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I. Introduction:
The Walt Disney Company is an American diversified multinational mass media and
entertainment conglomerate, headquartered at the Walt Disney Studios in California. It is the
world’s second-largest media conglomerate regarding revenue, after Comcast. One of the Walt
Disney’s business is to build the Disneyland Park, a large theme park which brings Disney stories,
characters and franchises to life through parks and resorts, boys, apps, apparel, books, and stores.
Disneyland Theme parks mainly focus on serving children and their families. However, because
there are much other business under the Walt Disney company such as Disney Channel, Radio
Disney and Disney Animation Studios, other age segments including teenagers and adults are also
intrigued by the Disneyland.
The reasons for bringing the Disneyland Theme park into Dubai are because there is no
child-friendly theme park like Disney in Dubai. In addition, on the one hand, in total, Disney’s
theme park attracted 132.5 million guests according to the 2013 global attractions attendance
report produced by industry monitors AECOM Economics and the Themed Entertainment
Association (TEA). According to the ranking of the most popular theme parks by attendance, eight
of the top nine are from the Walt Disney Company. In this case, the popularity of Disney Theme
park is apparent. Therefore, opening another theme park in Dubai is a practical option to share
Dubai’s tourism market and make the profit. On the other hand, According to Yahoo Finance (VZ),
the company is expected to see $15.5 billion in revenue, with annual growth of 4.6%. For fiscal
2018, the top-line estimate is $55.1 billion, with YoY (year-over-year) growth of 6.2%. In other
words, the potential profitability of Disneyland is considerable.
The causations to choose Dubai as a destination to introduce another new Disneyland
park are based on this particular location, the economic viability of Dubai and the tourism strategy
of Dubai in. For the particular place, Dubai is the largest and most popular city in the United Arab
Emirates (UAE). It’s a global city and business hub of the Middle East. Thus, the high popularity
and human traffic give the Disney company sufficient space to differentiate itself with other
competitors in Dubai such as the Bollywood Park, Motiongate, and Legoland to attract target
customers and build long lasting customer relationships. For the economic viability, tourism is a
central pillar of Dubai’s economic growth and diversification, and the tourism strategy in 2020,
the government of Dubai projects to attract 20 million visitors per year by 2020. Therefore, the
market size of the theme park will be increased, and the opportunity to make the profit will be
improved as well.
To enter the market in Dubai, the Walt Disney Company decides to use joint venture
structure. Disney works with Emaar Properties as a partnership to help Disney come into Dubai,
for on the one side, Emaar Properties is the most massive land/property developers in the Middle
East, with numerous large-scale projects such as the Dubai Mall. On the other side, Emaar
Properties has professional knowledge of the local market and ability to create large-scale projects
and some previous experience in international projects. At the same time, Disney’s worldrenowned brand and operational structure can bring Emaar Properties a positive prestige in the
world and create another category of business, establishing theme parks. Also, the Walt Disney
Company should also form a partnership with the UAE Government to ensure stable operational
environment once the project is complete, favorable tax incentives, and ability to apply for all
necessary permits/licenses.
II. Macroenvironment Analysis:
Political Factors:
Dubai is one the seven emirates of United Arab of Emirates. It is an absolute monarchy with no
elections. Dubai shares legal, political, military and economic functions with the other
emirates within a federal framework, although each emirate has jurisdiction over some
functions such as civic law enforcement and provision and upkeep of local facilities.
Economic Factors:
1. Dubai’s economy has been kept open and free to attract investors and business. There are
no direct taxes on corporate profits or personal income except for oil companies that pay
a flat rate of 55% and branches of foreign banks that pay a flat rate of 20% on net profit
generated within Dubai.
2. Customs duties are low at 4% with many exemptions, 100% repatriation of capital and
profits is permitted. Low duties attract more people to consume, and it would bring a
huge visitor population for the Walt Disney Company.
3. There are no foreign exchange controls, trade quotas or barriers in Dubai, and a stable
exchange rate exists between the US Dollar and the UAE Dirham (US$1.00=about AED
3.67250). Dubai’s free trade zone also creates a free economic environment for the Walt
Disney Company’s development.
4. Polycentrism is an attitude of openness towards other cultures. Dubai concentrates on
developing this kind of attitude to attract people from all over the world. It’s Liberal visa
policies permit easy importation of expatriate labor of various skill levels from almost all
over the world. The operation of the Walt Disney Company requires labor with various
skills. And Polycentrism provides a good opportunity to import different kinds of
employees that the company need.
5. Dubai’s total international trade has grown on average by over 11% per year since 1988.
Social Factors:
1. According to the Dubai Statistic Center, in 2014, Dubai has around two million people
living here, and the active daytime population which includes residents and labors working
in Dubai but living outside is about three million. There are lots of foreigners who share a
significant percentage of the population working in Dubai. Most of them come from lowincome countries such as India and Nepal and Philippines. Some of the foreigners are
professional workers from some developed countries, such as Canada, France, and
Australia. In addition, in Dubai, the number of male share sixty-nine percent of the total
population, and females only account for thirty-one percent. This difference of population
between genders is owing to male expatriates who work in Dubai alone without bringing
their families with them.
2. For the language problem, in Dubai, although the official language in Dubai is Arabic,
English is widely used and standard in the business community. Road signs, Restaurant
menu, maps and so on are written in both languages. Other languages, such as Hindi and
Farsi are also used commonly in Dubai. In this case, there will be no barrier for Disneyland
Park to use English when operating in Dubai.
3. Even though Dubai is established in a desert, it is the fourth largest tourist visit country in
the world after London, Paris, and Bangkok. In 2016, there were approximately fifteen
million overnight visitors in Dubai, up to 2022, it is estimated that the number of tourists
will increase to twenty million. Comparing with other countries in the world, Dubai has
the highest ratio of visitor per resident. From 2009 to 2015, the visitor per resident ratio
raised from around five visitors per resident to six visitors per resident. For Disneyland
Park, the sufficient customer source will enhance the opportunity to be profitable in Dubai
because the more substantial number of visitors come to Dubai, the higher rate of people
will visit Disneyland Park.
Technological Factors:
1. Dubai’s policy of investing heavily in transport, telecommunications, energy and
industrial infrastructure has enabled it to have one of the best infrastructure facilities in
the world.
2. The Emirate features a network of seven industrial areas, one business park and three
specialized international distinctions, two world class seaports, a major international
airport and cargo village, a modern highway network and telecommunications.
3. Airlines in Dubai served by over 120 shipping lines and linked via 85 airlines to over 130
global destinations. Fly Dubai and Emirates are large airlines in the world. According to
the Dubai airport review in 2015, 78 million passengers passed through DXB. This
highly efficient and convenient transportation attracts more tourists to visit. It helps the
Walt Disney Company benefit from this large number of visitors.
Environmental Factors:
1. In the last several years, Dubai strived to transfer its environmental outlook which was
resulted by quickly erecting a city on a desert and acquired a considerable improvement,
but according to the latest environment report, Dubai still face a series of challenges about
air, water, biodiversity, land, and other resources when maintaining its sustainable
development. To be more specific, Dubai faces the same situation as others about the
limited amount of water in the desert district. In UAE, the average amount of water that
one person consumes daily is five hundred and fifty liters. Therefore, Dubai had to
desalinate four billion liters of water on a daily basis to satisfy the demand of residents and
visitors. However, the process of desalinating produces abundant of carbon emissions
which leaves massive carbon footprints. In addition, according to the Economic Times
reported, the Gulf, a primary source of water for the region has seen its salinity rise to
47000 parts per million, up from 32000 only three decades ago. This scenario severely
attacks the marine and land lives and Dubai’s crucial ecosystems.
Legal Factors:
Dubai is one of the safest cities in the world. Crime rate in Dubai is 15.60, which is lower than in
most cities throughout the world of similar size. For the Walt Disney Company, very low
crime rate means that visitors are well-protected in Disney area- Safety is guaranteed.
1. The strict punishments are given to law breakers. The police publish safety tips on their
website, and the website provides basic tips on how to avoid becoming a victim.
2. The authorities have a zero-tolerance policy on drugs. Carrying drugs will result in a
prison for several years, which means that theme parks are safe enough. And such a
guaranteed environment is attractive for parents to bring their kids to come.
III. Competitive Analysis:
The technological analysis shows that the youthful population in Dubai is tech-savvy
and thus makes it easier for businesses to offer services easier using technology. This tech-savvy
will allow Disney Company to implement its technology of magic card to control its services and
market. The most aged population are wealthy and can afford expensive gadgets that support
services offered by Disneyland. The business legal environment in UAE is governed by both
sharia laws and civil laws. The most laws that affect the business are the federal and local
emirates laws. These legal systems shape the manner in which businesses can be established and
owned in Dubai. For instance, there is a way that foreign investors can be allowed to start
Limited Liability Company Such As to have a local shareholder to own 51% of shares.
Foreigners are even allowed to invest and repatriate the proceeds to their mother countries. This
is beneficial to Disneyland. In a nutshell, the legal system in UAE is a more relaxed and supports
foreign investments. Environmental analysis proves that the country is too hot which affects the
productivity of the inhabitants, this also implies that farming to be a challenge and the business
has to invest in cooling services which can run the business expenses high (Matias, 2016).In the
process of investing in UAE, Disney will consider doing a competitive analysis of the target
market. In this analysis, it appears that Disney faces competition from the Universal studios,
Lego land and six flags that have entered the Dubai market as entertainment service providers.
The sprawling resort possesses great competition to the Disneyland. This is because it was meant
to be double the size of Disneyland. It is most likely to enjoy local support because it was
established by the natives. Apart from the foreign entertainment companies investing in Dubai,
local investors are hurriedly venturing into this industry and that means that Disney will have to
position itself to beat this competition. Something good is that Disney has an edge in the
entertainment industry and this would mean just copy pasting its five star service delivery
mechanism to this new market. It should also leverage its goodwill brand name.
IV. Financial Analysis:
Disneyland Company is a multinational company and thus has adequate financial
muscles to support this new market venture. The balance sheet and stocks the company has is
enough to foster and make this new venture a reality. It has its investments in land, stocks, and
property. The cash flows as indicated in the financial statements show that the company has
adequate liquid cash that can be used to enter a new market in Dubai. In fact, the cash flows give
Disneyland a competitive advantage over the local UAE entertainment companies which are
unlikely to adopt new technologies due to inadequate financing as indicated in business reports.
Again, Disneyland has operations in many areas and it is able to charge low prices as entry
strategy while being supported by its parent company. This will help it increase its market share
quickly.
V. MODE OF ENTRY:
The Walt Disney open another Disneyland Theme park in Dubai by using joint venture
with another indigenous enterprise, Emaar Properties with high prestige in Dubai’s business world
and sufficient experience in international projects. When considering the mode of the joint venture,
the Walt Disney focus on seeking out established companies with an excellent reputation because
partnering with that company will include a direct or indirect endorsement from them. That
endorsement could carry a great deal of goodwill and break down sales barriers.
A. The introduction of the partner, Emaar Properties:
In the real estate field, Emaar Properties, a Public Joint Stock Company, is one of the
most valuable and respectful real estate development company. It was established in 1997. The
capability of Emaar Properties in the real estate is well-known. Its business focuses on integrated
master-planned communities, and the scope of its business not only in Dubai but also in other
countries such as Egypt, Turkey, and North Iraq. And the business categories of Emaar Properties
include shopping malls, retail, hospitality, and leisure. The core concept of Emaar Properties is to
design excellence, build quality and timely delivery.
B. Advantages of joint venture:
I. Access to new Market:
Although the primary source of the Emaar Properties profit come from real estate, Emaar
Properties also have business in the entertainment area, especially for children. For example,
Emaar Properties opens the Dubai Aquarium and underwater zoo and Dubai Ice Rink which
purpose to intrigue happiness and provide customers with the exciting and unique world. In this
case, for the Walt Disney, it is beneficial because Emaar Properties has previous experience in
entertainment and has already established the image in this domain either. Therefore, compared
with building a wholly subsidiary in the Dubai, the Walt Disney can rapidly catch the customer
attentions and occupy the market in accessing the entertainment market in Dubai. In addition, the
crucial concept of Emaar Properties in entertainment about inspiring happiness, exciting and
special moment matches with the service offered by the Walt Disney. In other words, there will be
no conflict between two corporations’ operating philosophy. Furthermore, owing to existing
business in entertainment, Emaar Properties has already owned its customer database, the Walt
Disney can utilize these historical data to conduct marketing research in order to waste money and
time when marketing the product, Disneyland.
II. Sharing risks with Emaar Properties:
For the Walt Disney, establishing a new Disneyland will cost them billions of dollars, and
this is a tremendous amount of money which brings lots of risks that the Walt Disney should bear.
In order to decrease the risk for the Walt Disney to establish its theme park in Dubai, collaborating
with Emaar Properties is a wise option because Emaar Properties which have a strong financial
background obtain around nineteen billion profit before tax in the last year. On the other hand,
starting a business in another country, the Walt Disney will face some challenges in culture, but
making a partnership with Emaar Properties, an indigenous company, the Walt Disney can avoid
mistakes causing unnecessary losses.
III. Cost Reduction:
As one of the leading developers in the UAE, Emaar Properties has strong power in
real estate. With the collaboration with Emaar Properties, the Walt Disney Company can gain
land which has a geographical advantage in Dubai with a cheaper price. What’s more, the
collaboration with Emaar Properties would help Walt Disney reduce costs by accessing to
greater resources. One of the valuable resources that Emaar Hospitality owns is Hospitality.
Emaar Hospitality Group is a wholly-owned subsidiary of Emaar Properties PJSC, one of the
world’s most valuable real estate development companies in hospitality and leisure. Its valuable
hospitality would give a good opportunity for Walt Disney to spend less fund in building hotels
and resorts in Dubai. For most people, hotels are the single most expensive component of a trip
to Walt Disney World. If a family plan on staying in a Deluxe Resort in Disney, the hotel could
eat up more than half of the entire vacation budget. Cooperation with Emaar will help Walt
Disney reduce the fee of hotel accommodation, which can attract more visitors to come. In
addition, Emaar Properties are diversified in many fields. It could share many specialized staff in
developing and building a new area in Dubai with Disney. That would avoid Disney spending
more funds in developing their theme parks in an unfamiliar area.
VI. CULTURAL TIPS:
When discussing projects with Dubai’s collaboration partner, the Walt Disney Company need to
achieve business etiquette to show respect to partners.
A. Business Etiquette:
1. Dubai is the most liberal of all the emirates; however, a modest dress code is expected to
be adhered to by everyone. The dress code for businessmen should be regular business
suits or formal office clothes. The dress code for businesswomen makes it compulsory for
women to cover their arms and legs and stay modest anytime in business environments.
2. When doing business in Dubai, appointments should be made several weeks in advance
as a sign of respect. Meetings taking place in restaurants are often informal.
3. Punctuality is really essential, which is considered as a sign of showing respect.
4. Working days in Dubai are highly different in different companies. Working days are
generally from Sunday to Thursday and many companies are open six days a week and
close every Friday.
5. In Dubai, simple and white designs are usually preferred in business cards. Business card
should have two sides with native language and Arabic. This is considered as politeness.
Business cards should be given at the beginning of the meeting.
B. Religion:
Islam is the official religion in the United Arab Emirates including Dubai. Although all
aspects life in culture, society, and profession have connections with Islam, the constitution of the
United Arab Emirates provides people with freedom of religion. In other words, no matter which
religion people believe in, the behavior of the religion can be practiced and respected. Hence, for
all the workers in Disneyland, they should be educated to esteem diverse religions and their
customs.
C. Muslim Law:
The country in the United Arab Emirates including Dubai applies Muslim law, so it is
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