By Lauren | October 16, 2013
Everyone liked to play “pretend” as a kid, right? Well, playing “pretend” (also known as forecasting, or future planning for the sophisticated business person), can be an extremely helpful exercise when thinking about international expansion for your business.
Something that seems so simple, but is so often forgotten or ignored, is the analysis of how your global strategy will be different from your domestic one. “What? That’s common sense!” you may say as you wave your hand dismissively. But, I promise you, it is not always so obvious!
A big risk when creating a global strategy from a domestic one is the Self Reliance Criterion. The SRC is, “…an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decision.” (Snyder, Ch1 ppt) Can you see how this would be a problem if a company like Disney was trying to expand into Europe, and/or China? Lo and behold, it was!
EuroDisney and Hong Kong Disney are good examples of how the failure to accurately forecast/assess how the current domestic strategy would work globally, substantially hurt business. (FYI- EuroDisney is in France.)
Lack of adaptations in the global strategy in Europe and China (in most part due to the SRC):
- Advertising did not emphasize French interests, such as ride variety and attractions, but rather Vegas-style glitz and glam (European people were unfamiliar with Disney).
- Little focus on European and Chinese ways of life/interests
- Expected everyone to vacation like Americans, with short, but frequent, trips; traditional European vacation style is one long holiday break.
- Ban on alcohol, which is of very high value to the French, and many Europeans.
- Misinformation that Europeans don’t eat breakfast led to HUGE morning food lines because the kitchen was not prepared.
- Come on Disney, think croissants!!
- Advertisements in Hong Kong with two parents and two children (typical American family), when there is a government restriction on having more than one child.
- Did not explain Disney characters in China even though prior to the park opening there was a 40-year government ban on Disney characters.
Another problem here was ethnocentrism; before expanding to Europe and China, Disney had experienced such immense success in the US and Japan that they believed their business model and strategy could not fail. There was a disregard for foreign customs/interests/ways of life due to the extreme amounts of trust put in the hands of top executives that ‘apparently’ knew the best way to do things. Again, Disney assumed that Europeans would change their traditional vacation style because of the new park; this ethnocentric approach impeded the ability to assess the new market in its true form.
Disney did seem to learn from their mistakes, however, and the new French CEO of EuroDisney set up marketing offices in different national markets, separately, to help gather information about different tourists’ habits, and focus marketing accordingly. This is the link to this case; it further outlines the mistakes and improvements of EuroDisney and Hong Kong Disney’s global strategy:
This is an article from Forbes that I wanted to mention; it interviews three CEOs that offered their insight into their priorities, change management solutions, future globalization insights, big data changes, and customer model differentiation. All of the topics address how the three CEOs managed changing into an international business strategy and/or expanding their international reach. Helpful tips!
This post is a combination of the discussions from my Fundamentals in International Business class and my International Marketing class. This is also a great example of the connectedness that I noticed during my undergraduate, and now graduate, experience at Canisius: Once you begin your specific program (ex: Management, Accounting, etc.), all of your classes include information that can be combined and supplemented with each other. Classes are unique, so you are never bored by learning redundant information, but similar enough that you can begin to combine techniques and lessons in a way that enriches both, and creates novel interpretations.
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