Case Details
How Business Model Reinvention Helped Tokyo Disneyland Build Success Post-Covid-19
Tokyo Disneyland’s 40th anniversary celebrations in April 2023 were so popular that the theme park’s operator, the Oriental Land Company (OL) reported record profits just three years after the COVID-19 pandemic forced the business to close for a total of 123 days.
Although these celebrations helped make OL’s 2023 year profitable, are the strategies OL uses to grow revenue enough to help the company overcome future setbacks and withstand increasing local competition in Japan?
To mitigate the pandemic’s impact, Tokyo Disneyland’s management experimented with new business strategies. In June 2023 the company announced a seven-year plan, its 2030 Goal, with a unique feature––to create more happiness, in a sustainable way.
The plan includes a number of key strategies including making long-term capital investments, innovating OL’s business model, committing to sustainable development, implementing strong business continuity practices, effective liquidity management, and enacting long-term corporate social responsibility (CSR) and environmental, social and governance (ESG) practices.
The company is also focussing on socially responsible marketing campaigns, enacting heterogenous coopetition policies, and has established a socially responsible, cooperative relationship with visitors and government.
The pandemic had a monumental impact on Japan with far-reaching health and economic impacts. It also accelerated much needed social change. Tokyo Disneyland’s management rapidly transformed this crisis into an opportunity to reshape and improve its future trajectory.
During the pandemic, OL prioritized the safety of its staff and visitors. It used the expertise it gained over decades to deliver live performances and attractions safely, including resuming its operations in carefully planned stages. As it lost revenue during the pandemic, it used innovative ways to address the shortfall by encouraging visitor spending with value-added services.
Learning Objective:
- Sustainability: It is vital that companies commit to sustainable development and embrace long-term corporate social responsibility (CSR) strategies to help them through economic downturns. A company’s environmental impact, its transition to sustainability, and the diversification of its portfolio all help to support business operations during unanticipated disruptions. A virtuous cycle can be established by prioritizing the company’s social contract, with management models and business tools.
- New Normal: The disruption caused by the pandemic impacted company operations globally. Supply chains were interrupted and business operations either stopped or were diverted. This had an immense financial impact on organisations.
- Customers First: After unanticipated disruption, companies can rebuild trust by making timely disclosures about their financial situation, viability, and ongoing performance, as well as their risk management strategies.
- Collaboration: Simultaneous cooperation and competition, known as coopetition, can have a positive impact on performance. Collaborating with competitors can result in business models that enhance performance.
- Social responsibility: Socially responsible behaviors show solidarity between a company and society. This includes improving living standards through better working conditions, wages and healthcare.