Case: Disneyland Abroad
Article by import export manufacturer
In 1984 Tokyo Disneyland completed its first year of operations after five years of planning and construction since the Walt Disney Corporation entered into an agreement with the Oriental Land Company in Japan. More than 10 million people (9 percent from other Asian countries) visited the park, spending $355 million. This was $155million more than had been expected, largely because the average expenditure per visitor was $30, rather than the estimated $21 per visitor. Tokyo Disneyland thus became quickly profitable. Growth continued, so that by 1990 more than 14 million people visited the park, a figure slightly larger than the attendance at Disneyland in California and about half the attendance at Walt Disney World inFlorida.
The Tokyo Park is in some ways a paradox. Although such firms as Lenox China and Mister Donut had to adapt to Japanese sizes and tastes, Tokyo Disneyland is nearly a replica of the two parks in the United States. Signs are in English, and most food is American-style. The management of the Oriental Land Company demanded this because they wanted visitors to feel they were getting the realthing and because they had noted that such franchises as McDonald’s have enjoyed enormous success in Japan as Japanese youth have embraced American-style culture. Yet, a few changes were necessary, such as the addition of a Japanese restaurant.
The timing of the Tokyo Disneyland opening coincided with a rise in income and leisure time among the Japanese. A Disney executive said that a similar rise inincome and leisure had contributed to the successful opening of the first park near Los Angeles.
That the park is nearly identical to the ones in the United States masks the fact that there have been numerous operational adjustments. Probably the most important were in the methods of promotion. Whereas Disney uses its own staff to prepare advertising in the United States, it has relied onoutside agencies within Japan to adapt to cultural differences. Even within Japan there are differences. For example, ads outside of Tokyo are more informational, whereas those in Tokyo, where the park is well known, rely more on a fun image.
Disney provided no financing for the Tokyo operation. Disney provided master planning, design, manufacturing and training services during construction, andconsulting services after completion of the facility. Disney received fees for its efforts during the construction phase, and — it now receives a 10 percent royalty from admissions and 5 percent from merchandise and food sales.
The success of Tokyo Disneyland led the company to consider expansion into Europe. In 1985 it announced that it had narrowed its locational choice to two countries, Spain andFrance, for a park scheduled to open in 1992. Since the park was estimated to provide about 40,000 permanent jobs and would draw large numbers of tourists, the two countries openly courted Disney. Disney, in turn, was likened to Scrooge McDuck, as it openly played one country against the other in an attempt to get more incentives. Spain offered two different locations and 25 percent of the cost ofconstruction, and claimed it could attract 40 million tourists a year. The French guaranteed 12 million customers a year, the number Disney estimated as the break-even point, and agreed to extend the Paris railway to the park’s location (thus linking the park to the rest of Europe) at a cost of about $350 million. In addition, the French government offered 4800 acres of land at about $7500 peracre, a cheap price for the area, and loaned 22 percent of the funds needed for financing. Disney finally signed an agreement with the French government in. 1986 because of the more central location of_ Paris (109 million people live within a six-hour drive of the French theme park), the large number of tourists who visit Paris throughout the year, and the availability of flat land near Paris.
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