Disneyland Africa

8/2/2019 Disneyland Africa

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Company Overview

Since its founding in 1923, The Walt Disney Companyand its affiliated companies have remained faithfulto their commitment to produce unparalleledentertainment experiences based on the richlegacy of quality creative content and exceptionalstorytelling. The Walt Disney Company, together with its subsidiaries and affiliates, is a leadingdiversified international family entertainment and

media enterprise with four business segment s:media networks, parks and resorts, studioentertainment and consumer products.
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1st Pillar : Setting Objectives :
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1- Disney m ission, vision,corporate, business & global

strategy, objectives Vision statement : Using our

portfolio of brands to differentiate

our content, services and consumer products, we seek to develop themost creative, innovative andprofitable entertainment

experiences and related products inthe world."
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Mission statement: To be one of theworld's leading producers and

providers of entertainment andinformation. Corporate strategy: Growth by

Related Diversification(Entertainment and Media)


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The Walt Disney Corporate Strategy, BusinessDevelopment and Technology Group is a sort of

secret weapon for the Walt Disney Company. Thislow-profile organization works exclusively for theDisney Corporation and handles strategyassignments in multiple business arenas (almostlike Disneys personal consulting company).

In addition to corporate strategy, the departmentcovers M&A, strategic alliances, corporatebusiness development, IP management andtechnology standards.

It also aids various business units on their strategy

when the issues are large enough to meritcorporate attention. The planning group employsonly 20 professionals who are divided into smaller teams to handle individual company needs andtasks, which can vary depending on the issues thecompany is facing at the time.


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Business strategy: (competitive

strategy): differentiation byintroducing unique entertainmentfacilities.

Global strategy: Regiocentric view.The international group comprisedthree geographical divisions: LatinAmerica, Europe, and Asia-pacifi c.


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Objectives:

The Walt Disney Company'sobjective is to be one of the world'sleading producers and providers of entertainment and information, usingits portfolio of brands to differentiateits content, services and consumer products.

The company's primary financialgoals are to maximize earnings andcash flow, and to allocate capitaltoward growth initiatives that will

drive long-term shareholder value.


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The companys approach : Disneys

Approach to Leadership Excellence Disney leaders across the globecontinue to emulate the inspirationalstyle of one man Walt Disney. Walteffectively demonstrated that theactions of one leader, multiplied bythe actions of many, can re-shape aculture and an organization.

Long term strategy: Marketpenetration and market growth
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SWOT Analysis

Strengths It is the largest media and entertainment company inthe world.

It has become one of the biggest Hollywood studios. Disney Company owns 11 theme parks and several

channels. Innovative ideas. Ability to realize mistakes and to change. It is among the popular brand names in the world.

Disney holds US$ 62.497 billion of assets. Popular characters. High brand awareness among the people. Walt Disney was ranked 8th in the Top 100 Global

Brands.

Proper inventory management.


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Weaknesses High operating cost. Culture imperialism. Euro Disney first- years failure. The $1.8 billion park has only 16 attractions. Religious culture differences.

Poor management. Disney has been blamed of having sexual

implication or references concealed in some of their animated movies, including The Lion King, TheLittle Mermaid, Aladdin, Who Framed Roger Rabbit,and Disneys original releases of The Rescuers.

High investment with high risk involved. Limited range of target audience mainly Children.


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Opportunities Move into different segments. Taking First Mover Advantage. Attract around 300 million customers from all over

the MENA Region, Africa, and Mediterranean

countries. High demand for the foreign currency that the FDI

will provide in Egypt during the currentcircumstances. This will lead the Egyptian

government to introduce more concessionconcerning taxation and decision making.

Reduction in operating costs (cheap labor in

Egypt, unemployment). Integrate local culture into theme park.


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Threats Security Threats due to political instability in

Egypt. The possibility of the application Islamic Shariaa. Employee retention and dissatisfaction. High competition in Media Industry.

Social and ethnic groups. Government policies. Recession. High prices.

Unskilled workers.


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2nd Pillar : Environment Scanning


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PESTEL analysis of the macro-

environment Political conditions:

It determines the political ideology prevalent in thecountry whether socialism, capitalism or mixed andtheir reflection on the market type : planned, openor mixed market. There is Political Instability sincethe Egyptian Revolution against Mubaraks regime.However, after 30 years he left the country to theSCAF & it may change the political ideology of thecountry and as a result the economic ideology willbe changed according to the coming political party.


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Economic Conditions: Variables such as, GDP & GNP, unit labor cost, and

personal consumption expenditure that influence afirms ability to do business and the kinds of economic system, open, command or mixed.

GDP : It has annual GDP of 1.9% during the financialyear 2010/2011, in comparison with the previousfinancial year 2009/2010. This is as a result of deceleration of all economic activity sectors thathas accompanied the Egyptian Revolution on the25 th of January 2011. (Central Bank of Egypt-

Publication 2011)

l


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Unemployment: Unemployment rate has reached 11.8% during end

of June 2011, in comparison with 11.9% by the endof March 2011.

Infrastructure: In the past half a century, Egypt has experiencedremarkable progress in the provision of infrastructure in all areas, including transportation,telecommunication, power generation, and water

and sanitation. Judging from an international perspective, Egypthas achieved an infrastructure status that closelycorresponds to what could be expected given itsnational income level. The present infrastructure

status is the result of decades of purposefulinvestment. In the past 15 years, however, aworrisome trend has emerged: Infrastructureinvestment has suffered a substantial decline,which may be at odds with the countrys goals of raising economic growth.


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Investment and Trade Issues: Investment Law: On May 11, 1997, Egypt's new

Investment Incentives and Guarantees Law (Law

No. 8 of 1997), which repeals and replacesInvestment Law No. 230 of 1989, was legislated. Tax Incentives: Law No. 8 of 1997 grants the

projects working under its rubric a tax holiday thatincludes provisions of interest to investors.

Profits on projects and shareholder shares areexempted from the tax on industrial andcommercial profits and from the corporate tax for aperiod of five years starting from the first fiscalyear following the beginning of production or

activity. The exemption may be extended to tenyears for projects established in new industrialzones, new urban communities, remote aroundthose projects financed by the Social Fund for Development.


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Trade Agreements: Egypt is not a signatory to any free trade agreement.

Egypt, however, has been negotiating with the EuropeanUnion (EU) to realize a free trade agreement which willreplace the earlier agreement concluded in 1977 thatgave Egyptian industrial products free access to theEuropean market. Negotiations have focused on theabolition of quotas on oil, textiles and other manufactured products and a relaxation of restrictionson agricultural produce.

Customs: Egypt has complex tariff and non-tariff barriers.

The latter include: a banned import list, quality controlinspection standards, prior approval list, quotas, Egyptianselling prices imposed on imported goods for customs

valuation purposes and government procurementpractices. Tariffs range from 5 percent to 55 percent,with certain rare exceptions such as automobiles (up to135 percent).


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Financial Variables: such as currency value rate, interest

rates, inflation rates, and taxation. Inflation: Headline CPI published by the Central Agency

for Public Mobilization and Statistics on March 10, 2012,increased by 0.67 percent (m/m) in February following a0.15 percent (m/m) inch up in January, bringing theannual rate to 9.19 percent in February from 8.60 percentin the previous month.

Currency: the Egyptian pound has depreciated in order tomaintain the Egyptian exports.

Egyptian exchange rate in 2012 is US$=5.85 L.E. Interest Rate: Central Bank of Egypt holds Interest Rate

at 8.25% August 2011.


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Technological:

The ICT sector has had a Leading role in the Egyptianrevolution.

Blogs have increased public awareness concerningfreedom and citizens right since the early 2000s.

Social networking websites like the Face book (8.8million users, September 2011) and Twitter were themain sparks of the revolution.

An increasing number of Egyptians also use the internetto follow the latest videos, news and all the materialsbroadcasted on television.

This was in line the booming mobile internet (7.29 millionusers, 2010) and increasing use of smart phones.
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Environmental factors:

Environmental factors include the weather and climatechange. Changes in temperature can impact on manyindustries including farming, tourism and insurance. Withmajor climate changes occurring due to global warming

and with greater environmental awareness this externalfactor is becoming a significant issue for firms toconsider. The growing desire to protect the environmentis having an impact on many industries such as the traveland transportation industries (for example, more taxesbeing placed on air travel and the success of hybrid cars)

and the general move towards more environmentallyfriendly products and processes is affecting demandpatterns and creating business opportunities.


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Legal factors:

The main laws governing foreign investment are theCapital Market Law of 1992, as amended to increasestock market regulation in 1998; the InvestmentIncentives and Guarantees Law of 1997, establishing the

regime for free trade zones (FTZs); and a series of laws in1998 setting conditions for private (including foreign)participation in public banks, insurance, maritimetransport, electricity distribution, andtelecommunications.


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Legal factors:

Depending on their size, location, and other characteristics, new projects financed with foreigncapital are exempt from taxation for five to ten years; inaddition, payments of interest on foreign loans are not

taxable and investors are exempt from certain customsduties. There is one basic condition for approval: theproject must be on an approved list in the fields of industrialization, mining, energy, tourism, transportation,reclamation and cultivation of barren land, or animalhusbandry. Applications must be made to the General

Authority for Arab Investment and the Free Zones, whichconsists of the minister of state for Arab and foreigneconomic cooperation and seven other members. Thebidding process for contracts has been made moretransparent, but Egyptian bids have preference up to 15%above foreign bids.


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The Demographic of the MENA Region:

The MENA Region is one the most threaded regions ofpopulation doubling rate. Also, There is a race betweeneconomic development and population growth.

The population of the MENA region at its least extent is

about 381 million people, about 6% of the total worldpopulation. At its greatest extent, its population isroughly 523 million. 36 percent of the total MENApopulation is less than 15 years of age.


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3 rd Pillar : Mode of Entry


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Africa Disney Mode of entry

The importance of the location decision (e.g., thesequence of where to take your product/servicefirst). With a global strategy you need to select newlocations that are most similar to where you have

been successful in the past. Successful companies can get into trouble basing

future success too heavily on past performancewithout making appropriate adjustments for the newcountry and culture.

The importance of mode of entry: each mode may bemore appropriate under different circumstances;the choice regarding mode of entry can stronglyinfluence the success of international expansion.


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Entry Strategies

JV(with companycurrently operating

within the country)

Control

RequiredInvestment

Low High

High

Low


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Disneys Performance JJ


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The hereunder capital structure belongs to ( Disneyparis ) and we suggest to complete a joint venture inegypt with Sawiras or Ahmed bahgat group .

IndividualShareholders 43,6%

Walt Disney Co. 39,1%

Prince Alwaleed 17,3%

Euro Disney Capital Structure


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Market Entry MechanismsJoint Ventures/Alliances

Advantages Overcome ownership

restrictions and culturaldistance

Combines resources of twocompanies, potential forlearning

Viewed as insider Reduces investment

Disadvantages Difficulties in managing j/v Dilution of management

control Greater risk (than export,

license) Partner may become

competitor; potential forknowledge spillovers

Conditions favoring joint ventures/alliances Similar to sole ownership plus: cultural distance is large Government restrictions on foreign ownership Local company can provide complementary skills

Local knowledge, resources, distribution, brand name,

etc.


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4 th pillar : Customization , Marketing Mix


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Socio-cultural aspects:

The MENA region population which are estimated as 6%of the world population is characterized with the Islamictraditions (they are religious), big families and care aboutowning fancy materials and products.

Staff shall be conservatives from tattoos, piercings and

closing. Staff shall also speak the three main languages spoken in

the Region: English, French and Spanish.


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The Marketing Mix :

Product : The products are the Theme Park experienceand entertainment and the various Disney products soldinside.

Include: well known hotels for ex: four seasons ,intercontinental and movenpick

Restaurants: like Chilis, Fridays and Roastry Also fast foods like KFC and MAC Cafes: Starbucks and Costa Also giftshops and all facilities anyone may need like

pharmacies all of these are just beside luxury Disney land

touch in all different shows and rides and more thansomeone can dream.


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Product : We decided to enter with four cities from ourFloridas Walt Disney world:

1- Magic kingdom: is for kids probably Entertainment at Magic Kingdom theme park includes

parades, musical stage shows, spectacular nighttimefireworks performances and the chance to meet princes,princesses, heroes and popular Disney Characters.

2-MGM studios for adventurers: Attractions at Disney'sHollywood Studios theme park , centered on stardom and

spectacle, include high-speed rides, high-octane stuntshows and hilarious live performances 3- Epcot: Entertainment at Epcot theme park continues

day and night. See live shows, concerts, Character meetand greets, acrobats, fireworks, musicians, mimes,dancers, drummers, comedians and a talking turtle

named Crush. 4- Animal kingdom: Entertainment at Disney's Animal

Kingdom theme park includes elaborate parades,performances that feature nearly 20 species of birds andbig-as-Broadway musical-stage shows and DisneyCharacter meet and greets.


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Promotion: It has already accepted the new spirit of co-operation to promote its products. It has joint deals withthe leading travel operators, competitions in the regionaland national press, discount schemes for its frequent

customers and television, radio and press advertising. Also moving shows in the most crowded areas in each

country of our targets like: UAE , KSA , KUWAIT ,JORDAN , TUNISIA ,ALGERIA beside some of theMediterranean countries like: TURKEY , ITALY ANDGREECE.

Also some African countries. What do you think of thisguys?

Shows should include original Disney characters plus oneof national characters in Egypt FOR EXAMPLE: BAKKAR

IN KSA : fulla

While the show is presented some of pharonic dressedpeople will give people who are watching discountcoupons to attract them and their friends.

For African Countries there are the characters of theAfrican countries: Bino and Fino, it's Nigerian educational

animated cartoons that reflect the African Culture.


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PLACE:

The new place in Cairo (capital of Egypt withthe moderate weather and the flat space forconstruction) is Kattameya. It is surroundedwith multinational Universities and schoolsand high class compounds. It is also near the airport.


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References http://www.unctad.org/Sections/wcmu/docs/site_ieb

_2011d09_en.pdf http://www.nationsencyclopedia.com/Africa/Egypt-

FOREIGN-INVESTMENT.html http://econ.worldbank.org/external/default/main?pag

ePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503

http://www.infoprod.co.il/country/egypt2f.htm
http://www.unctad.org/Sections/wcmu/docs/site_ieb_2011d09_en.pdfhttp://www.unctad.org/Sections/wcmu/docs/site_ieb_2011d09_en.pdfhttp://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://www.infoprod.co.il/country/egypt2f.htmhttp://www.infoprod.co.il/country/egypt2f.htmhttp://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166322&entityID=000158349_20100113082503http://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://www.nationsencyclopedia.com/Africa/Egypt-FOREIGN-INVESTMENT.htmlhttp://www.unctad.org/Sections/wcmu/docs/site_ieb_2011d09_en.pdfhttp://www.unctad.org/Sections/wcmu/docs/site_ieb_2011d09_en.pdf

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Disneyland Africa