Write a one to two page analysis on the company of your
choice and their selected entry strategy or strategies into the country of your
choice. What method(s) do they use? Have they been successful using
these methods? Is there discussion surrounding their future strategies?
.
When asked to summarize the best argument for his campaign plan, the character of George W. Bush, played by Will Ferrell on a Saturday Night Live comedy sketch, answered with “Strategery”. If basic strategy is a look at how managers are moving forward towards the company’s goals, we can only imagine then, that strategery must mean a more artful and magical approach to those strategic actions. The Walt Disney Company is all about “Strategery” in their business plans when it comes to expanding into rising global markets such as Russia.
The Walt Disney Company frequently
uses strategies for reaching global
markets such as Foreign
Outsourcing, Licensing, and Direct Investment. [1] Over the last ninety years, Disney has grown from a
small cartoon studio in the United States to a worldwide brand name, something
that could only seemingly be done with help from a little magic. However, it
isn’t magic, it is just smart strategic action. “When pursuing new markets,
Disney typically focuses first on introducing the channel to deliver its brand
directly to people’s homes. Then it uses that base to sell theme park vacations
and merchandise” (Brooks Barnes). Broadcasting their specialized
Disney channel to households in the developing markets such as Russia, allows
Disney to advertise their brand name and expand their presence in the country.
Since 2009, Disney has focused much
of their broadcasting energy into establishing these foundations for long-term
growth in these emerging markets mainly because of that market’s economic
growth combined with the growth of that population’s purchasing power. Of
course, as an American company, they face many barriers to trade, and have
developed a need to adapt to the sociocultural, economic differences, and legal
differences, as well as political differences. [2] This is
especially true in Russia, where the government blocked Disney’s original
attempt at a partnership with Media-One-Holdings Limited, a Russian media
company, in 2008. However, in 2011,
Disney was able to enter into a strategic alliance by acquiring 49% of the
broadcast channel SevenTV, which is estimated to reach more than 75% of
Russia’s measured television audience. SevenTV will remain majority owned by
UTH Russia, a fast growing media company. [3]
This
localization strategy is seen in the programming lineup of the new rebranded
channel (from SevenTV to Disney Channel), which shows a mix of Disney’s
signature children’s show as well as original Russian content. The channel
currently shows older Soviet films, and is set to reach approximately 40
million households out of a population of 140 million people. Although the
acquirement of SevenTV is considered a small audience share in Russian
television and advertising, Disney knows that this will provide them with the
infrastructure to build a national network in Russia. This deal also signaled a
new approach for Disney Channel, which had always been part of a paid-tv
service (non-basic channel), since they launched this channel in Russia as part
of a free network of programming. [3]
Since the rebranding
of SevenTV into The Disney Channel in 2012, Disney has expanded in Russia
through various outlets. As part of their 2012 Season of Giving (charitable
events which occur around the holiday season) the Disney team in Russia hosted
an event at the newly opened Rossia Theater in Moscow. More than 1200 children,
including orphans, children with disabilities, and children with
life-threatening medical conditions were invited to a special performance of
one of their newest Disney experiences, a stage performance of The Little
Mermaid musical. [4] In 2013, Disney worked with the Saint Petersburg
Theatre of Musical Comedy to develop a special performance of Aladdin. In
reference to this specialized performance, the managing director for Disney is
Russia stated, “We are commited to creating shows specially designed for
Russian audiences, and Aladdin is another example of that commitment.” [5] Even though the Walt Disney Company has been present
in Russia through various aspects since 2006, [6] they had always viewed their position there as just a
small ‘toehold’, but the acquisition of SevenTV in 2012 gave them an important
‘foothold’ where, according to Disney’s CEO Robert A. Iger, “We can now grow
more robustly.” [2] And grow you shall.
As you can
see, The Walt Disney Companies pursuit of emerging markets is much like the
easy, yet powerful, stroke of an artist. Slowly and steadily, they make their
mark and expand their presence. By working closely within the communities to
transition into the culture, Disney is able to grow significantly by using the Stratergeries of alliances,
localization, foreign outsourcing, licensing, and direct investments. Спасибо (spasibo/thank you) Mickey
Mouse.
Cited Websites:
[1]
https://sites.google.com/a/email.vccs.edu/bus100bmenegazzi/strategies-for-reaching-global-markets
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