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Disney: Losing Magic in the Middle Kingdom

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Hong Kong Disneyland has been struggling with lower-than-expected attendance rates for almost three years since its opening. Factors such as small size, inconvenient location, lack of unique features, insufficient appeal to adults and missing Chinese elements have been cited as possible causes. The Walt Disney Company and its joint-venture partner, the Hong Kong government, are negotiating about injecting extra capital to expand the park in order to attract more visitors. For a successful turnaround, the management has to figure out what went wrong in the first place. This case explores the possible reasons for the park's lacklustre performance. It also covers the park's positioning and product offerings, the remedial actions taken by the company, an analysis of the market dynamics for both local and overseas visitors, and the competition faced by the park. The launch strategies and performance of Tokyo Disneyland and Disneyland Park in Paris are included in the case for comparison.

This case was used in the 2nd McKinsey/HSBC Business Case Competition

Learning Objective:

Unsuccessful market entry to China. Corporate turnaround strategies for survival. Dilemma of standardisation versus differentiation / localisation in overseas expansion. Proper positioning and continual reinvention of product offerings to cater for changing consumer tastes. Importance of cultural sensitivity in building rapport with the local communities. Impact of negative media coverage and tarnished corporate image on business success.

Year of Publication: 2010
Ref. No.: 09/419C
Discipline: Strategy & General Management
Industry: Hotels, Restaurants, Leisure
Country: Hong Kong SAR
Company: Hong Kong Disneyland
Languages: English
Pages of Text: 33