Anda di halaman 1dari 7

Globalization

International Business
Group 37

Business: Mass Media and Entertainment


REASON FOR SELECTING DISNEY
The Walt Disney Company, commonly known as Disney, is an American
diversified multinational mass media and entertainment conglomerate
headquartered at the Walt Disney Studios in Burbank, California. It is the world's
second largest media conglomerate in terms of revenue, after Comcast. Disney
ranks 121 in the Forbes Global 2000 list, higher than any other entertainment
company in the world. The most visible international presence of Disney is their
parks - currently in Tokyo, Paris, and Hong Kong. Disney films and digital content
reaches more than 190 countries through ESPN and other special networking
partners. Disney Channels Worldwide reaches more than 600 million viewers in
over 100 countries in the U.S., Europe, the Middle East, Asia Pacific, Latin
America and South Africa. In addition, Disneys theatrical shows continue to
record successes throughout America and Europe and increasingly throughout
Asia. Disney consumer products are also being produced and consumed
internationally at an increasing pace. Disney is also the 11 th most value brand in
the world, with Mickey Mouse being one of the most recognized icons in the
world. Disney is one of the very few entertainment companies which have been
globally successful, both in their content and strategy. That is why we have
decided to analyse the progress of globalization which Disney followed the issues
it is facing in todays world.

The Walt Disney Company


INTRODUCTION

Globalization has been at the core of Disneys strategy since its inception.
History of globalization:
o Incorporation of various ethnicities in media productions like Lion
King, Princess and the Frog, Alladin, etc, which has helped Disney
become famous worldwide.
o First international theme park in Tokyo.
o European initiative in 1990s establishing European headquarters
in France.
o Partnership with ESPN and many other networks to enhance reach
o Production of region specific content to enhance relevance in
various countries.
o Taking the help of social media and other technological
developments and to gain interaction with worldwide public.
Disney movies now reach over 190 countries in the world today and
Disney channels have a reach of 600 million people across 100 countries.
Apart from entertainment, Disney has had a major impact on global
tourism as well. Over 52 million people vacation at Disney World annually,
making it the most visited resort in the world.
The Walt Disney Company creates content and experiences in ways that
are relevant to the many cultures and localities found around the world.
The prime focus of Disney in the recent past has been to establish the
foundations for long-term growth in the emerging markets of Latin
America, Russia, India and China the most promising emerging
economies in the world.
MEDIA AND ENTERTAINMENT GLOBALIZATION

Due to extraordinary growth of the middle class all across the globe,
entertainment industry like so many others is undergoing enormous
changes.
70% of global box office is generated outside US. A few years back, the
reverse was true.
For the first time in history, American studios are setting offices abroad to
facilitate local productions in local languages and with 40 international
operational offices Disney is no far,.
The globalization of entertainment and media is not just globalization of
capital, but culture as well, which makes it even more complex.
With the increasing demand in developing nations, not only are new
markets getting created, but so is the demand for newer content.
CURRENT GLOBAL ISSUES

With an increasingly global world and the rise of many new markets, we are
faced several new challenges, along with opportunities. These challenges are
changing the traditional way of doing business and need to be tackled very
carefully:

The Walt Disney Company


a) Technological Evolution: With technology evolving at exponential rates
and technology transfer among countries becoming increasingly easier
and cheaper, technology trends are changing the existing markets,
creating new ones and smashing parts of it. The recent switch of
customers moving away from classic cable TV to go on the web or
pay for streaming services reduces our viewers at the same time. More
and more e-streamers today like Netflix, which one point in time worked as
collaborators for us, are now creating their own content, targeted at all
segments of the market, culturally and geographically. This not only puts
pressure on us to create better content in order to retain existing
customers, but also makes it difficult for us to acquire newer customers.
b) Growing demand for local content: The middle class population in
developing countries is growing at an exciting rate. And so is the chunk of
our business in those countries. China is the 2 nd largest market for us after
USA and Europe, the Middle East, Asia Pacific, Latin America and South
Africa are growing by the day. As these countries develop, their
aspirations for All things American gets lower. We can no more
bank upon the made in America brand as these countries want their
culture and individuality to be respected. We need to find a way to
produce more and more local content in order to engage local audience,
while maintaining the quality standards that Disney is known for.
c) Varied cultural identity of different markets: Each market identifies
itself and the products we sell in its own way. One symbol or brand might
mean several different things in different economies. For e.g., Star Wars is
a cult classic in some countries, while kids movie in others. We need to
take into consideration this growing individuality and cultural identity of
countries and produce content accordingly.
d) Opening up of newer markets: This increasingly globalized world
brings with it markets, which were inaccessible to us for a long time.
Though the world has opened up, one shoe does not fit all. Extensive
market research and analysis needs to be done before these markets can
be entered. Most of these markets also bring with them, the challenge of
unknown, unseen regulations and authorities which need to be dealt
with.
e) Outsourcing and quality: We outsource products and services,
including, merchandise, animation, restaurants, etc, from international
vendors all over the globe. We need to ensure that the quality provided by
these vendors is at par with Disney standards. We need to partner with
more and more local and international quality and auditing agencies to
ensure quality standards are met across the globe.
FUTURE OF GLOBALIZATION

With growing middle class and developing economies, the international


demand for quality entertainment and media is not going to slow down.
The brands which Disney owns and operates, including Star Wars, ESPN,
Disney channel, and many others, will gain more popularity in newer
markets as these markets become more open.

The Walt Disney Company

But along with the demand for global content, the demand for localization
of the content will also grow.
Along with global content, demand for local content, with global
standards, will also be on an alarming rise.

PATH MAKING
In this global world, shrouded with uncertainty, we need to improve the path we
take towards globalization and minimize the risks we may face along the way.
a) Anticipate bumps detours and predictable surprises and be
prepared: We need to study the markets we endeavour into very
thoroughly, take into account the risks, threats, competition and
opportunities in extreme depth in order to optimally capitalize on the
opportunities the country has to offer. For eg, in order to enter a country
with a negative sentiment towards USA, we must enter with more and
more local content and collaborations. While in a country where US
content is considered to be elite and aspirational, we need to enter with
content already successful in the western markets. We need to be so
strong in our research that we are able to anticipate any trends,
preference changes, bumps, which we may face along the way and be
prepared for it.
b) Add to predictive power by taking things down to the industry
and company level: Do not just study the country and the market, study
the industry. Each market will have a different set of competitors which we
have to face. For e.g., the release of Star Wars faced competition from
Bollywood movies, which is a completely different genre and market
segment. Be on the lookout for competition from everywhere, locally and
internationally, on TV or online.
c) Dont let a focus on the future crowd out consideration of the
here and now: Dont let the aspiration to expand and grow make you
lose focus on the present situation. We are leaders in media and
entertainment across the globe, in terms of content as well as technology,
and we need to maintain that position in order to grow any further.
5 STEPS TO A GLOBAL STRATEGY AUDIT
In order to get started with redefining the way we reach the world, we need to do
an audit of how we do things right now. We can follow a 5 step framework to
start devising a better global strategy.
1. Performance review:
o As of 2014, 75% of revenues were still being generated in the US.

The Walt Disney Company


Asia Pacific accounted for the highest growth rate of 18%, while the
growth in Europe was the slowest at 5.24%
o Made 4 times as much net profit as our closest competitor.
o Revenue grew at twice the rate of industry average.
But instead of only looking at financial indicators, we need to take a more
value focused perspective, especially since we operate in a services based
industry.
o

We need to develop a globalization scorecard measuring several other


indicators, apart from financial performances.

2. Industry and competitive analysis:


o Look for competition inside and outside the industry.
o How many players exist? Too many channels and production
houses?
o Your collaborators can turn into competitors anytime be on the
lookout (e.g. Netflix)
o Standardized global content or local and localized content Needs
to vary, depends on the country and perception of people (e.g. India
prefers localized global shows, while China wants locally made
shows)
o Sources of advertising and marketing Need to be extremely
country specific.
o Producing locally or outsource? Which is cheaper and provides
better quality?
o Ease of doing business in the economy? Is it easy or too
regulated?
o Leadership and changes in leadership Hire local employees or
send expats?
3. Difference Analysis:
o Cultural: Analyse the cultural differences across countries and
accordingly develop content. For e.g., family programming from the

The Walt Disney Company


US might not be very successful in Asian countries, where the
culture is a lot more conservative. Similarly, movies or content
based in Latin America may not be appealing in Europe or US. While
transferring content across borders, these cultural differences need
to be taken care of, while maintaining uniformity in quality.
o Administrative: Every new country we enter, there is an entirely
new set of rules and regulations to be followed. Censorship and
broadcasting regulations are the aspects which we need to focus
on in particular.
o Geographical: Geographical differences need to considered
especially while selling apparels and other consumer products as
geographical constraints play a major role in making key decisions
in these areas (for e.g. cant sell heavy winterwear in tropical
countries.)
o Economic: Per capita income and macroeconomic environment of
each country is different. This needs to be taken into account while
making pricing and other such decisions.
4. Development of strategic options: Using the AAA framework:

5. Evaluation of strategic options: Each strategy devised and developed


must be evaluated through the globalization scorecard mentioned above
and test-marketed in a smaller market, before launching it in full scale.
The focus must be on value addition for customers, suppliers, company,
environment and all other stakeholders, instead of just financial indicators.
I only hope that we never lose sight of one thing that it all started
with a mouse Walt Diney

The Walt Disney Company

REFERENCES
1. https://ditm-twdc-us.storage.googleapis.com/FY14-PerformanceSummary.pdf
2. http://csimarket.com/stocks/segments_geo.php?code=DIS
3. http://thewaltdisneyco.blogspot.in/2011/09/chapter-5-developing-globalvision.html
4. http://disneycareers.com/en/about-disney/global-footprint/
5. http://www.gereports.com/post/109210929783/the-globalization-ofentertainment/
6. http://www.nytimes.com/2013/10/15/business/media/peering-into-thefuture-of-media.html?pagewanted=all&_r=0
7. http://www.fool.com/investing/general/2013/11/23/disney-needs-toaddress-these-2-issues.aspx
8. http://www.smarteranalyst.com/2015/08/13/apple-inc-and-walt-disney-cosimilar-past-similar-issues-similar-future/
9. Interaction with Disney India office