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Assess the factors that might affect the success of a global business such as Disney when entering a new market such as China. - Edexcel - A-Level Business - Question 1 - 2019 - Paper 3
Question 1
Assess the factors that might affect the success of a global business such as Disney when entering a new market such as China.
Worked Solution & Example Answer:Assess the factors that might affect the success of a global business such as Disney when entering a new market such as China. - Edexcel - A-Level Business - Question 1 - 2019 - Paper 3
Step 1
Factors affecting success: Economic and Infrastructure
Answer
Several factors can influence the success of Disney when entering the Chinese market. A critical factor is the level of disposable income among the Chinese consumers. With a higher disposable income, families are more likely to spend on leisure activities, which could lead to increased ticket sales for Disney.
Additionally, the availability and quality of infrastructure, such as transportation services, can significantly affect visitor access to the park. If transport bottlenecks occur due to inadequate infrastructure, this may deter potential visitors.
Step 2
Brand Recognition and Competition
Answer
Disney is already a well-known brand that is associated with fun and happiness. This brand recognition is a significant advantage as it can attract consumers who are already familiar with Disney's offerings. However, Disney may face competition from other entertainment providers in China, which could dilute its market share and impact sales.
Step 3
Local Partnerships and Cultural Understanding
Answer
Establishing strong local partnerships, such as Disney's collaboration with Fosun International, is essential for navigating the local market effectively. These partnerships can aid in overcoming potential planning and infrastructure hurdles. Moreover, understanding Chinese culture and consumer behavior is vital for adapting marketing strategies.
Step 4
Long-term Strategy: Business Sustainability
Answer
The long-term success of Shanghai Disney will depend on the company's ability to maintain effective business strategies, such as extending the park’s life cycle through launching new attractions like Toy Story Land. By continually refreshing offerings, Disney can sustain interest and encourage repeat visits.