Important Considerations before Engaging in International Business

Introduction

Can an international marketer foresee and prepare for problems faced in businesses expanding in a foreign country? A few problems that Disney faced are concerned with cultural differences, foreign currencies, language barriers, and poor assumptions. These issues arise because expanding a business in a foreign country and being successful requires great preparation, research, and risk management. These problems can affect a business entirely. The existence of these problems connects to barriers of trade. Like in this case study, many of them are expected, and some of them are beyond the marketers' control. The sector responsible for addressing many of these problems would be the marketers. Unfortunately, a successful marketer must be farsighted and informed of the barriers prior to entering a particular market or country.

Case Study: Disneyland's International Expansion

Disneyland has expanded to Paris, Tokyo, and Hong Kong. All three locations have had different outcomes because they were approached with divergent strategies. For instance, as mentioned in the study, many Europeans did not understand the American way of free-market financing. Some key problems that Disneyland Paris faced were related to enormous cultural differences and poor assumptions. One problem I noticed while reading the study was the Paris location. Even though the country and city were precisely picked over 200 other locations, the park was near other theme parks that were not part of Disney. In my opinion, a marketer must choose a location where the product, in this case, the experience, is one of a kind. Meaning that there shouldn’t be other options to try out. Also, the French are known to prefer their own parks, products, and even their language as opposed to others. Therefore, France as a country selection is, in my opinion, risky and extremely difficult to market to.

Another cultural difference that was ignored in planning this growth plan was the purchase of trams. The lifestyle and cities in Europe are known for their sightseeing because they are worth walking and designed to do so as transportation. An international marketer should have foreseen that Europeans are accustomed to walking and even prefer to do so. In this case, it resulted in an enormous financial problem. On the other hand, some key problems that Disney faced are close to impossible to predict. As mentioned in the case study, Disney failed to foresee the Gulf War and the European recession. With war comes recession, with recession comes high-interest rates, devaluation of currencies, and a heavy break on vacation. Therefore, sometimes even a marketer can’t predict the problems that a business or country might face. After all, they can’t see the future. Other factors that affected Disney included September 11, terrorist attacks in France, tourism slump, and the summer heat wave.

Disney also faced a problem in Disneyland Paris with the ban on alcohol. In a country like France, this is opposite to the local culture. However, Disney has managed to announce the park to be pets allowed. Disney finally took the French citizens' view on pets and applied it. Another cultural difference that was not handled properly in Disneyland Paris was the vacation customs. All of these factors must be taken into consideration before entering a foreign market or country. The Disney management team made so many poor assumptions that resulted in failure. The pricing policies, initial financing, and construction design were affected in the company. Although, Disney’s marketers have faced a difference that was researched but failed anyway. Such as the breakfast custom. The Disneyland in Paris was visited only on public holidays and the normally busiest month for vacations (August) was determined to be wrong.

Disney's Strategic Adjustments

After facing all of these problems, Disney started targeting national markets separately. Disney opened marketing offices in many other cities in Europe and advertised in each one. As a solution, Disney decreased its park admission by up to 20% and also 30% of hotel room rates. Disney started making winter month promotions and provided covered seating areas to attract more customers. Disney changed its marketing perspective to “Authentic Disney day out”.

A quote that Disney mentions in the study proves that they are learning from past mistakes. “Now we realize that our guests need to be welcomed on the basis of their own culture and travel habits” (Disney, 2023). I believe that this is completely right. Even though the Japanese preferred having the “all American experience”, culture must be taken into consideration before global expansion. The reason behind the success of the park in Japan is because the Japanese were familiar with Disney characters. This is why there was a huge profit when they transplanted the exact American Disney to Japan. Like stated in the study, “Disney has learned that they can’t impose the American will of Disney’s version of it on another continent.” On the other hand, the location in China was designed with adding the Chinese culture. Disney even designed the whole park according to feng shui. Although, because of the unfamiliarity with the Disney characters, the citizens couldn’t make a connection. Another poor marketing I noticed in the study was the advertisement in China. I think it is very immature of a marketer to make a mistake like that. A marketer should have foreseen the Chinese government's limits in the society.

Conclusion and Recommendations

To sum up, an international marketer can foresee and not see many key problems when expanding in a foreign country and market. Although, an international marketer is responsible for knowing the market. There are many solutions for companies like Disney. My solution to the problems is global awareness and sensitivity. You must know your market in order to be successful. This starts from cultural beliefs, religions, slang, legal differences, language barriers, political changes and goes until pricing decisions. An international marketer also must create a market segmentation analysis to know if your theme park/product will sell in that specific market. A strategy that helps my solution and also helps most companies and is guaranteed is, a SWOT analysis.

References:

• Disney. (2023). Lessons from International Expansion. Disney Publications.