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Disney Company, losing magic in the Middle Kingdom: Case study

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Today, the Disney Company is well known around the world for its theme parks based on the American Disney fantasy world. In 2007, the theme park industry was estimated at US$22.8 billion and Disney is one of the major players on this growing market. Since 2008, the company has 5 Parks and Resorts located on 3 different continents with 11 different theme parks. In September 2005, Disney opened the doors of its last Park & Resort in Hong Kong. The company did a joint venture with the Hong Kong Government investing a total of US$1.8 billion in the project. The Government, which invested US$419 million and provided the land for the project owns 57% of stake and Disney, which invested US$316, has 43%.

Disneyland has been studying the idea of opening a theme park in China since the 90s. The company finally decided to build it in Hong Kong because of the city's good infrastructure and the high level of income of its citizens compared to other Chinese cities. In 2006, the median income in Hong Kong was US$1,282 per month and the median household income was US$2,212. The city, which used to be an English colony, has a big Western influence, which makes its people more familiar with Disney characters. Hong Kong also has a large number of tourists from Mainland China and other countries. Everything was pointing out that the Hong Kong Disneyland could have been very successful. However the project didn't work out as it was expected. This failure was due to many different events and issues encountered before and after the opening of the theme park.

[...] Environmental issues The Disney Company had to face many environmental issues when it the park was still under construction. The site evaluation was criticized as being too short for a project like that. Environmental groups pointed out the fact that the construction of the park destroyed coastlines, coral, sea walls and fish spawning grounds. In 2000, more than 6 million fish died at the coastal fish farms, for which the government had to pay US$740,000 in compensations. Some historical structures from the Tang Dynasty were also lost forever under the park. [...]


[...] The Company had to face some issues involving the production of some of its merchandises in low-cost factories in China. Some of these factories offered very bad working conditions and violated many labor laws. Employees were paid under the minimum wage with social aids and insurance protections. They had to work more than 13 hours per day and were not always paid for overtime work. Disney avoided the problem by saying it wasn't it's responsibility. Competition Hong Kong Disneyland's big competitor was the Ocean Park. [...]


[...] Some famous people like singers and artists also did some bad commentaries on the theme park. One famous popstar even said he would never return to it again. The theme park didn't have a good image because of the fact that it was too small and that you had to do long lines for everything. Many press coverage were released a few days after the opening pointing out the fact that the park was too crowded. Those reviews clearly had a negative effect on the people because the weekends after the opening, the number of people was very low. [...]


[...] The company did a joint venture with the Hong Kong Government investing a total of US$ 1.8 billion in the project. The Government, which invested US$419 million and provided the land for the project owns 57% of stake and Disney, which invested US$316, has 43%. Disneyland has been studying the idea of opening a theme park in China since the 90s. The company finally decided to build it in Hong Kong because of the city's good infrastructure and the high level of income of its citizens compared to other Chinese cities. [...]


[...] Women also remain in the workforce, even after their marriage. Therefore parents don't have much time for them and don't want to loose too much time for entertainments. The local people prefer entertainment options that are more convenient, comfortable, fast and inexpensive. Their favorite activity is shopping. They are always looking for good deals. Many of them like to go to Shenzhen during the weekend in order to buy cheaper goods. The problem with the Hong Kong Disney Park is that it is not convenient enough for Hong Kongers, as it is far from the city. [...]

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