Istanbul: Business, Disney and Culture
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Culture plays an important role in the growth of an organization and its capacity to develop externally through international expansion. Internally, culture is important in keeping the organization together. Externally, organizational culture is valuable because it enables organizations to penetrate foreign markets. Disney is one of the most success international organizations in the entertainment industry. The company is capable of expanding in foreign markets, even in non-Western regions. The success of Disney could be attributed to the company’s ability to adopt and blend in with diverse culture. Initially, Disney suffered a great loss when the company failed to adapt to a local market in Hong Kong. However, the situation became a learning experience for Disney when the company adopted the local culture and integrated it to its marketing practices. The company’s strategies led to its success.
The experiences of Disney illustrate the importance for companies to exhibit flexibility when it comes to creating business models for expansion in other countries. Companies must make sure that those business models are well-matched and capable of providing the needs and demands of the local market. Furthermore, companies would be able to do so by conducting thorough market research and implementing research and development (R&D) practices. Considering these valuable lessons in international expansion, the succeeding discussion will cover various issues and concerns including: (1) the importance of culture in organizations in general, (2) the importance of culture in Disney, (3) the basic cultural concerns of Disney when expanding to foreign markets, (4) the probability of Disney expanding in Istanbul, and (5) the basic concerns that Disney should considering when planning for its expansion in the city. All ideas will be supported by relevant literature.
Disney: Business Expansion and Cultural Concerns
In the corporate world, Disney is known as a leader in global entertainment. The success of Disney could be attributed to the company’s effective practices and strategies like strong leadership and stable financial standing, but various elements also contribute to its success, especially in the international scene. Disney’s international success could therefore be attributed to the company’s global presence. Since Disney was established, the company sought to expand its reach worldwide be penetrating foreign markets. Moreover, Disney employs various strategies and practices to ensure that the company’s products and services are suitable and appropriate to its culturally diverse market segments. Considering these issues, the primary objective of this report is to determine how Disney could penetrate the market in Istanbul by reviewing the company’s business strategies. Prior to the discussing these concerns, the initial discussion will focus on the business and cultural strategies of Disney that contributed to the company’s success.
Business outcomes are largely influenced not only by internal but also external factors, including culture. A business may have adequate capital and other resources, but its success also relies on how the business is managed, as guided by internal culture, and how it relates to stakeholders, specifically to consumers. Internal culture refers to business values and practices inherent in an organization. The nature of internal culture greatly affects workings within the organization, such that business values affect the outlook and performance of employees, and thus, the quality and quantity of business outcomes. Overall, “organizational culture is the social or normative glue that holds an organization together” (Gamage 2006: 58). Furthermore, culture determines the nature of organizational mission, vision, goals, and philosophy, employee behavior, and nature of systems within the organization. In terms of organizational culture’s impact on the external environment, the kind and quality of business culture determines how successful it would be in penetrating target markets. In the case of Disney, the company’s culture contributed to its international success.
Over the years, “the Walt Disney Company has made it a priority to build its international business in television, movies, retails, and theme parks with the goal of half of profits to come from overseas by 2012” (Czinkota, Ronkainen, & Moffett 2008: 22). Disney managed to achieve its goal by focusing on culture, specifically by “embracing local culture” (Czinkota, Ronkainen, & Moffett 2008: 22). When Disney launched a theme part in Hong Kong, sales and profit did not reach the intended goal in 2005. The business’s failure was attributed to Disney being unappealing to locals in Hong Kong. To address the issue, Disney decided to incorporate elements of Chinese culture in its marketing. Come New Year in 2008, Disney incorporated Chinese Astrology in its marketing practices, and thus, declaring 2008 as “The Year of the Mouse” (Czinkota, Ronkainen, & Moffett 2008: 22). In Disney’s Paris and Tokyo models for expansion, the company is conducting thorough research in order to determine the preferences of two different markets. “Disney wants to satisfy those who are longing for the high-speed rides and the many well-known characters” (Ungson & Wong 2008: 136). Disney, therefore, shapes its culture by adopting the culture of local markets to its practices. The company’s ability to adapt to any culture is an enabling factor that allows Disney to expand capturing their interest, preferences, and lifestyles of the local market.
Overall, the international expansion of organizations like Disney must be based on various considerations. As previously discussed, Disney is in the process of conducting research to determine what models work for its target market in Tokyo and Paris. Disney acknowledges the fact that all markets are different, and therefore, the company conducts thorough research to determine the unique qualities of its target market. Through market research, Disney would determine the elements of local cultures. Disney must seek to answer the kind of society inherent in local markets. Are specific societies individualistic or strongly based on community? Is the society modern or traditionalist? Do locals speak English? What language is prevalent among the locals? Do they know Disney characters? What are the local population’s interests and preferences when it comes to entertainment? Disney must ensure that it understands the local culture so as to create a business model that meshes well with the needs and demands of its target markets. At present time, Disney is doing well in handling international expansion and cultural diversity. The company’s handling of the issue in Hong Kong – the inclusion of local tradition (Chinese Astrology) to marketing – reflects Disney’s approach in expanding to non-Western cultures. Disney does not assume that other people are aware about Disney characters. On the contrary, Disney conducts market research separately, creates, and implements unique and differentiated business plans that suit the unique and distinctive cultural situations in a given place.
Disney’s expansion in Istanbul must follow the same strategies and practices that the company applied in the past. Primarily, Disney must identify the unique culture of in Istanbul. Disney’s plan of expanding in Istanbul appears to be promising because of the country’s recent openness to foreign investors. The Prime Minister of Turkey understands the economic contributions of foreign businesses, and is therefore willing to establish trade relations with various corporations (Pizzi & Weiss-Sussex 2010: 45). Geographically speaking, Disney would be at an advantage because Istanbul is a “mega city” with a large population. Moreover, many people travel to and from the city daily (Beckel 2001: 37). Disney’s other major considerations should focus on the fact that Istanbul is a Muslim society and consumer decisions would therefore be influenced by their religion. For instance, some foods are prohibited in Islam, so Disney establishments should make sure that their menu suit the palate and proscribed foods of Muslims in the city. Another consideration is that people in Istanbul are highly active in the night life scene. The entertainment industry benefits from the active and social lifestyle of the locals and Disney should take advantage of this. In Istanbul, “There has been an explosion especially in the entertainment sector. The night life is vibrant, with traffic jams until daybreak during weekends” (Keyder, 1999: 14). These are just some of the distinct characteristics of people in Istanbul. Overall, Disney must conduct a thorough investigation of the local market through continued market research and research & development (R&D) to understand the local culture. Most importantly, the business model of Disney should be based on the outcomes of research.