Globalization of

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Jessica Saluti International Business December 5, 2017 Table of Contents

Introduction……………………………………………………………………………..…3

Disney Overview……………………………………………………..……………….…..4

Disney SWOT Analysis……………………………………………………….……….….6

Media Networks…………………………………………………………………………...9

Parks and Resorts………………………………………………………………………...10

Studio Entertainment…………………………………………………………………….14

Consumer Products and Interactive Media………………………………………………16

Conclusion……………………………………………………………………………….16

Works Cited……………………………………………………………………………...19

!2 Introduction

As a large company or organization, globalization can create enormous success if done correctly. Many international companies, or companies that want to become international, use different tactics to create and maintain a large global market presence.

One very important aspect of globalization that many companies may tend to forget about is fitting their international presence to the company that they are entering. This involves knowing the customs and traditions of the area, the government and politics and the economic situation of the company. A company or organization will likely only do well in foreign places if they make their product or service beneficial for their target market in that country.

This process of adapting products to the local culture in which a business is trying to enter economically is called glocalization (Wang, 2015). When companies practice this, they will adapt their international products to the local culture in order to make the consumers there be more likely to purchase. This integrates these local markets into the global economy and world markets.

Glocalization can create immense success for international companies because consumers are more likely to buy something that they are familiar with (Wang, 2015).

According to Matusitz, glocalization is “transplanting a theme, product, or service elsewhere has a higher probability to succeed when it is catered to the local region in which it is introduced” (Matusitz, 2010). This is especially true because Western society can be very different than the societies in other parts of the world. Although many areas

!3 of the world are “westernizing” such as in Asia, areas will still be more comfortable with what they are accustomed to. This means that companies must cater to that local area’s culture and traditions in order to create success. This also can create a bridge for companies to sell different products in those foreign economies.

If a company begins by selling products that are familiar to the consumers, they can then slowly begin to add in products that are popular in other parts of the world. In addition to this creating more success for these international companies on the global scale, it can also help develop and immerse local communities and economies into the global economy. In addition to this, becoming successful in one local area can help if the company then wishes to venture to other local areas that are similar to the one they are already successful. For example, once Disney found success through glocalization in

Paris, which would facilitate their globalization, if they wish, in similar parts of Europe.

This can cause an almost wildfire effect, if the company does so well, in globalizing to similar areas.

When companies do not take glocalization seriously in their process of globalizing into the global market, they may not have the success they want. For example, when Disney first created Euro Disney in France, it did not have the success they had hoped for because they did not initially take the time to make it accustomed to the local market.

Disney Overview

The Company is an American Diversified Multinational mass media and entertainment conglomerate. It is the world’s second largest , in

!4 terms of revenue, behind Comcast. ’s mission “is to be one of the world’s leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services, and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world” (Disney, About The Disney Company, 2017). The Disney brand recently was valued at $36.5 billion (Robbins, 2014). The success of Disney has been accumulating since it was founded on October 16, 1923 (Robbins, 2014). However, this success did not come easily for the Disney Company. The company learned over time, through different business conquests and mistakes along the way, how to become such a large and successful presence within the global market.

The journey through which Disney has gone for this success has been called

Disneyization. This has been defined as “the process by which the principles of the

Disney theme parks dominate more and more sectors of society” (Robbins, 2014). With this process in mind, Disney has worked to become the number one in theme parks and attractions in the world. The company wants to dominate more sectors of society with the theme parks in order to create more success in the global market. Today, Disney has five theme parks in the world. Because of the importance of glocalization in their globalization with theme parks, Disney has taken their time in creating these parks as to create maximum success. In addition to theme parks, Disney also has their foot in many other markets. Disney owns and operates many companies that focus on different markets in order to widen the success of the company. Disney has five main business segments, which include media networks, parks and resorts, studio entertainment, consumer

!5 products and interactive media (Robbins, 2014). Disney operates Walt Disney Studios,

Disney Consumer Products and Interactive Media, Walt Disney Parks and Resorts, and more (Johnson, 2017).

There are five main business segments in which Disney operates. These five segments are Media Networks, Parks and Resorts, Studio Entertainment, Consumer

Products, and Interactive Media. (Robbins, 2014) With these five segments, Disney has made its brand one of the most well known in different markets around the world.

Disney SWOT Analysis

The Disney Company, over time, has become very successful. Because of this, the company has much strength. However, as with any company this large in scale, The

Disney Company has some weaknesses that it works to improve. With globalization, there are many opportunities for expansion. However, with the cultures and traditions of different societies, this expansion can be difficult and the areas and other local companies may pose threats to Disney.

The main strength of the Disney Company is its brand awareness and recognition.

Because of how long the brand has been around and because of all of the different markets that Disney has become involved in, the brand name has grown substantially since it was founded. With this brand recognition, the Disney Company has created a very good reputation for itself.

Especially with the Parks and Resorts segment of Disney, the company has become a powerhouse in theme parks around the world. Because of the brand reputation and strengths of the business, Disney Parks saturate the top theme parks around the world

!6 by attendance (Dillinger, 2017). With this saturation of top theme parks, Disney has created brand awareness as their parks being at the top and superior compared to other theme parks. With vacationing, many people will travel great distances for theme parks.

This is especially true with Disney. Because of this, brand recognition and reputation are extremely important. If consumers are going to travel long distances to go to a theme park, they want this theme park to be one that they know is reliable and lives up to its brand reputation. Disney’s saturation of the top theme parks creates a trust for these consumers that helps assure them that the brand reputation of Disney is one that they can trust.

!7 !

As seen in this chart, Disney has eleven of the top twenty-five theme parks by attendance in the world (Dillinger, 2017). However, one possible weakness in the Disney

Company is its reliance on the United States with Parks and Resorts for their income.

Seven of those eleven theme parks in the top twenty-five come from the United States

!8 between Disneyland in and in Florida. Although this shows success within the country, it could also become problematic if there were to be any problems or changes in the United States. Between economy and politics, there are a multitude of problems that could occur that could make income in the United States decrease. If this were to happen, Disney could take a negative hit in income.

There are many opportunities that the Disney Company has. With Parks and

Resorts, there are different parts of the world that the company has not yet reached and, through globalization and glocalization could do so. Another opportunity for the Disney

Company is to produce movies based in other countries. This could be facilitated with

Disney’s new streaming service, especially when it goes global outside of the United

States. Lastly, an opportunity for Disney is to strengthen its position in the entertainment industry, especially in television. The Disney Company has already acquired a variety of networks within the television industry. If the company continues to acquire networks, they can continuously increase their share in the market.

Any international company, especially ones as large as the Disney Company, faces different threats to their business. One major threat of the Disney Company is competition. With theme parks, especially in the United States, one threat is Universal

Studios and Islands of Adventure (Dillinger, 2017). Because a large portion of their theme parks income comes from the United States, this threat is one to take seriously.

Another threat that the company faces is piracy. As piracy has become very popular, especially in recent years, any company that is in the entertainment and movie industry is threatened. Lastly, the Disney Company faces the possible decreasing of popularity in

!9 online streaming. Because Netflix already has such a strong presence in the online streaming industry, Disney may have a difficult time competing with the market of consumers that Netflix has already reached. However, if Disney can compete with Netflix because of the popularity of Disney’s movies, they could create immense success for the entertainment industry of the company.

Media Networks

Disney has different sections of their Media Networks in broadcast, cable, radio, publishing and digital businesses (Disney, About The Disney Company, 2017). Their digital business is divided into The Disney/ABC Television Group and ESPN Inc. The

Disney Company owns and controls The , ABC, Freeform (formerly known as ABC Family), and ESPN (Disney, About The Disney Company, 2017).

Dividing their digital businesses amongst these four networks was a smart business decision by Disney because, between all four, they reach a wide target market. From

Disney Channel’s reaching children and teenagers with appropriate shows for different ages with the inclusion of , to ESPN sports, Disney reaches different demographics, especially age and gender.

A bold and large business decision that Disney recently made was to pull its movies from Netflix and to start streaming services of its own (Castillo, 2017). This was a bold business decision for The Disney Company because Netflix has become such a large player in the market of streaming businesses. Netflix has a plan to launch their

“branded direct-to-consumer streaming service” in the United States in 2019. From there,

Disney plans on expanding this globally. Although Disney movies and movies will

!10 no longer be streaming on Netflix after 2018, Marvel TV shows will remain streaming

(Castillo, 2017).

Disney’s new streaming platform will contain all Disney movies and will start with new movies coming up in 2019. These will include Toy Story 4, Frozen 2, and the live-action The Lion King (Castillo, 2017). With the popularity of Disney’s movies in the

United States and globally, Disney will gain their success in the United States before expanding internationally. Disney also is launching an ESPN video streaming service to feature about 10,000 sporting events every year including MLB, NFL, MLS, collegiate sports and tennis’ Grand Slam events (Castillo, 2017).

In order to create success for their streaming service and operate a company that will further their presence in different markets, Disney is buying a majority ownership of

BAM Tech (Castillo, 2017). , CEO of Disney, said that this was a shift in strategy for the company as controlling this platform gives Disney control of their destiny

(Castillo, 2017). This control of destiny will help Disney expand further globally in years to come.

Parks and Resorts

The Parks and Resorts segment of Disney has grown on the global scale since

Disneyland first opened in California on July 17, 1955 (, 2012). Walt Disney Parks and Resorts is “one of the world’s leading providers of family travel and leisure experiences, giving millions of guests each year the chance to spend time with their families and friends, making memories that last a lifetime” (Disney, About The Disney

Company, 2017). Disney Parks and Resorts has locations globally that appeal to a wide

!11 target market. The five Theme Parks of Disney are Disneyland in California, Walt Disney

World in Florida, Tokyo Disneyland, and Hong Kong Disneyland

(Robbins, 2014). For resorts, Disney owns and operates Walt Disney World Resort in

Florida, in California, , Aulani, a Disney Resort and Spa in Hawai’i, , , Disneyland Resort

Paris, , Hong Kong Disneyland Resort and .

The first Disney theme park to ever open was Disneyland in California, which opened on July 17, 1955 (D23, 2012). Following this, Walt Disney World was opened on

October 1, 1971 in Orlando, Florida (D23, 2012).

December 3, 1980 and April 15, 1983 were both important dates for the Disney

Company in terms of globalization. On December 3, 1980, Tokyo Disneyland had its groundbreaking and site dedication (D23, 2012). Then, on April 15, 1983, Tokyo

Disneyland was opened (D23, 2012). This was so important in the globalization of

Disney as an international company because Tokyo Disneyland was Disney’s first international theme park.

After Tokyo Disneyland was opened, although Disney was continuing their journey in globalizing and internationalizing by opening other international theme parks and resorts, the company also worked to create growth at home in the United States. In

Walt Disney World in Orlando specifically, Disney expanded by creating new parks in order to attract new consumers and create an even larger Disney experience. On October

1, 1982, the EPCOT Center opened in Orlando (D23, 2012). Because of this local

!12 expansion in addition to international expansion, Disney, over the years, grew more successful globally.

The next international expansion for Disney was official on March 24, 1987 when the Euro Disneyland agreement was signed in France (D23, 2012). The building of this park had a positive effect on the economy of the area because of the amount of jobs it created locally (Matusitz, 2010). This location, about twenty miles outside of Paris, was chosen because it had history and beauty and was also easily accessible through trains, planes and cars (Matusitz, 2010). Euro Disney was opened on April 12, 1992 (D23,

2012). When it was built and opened, it was the biggest theme park and resort development in all of Europe (Matusitz, 2010).

However, when Euro Disney was opened, it was not as successful as Disney had anticipated. The first chairman of Euro Disney, Robert Fitzpatrick, had forecasted that

500,000 people would attend the park in the first year, when realistically only 50,000 actually attended (Matusitz, 2010). With this low attendance, park sales in souvenirs and food were low as well. Within the first four months of Euro Disney being open, over one thousand employees quit their jobs because of working conditions (Matusitz, 2010).

The reasoning for Euro Disney’s lack of success was that Fitzpatrick’s management style was too American (Matusitz, 2010). Both employees quitting and low attendance can be attributed to this as working conditions in the United States are very different than those in Europe and consumers in Europe, especially France, want a different experience than those in the United States. When Euro Disney got a new chairman, Philippe Bourguignon, after almost going bankrupt, the company realized that

!13 using a global strategy for success in Paris was not as important as using a local strategy

(Matusitz, 2010). With the change in chairman, Disney made drastic changes in management, from American-style to European-style. With this change in approach, Euro

Disney had a complete turn-around in terms of success (Matusitz, 2010). Disney made many modifications to the theme park in addition to the new chairman. Amongst these changes was changing the name of the park from Euro Disneyland to Disneyland Paris, in order to be specific about where the park was to make it easier for consumers (Matusitz,

2010).

With the next chairman of Disneyland Paris, Gilles Pelisson, Disney found that marketing was not the only aspect of the business plan that needed to be changed and boosted. With this new management, there was a focus on local tastes for the park, rather than global (Matusitz, 2010). Because of the success that these changes and modifications brought for Disneyland Paris, Disney realized how important glocalization was in their internationalizing of the company (Matusitz, 2010). Although Disney had to first feel the failure of not optimizing glocalization in foreign locations, the company learned how important the concept is in all internationalization. This helped the company in future global endeavors, especially in Hong Kong (Miller, 2007).

Hong Kong Disneyland opened on September 12, 2005 (Miller, 2007).

Disneyland Hong Kong was very quickly successful and was one of the top three in popularity of attractions in Hong Kong (Miller, 2007). This success, however, did not come easily for Disney. Because Disney learned the importance of glocalization with

Disneyland Paris, the company worked hard in the creation of Disneyland Hong Kong.

!14 Josh D’Amaro, of Sales and Travel Trade Marketing with the Hong Kong

Disneyland Resort, said “Disney has to work twice as hard to market itself in Mainland

China because most Chinese have not grown up with Disney” (Miller, 2007). Part of this difficulty came with the position and importance of the government in everyday life of businesses in China. With this presence of government, Hong Kong Disney is the only

Disney Park that is partly government-owned. The Walt Disney Company owns 43% of

Hong Kong Disneyland and The Hong Kong Special Administrative Region government owns a majority of 57% (Miller, 2007).

Although the park in Hong Kong is inspired by Disneyland in California and is very similar to that park, the culture of Hong Kong was also taken into serious consideration in the building and designing of the park (Miller, 2007). For example, feng shui principles were used in designing the park and hotel. One part of this is how there are no fourth floors in the hotels because four is an unlucky number in Chinese culture

(Miller, 2007). In addition to the design of the park and hotel, Disney works to enhance the park so that the guests see something new whenever they visit (Miller, 2007). In addition to the Christmas tree and holiday parades and shows, the Chinese New Year is celebrated at Disneyland Hong Kong with character costume changes, new decorations, and lion dances (Miller, 2007).

With parks and resorts, Disney learned how important glocalization is in its internationalization. Because of this, their future expansions must follow in these footsteps, while still maintaining the overall feeling of Disney in order to be successful.

Studio Entertainment

!15 The Walt Disney Studios has been considered the foundation of the Walt Disney

Company for over ninety years (Disney, The Walt Disney Studios, 2017). The Walt

Disney Studios includes Walt Disney Animation Studios, Disney Live Action, Pixar

Animation Studios, , , , and Disneytoon Studios

(Disney, The Walt Disney Studios, 2017). With all of these areas of the studio, Walt

Disney Studios can reach a large and diverse target market with their studio entertainment. From family and children entertainment of Walt Disney Animation and

Pixar Animation, to the larger market that Marvel reaches, and the more natural aspect of

Disneynature, many consumers are reached with Disney’s studio entertainment. The revenue of the Studio Entertainment segment of Disney has overall been increasing since

2008 (Statista, 2017).

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!16 As seen in this graph, although there are not drastic changes, the overall trend has been positive (Statista, 2017). In 2017, Walt Disney Studio Entertainment revenue was

8.38 billion U.S. dollars, which is the second highest amount, behind only 9.44 billion dollars in 2016. This accounts for 15% of the revenue of the Walt Disney Company as a whole.

Consumer Products and Interactive Media

The Walt Disney Company refers to the Consumer Products and Interactive

Media (DCPI) segment by saying, “from toys, apps and apparel to books and games,

Disney Consumer Products and Interactive Media brings our company’s stories and characters to life through innovative and engaging physical products and digital experiences, inspiring the imaginations of the young and young at heart” (Disney, About

The Disney Company, 2017). This segment of Disney’s company includes Disney

Consumer Products and Interactive Media, Disney Publishing Worldwide, and Disney Digital Network (Disney, About The Disney Company, 2017).

The physical products created by DCPI are sold in the Disney Store, which has many locations, even outside of the Disney Parks and Resorts. These stores can be found at shopping malls. These additional locations help further recognize the Disney brand as more than the parks, resorts and entertainment. This also is a good way for Disney to increase revenue.

Conclusion

The Walt Disney Company is a good example of how a company can internationalize and become a world market leader. Through the five business segments

!17 that Disney operates (Media Networks, Parks and Resorts, Studio Entertainment,

Consumer Products, and Interactive Media), the Walt Disney Company has created a brand that is well known globally (Robbins, 2014). Because of this brand-reputation,

Disney has created immense success, especially in terms of revenue. In terms of attendance, Disney Parks saturate the top global theme parks (Dillinger, 2017).

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In recent years, as seen in the graph above, Disney has had a steady increase in revenue, which is an obvious and immediate way to depict success of a company

(Statista, 2017). Because of the different markets that Disney is involved in, the company has given itself many opportunities for expansion.

Especially in the Parks and Resorts segment, globalization has been a large part of the Walt Disney Company’s success. However, the company learned how important glocalization with the local culture and traditions is in being a successful international

!18 powerhouse. Since learning the importance of this, the most important part of Disney’s acquisitions and expansions is knowing how to market to specific consumers in order to be successful.

Overall, the Walt Disney Company is an excellent and successful example of how companies and organizations should initiate and build their global growth. In future years, if the company continues in their global expansion, they will continue to be one of the most well known brands in the world with a positive reputation.

!19 Works Cited Castillo, M. (2017, August 8). Disney will pull its movies from Netflix and start its own streaming services. Retrieved November 20, 2017, from CNBC: https://www.cnbc.com/ 2017/08/08/disney-will-pull-its-movies-from-netflix-and-start-its-own-streaming- services.html

D23. (2012). The History of Disney. Retrieved November 20, 2017, from The Official Disney Fan Club: https://d23.com/disney-history/

Dillinger, J. (2017, April 25). Most Popular Theme Parks by Attendance. Retrieved November 20, 2017, from World Atlas: http://www.worldatlas.com/articles/most-popular- theme-parks-in-the-world.html

Disney. (2017). About The Disney Company. Retrieved November 20, 2017, from The Disney Company: https://thewaltdisneycompany.com/about/

Disney. (2017). The Walt Disney Studios. Retrieved November 20, 2017, from The Walt Disney Studios: http://www.waltdisneystudios.com/about/

Johnson, M. (2017, April 21). Your Complete Guide to All the Things Owned by Disney. Retrieved November 20, 2017, from Nasdaq: http://www.nasdaq.com/article/your- complete-guide-to-all-the-things-owned-by-disney-cm777262

Matusitz, J. (2010, June). Disneyland Paris: a case analysis demonstrating how glocalization works. Journal of Strategic Marketing .

Miller, P. M. (2007, January). Disneyland in Hong Kong. China Business Review .

Robbins, M. J. (2014, May). The Most Powerful Mouse in the World: The Globalization of the Disney Brand. The University of Tennessee Knoxville .

Statista. (2017, September). Revenue of Walt Disney's studio entertainment business in the fiscal year 2008 to 2017 (in billion U.S. dollars). Retrieved November 20, 2017, from Statista: https://www.statista.com/statistics/193243/revenue-of-walt-disneys-studio- entertainment-business-since-2008/

Wang, N. (2015, November). Globalisation as Glocalisation in China: a New Perspective. Third World Quarterly .

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