Walt Disney Company. A multinational corporation PDF

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Bogdan Ditu

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Walt Disney Company. A multinational corporation The openning of Disneyland in Shanghai LEI1010-STD-1516: 15/16 Globalisation and the Experience Economy Module leader: Clare Mackey

Globalisation is a phenomenon that started to take place mostly after the end of the Second World War. As Steger states, the term dates back to the 40s but it was the end of the 20 th century when globalisation started to represent the increasing interconnectedness between economies and societies at different levels. According to Steger, globalisation is ‘a process, a condition, a system, a force, and an age’ (2013, p.9). Anthony Giddens, the Former Director of the London School of Economics, believes that a definition of globalisation may refer to the intensification of worldwide social relations that link places around the world in such way that what happens on local is a result, or is influenced by events occurring on another place on Earth. Roland Robertson, Emeritius Professor of Sociology at University of Aberdeen in Scotland, says that the concept of globalisation refers to the compression of the world and to the intensification of consciousness of the world as a whole as well (Steger, 2013, p.13). In other words, globalisation links, or connects countries and people from an economic perspective, a political one or from a cultural point of view. Globalisation is the nowadays most controversial concept. As Steger said (2013, p.1), it is ‘the buzzword’ of our time. It is very controversial because scholars can`t agree whether it is a new phenomenon or an old one and as well, if it is a more positive mechanism in which the world works or if it is a more negative one. Some scholars agree on the idea that globalisation is in fact a continuously process that is taking place starting from the Antiquity when the first states appeared. The first form of migration, trade and traveling away from hazards (such as war, natural catastrophes) among with the invention of coins were the first forms of what we call now an inter-connected world. Wright believes that since the late 60s globalisation has established more and more, by the spread of capitalism, of a new international division of labor which is based on a low-paid and flexible labor relations, and of new international marketing strategies (2007, p.269). It is no doubt that globalisation as a process lead to the development of the Experience Economy. Pine and Gilmore (2011, pp.2-4) have a good example that gives the understanding of the experience economy. For Pine and Gilmore, the human society developed through time from its earliest stages of commodities to present experiences. If the commodities stage of the economy is defined by the verb extract, the goods economy by the verb make, the service economy by the verb deliver, then the experience economy is defined by the verb stage. In a nutshell, buying the ingredients for making a cake represents the goods economy, buying the cake already made is the service economy but buying the whole birthday party means to reach the experience economy. Experiences are defined by their continuous form, in ‘ing’ (2011, pp.30-33). A similar example of the birthday cake is with Apple. An iPod is a good. iTunes is the service that costumers use but podcasting is an entire experience. This example shows clearly the progression of economic value through time, and the stage that globalisation brought for nowadays economy: added value by experiences. Many companies today wrap experiences around their existing goods and services to differentiate their offerings because important are not the venues themselves, but the memories that people remain with. Goods and services are no longer enough. People now have more disposable

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income so they are able to afford for themselves experiences. Experiences are rich in sensations, created with each guest. In the experience economy consumers are not simple costumers. They are not numbers, they are guests (Pine and Gilmore, 2011, p.17). Talking about globalisations` facilitators it is not enough to mention only the technological ones, such as the internet and the creation of World Wide Web which connects billions of people, or such as social medias, the spread of the smartphone, or even having airplanes which makes the world to feel smaller. Globalisation could not have been possible without the internationalization of trade and finance. Due to the creation of a global market, that eliminated or reduced existing trade barriers and fees, an international peaceful relationship has been establish between countries, with technological innovation benefits as well (Steger, 2013, p.41).However, one of the most important pillars of globalisation are TNC`s, or Transnational Corporations. Examples of TNC`s from the Sports Industry are Nike, Adidas, Time Warner; from the Tourism Industry are Ryan Air, British Airlines, Carnival Cruise lines, who are intermediaries in the industry and Thomas Cook, a tour operator and travel agency; and the last but not the least, from the Events Industry examples regard to Messe Frankfurt, an exhibition organizer, Premier Exhibitions and Disneyland. From these, the most outstanding transnational corporation is Disneyland whom left as a legacy the concept of Disneyfication (Matusitz, 2011, p.678). Walt Disney Company is a giant of globalisation (Matusitz, 2011, p.669). It grew from a small business in 1923 to one major player in the process of globalisation that by 2005 had more than 129,000 employees. The expansion of Disney across the world is one part of the process called Americanization, as Matusitz said (2011, p.678) which means cultural domination of American culture upon other cultures in the world. The challenge that Japan was facing in the mid-90s is linked to this concept of Americanization. In order to stop purchasing Western culture products, Japan started to produce its own cultural products, Power Rangers, Kurosawa, Godzilla, The Mighty Morphin, Hello Kitty, sumo and sushi that found niche markets overseas. Yet, the brilliant phenomenon for Japan is Pokemon, and why, because Pokemon`s producers decided that in order to make Pokemon globally, they need to reduced its ‘cultural odor’, as Koichi Iwabuchi (1998, cited in Carlsson, 2002, p.56) said (2002. pp.55-56). Therefore, the ‘dejapanization’ of several video games characters lead to the globally success of them, examples: Space Invaders, Donkey Kong, Super Mario Brothers, Pacman and Duck Hunt. Disney is so successful because Mickey Mouse and Donald Duck are ‘enduring icons worldwide’, whereas Pokemon (Japan`s long awaited answer to Mickey), even though the best video game and cartoon ever in history as Carlsson said, started to decrease in popularity from the 2000s and to remain famous only in Japan and in the USA (2002, p.53). Other elements of Americanization relate to the expansion of franchises all over the world, example Mc Donalds, Coca Cola, Starbucks, all these spreading American culture and being responsible for cultural globalisation.

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Disney`s expansion was not successful from the beginning. The opening of a new Disneyland in Hong Kong in 2005 received a lot of negative reply from the locals because the theme park was not Chinese at all, and local Chinese people found the situation as American Imperialism. Disneyland in Hong Kong needed a glocalised perspective in order to succeed. The terms of Glocalisation and glocal refers to the interference of the global and the local in the way in which a product needs to meet local desirability in order to be sold on the global markets. As Koichi Iwabuchi said, Sony used this term to adapt their products world-wide (1998, cited in Carlsson, 2002, p.57). But it is Robertson (1992, 1994, cited in Matusitz, 2011, p.668) that developed glocalisation as a theoretical concept that make a symbiosis between both globalisation and localization. It is the success of Disneyland Hong Kong that led to the idea of opening another theme park in Shanghai. A new Disneyland in Shanghai will benefit the local economy by creating jobs, will improve the city`s image and it will be a great opportunity for Walt Disney Company to go deeper into the biggest consumer market on the planet (Matusitz, 2011, p.677). The glocalisation of Disneyland Hong Kong was possible by making four major changes to the theme park, and they are reduction of prices, adaptation to local visitors’ customs, change of decors and settings and adaptation of labor practices. Notable to be discussed about the reduction of prices is that when the theme park actually opened in September 2005, the South-East region of Asia was not fully recovered from the late 90s Asian financial crisis. China was still a country with a low average income and Disney`s ticket price was too expensive, so keeping the prices at an affordable level is crucial for Shanghai`s success. The threat came as well from the fact that China already had several theme parks. Nowadays Hong Kong`s economy increased so much that Disneyland increased the ticket price in 2009 from HK$210 to HK$250 for children, and from HK$295 to HK$350 for adults (Matusitz, 2011, p.672). Disney Paris, for example, had very serious financial difficulties at their opening in 1992 because of high labor costs and operational mistakes despite 7 years of planning, all these leading to a 1 billion $ total loss (De Groote, n.d., p.26). Talking about adaptation to local visitors costumes, at the beginning, Hong Kong Disneyland was so unpopular that a Hong Kong transvestite bar nearby was able to attract much more visitors from the mainland. Disney Company needed to set-up adequate commissions in order to collaborate even better with tour operators and to get more people visiting the theme park. Another change in terms of adaptation to local costumes that was made by the managers was introducing seasonal entertainment events in the theme park, such as A Sparkling Christmas, and Disney’s Chinese New Year, and changing the characters according to the Chinese culture and political influence at to that time (Matusitz, 2011, p.673). In Disneyland Tokyo, for example, the Tanabata Festival is celebrated every summer (Abreich and Shim, n.d., p.6). All these adaptations will need to be as a standard for the opening of the new theme park, in order to succeed. For example, Mickey was dressed in a bright red Mao suit while Minnie sported a cherry-blossom red dress, in order to appeal more to the Chinese

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tourists. Not to be negligee is the fact that managers at Disney had to adapt the food served in the restaurant. First, to serve Chinese food instead of European and American food, and second to offer the possibility of group dinner, because most of the tourists that are coming from the Mainland are traveling in forms of groups. Very interesting is how the theme park had to be modified in order to fit the Chinese culture. Feng shui experts were hired to lay out the arrangement of the theme park. The main entrance, for example, was shifted by 12 degrees and also added a curve in its walkway from the train station to it so that chi energy cannot flow into the South China Sea. According to Holson (cited in Matusitz, 2011, p.674) the number eight is a lucky number in the Chinese culture, and number four is an unlucky one. Hence, there is no number 4 button at the elevators in the theme park. The feng shui consultants think that the changes are bringing prosperity to the theme park. The last glocalisation change that was made by the managers of Disneyland Hong Kong is in terms of adaptation of labor practices, a shift from American style to a Chinese culture perspective. The problem here consisted in what is called ‘emotional labor’, as Bryman (2006, cited in Matusitz, 2011, p.675) said. The concept of emotional labor means that employees are expected to exteriorize the emotions and feelings that are in accordance with their duties. Disney is known as one of the happiest places on earth, and staff were required to smile for the guests all the time. Moreover, Asian crew personnel just couldn`t smile more than natural, as part of their culture and beliefs, and this intern regulation almost lead to a mini-revolution. Disney had to make adjustments because the idea of making the employees ‘smiling robots’ did just not work (Matusitz, 2011, p.676). The implementation of the glocalised changes to the theme park made Disneyland Hong Kong such a success that the venue was often overcrowded and stopped selling tickets. Chinese families from all over the country came to visit Disneyland. Even though Hong Kongers and Chinese visitors can see that the theme park is still attached to the Disney brand itself, the crew personnel are so busy that they seem to not be able to catch a break, which means that visitors are coming all the time. Disney is so successful that they have built their own ships for family theme cruising, taking ahead in this industry. As part of the business plan, Disney offered package deals for people, such as four nights on the ship and three days for free at Disney World (Klara, 2012, p.1). But not only Hong Kong Disneyland is a successfully theme park. Similarly, as Abreich and Shim states, the one opened in Tokyo in 1983 led to the development of other 60 theme parks across Japan and managed to attract 10 million people in the opening year (n.d., p.5). This is why it is considered to be the third most successful theme park in the world. In contrast with the French guests at Disney Paris, the Japanese felt in Tokyo that they want to visit the theme park in order to visit America and its culture. Not the same thing happened in Paris where the marketing of the venue was focusing too much in an American style of ‘bigness and extravagance’, as De Groote stated (n.d., p.26), and this

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is the reason why the theme park had problems in integrating itself among the European societies and finally, in attracting guests. In conclusion, Walt Disney Company in general and particularly Disneyland as a theme park is a Transnational Corporation that still plays a very important role in the process of globalisation across the world. Through its glocalised approaches in Paris, Tokyo and Hong Kong, Disneyland managed to become a successful and famous business. It is no doubt that without shifting from its American standards to the way in which local traditions and culture are implemented, Disneyland would have had success in neither of the places mentioned above because different markets have different demands and globalisation as a phenomenon has inter-connected the world in the way in which approaching a glocalised perspective, by meeting the global in the local, demands are meet and success is reached. Therefore, adapting to the local culture and meeting all the requirements in terms of offer and demand on the market, the opening of Disneyland Shanghai theme park will definitely be a success.

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Reference list Abreich, P. and Shim, A. [n.d.] TOKYO DISNEYLAND AFFECTS JAPANESE CULTURE. East Asian UCSB [online]. Available from: http://www.eastasian.ucsb.edu/classes/TourEA130/tokyodisneyland.pdf [Accessed 8th January 2016].

Carlsson, U. (2002) Globalisation of Children's TV and Strategies of the 'Big Three'. UNESCO [online]. Available from: http://www.unesco.org/new/fileadmin/MULTIMEDIA/HQ/CI/CI/pdf/youth_media_globalisation.pdf#page=6 1 [Accessed 31st January 2016].

De Groote, P. [n.d.] GLOBALISATION OF COMMERCIAL THEME PARKS Case: the Walt Disney Company. Scientific Papers [online]. Available from: http://ageconsearch.umn.edu/bitstream/104660/2/2_Parick%20Globalisation_Apstract.pdf [Accessed 31st January 2016]. Klara, R. (2012) Mouse Boat. Adweek [online]. 53(14). Available from: http://web.b.ebscohost.com/ehost/detail/detail?sid=9bde0f0c-2c76-4776-81f9d614183d3db2%40sessionmgr113&vid=0&hid=115&bdata=JkF1dGhUeXBlPWNvb2tpZSxpcCxzaGliJnN pdGU9ZWhvc3QtbGl2ZQ%3d%3d&preview=false#AN=74223949&db=buh [Accessed 6th January 2016].

Matusitz, J. (2011) Disney`s successful adaptation in Hong Kong: A glocalization perspective. Asia Pacific Journal of Management [online]. 28(4). Available from: http://download.springer.com/static/pdf/438/art%253A10.1007%252Fs10490-009-91797.pdf?originUrl=http%3A%2F%2Flink.springer.com%2Farticle%2F10.1007%2Fs10490-009-91797&token2=exp=1454788234~acl=%2Fstatic%2Fpdf%2F438%2Fart%25253A10.1007%25252Fs10490009-91797.pdf%3ForiginUrl%3Dhttp%253A%252F%252Flink.springer.com%252Farticle%252F10.1007%252Fs10 490-009-9179-7*~hmac=341a1826af151ae5fc268030475cdf853a8f77301b54bba75ae9049f48063180 [Accessed 6th February 2016].

Steger, M. (2013) Globalization: A Very Short Introduction. 3rd edition. Oxford: University Press. Wright, G. (2007) The Impact of Globalisation. New Political Economy [online]. 1469(9923) Available from: http://www.tandfonline.com/doi/pdf/10.1080/13563469908406399 [Accessed 31st January 2016].

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