The Walt Disney Company: Walt Disney Parks and Resorts

Theory: Global Strategy - Standardization Versus Adaptation

Lecturer: Mr Michael Liew
Prepared By Hanim Mohammad Tahir
Student No: B1017000030

About the Company & Theory: Theme park opening dates:

Walt Disney paved the road for a new form of family recreation with the opening of Disneyland on July 17, 1955. He created a
magical place that goes beyond imagination for everyone to enjoy and immerse themselves in [1]. More than sixty years later, the • Tokyo Disney Resort opened on April
Walt Disney Parks and Resorts (WDPR) segment of The Walt Disney Company has grown into one of the world’s leading providers of 15, 1983
family travel and leisure experiences, providing millions of guests each year with the chance to spend time with their families and • Disneyland Paris opened on April 12,
friends making memories that will last forever [1] 1992
• Hong Kong Disneyland opened on
Global Product strategy: A company has to decide the degree of adaptation of the product. If they fail to modify their product to
Sept. 12, 2005
specific markets, it can be a big problem and can result into a disaster (Douglas & Craige, 1995). [2] Although both standardization • Shanghai Disney Resort opened on
and adaptation are appropriate global strategy, the debate on this matter is polarizing, favouring different approach. [3][4]. The June 16, 2016 [1]
fundamental aspect of the decision lie on the compactivity of the product together with the advantages of standardization with
the responsiveness to the local need. [4]. In short, a global strategy should apply a “think global, act local” approach [4]

Disneyland Global Strategy During the First Year of Operations

Initial Strategy
Homogenization of Demand
The strategy WHY?
Disneyland employed YES applied was a YES Researches supports the notion that the success of a standardization strategy relies on
standardization strategy for success? whether the country of the product and the newly entered country‘ are culturally
their international theme park? compatible, and this doesn’t hinder the potential customers from purchasing the
product [5][7]
Disneyland
Paris Tokyo Furthermore, research by Cavusgil & Zou (1994) construct three factor that highlight
the possibility of a standardization is applicable in the new market when the
Disneyland
No homogeneity of the customer response to the marketing mix is high, the similarity in
Hong Kong the degree in economic freedom is high in both countries and the competitive
Disneyland advantage are easily transferable. [7]
No
The Disneyland’s Japanese partner resist the effort to ‘localize’ Disneyland as consumer
prefer the replication of the American Original [8]. This decision of Disneyland's
standardization can be support by [6] the advancement of technologies &
WHY? communication resulted to a global homogenous market and the customer respond to
the homogeneity of the product is high.
Disneyland employed
adaptation strategy
Cultural differences Environmental Factors Legal Factors
The role of cultural difference influencing the
standardization strategy is recognized in several literature Product that uses condition such as climate and Past research has highlighted that legal factors
[3][9] as a barrier for the implementation of the impact the standardization [16] as it serves as a
topography should ensure that the product
standardization strategy in a global market. The greater the constrain to strategy as the environment between
presented in the intended and acceptable two markets is different it would imply the
cultural differences between two countries, the lower condition and if the condition is uniquely different
The strategy degree the standardization [9] should be as a highly company will face with two set of different policy
applied was a by country, region or market area, therefore a and constraint which resulted into a difficulty in
constraint culture are more difficult to standardize.
success? specialized modification and adaptation is the standardization process [3]
Utilizing the same strategy as Tokyo Disneyland, in hope to required to suit the market circumstances [14][5]
replicate the success. however, Disney failed to recognized This is evident with Disneyland, as Disney did not
Shanghai that a “ business is a different games in each county ”[10] as Disneyland a product that rely on conditions such understand the differences in the United States
Disneyland the French wasn’t receptive on the American fairy tale as climate and topography, should modify their versus European Labour Laws which lead to
characters as compared to the Japanese consumer that underestimate of the labour cost that increase
product in an acceptable condition [18] and a
believe the characters are genuinely part of their culture Disneyland’s debt [15]. It is argue that foreign law
[11].
required adaptation to suit the market-
will primarily affect the product standards,
specification circumstances is highly necessary
Disneyland should avoid the application of a singular features and performance [17] ergo, Disney should
YES [19].
approach as an effective global strategy but instead should implement the law based on the country it
incorporate different strategies; adaptation [13]. Instead, it operates as different countries execute a different
imposed the Disney culture on the French and Hong Kong, law [15].
thereby assuming its way was the “right” way, and the host
culture’s customs were “wrong” or “unacceptable.” [12]
WHY?

Adaptation of Product
A study by Hout, Porter and Rudden, rejected the application of a singular approach such as product standardization as an effective global strategy but
instead should incorporate different strategies.[13] and adaptation is evident to result in more sales and/or market share [14][20]. Realistically, a
company or corporation are not just marketing themselves or their product but also their ideas, concepts and practices that are related to the
domestics culture [22] when they entered a new market. [22][23] This can result the local government or market to create ”natural barrier” for the
product, ergo, by implementation of the adaptation strategy, the company can overcome these barrier in their product successfully. [22] Additionally,
when it is evident that the cultural and environment factors between two countries are different, the company should expect to modified and adapt
their product to meet the unique local and environment requirement while simulators deliver the market’s expectation. [22][8][9][3]

One of the Disney Director stated that “the our newest Disney destination (Shanghai) is authentically Disney, distinctly Chinese — is unlike anything
we’ve ever done before and the people of China absolutely love it [21]. Achieving a global product success is not a simple process of duplication of the
original even though this application was proven to be successful with Tokyo Disneyland, Disneyland kept losing money in their initial operational
years for Hong Kong & Paris[24] ergo Disneyland applied adaptation strategy for Shanghai.

Reference
[1] Walt Disney Park and Resort, Overview, viewed on 4 June, 2017, <https://aboutdisneyparks.com/about/company-overview>
Conclusion
[2] Douglas & Craige, S. P. & Craige, C 1995, Global marketing strategy, Mc:Graw-Hill Inc, USA.
[3] Viswanathan, N K & Dickson, P R 2007, "The fundamentals of standardizing global marketing strategy", International Marketing Review, Vol. 24 Issue: 1, pp.46-63. In conclusion, Disneyland should analyse beforehand the
[4] Wills, J., Samli, A C & Jacobs, L 1991, “Developing global products and marketing strategies: a construct and a research agenda”, Journal of the Academy of Marketing Science, Vol. 19, No. 1, Winter, pp. 1-10. market that they are planning to expand their theme park in
[5] Powers, T L & Loyka, J J 2007, "Market, industry, and company influences on global product standardization", International Marketing Review, Vol. 24 Issue: 6, pp. 678-694.
[6] Levitt, T. 1983, “The globalization of markets”, Harvard Business Review, Vol. 61, May-June, pp. 92-102
order to apply the appropriate strategy in the global market. A
[7] Cavusgil, S. & Zou, T. S , 1994, “Marketing strategy-performance relationship: an investigation of the empirical link in export market ventures”, Journal of Marketing , Vol. 58 No. 1, pp. 1-21. prior understanding of the target market is crucial in access the
[8] Brannen, M. Y., & Wilson III, M 1996, “Wilson recontextualization and internalization: lessons in transcultural materialism from the Walt Disney company”, CMES Business Review, Vol. 1, pp. 97-100. degree of the standardization or adaptation that is required for
[9] Omar, M & Porter, M 2011, "Reducing risk in foreign market entry strategies: standardization versus modification", Competitiveness Review: An International Business Journal, Vol. 21 Issue. 4, pp. 382-396.
[10] Hofstede, G 1980, Culture's Consequences: International Differences in Work-Related Values. Beverly Hills CA: Sage Publications.
modification of the product.
[11] Brannen, M Y 1992, “B'wana Mickey: Constructing cultural consumption at Tokyo Disneyland. In J. I. Tobin (Ed.). Re-Made in Japan”, New Flaven, CT: Yale University Press In regards to Disneyland Paris and Hong
[12] Newell, L A 2013, “Mickey Goes to France: A Case Study of the Euro Disney Negotiations.” Cardozo Journal of Conflict Resolution. Vol 15. pp. 193–220
[13] Hout, T., Porter, M.E. & Rudden, E 1982, “How global companies win out”, Harvard Business Review, Vol. 60, pp. 98-105 Kong Disneyland, a change of the global
[14] Cavusgil, S.T., Zou, S. & Naidu, M.G. 1993, “Product and promotion adaptation in export ventures: an empirical investigation”, Journal of International Business Studies, Vol. 24 No. 3, pp. 479-506. strategy should take place promptly and
[15] Yue, W 2009, The Fretful Euro Disneyland, The international Journal of Marketing Strategy, Vol.1, No.2, pp. 87-91. a degree of adaptation should be
[16] Jain, S C 1989, “Standardization of international strategy: some research hypotheses”, Journal of Marketing, Vol. 53 No. 1, pp. 70-9.
[17] Baalbaki, I B & Malhotra, NS 1993, “Marketing management bases for international market segmentation: an alternate look at the standardization/customization debate”, International Marketing Review, Vol. 10, included in the strategy as the cultures is
No. 1, pp. 19-4 incompatible thus hinder the
[18] Kanter, R M & Dretler, T D 1998, “Global strategy and its impact on local operations: lessons from gillette Singapore”, Academy of Management Executive, Vol. 12, No. 4, pp. 60-8. competitive advantages of Disney to be
[19] Porter, M.E 1990, “The competitive advantage of nations”, Harvard Business Review, Vol. 2, pp. 74-94.
[20] Yip, S.G 1989, “Global strategy in a world of nations?”, Sloan Management Review, Vol. 31 No. 1, pp. 29-41. transfer the new market. In short, the
[21] Smith, T 2017, Shanghai Disneyland Welcomes Almost 8 Million Guests, DisneyParks Blog, Viewed on 1 July 2017 https://disneyparks.disney.go.com/blog/2017/03/shanghai-disneyland-welcomes-almost-8-million- best strategy to utilize is highly depend
guests/ on the similarity and difference of
[22] Medina, J F &Duffy, M F 1998, "Standardization vs globalization: a new perspective of brand strategies", Journal of Product & Brand Management, Vol. 7 Issue: 3, pp. 223-243.
[23] Terpstra, V. 1981, “On marketing appropriate products in developing countries”, Journal of International Marketing, Vol. 1, No. 1, pp. 3-15. cultures between the two countries.
[24] Zhu, L & Xu, D 2010, Marketing Strategic Change in Expansion of Disneyland: Cases Study of Disneyland’s Overseas Expansion in Shanghai, Master Thesis, Jönköping University