Disneyland in Hongkong a Multinational

Disneyland in HongKong A multinational corporation is an enterprise that manages production establishments or delivers services in at least two countries (Wikipedia 2006). Multinational corporations or MNCs are horizontally integrated, vertically integrated or diversified. Horizontally integrated multinational corporations manage production establishments, which are located in different countries to produce the same or similar products. Vertically integrated multinational corporations do so to produce products, which serve as input to its production establishments in another country or other countries.

And diversified MNCs are located in different countries, which are neither horizontally nor vertically integrated. Of the 100 largest economies in the world, 51 are multinational corporations and MNCs assert huge economic influence in politicians' representative districts and their extensive financial resources in public relations and political lobbying. MNCs also play an important role in globalization. Sometimes, regions must compete among themselves in order to have these MNCs and they do this by offering incentives, such as tax breaks, pledges of government assistance, improved infrastructure, or lax environmental and labor standards.

The competition attracts foreign investment. The first MNC is believed to be either the Knights Templar, which was founded in 1118 or the Dutch East India Company. Examples of present-day multinationals are Apple Computer, AOL, Cadbury, Coca-Cola, Dell, Exxon, Ford, General Electric, General Motors, Google, Hewlett Packard, HSBC, IBM, McDonalds, Pfizer, Wal-Mart, Inc. And The Walt Disney Company (Wikipedia). Company Background - Hong Kong Disneyland Resort was built by the government of Hong Kong and The Walt Disney Company (Wikipedia 2006). It opened on September 12, 2005.

The Resort consists of the Hong Kong Disneyland theme park, two hotels and retail, dining and entertainment facilities on 310 acres on Lantau Island. The hotels are Disneyland Hotel and Disney's Hollywood Hotel. The Resort stands on reclaimed land beside Penny's Bay at the northeast tip of Lantau Island in Hong Kong. It is currently managed by executive vice president Bill Ernest.

The Hong Kong International Theme Park Limited was created in 1999 with Disney's investment of YS$316 million at a 43% equity stake and the Hong Kong government's owning the remaining 57% of the U.S.$1.8 billion project. Through this project, the Hong Kong government expects to provide 18,400 jobs to its people and 35,800 more in the succeeding 20 years. It also expects to reap economic benefits amounting to an estimated HK$148 billion or roughly 6% of its gross domestic product over 40 years of operation.

In averting a similar problem, which developed in France, Disney exerted efforts to make this park in Hong Kong reflect local culture. It was said that feng shui consultants helped with the layout of the part and the grounds. Incense was burned with the completion of each building. One of the main ballrooms is 888 square meters large, since 8 is a favored number in Chinese culture for good fortune and the number 4 is skipped as it signifies bad luck.

Disneyland employees speak English, Cantonese and Mandarin and undergo training at other Disney parks while the Hong Kong theme park was under construction. This Hong Kong Disneyland was the smallest among Disney's parks. Construction consisted of two phases. The government of Hong Kong stressed to the public and Disney that there was available land next to the resort for another theme park and many more hotels, which did not need to cost more than what Disney already paid for.

Critics believed that the government hinted at selling the land to Disney's rivals, NBC Universal, Six Flags and Anheuser Busch, but considered it only an attempt at extracting more money from Disney because the government did not intend to have another theme park in the area. Construction is ongoing and projected to be completed in 2008. Presently, construction for another new Disney theme park will be started and to open in 2010 (Wikipedia).

Hong Kong - The Hong Kong Special Administrative Region of the People's Republic of China is one of the two special administrative regions of the People's Republic of China or PRC (Wikipedia 2006). The other is Macau. Hong Kong lies on the eastern side of the Pearl River Delta on the southeastern coast of China towards the South China Sea in the north and borders Guangdong Province in the north. It is among the most liberal economies and a major international center of finance and trade.

It was a British colony from 1842 until its sovereignty was moved to the PRC in 1997. Basic Law guarantees it a relatively high degree of autonomy as a special administrative region until 50 years from the transfer of its sovereignty or in 2047. Under the "One Country, Two Systems" policy, Hong Kong retains its own legal system, currency, customs policy, culture, and immigration laws (Wikipedia).

Hong Kong Disneyland - Hong Kong Disneyland offers a world-class and unique family entertainment experience inspired by the original Disneyland in California but suited to local culture (Disney.com.hk 2006). It features some of the best and classic attractions and entertainment from other Disney parks around the world. It is designed for visitors to leave the outside world behind for a while and enter a world of "yesterday, tomorrow" and fantasy.

It is located on Lantau Island, 30 minutes from the Hong Kong International Airport and can be reached in 30 minutes through mass railway transport from Central Hong Kong. Park hours vary and visitors are advised to check the calendar and events on the company's website. Hong Kong Disneyland has the advantage of warm climate so that guests are advised to wear or bring light clothing, sunscreen and umbrella. Attractions are for all ages, but young children must be accompanied by an adult. Some rides require minimum height.

Hotel packages and park tickets are offered at published rates and guarantee park ticket availability during one's stay (Disney.com). The Company issues and uses a FASTPASS ticket system to save time on lining up for a specific attraction and enjoy the Park better (Disney.com 2006). This ticket comes free with admission when the admission ticket in inserted in a FASTPASS Distribution Machine at a designated attraction. The ticket limits the time for a specific attraction, date and time of issue (Disney.com).

The Company requires all visitors and their bags, parcels and other belongings to security checks at the admission or elsewhere in the Park (Disney.com 2006). They are also required to show courtesy to one another and the members of the cast; refrain from unsafe, illegal, or offensive language or behavior; use proper attire; smoke only in appropriate locations; and present tickets for entry. Dangerous or hazardous materials; food, alcoholic beverages and canned or bottled beverages; carts and other wheeled carriers; and pets are not allowed into the Park.

Likewise prohibited are selling goods or services or their display for sale; the distribution of printed materials of any kind; un-authorized events, demonstrations, speeches or public gatherings within the Park; the display of flags, banners or other emblems; and photography, videotaping, recording of any kind, broadcast or transmission for commercial purposes; acts, which may interrupt Park operations (Disney.com).

The Walt Disney World Resort, which licenses Hong Kong Disneyland is located 15 miles southwest of Orlando, Florida, has the four theme parks, namely Magic Kingdom, Epcot, Disney-MGM Studios and Disney's Animal Kingdom (Disney.com 2006). It also includes hotels; vacation ownership units; a retail, dining, and entertainment complex; a sports complex; conference centers; camp grounds; golf courses; water parks; and other recreational facilities designed to make visitors extend their stay. The destination resort is marketed by a network of national, international and local advertising and promotional activities.

Magic Kingdom consists of seven themed lands, namely, Main Street USA, Adventureland, Fantasyland, Frontierland, Liberty Square, Mickey's Toontown Fair, and Tomorrowland. Each land offers a unique experience through themed rides and attractions, live character interaction, restaurants, refreshment areas and merchandise shops. Daily parades and spectacular nighttime fireworks accentuate this experience. Epcot consists of Future World and World Showcase themes.

Future World dramatizes historical developments and addresses challenges confronted by today's world through major pavilions designed to showcase science and technology improvements, communication, energy, transportation, one's imagination, life and health, nature and food production, ocean environment and space. On the other hand, World Showcase presents a community of nations focusing on the culture, traditions and accomplishments of people throughout the world. Disney-MGM Studios consists of a theme park, an animation studio, and a film and television production facility.

It focuses on Hollywood in the 30s and 40s and features Disney animators at work and backstage in addition to other attractions, themed food service and merchandise. It also features Fantasmic, a night time entertainment spectacular. And Disney's Animal Kingdom consists of a 145-foot Tree of Life, surrounded by six themed areas, namely Dinoland USA, Africa, Rafiki's Planet Watch, Asia, Discovery Island, and Camp Minnie-Mickey. Each of these contains adventure attractions, entertainment shows, restaurants, and merchandise shops.

The Park displays more than 200 species of animals and 4,000 varieties of trees and plants on more than 500 acres of land (U.S. Securities and Exchange Commission 2003). Compliance with Government Regulations and Current Issues - Initially, this joint venture between the Walt Disney Company and the Hong Kong government appeared successful as evidenced by the huge crowd it attracted since its opening on September 12, 2005 (Great Holidays and Hotels 2004, Giezl 2005). The very next day, Park chairman George Mitchell arranged for the opening of a second park in the adjacent lot.

The government required an attendance of approximately 10 million visitors a year to approve land reclamation and the construction of a second park. The first and existing Park proved too small for the drones, which flowed into the Park, especially during the Lunar New Year holiday week, so that the gates had to be closed. Many of these visitors came all the way to Hong Kong to see the Park had to climb the fence and walls to get in.

They also complained that their advanced ticket sale, which said admission was allowed anytime in a six-month period, was not honored because the Park was too crowded. It seemed that the Park could hold only 30,000 guests. Hong Kong legislators considered Hong Kong Disney's refusal to accept those tickets for entry constituted a breach of contract. They also felt that chaotic scenes at the theme park as harmful to Hong Kong's reputation as a tourist paradise.

Disney executives said they understood the disappointment of ticket holders who were refused entry, but the refusal was grounded on the company's concern for guests' safety. The government, then, urged the company to improve its ticketing mechanisms (Great Holidays and Hotels). Despite loud complaints of overcrowding and long queues of visitors to its Park, Disneyland Hong Kong announced that it would not cut its maximum daily capacity of 30,000 (Shenzhen 2005). Critics urged the company to reduce the Park's maximum daily capacity, according to the newspapers.

Company spokesperson, Esther Wong, however, said that the company was confident it could manage peak-day attendance in the future and that it had established marketing and sales strategies to do so throughout the year. The company was even considering extending its opening hours and adding more shows at the Park. The Park was expected to draw 5.6 million people right in its first year of operation and that about a third of them to be mainland Chinese tourists.

But mainland travel agents complained that ticket sales were as bad as the long queues and the hotel rates were expensive. The Morning Post reported that these factors were driving mainland tourists away. A survey conducted by the Democratic Alliance for the Betterment and Progress of Hong Kong stated that around 3 out of 10 visitors interviewed said they would not go back there (Shenzhen Daily). This early, the Disneyland in Hong Kong is ridden with disputes and difficulties (Great Holidays and Hotels 2004).

A Singaporean woman sued the company for the death of her mother who was made to wait three hours for an ambulance at the Park. The mother was pronounced dead of congested arteries upon arrival at the hospital. The daughter claimed that Disney did not offer first aid when her mother fell ill and made to wait for half an hour for a bus to the Hong Kong Disneyland hotel.

For its part, Disney said that is staff handled the situation in the most appropriate manner possible an given immediate attention (Great Holidays and Hotels). This was just the latest of Hong Kong Disneyland's troubles with its public and legal image. In keeping with its local culture motif, the Company originally planned to serve shark fin soup, which is a traditional Chinese delicacy, at wedding banquets (Wikipedia 2006).

Animal rights groups right away protested in June 2005 that the practice would threaten and extinguish the shark population in global waters and that the methods often used in cutting the fin and disposing the live sharks back into the water would be cruel. Disney initially removed shark's fin soups from its menu, but said that they would still offer the soup to those who wanted it at their wedding. It also said that its staff would distribute leaflets about shark conservation to discourage the practice.

But with constant pressure from environmental groups and school children and out of concern for its corporate image, Disney finally announced on June 24, 2005 that it would not serve shark fin soup at all. And this was not all (Wikipedia). The media and local watchdog groups named other concerns and violations committed by the company (Wikipedia 2006). Disney employees had been neglectful in enforcing non-smoking policies on visitors out of fear of offending and driving them out.

Sanitation was also an issue, such as some visitors' urinating on flowerbeds and even near food facilities. Local newspapers carried photos of these unruly behavior in their photo essays for days. Other visitors said that Disney employees did nothing to enforce any kind of civic responsibility at their Park. Members of the cast of the Park attractions were themselves paid quite low wages. It was also reported that fish around Ma Wan died as a result of land reclamation, which had exacted concrete damage on the environment.

Other reports reflected that ancient commercial vessels and bones on the sea floor got buried under land fill. Critics observed that the Park had refused to use the same and more ecologically sound launching technology for fireworks developed and used at the original Disneyland in the United States. This is of particular concern to surrounding residential are of Discovery Bay.

Several reports of food poising were received by the health department, which came to inspect the Park, indicating that even a large and profitable MNC like Hong Kong Disneyland was not above the law (Wikipedia). In the face of these and other crises (BBC News 2006, Bowring and Yung 2005), the management of Disneyland of Hong Kong planned to expand the Park and introduce more attractions to existing ones.

Autopia would be added to Adventureland, Fantasyland and Tomorrowland this year and Pirates of the Caribbean would be constructed in 2009 or 2010 (Great Holidays and Hotels). In a public occasion, Shanghai Mayor Han Zheng responded positively to the building of an excellent Disneyland and that all preparations were then underway (Zhi Ping, ed 2004). He also said that the project was then only waiting for the approval of the central government.

He said this not long after Disney President and CEO Robert Iger admitted to the negotiations between his company and the Shanghai Municipal Government and that the construction of a theme park was then already ongoing. Sources revealed that Disney's Shanghai would occupy 6 square kilometer or 4.7 miles greater than the present size of Hong Kong Disneyland. Negotiators for Disney were said to have already met with Shanghai-based developer Lujiazui Group to discuss schedules and cooperation on the venture.

Reports said that the two sides had reached initial agreements to jointly register a company in Shanghai at a proportion of 51% for the U.S. company and 49% for Shanghai. The U.S. side would consist of brand, technology and capital, while the Shanghai side would supply land. The agreed site would be the resort park in a town 5-kilometer from the Shanghai International Airport in Pudong area. When completed, the Shanghai Park would be the sixth Disneyland in the world and the fourth outside the U.S. (Zhi Ping).

Conclusion and Recommendations - Shanghai is not the only Chinese city applying for the installation of a Disneyland resort on the available land (Zhi Ping, ed 2004). There are mixed reactions to the possible and.