and Wrong Moves of Disney management/)

A review of the historical development of Disney found that the company has both business success and failures in
RECENT ARTICLES
global market. At the early days, the company was correct to expand to the global market, as international expansion
is rational, considering that Disney has a strong brand name and popular cartoon programs around the world. The Development of the Internet
company is famous, and thus, by leveraging on the business reputation, international expansions can be made easy. its Impacts on Bus
This is proven through the correct business judgment of expansion to Japan. However, the other business expansion, (http://businessessays.net/unc
such as to Hong Kong and particularly to France, cannot be considered as a success. Nevertheless, in the following of-the-internet-and-its-impact
section, the mistakes of Disney will rstly be outlined. on-business/)
Not taking suf cient portion of ownership in pro table business venture. On hindsight, it is found that Disney is not An Essay on People Managem
making correct decision in using licensing as the choice of expansion to Japan. This is because the Japan expansion is Tony Watson versus Leary-J
a proven success, and Disney can only pro t from the royalty income from the business venture in Japan. However, it (2010)
is also understood that this is because the company is making rst time business venture to the international market. (http://businessessays.net/hum
The management has little experiences, and perhaps con dent to foreign business venture, and thus, choose resources-management/an-es
licensing as the entry mode to Japan, as that methods is one of the lowest risk of all international expansion on-people-management-tony-
techniques. watson-versus-leary-joyce-20
Not conducting market research diligently. However, across the international expansion, it is found that Disney is Finance Developments
not able to conduct the research properly before venturing into any foreign market, as the expectations and Economic Growth: The Cas
estimates on business ventures to other foreign nations, such as in France and China were wrong and inaccurate. Asia
Apparently, the company had not conduct market research properly – and often, not comprehends the local culture, (http://businessessays.net/eco
consumer behaviors and consumption preferences. Thus, many times, the value proposition to the local consumers and- nance/ nance-
are not formulated in the best possible manner, to ful ll the needs and wants of the local consumers. developments-and-economic-
growth-the-case-of-asia/)
Not selecting a strategic partner in foreign business venture. It is found that Disney has been repeatedly making
wrong business judgment call in the foreign countries. This is probably due to the reason that the management has Financial, Investment and Stra
little experiences in the local context. As such, it is crucial and viable if the management to form strategic alliances Analysis on Best
with other party from the local countries, top tap into in-depth knowledge on the business landscape, societal values (http://businessessays.net/stra
and preferences, cultural aspects and other necessary information in the foreign environment (Mellahi et. al., 2005). management/ nancial-
Not incorporating the wisdom from a local strategic partner may be causing Disney a great deal of losses, and indeed investment-and-strategic-anal
was making the business expansion venture a risky one (due to unnecessary speculation or wrong assumptions by on-best-buy/)
the management that comes primarily from United States). Dissertation: Cross Sectional S
It is also found that Disney is making correct judgment in certain times as well. For example, the company is fast to Returns and Fundam
realize the different needs and expectations from the different customers around different regions of the world. For Variables: Empirical Evide
example, after realizing that people in China are not familiar with the western cartoon characters promoted by from Kuala Lumpur Comp
Disney, the company is fast to change the traditional Disney character, to replace with higher degree of Chinese Index (Part
elements and characters. Apart from that, the company is also correct in partnering with local animation companies (http://businessessays.net/eco
in Japan. The end result of such partnership is development of programs well favored by the Japanese consumers. and- nance/dissertation-cross
sectional-stock-returns-and-
Besides, the company is also formulating and executing the strategic direction of the rm rationally. Consistent with
fundamental-variables-empiri
the business theory, the company should be able to enhance the growth rate and prospects of the company by
evidences-from-kuala-lumpur-
expanding to fast growing countries, such as to China and India. It is reasonable to expect that as these emerging
composite-index-part-55/)

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countries growth, the people from these countries will enjoy higher purchasing power (Morrison, 2006), and thus, ARCHIVES
demand more of Disney products. All these will de nitely contribute positively to Disney pro tability and expansion
around the globe. October 2
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Lessons Learned from Disney September 2
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Many lessons can be learned from the Disney story. Firstly, it can be seen that even successful companies with long
term pro table track records in United States, may face many hinders and barriers in pro table expansion to other
foreign countries. Internal business management is never easy, as it is much more complicated and challenging. The
management must be equipped with several experiences, expertise and with proper expectations and
understandings on what is necessary for successful business venture to foreign market. Of particularly important are
the different cultural aspects in the different nations around the world. For example, people from the east and the
west have different culture, and they may response differently to a particular set of value offering. Thus, in many
instances, the successes of any business in a country may not be duplicated to other part of the world. Adjustment
and adaptation of the local context is often necessary, as the best practices in the domestic country may no longer
stay effective in another country (Stonehouse et. al., 2004). Not only is that, it is also found that consumer behaviors,
expectations and consumption habits may different greatly across borders (Roedl, 2006). Thus, in-depth and
insightful market research is necessary, before expansion to any part of the world. Unless the management
understand the market deeply, to make other assumptions or to speculate on estimates of the business ventures to a
foreign countries can bring a lot of risks to the company. It is found that in the case of Disney, for example, a lot of
risks and the key contributors of business failures come from inaccurate understandings on the business landscape of
the international market. Not only is that, it is also learned that the entry mode will have huge impacts to the business
prospects and pro tability of any company. The different entry mode have different advantages or disadvantages,
and management has to be clear on their choices, as these entry mode will have long term signi cant impacts to the
nancial position and competitiveness of the company in the future. Over the years, it can also be found that the
company is getting the mantra and best philosophies of managing and expanding business globally. The company
increasingly buys into the idea of ‘thinking global, acting local’ in the business expansion context (Gannon, 2002).

Conclusion
Overall, it can be seen that expanding to the global or international context is never something easy. To duplicate the
success stories or business models (from the domestic country) to the other foreign countries or markets is often not
feasible, as the business landscape and market situation in the foreign market may no longer be similar. Very often,
the cultural differences and the local societal factors such as consumers’ preferences, expectations, purchasing
behaviors, consumptions habits or attitudes may differ to that of the domestic country (Goss, 2003; Lam, 2010).
Thus, the successful business model, or even the existing value propositions may not be portable or transferred
directly or completely to the new market or country. This is the key issues in managing an international business, and
experiences or expertise on the cultural uniqueness or societal differences in the different regions of the world
should be studied and understood. Only when that is done, the value delivered to the people in other nations can be
adjusted to suit the local context; to enhance the probability of success and pro table business venture to a foreign
market, while at the similar time reducing the risk of business failures.

References
Britt, B.  (1990, May). Disney’s Global Goals. Marketing,22.

Gannon, M. J. (2002).  Handbook of Cross-Cultural Management.  Oxford, U.K.: Blackwell Publishers Ltd

Goss, B. M.  (2003). Understanding Disney / Global Hollywood. The Journal of Communication Inquiry,  27(2),  215-
222.

Grif n, R.W., & Pustay, M.W. (2007). International business: A managerial perspective (5th ed.). New Jersey: Pearson
Education.

Lam, S. (2010). ‘Global corporate cultural capital’ as a drag on globalization: Disneyland’s promotion of the Halloween
Festival. Media, Culture & Society, 32(4), 631.

Lasserre, P. (2003). Global strategic management, New York: Palgrave Macmillan.

Mellahi, K., Frynas, J.G., & Finlay, P. (2005). Global strategic management, Oxford: Oxford University Press.

Morrison, J. (2006). The international business environment: Global and local marketplaces in a changing world (2nd ed.).
Basingstoke: Palgrave Macmillan.

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 2017­6­12 Global Business Strategy: A Case Study on Disney Corporation – BusinessEssays.net

Roedl, S.  (2006). MICKEY AND MIMI: THE GLOBAL FLOW OF CULTURAL PRODUCTS. The Journal of Language for
International Business, 17(1), 1-14.

Stonehouse, G., Campbell, D., Hamill, J., & Purdie, T. (2004). Global and transnational business: Strategy and management
(2nd ed.). Chichester: John Wiley & Sons.

Bibliography
Browaeys, M-J. and Price, R. (2008) . Understanding Cross-cultural Management (1st Ed.).Pearson.

Daniels, J.D., Radebaugh, L.H., & Sullivan, D. (2008). International business: Environments and operations (12th ed.).
Upper Saddle River: Pearson Prentice Hall.

Harris, P. R. & Moran, R. T.(2000). Managing Cultural Differences (5th ed.). Houston: Gulf Publishing

Schneider, S. C. and Barsoux, J-L. (1997). Managing Across Cultures (2nd Ed).  Harlow: Pearson.

Segal-Horn, S. & Faulkner, D. (1999). The dynamics of international strategy. London: International Thomson Business
Press.

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