Expansion of Disneyland to Brazil AUTHORS: Fahim Abdin, Anna Fajardo, Jennifer Prudencio ACADEMIC YEAR: 2015-2016 SUPERVISOR: Valentí Camps KEYWORDS: Disneyland, Expansion, Brazil, Theme Parks, Entertainment DATE: June 9th, 2016 Expansion of Disneyland to Brazil 2016 Abstract This business plan explores an opportunity for The Walt Disney Company to develop its presence in emerging countries through the expansion of its Disneyland Park to Brazil. The venture proposed would be a break-through for the company who has yet to have such close presence in similar markets. Perhaps a move against the odds, the successful expansion of Disneyland to Brazil will be a great accomplishment for the company and the country, who has been working tirelessly to keep up with developed nations. This business plan has the opportunity to show the world the potential of emerging countries, and as a result, open the door for many companies to invest in the potential offered by developing nations. Abbreviations OLC – Oriental Land Company WDC – Walt Disney Company PT- Partido dos Trabalhadores/ Worker’sParty PMDB – Partido do Movimento Democratico Brasileiro/ Party of the Brazilian Democratic Movement PSDB – Partido da Social Democracia do Brasil/ Brazilian Social Democracy Party PBS – Partido Socialista do Brasil /Brazilian Socialist Party DEM – Democratas/Democrats S&P – Standard &Poors GDP- Gross Domestic Product UCLA – University of California, Los Angeles SINDEPAT – Sistema Integrado de Parque e Atracoes Turisticas/ Integrated System of Parks and Touristic Attractions BNDES – Banco Nacional de Desenvolvimento Econômico e Social/ National Bank of Economic and Social Development BRIC – Brazil, Russia, India, China IAAPA– International Association of Amusement Parks and Attractions ILS - International Labor Standards PR – Public Relations Expansion of Disneyland to Brazil 2016 Table of Content 1. Executive Summary………………………………………………………………………….... ........ 1 2. Business Description: Disney’s Internal Analysis………………………………………………. ...... 2 2.1. History and Development………………………………………………………………….. ...... 2 2.2. Tokyo Disneyland……………………………………………………………………….... ....... 2 2.3. Disneyland Paris………………………………………………………………………….. ........ 2 2.4. Hong Kong Disneyland……………………………………………………………………. ...... 4 2.5. Disney’s Mission Statement……………………………………………………………………. 4 2.6. Organization Structure……………………………………………………………………. ........ 5 2.7. Value-added Chain………………………………………………………………………….. ..... 5 3. Brazil’s External Analysis………………………………………………………………………….. .. 6 3.1. PESTEL……………………………………………………………………………………….. .. 6 3.2. CAGE…………………………………………………………………………………....... ......10 4. Theme Park Industry Analysis………………………………………………………………….. .....12 4.1. Analysis of Theme Park Industry in Brazil……………………………………………….. ......12 4.2. Analysis of Competitors……………………………………………………………….... .........12 4.2.1. Current Competitors……………………………………………………………...... .........12 4.3. Strengths and Weaknesses of the Product/Service. Porter’s Five Forces for the Amusement Park Industry………………………………………………………………… ..........................................13 5. Logistics……………………………………………………………………………………...... .......15 5.1. Scorecard Model………………………………………………………………………..... ........15 5.2. Location………………………………………………………………………………….. ........15 5.3. Suppliers………………………………………………………………………………..... ........16 6. Marketing……………………………………………………………………………………… .......16 6.1. Segmentation: Target Consumer………………………………………………………….. ......16 6.2. Focus Group……………………………………………………………………………….. .....17 6.3. Survey Highlights…………………………………………………………………...…….. ......18 6.4. Marketing Mix…………………………………………………………………………….. ......19 6.4.1. Product Strategy……………………………………………………………………. ........19 6.4.2. Pricing Strategy……………………………………………………………………….......19 6.4.3. Promotional strategy……………………………………………………………….. ........20 6.4.4. Placement Strategy ……………………………………………………………….. ..........21 Expansion of Disneyland to Brazil 2016 7. Financials……………………………………………………………………………………… ........22 8. Conclusion…………………………………………………………………………………..... .........25 9. Appendix……………………………………………………………………………………….. ......26 10. Supplement…………………………………………………………………………………….. .......53 11. Bibliography…………………………………………………………………………………….. .....54 Expansion of Disneyland to Brazil 2016 Table of Appendix Exhibit 1………………………………………………………………………….... ..............................26 Exhibit 2………………………………………………. ....................................................................27 Exhibit 3………………………………………………. ....................................................................28 Exhibit 4………………………………………………. ....................................................................29 Exhibit 5………………………………………………. ....................................................................30 Exhibit 6………………………………………………. ....................................................................31 Exhibit 7………………………………………………. ....................................................................32 Exhibit 8………………………………………………. ....................................................................32 Exhibit 9………………………………………………. ....................................................................33 Exhibit 10………………………………………………. ..................................................................34 Exhibit 11………………………………………………. ..................................................................47 Exhibit 12………………………………………………. ..................................................................48 Exhibit 13………………………………………………. ..................................................................48 Exhibit 13.1……………………………………………………………………….... ............................ 48 Exhibit 13.2 ………………………………………………………………………….. ......................... 48 Exhibit 13.3…………………………………………………………………….. .................................. 49 Exhibit 13.4…………………………………………………………….... ........................................... 49 Exhibit 13.5……………………………………………………………………. ................................... 49 Exhibit 13.6………………………………………………………………………….. .......................... 49 Exhibit 13.7………………………………………………………………………….. .......................... 49 Exhibit 13.8………………………………………………………………………….. .......................... 50 Exhibit 13.9………………………………………………………………………….. .......................... 50 Exhibit 13.10………………………………………………………………………….. ........................ 50 Exhibit 13.11………………………………………………………………………….. ........................ 51 Exhibit 13.12………………………………………………………………………….. ........................ 51 Exhibit13.13…………………………………………………………………………………................ 52 Exhibit 13.14……………………………………………………………………………....... ............... 52 Expansion of Disneyland to Brazil 2016 Expansion of Disneyland to Brazil 2016 1. Executive Summary Since its creation, The Walt Disney Company has developed itself into the world’s leader in entertainment, touching the lives of individuals in every corner of the world. By having a presence in media networks, theme parks and offering unique products and services, The Walt Disney Company has had an impact in the childhood of millions, perhaps billions, of children all over the world. To this day, the Disneyland Park has expanded to two additional continents, Asia and Europe. In almost 100 years of history, the Walt Disney World has certainly accomplished its goal of making people happy. Disneyland is truly, the place “where dreams come true”. As many multinationals are increasing investments in emerging countries, we also recognize the potential such locations can offer to a company as unique as The Walt Disney Company. Therefore, we have decided to analyze the feasibility of expanding the Disneyland Park to Brazil, an emerging country which has been in the spotlight recently for hosting the World Cup of 2014 and the Olympic Games of 2016. The construction of a Disneyland Park in Brazil will be an opportunity of mutual benefit for both parties involved. The Walt Disney Company will gain valuable experience regarding operations in emerging countries, markets that are on their way to be a source of sustainability for multinationals. Brazil on the other hand, will incur an economic boost from the creation of new jobs, expected increase in tourism and infrastructure development. In this business plan we have explored the many reasons why Brazil offers a suitable environment for this venture as well as how financial and legal risks can be minimized. The following proposal includes an audit of the company, an in-depth external analysis of the country of Brazil, the market and the theme park industry, as well as a detailed marketing and logistics plan to support the venture. The financial projection of the proposal has been developed accounting for the difference in costs and supported by data from competitors and existing Disney Parks. Moreover, all monetary figures have been converted into Euros using the most recent exchange rates. We include an Income Statement and Cash Flow Statement for seven years illustrating the potential profits of this project from Year 1. The proposal aims to evaluate the viability of the project with the mentioned variables accounting for the benefits and the risks attached to the project. The final analysis shows that the benefits of this project outweigh the risks, and that the project is a sustainable in the long run due to the potential of the market. It also allows Disneyland to increase operations in developing markets given its firepower in terms of resources. 1 | Page Expansion of Disneyland to Brazil 2016 2. Business Description: Disney’s Internal Analysis 2.1. History and Development Disneyland Park,