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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 2 - 2019 - Paper 3

Question 2

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 2 - 2019 - Paper 3

Step 1

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Answer

Several factors can influence the success of Disney when entering the Chinese market:

Disposable Income Levels: As disposable income levels rise in China, more consumers can afford entertainment options like those offered by Disney.
Infrastructure Development: Adequate infrastructure is necessary for transport and accessibility to the parks. Without it, bottlenecks could hinder visitor numbers.
Brand Recognition: Disney is a globally recognized brand associated with fun and happiness, which can ease entry into new markets.
Local Partnerships: Collaborating with local firms, like Fosun International, can help navigate regulatory issues and support planning and infrastructure needs.

Step 2

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While there are positive factors, there are also challenges:

Market Competition: The presence of other entertainment parks in China may reduce Disney's market share.
Changing Consumer Preferences: The novelty of Disney may wear off over time, affecting long-term sales.
Government Regulations: Policies related to foreign businesses could pose challenges for operation in China.

Step 3

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For sustained success, Disney must maintain effective business strategies:

Consistent Brand Marketing: Continual marketing efforts should align with local culture to strengthen brand loyalty.
Expansion and Innovation: Prolonged success may depend on launching new attractions, such as Toy Story Land, to keep the experience fresh and appealing to returning visitors.
Adapting to Local Culture: Understanding and integrating local customs and preferences into park offerings will help resonate with Chinese consumers.