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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
Factors Affecting Success
Answer
Several factors influence the success of a global business like Disney in new markets like China:
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Disposable Income and Economic Stability: The level of disposable income in China significantly affects consumer spending on entertainment. As disposable income rises, families are more likely to spend on leisure activities and theme parks.
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Infrastructure: A robust infrastructure is crucial for transport and logistics. If transportation bottlenecks exist, it can deter potential visitors from accessing Shanghai Disneyland, negatively impacting sales.
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Brand Recognition: Disney's strong branding is pivotal. In markets where the brand is well-known, there’s likely to be a higher initial interest and customer base.
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Market Competition: The presence of local competitors and their strategies can impact market entry. Disney must differentiate its offerings to capture market share against local parks.
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Regulatory Environment: Understanding and navigating the Chinese regulatory landscape is essential. If regulations are prohibitive or burdensome, it could hinder operational success.
Step 2
Counter-Balancing Factors
Answer
Although opportunities exist, several counter-balancing factors may impact long-term sales:
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Market Saturation: The novelty of Disney may wear off over time. As local parks develop or improve, Disney must consistently innovate to retain interest in its offerings.
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Local Preferences: Cultural differences may influence the appeal of Disney’s offerings. Adaptation to local tastes and preferences is essential for sustained interest.
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Employment Practices: Disney’s ability to attract and retain a local workforce may affect service quality. If employee compensation and training are inadequate, guest experiences could suffer.
Step 3
Long-Term Success
Answer
To ensure its long-term success in China, Disney must focus on:
- Continuously upgrading and extending its park offerings, such as launching new attractions like Toy Story Land. This keeps their brand fresh and relevant, encouraging repeat visits.
- Maintaining effective marketing and operational strategies that resonate with local consumers and support community involvement, which can enhance brand loyalty.