Impacts of globalisation on Walt Disney

Impacts of globalisation on Walt DisneyGlobalization is a process whither there is increasing of connectivity and mobility of the worlds securities industrys as rise up as melodyes where they ar expanding from house servant to external geniuss. Since the last deuce decades, advancement of technology has speed up the process to make travelling, communicating and duty glob anyy much to a greater extent easily. The two major driving forces of globalisation ar advances in telecommunications infrastructure and network. As economies argon more connected to each other, opportunities increase as well as competitions. Nowadays, most of the company in the world adapted globalisation to secure their position within the hawkish market, for example, The Walt Disney Company (TWDC), yet there are still negative impacts on the company.http//www.investorwords.com/2182/globalization.htmlWalt Disneyis one of the largest media and pastime corporations in the world in term of revenue which is baseally known as the Disney Brothers Car similarlyn Studious. It is founded by Walter Elias Disney on October 16, 1923 and his brother Roy Disney. It is the leading diversified entertainment and media multinational enterprise with five profession segments worldwide which are media networks, greenss and resorts, studios entertainment, consumer products and interactive media. The companys key products and services are as fol confused http//corpo arrange.disney.go.com/investors/index.htmlMedia networksDomestic broadcast television system recording networkTelevision production and distributionDomestic television stations seam and satellite networks and international broadcast operationsDomestic broadcast radio networks and stationsInternet operationsParks and ResortsWalt Disney manhood ResortDisney CruiseLineDisneyland Resort ESPNZone Disneyland ResortHong Kong DisneylandTokyo Walt Disney ResortDisney ImagineeringStudio amusementTheatrical distributionHome entertainment distr ibutionTelevision distributionAudio products and music createConsumer ProductsCharacter merchandise and publications licensingBooks and magazinesBuena Vista gamesThe Disney StoreDisney Catalog and disney precede.comInteractive MediaDisney Interactive StudiosDisney OnlineIn this assignment, we will be concentrated more on Disney Theme Parks and Resorts and touch a little bit on its other business segmentsDisneyland Resort in Anaheim California.Walt Disney World Resort in Orlando Florida.Tokyo Disney Resort in Tokyo.Disneyland Resort Paris in Paris. (Formerly EURO-Disney)Hong Kong Disneyland Resort in Hong Kong.In order to expand its business, Disney chooses countries with high Disney sense and affinity, large population centres with stable economies and mountain having disposable income to spend on leisure. The most important are the market size where it has to be large to guarantee a steady flow of visitors, and level of genuinely income of consumers to exhaust a certain spend ing power to enjoy leisure activities. The availability of infrastructures as well as skill levels in the host economy and other resources must take into account too follow by other aspects analogous political, trade policies and macroeconomic stability. To see whether a melodic al-Qaida park operation is victoryful or non, it is highly depends on the stability of political and economical circumstances in the host country to avoid any negative impacts on its business.The characteristics of globalisation are there is an increase in alien sales, overseas direct investment, expanding market size, communications, global competition, rapid increase and expansion of technology, liberalization of cross border movement, development of supporting services, etc.Foreign Direct InvestmentGlobalisation leads to increases foreign direct investment of a company from its country of rootage into other countries. According to Stephanie Rohac (2006), foreign direct investment is the internati onal flow of capital by creating or expanding a subsidiary in other country. It may be made through open a unsanded enterprise or science of an existing entity. A firm becomes multinational in the case of establishing in two or more countries business enterprises through FDI. Foreign direct investment provides job opportunities, and increase in transfer of skills as well as technology.The headquarter of The Walt Disney Company is located in United States, in order to expand its theme park and resort businesses, Disney develops its foreign markets by doing foreign direct investment in California, Tokyo, France and Hong Kong. After the success of its first venture of Disneyland in Anaheim, California, The Walt Disney Company (TWDC) continue to expand into Asian fields with Tokyo Disney in Tokyo. Nearly twenty socio-economic classs later, the company decided to do its expansion into the atomic number 63an market and here come Euro Disney which is now known as Disneyland Resort Par is. The theme park Euro Disney was expected to bring $600 zillion in foreign investment into France perpetuallyy year and it is the largest single Foreign Direct Investment ever in France. Lastly, back to Asia again, followed by Hong Kong Disneyland.http//books.google.com.my/books?id=9PqwNoOJagoCprintsec=frontcoverdq=foreign+direct+investment+of+disneysource=blots=Yap4ZathyBsig=Dkmc0vKm5ajWEuErX5x_E93osq0hl=enei=hCP_TJjSCcLirAfyyt2ACAsa=Xoi=book_resultct=resultresnum=10ved=0CFQQ6AEwCQv=onepageqf=falseMergers and AcquisitionsAccording to QuickMBA.com, unification is the combination of assets and also liabilities of two companies to form a single entity while acquisition is when a larger firm took over the small ones. http//www.quickmba.com/finance/mergers-acquisitions/ According to Paul R. La Monica (2006), Disney bought over Pixar which is owned by Apple and led by Steve Job, a deal that worth $7.4 one gazillion million million. The deals included Steve Job becoming one of the board members of Disney and 2.3 shares of Disneys will be issued for each Pixar share. Merger of these two companies will bring higher tincture of celluloids to the pot around the world as well as generates higher profit.http//money.cnn.com/2006/01/24/ newsworthiness/companies/disney_pixar_deal/ veridical Impacts of globalisation on Walt DisneyPoliticalPositive impactsAccording to Stephanie Rohac (2006), France government has reduced 18.6% of value-added tax on Euro Disneylands tatter sales to only 7%. Besides that, 20 years loan of $960 million at low and subsidized interest rates of 7.85% is provided too. Variety of investment incentives are offered by the host governments to encourage foreign investors to invest into their country. The main issue of France government facing at the time was its unemployment rates increased by 10%. The opening of Euro Disneyland foundation truly solve the problem where it creates more than 30,000 new construction jobs, 12,000 on-the-spot(pr enominal) positions and 30,000 jobs in off-site serving.EconomicalPositive impactsBrand recognition worldwideThe Walt Disney Company markets itself worldwide, creating huge revenues and come along establishing itself as a global brand. As the business globalised, Disney brand is known by people globally and merchandising has played an important role in establishing the Disney brand.Market sizeDue to globalisation, company increases its market size from domestic to international market. By investing into various countries of its theme park and resort business as well as exporting its products to other countries, Disney has enlarged its market size at the corresponding time. According to James Ketterer (2010), the very first Disney Store was opened 28th March 1984 in Glendale, California. The Disney stores are located worldwide, throughout the US, UK, Spain Italy, japan, and France. Since May 1st 2008, the Walt Disney Company owns all Disney stores in America, Canada and Europe, how ever the stores in Japan are owned by the Oriental Land Company, for example, Disneyland Tokyo. In the year 2004 alone, merchandise has made $2.5 meg for the company, a figure that shows how globally successful Disney really is.http//www.suite101.com/content/disney-and-globalisation-a196391FinancialRevenues by country of originThe US and Canada,Walt Disneys largest geographical market, accounted for 76% of the total revenues in the year 2009. Revenues are generated through other countries of origin Europe(17%), Asia Pacific (5%) and Latin America and other (2%).RevenuesOperating Income(in millions)200920082007200920082007Country of originUnited States and Canada$ 27,508$ 28,506$ 27,286$ 4,923$ 6,500$ 6,052Europe$ 6,012$ 6,805$ 5,898$ 1,158$ 1,423$ 1,192Asia Pacific$ 1,860$ 1,811$ 1,732$ 430$ 386$ 437Latin America and Other$ 769$ 721$ 594$ 161$ 175$ 156Total$ 36,149$ 37,843$ 35,510$ 6,672$ 8,484$ 7,837The data above is obtained from Walt Disney 20009 annual reports. no matter the f inancial performance of Walt Disney, try to imagine what would be the revenues and operating income of Disney if it has never globalise. Globalisation helps Disney to gain its revenues from all over the world instead of only from its host countries, United States. The total revenue in year 2007 was $35,510 million. The total revenues increased by 6.6% to $37,843 million in 2008. However, the total revenues dropped by 4.5% to $36,149 million in 2009. controvert impactsGlobal RecessionAccording to Jason Garcia (2009), during the global recession in year 2009, despite the well-heeled clock of the busy Easter holiday, Walt Disney Parks and Resorts suffering from downfall of its operating profit and total revenues by 19% and 9% respectively. Disneys profit and revenues in United States go for declined by 26% and 7% to $954 million and $8.6 billion respectively. Although Walt Disney World is having the same amount of visitor compared with the previous year and 10% more guests in Disneyl and, Disney does not make any profit as it gives out discounts and special deals to uphold the at slopeance level of visitors. http//articles.orlandosentinel.com/2009-07-31/news/disney_1_walt-disney-disney-world-disney- setFinancial CrisisAccording to Wu Jin (2009), during 2009 global financial crisis, Hong Kong Disneyland left with no choice and plan to raise its unveiling ticket prices by nearly twenty percent. The decision was made after numbers of market surveys have been conducted where the tourist visits are not affected by prices but seasonal factors. However, Hong Kong Disney have been threatened and boycotted by topical anaesthetic anesthetic travel agencies and public dismay, and then, it adjusted its price strategy again.http//www.china.org.cn/travel/news/2009-02/05/content_17226206.htmGlobal competitionsA company at first have its own competitors in its domestic market, however, due to globalisation, there are more competitors as it has to face global competitions wit h international competitors. Company tends to strive to be better in order to compete with its competitors.Walt Disney Company has its own competitors in each and every one of its business segments topically and internationally. However, its major competitors are CBS Corporation (CBS), News Corporation (NWS) and Time Warner Incorporation (TWX). They compete direct with Disney in various business lines which is shown in the chart belowDisneyCBSNews Corp.Time WarnerFilmsTheme parksCable networksBroadcast networksTelevision stationsRadioInternetSocialPositive impactsConsumer SpendingSource http//bigpicture.typepad.com/comments/2005/11/why_the_focus_o.htmlThe table above shows where United States people spent their money. And it shows that most of their spending is on entertainment publishing industries, motion picture and sound recording industries, broadcasting and telecommunications as well as amusements, gambling and recreation. This is favourable to Disney as it business focuses o n those entertainments.Negative impactsCultural DifferencesAs every country have incompatible cultural practices, Disney pauperism to add local attractions to attract local consumers. For example, in Hong Kong Disneyland, a Mickey pilfer mascot is wearing a bright red Mao suit while Minnie Mouse mascot is wearing a cherry blossom red dress. http//www.nytimes.com/2008/01/22/arts/22arts-ACHINESEMAKE_BRF.htmlBesides that, employees in the theme parks have to know different languages in different Disneyland theme parks, in Hong Kong Disney land, they speak both English and local dialects like Cantonese and Standard Mandarin. Their brochures and maps are printed in those languages too with additional Japanese language. And the most special one, they in truth included sharks fin soup in their menu. http//www.springerlink.com/content/h6335466636hw877/TechnologyPositive impactsNowadays, technology has become a very increasingly important tool to compete with rival companies and industrie s. The development of technology like video editing software, high definition and 3D have a strong impact on film producer like Walt Disney to helps them in producing the film efficiently. According to Bloomberg (2010), the latest Walt Disney animation movie which is named Alice in the Wonderland which comes with 3D resolution have hit 210.3 million ticket sales in worldwide and 116.3 million in United States. The improvement of technology brings better sales to Walt Disney.http//www.businessweek.com/news/2010-03-07/disney-s-alice-in-wonderland-makes-116-million-sets-records.htmlNegative impactsBefore the existence of internet in year 1955, consumers purchased entertainment products such as music CDs from entertainment outlets. As technology advances, entertainment industry has been affected with the existence of Peer-to-peer (P2P) architecture which implemented worldwide. According to Sammy Khayat (2004), P2P is the distributed computing network where people directly shares files o r resources from computer with others without going through central server, for example Napster. Hence, people no longer procure CDs from the shops anymore. According to the Recording Industry Association of America, the number of CDs shipped in United States feel 15% from 940 million to 800 million between year 2000 and 2002 which brought to dropped in sales about $2.5 billion. Copyright infringement is expanding as people often do file sharing over internet which allows them to download free music and wherefore send to their friends which is a great threat to Disneys entertainment business. Other than that, pirated CDs, DVDs and soft toys give big impacts to Disney as well.http//www.personal.psu.edu/sbk142/disney.htmEnvironmentNegative impactsBad weathers like rain and thunderstorm decreases entrance tickets sales of Disney theme parks as consumers will be taking the consideration under the hazardous weather. Take Gold bound theme parks as example, the wet weather at south-east ern Queensland had affected the revenue of the company to fall.http//www.smh.com.au/business/wet-weather-means-less-fun-for-theme-park-profits-20101102-17cd3.htmlLegalAll Disneys cartoon characters like Mickey Mouse are trademarked, hence other people sessnot use them without authorization. There was a case back in year 1989 where there were three day-care centres in Florida painted Mickey Mouse and other Disney cartoon characters on their wall and Disney took legal action against them. The rival, universal Studios replaced with its cartoon characters after Disneys were removed. http//www.snopes.com/disney/wdco/daycare.asp Besides that, technology advancement has led to pirated products such as soft toys which cannot be controlled by the company as it goes worldwide in huge numbers.Potential impacts of Globalisation on Walt Disney life-style influencesNowadays, people are so stressful to face their problems at workplace, school and even at home. strain lifestyle is favourable to Di sneys business which is concentrate on entertainment sector as people tend to spend their money on entertainments just to make themselves feel more comfortable and relax. This can actually lead to increase in Disneys sales and revenues.Technology advancementAs the technology advances, Disney can apologise its labour costs. For example, in Disney theme parks, people can buy their tickets from ticket machines where there is no need ticket booths that require workers to sell the entrance tickets. Operators are no longer requires if the theme park is in full computerized, where the roller coasters, marry-go-round, etc, will automatically run when consumers are ready to go.Besides that, future technology can makes Disney films more interesting, maybe it will be in 4D or 5D where people can experience new things and they are unbidden to spend their money for new kind of entertainment. Disney can also be progressive in their theme parks and come out with new kind of games, gadgets and amusement rides to attract more consumers. In this way, Disney can generate more revenue due to its new technology.StrategyChina is having a population of 1.26 billion people which is equivalent to 20 percent of the worlds total population. With the humongous population and established relationship with Chinese Government, its foreseen by the Walt Disney Company that there is high demand for entertainment and the fourth Disney theme park, Hong Kong Disneyland can generates revenue by entering the country. Besides that, the labour cost in China is two third lower than Disneys other theme parks where lower costs generate higher profit. Disney can actually expand more of its businesses into China as it is having very huge and potential market. With one nestling policy in China, the grandparents as well as parents are pampering their child and they are willing to spend money on entertainment that their child wanted like theme parks and movies. The adults who are facing problems simply need entertainments just to relax themselves.The demand for entertainment is very high in China, however, due to their lower incomes, they may not afford to pay for it. Disney should have brought down its selling prices and hence generates more sales. Besides that, Disney has to understand their cultural practices and try to adapt local custom by doing more market researchers, interview and questionnaires, so that the company can roughly have an idea on what the local people prefer.There are a lot advantages for China if Disney to expand its businesses at China where the business can helps to raise its technology level, provide job opportunities for its people and increase its economic growth. In my opinion, the breastwork for Disney to enter China should not be a problem.Source http//www.indexmundi.com/china/unemployment_rate.htmlThe table above shows the unemployment rate in China from year 2004 to 2010, the data is for urban areas only, including migrants may boost total unemplo yment to 9%, comforting unemployment and underemployment in rural areas. If Disney further expands its business in China, it can help to reduce China unemployment like how it helps Frances.The Walt Disney Company is having a strong brand name and reputation in this world, it should keep it up and come across its mission all the time which is to make everyone happy. I believe that Disney will never fail in its business and always stay at the top level.