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BPD1100 INTEGRATED BUSINESS CHALLENGE

Assessment 3B: Disney Scoping Report & Presentation

Where in the World is


Disney?
Project Team Members:
Foo Pei See 4532431
Genevieve Lim Bee Ai 4531879
Hoo Chak Hou 4534056
Jasim Ali Hasan Mansoor Nayem 4530474
Yong Chen Foong 4534304

Executive Summary (Foo Pei See)

The purpose of this scoping report is to describe the four scoping aspects for the most
logical and appropriate location for the expansion of a new Disney theme park in Istanbul.
This report aim to give solid analysis and evaluation of factors that solved with a wellinformed decision for Disneys expansion to a new global country. Furthermore, this report
explores the areas of Disney as a successful business, and its culture, as well as an in-depth
look at Istanbul, Turkey as the best chosen ideal location. The four scoping aspects include
legal systems, financing, marketing the expansion, as well as discussing about the business,
Disney and culture. As a result from analysing and understanding the scoping aspects, it can
be seen that Disney may not face much difficulties in terms of the overview of the
international, national, workforce legal issues like the workplace and consumer law in
Istanbul. Istanbul has a more lenient legal system as compared to other countries that Disney
had expanded to. A financial analysis for Disney was made in this report. This includes
recognizing the sources of finance in terms of financial and non-financial costs plus benefits
for Disney. This report provides a few recommendations on whether how and who Disney
should could obtain their financial support for the expansion project, for example, getting
sponsorship from the government. Based on the analysis, it is apparent that Disney is likely to
not face any financial difficulties when expanding their brand to Istanbul. As Disney is a
well-known large corporation, many banks would be willing to provide loan and capital for
Disneys expansion. A set of promotional strategies for Disney during its expansion in
Istanbul was also recommended in this report. Disney will use the marketing mix which is the
4Ps (price, promotion, place, and product) to advertise the business. Strategies like setting
new launch pricing for their theme park entrance tickets, advertising through social websites,
targeting the right target market will be used to attract customers to Disney in Istanbul.
Research had also been done in this report about the culture in Istanbul. Research shows that
there are difference in culture, values and norms between Istanbul and other countries that
Disney had expanded to. It was also found that the language, attire, practices and others are
very much different in Istanbul. Nonetheless, this report found that the prospects of Istanbul
are positive and the major areas of strength require further research and remedial action by
Disney.

1. Introduction (Foo Pei See 4532431)

Disney is arguably one of the most valuable brands in the world, with its quick
expansion and improvement of its world-class entertainment products as the key factor to its
success, and a persisting attention on its future developments. (Forbes 2015) This future
development includes the expansion of Disney to a new global location that involves a highly
constructive decision of huge financial and developmental decisions to be made, which will
be discussed below. Before proceeding with the expansion, we researched the historical
success of Disney, and all the reasons that led Disney to become such a most welcoming
brand in the world for over the years, for young and old alike. Out of all the candidates cities,
Istanbul in Turkey was chosen as the most suitable location for this expansion project. This
report will be explaining about why Istanbul is the ideal city for Disneyland by outlining
important aspects that will be taken into consideration before the expansion.
Disney, as a large international corporation, must aim to fully understand the cultures
of all the countries in which it wishes to enter. Two key factors that help determine cultures
are; values and norms. Values provide the context in which a societys norms are established
(Hill, 2007 p.91) and norms are the set of rules that govern what is assumed as reasonable
behaviour. Istanbul is one of the largest, most famous and most culturally significant cities in
Turkey. (Bowden 2007) Looking into the values and norms of this city, Istanbul has a more
holistic and agonizing environment, where the people are educated with respect to the
specific social, geographical, and culturally defining individuality that make this not only a
suitable location for the expansion, but a place to provide a great draw card by tourists from
all around the world.
Next, Istanbul is ranked as the most popular travel destination because of its vibrant
city that incarnates both modern and ancient. (Business Insider 2014) With so many tourists
visiting Istanbul every year, it is believed this will help increasing the number of visitors to
Disneyland. According to the Istanbul Tourism Statistics, Istanbul saw an increase of 13.4%
in the number of international tourist arrivals as of 2014. (Istanbul CVB News 2014) The
number of foreign tourists coming to Istanbul between the years of 2000 and 2013 is
approximately 10 and half million and this had been increasing throughout the years.
Nonetheless, according to MasterCards Target Cities Index, Istanbul has been ranked as the
third favourite European destination of choice for foreigners from London and Paris which
further proves that Istanbul is indeed a popular tourist destination. (Daily News 2014)

Furthermore, Istanbul has high economic potential and growth; hence the expansion
in that city will not be a burden to Disney. This city contributes about 23% of Turkeys Gross
National Product which shows that its economy is capable on its own. (Istanbul Metropolitan
Municipality 2008) Their tax contribution made up to 40% of the annual state budget.
(Bowden 2007) Its economy is growing constantly with the gain from their exports and
imports as this city has central importance in both domestic and international trade. Most
headquarters of private banks in Turkey are located in this city, leading Istanbul into an
important world financial centre. (Istanbul Metropolitan Municipality 2008) Other than that,
Istanbuls high population made this city more attractive for the expansion. As of 2014,
Istanbul is the fifth most crowded city in the world with 14.16 million populations. (Istanbul
2014) This city is having the most rapid population growth rate of 3.45 % among the 78
largest metropolitans in the world. For Disney, high population is a key criterion in the
selection for expansion after seeing the recent successful development in Hong Kong
Disneyland, with a population of 7.1 million, as Hong Kong had possessed the population
that gives Disney the necessary factors to flourish. (Li 1999) After all the problem analysis,
Istanbul in Turkey has emerged as our strongest choice for Disneylands expansion.

[650 words]

2. Legal Systems (Jasim


Mansoor Nayem 4530474)

Ali

Hasan

In every particular community or country, they have certain rules and regulations
which all of the people have to follow, for them not to get penalized they must follow the
rules and regulations, law can differ from country to another, the law exist in every country to
control the people by introducing justice, equality and fairness. This means punishing those
who do illegal activities and providing protection to those who are affected by these illegal
activities. If law does not exist in a society, everyone will be able to do whatever he\she
wanted to do and make decisions solely, and this will lead to having more crimes and many
other social problems (Gates, 2009). The same concept which applied to society is applied to
business too, without law in business, nothing can protect the business from others
behaviour and the property interests, and the business will be chaotic. Law plays a very
important role in business; it provides guidance and way to every part of the business
(Ibrahim, 1996). When expanding the business in another country, it is important to know
about the relationship between the origin country of that business and the country which the
business will be expanded in, as well as legal systems there. For instance, it is important to
know about the workplace law of the country of expansion, which is Istanbul. All parts of the
relationship between the employer and the employee are covered in the workplace law. Also,
it is important to know about consumer law which is designed for consumer rights and
providing protection for them against businesses who involved in unfair practices (Burman et
al, 2010).
Our next expansion for Disney will be in Istanbul, knowing and understanding main
workplace law of Istanbul as well as the consumer law there will help the expansion in
adapting with the new city which is Istanbul as compared to the main branch which is in
California, United States. In Istanbul, under the workplace law, it is stated that children who
are below the age of fifteen are banned from working, and for the people who are below the
age of eighteen are banned from working in certain places as well as the jobs where working
for night shifts is required. So, people in Istanbul can start working in the age of eighteen.
Moreover, the minimum wage in Istanbul is $3.49 per hour, and if a worker works more than
45 hours per week, the worker will receive 1.5 times the regular hourly salary because the
rest of the hours will be considered as an overtime hours (Belsil, 2008). On the other hand,
under the workplace of United States, the minimum age is 14 years old, they can work for

limited periods after school hours, while the basic minimum age is 16, youth can be
employed in that age but apart from hazardous jobs, but in the age of 18, youth can be
employed even in jobs considered hazardous. The minimum wage in US is $7.25 per hour,
which is more than the minimum wage in Turkey (Verkerke, 2015).
Based on the above, it will not be hard initially for our next Disney expansion to adapt
with the legal system and the issues which is in Istanbul, because as compared to the
workplace rules and regulations in the United States, it is more lenient in Istanbul like for
instance in terms of wages, the minimum wage is lesser in Istanbul than the one in the United
States which can help the expansion legally and financially, and there will be no difficulties
in terms of working age because it is almost the same with United States with slight
differences. And for the consumer law in Turkey, we will not face difficulties because the
business is not involved in any unfair practices since the aim of Disney is to make people
happy through the entertainment which is provided by Disney. Additionally, it is good to
know that the American-Turkish trade and investment relations is good since they have
TIFA between them, which is Trade & Investment Framework Agreement, this can lead to
have less barriers for businesses to enter the Turkish market and ease the procedures for
entering the market (Mullaney, 2011). As a result, in terms of legal system and issues, it will
be easy for the expansion to adopt with the new country Istanbul.
[730 words]

3. Financing the Expansion (Yong Chen


Foong 4534304)

Project Finance (Yong Chen Foong, 4534304)


Project finance is described as a source of financing towards the development of a
large-scale infrastructure project that requires a hefty amount of capital funding. This debt is
contracted under the limited recourse basis, which subjects the creditor to limited or no
claims on the loan.
4.1 Financial Support for Disney(Yong Chen Foong, 4534304)
For the expansion of Disney, huge amount of financial support is needed from other
sources. There are a few sources of funds can be found which government sponsorship, bank
loan, joint venture are, issue shares and so on. First of all, government sponsorship is a huge
amount of money sponsored by local government to support private sector and public sector
projects. In order to receive the sponsorship from government, the sector has to aid
government in boosting countrys economy (Queensland Government 2013). In this case,
Disney is able to get the sponsorship from government as Disney can boost Istanbuls
economy by increasing employment rate and tourism rate once the Disneyland is expanded in
Istanbul. Therefore, government might be willing to sponsor Disney from the financial sector
and provide land to expand Disneyland in Istanbul. When the government decided to offer
this sponsorship, the government have to take the risk for the expansion in Istanbul. This is
because if the expansion of Disneyland fails to complete, the sponsorship given out by the
government will not be able to be collect back from Disney and is wasted. For example,
Disney in Hong Kong and Paris has an agreement with the government whereby the
government will help in expanding Disneyland in their country by providing funds
(Legislative Council Secretariat 2009).
Next, Disney needs a huge amount of money to finance the expansion of Disneyland
in Istanbul and this can be funded by bank loan. Many banks are willing to lend out the loan
to Disney because Disney is very well-known in the world and this project will be profitable
(Nordenfelt & Villasenor 2008). In this case, Disney will borrow a huge amount of money
from bank as expansion of Disneyland is huge projects which need a lot of funds. The higher
the loan given by the bank, the higher the rate of interest will be charged (Carney 2013).
When bank lends out the loan to Disney for the expansion of Disneyland in Istanbul, bank
will be able to earn interest and increase their reputation while Disney is able to have the fund
for their expansion project. Therefore, there is a win-win situation between Disney and the

bank. On the other hand, in case the expansion of the Disneyland in Istanbul failed to make
profit and unable to pay off the loan, the bank can still avoid them from incurring loss by
seizing the Disneys property.
Furthermore, the fund for the expansion of Disneyland in Istanbul can be obtained
through joint venture. Joint venture refers to the joining of two or more business partners who
can exchange each other resources, share risk and profit among each other (Stewart &
Maughn 2011). Disney can offer joint venture with other business partners in Istanbul to run
the expansion of Disneyland so that the expenses are shared and each company is bearing less
cost pressure. As Disney is an international company, it has high credibility, as such more
business partners will be confident to cooperate with Disney. Meanwhile, the business
partners that cooperate with Disney need to face some consequences such as Disneyland that
expand in Istanbul fail to make profit so the business partners need to bare the liabilities
together. For example, Disney has an agreement with Shanghai Shendi Group in China which
using joint venture to expand the Shanghai Disney Resort (The Walt Disney Company 2014).
4.2 Loan for Disney (Yong Chen Foong, 4534304)
Government sponsorship can help Disney to get a huge amount of fund for the
expansion of Disneyland but it require Disney to boost the economy of Istanbul and the
future of Istanbuls economy is difficult to predict. Disney can get the fund by using bank
loan but having a bank loan Disney need to pay a high fixed interest rate to bank. Meanwhile,
bank loan is the fund which will be getting in full on time. By using joint venture for the
expansion of Disneyland in Istanbul, Disney has to share the profit among the business
partners (Finnerty 1986). Meanwhile, Disney can share the risk and liabilities with the
business partners.

The best choice to be chose by Disney is the government sponsorship as it is free of


charge. On the other hand, the future of Disneyland can be guaranteed as Disney is a wellknown international company and a lot of people like Disney characters such as Mickey

Mouse, Donald Duck, Elsa and etcetera. Therefore, Disney definitely can boost the economy
of Istanbul by boosting tourism and Istanbuls local employment rate.
(767 words)

4. Marketing the Expansion (Hoo Chak


Hou 4534056)

4.1 Importance of Marketing Consideration to Business Project (Hoo Chak Hou,


4534056)
Marketing is known as satisfying needs and wants of consumers, by delivering,
communicating and exchanging offering to customers, clients or to the world at large (Kincki,
2002). In terms of Disneys expanding, it is called international business which is selling or
providing goods and services towards the people from other country (Williams & Mc
Williams, 2014). It is important for marketers to plan before going for expanding the Disney
to another country, as we all know planning is a must for every business, by developing a
marketing plan would help to aware of the possible issues that may happen in future (Lamb,
Hair, McDaniel, 2012). Marketing plan can lead to good marketing strategy as company are
clear with their goals and coming out with good strategy to sustain in the market (Elliott,
Rundle-Thiele, Waller, 2012). Marketing research should be conducted to get information to
identify the opportunities and threats that Disneyland might face in order to succeed in
expanding (Hawkins & Mothersbaugh, 2013). The methods that Disney should use are data
collection, finding experts to analysing it and coming out with a report, in order fully
understand consumer behaviour. For example, how will they react towards the expansion of
Disneyland, how likely consumers will spend their time in Disneyland, how often will they
go and etc.
4.2 Target Market (Hoo Chak Hou, 4534056)
In order to have a target market, market segmentation is a must go process. Market
segmentation means that dividing people into groups that are having similar needs and wants
(Kotler, 2003). The market can be divided into 3 main groups which is geographic,
demographic and psychographic segmentation (Wild & Wild, 2014). The types of
segmentation that should be focused by Disney are demographic segmentation which
includes age groups and income. Disney is mainly targeting children for their main customers
but as we all know the parents will be the one who is paying, so indirectly Disneys main
targeting is a family group (The Walt Disney Company, n.d). On the other hand, Disney is
providing a luxurious entertainment; therefore the targeted income group should be middle to
high income levels group. According to Margaret Miller in 2014 a country is considered a
high income level group with at least $12,476 of GDP per capita. Istanbul actually had a
$22,765 of GDP per capita (Brookings & Jpmorgan, 2012), therefore it actually means that
Istanbul is actually a potential earning investment for Disney.

4.3 Product Profile (Hoo Chak Hou, 4534056)


Products and Services that offers by Disney is actually very broad, in Disneyland,
they provide a large theme park for family entertainment and leisure experiences, they also
have their own Disney products to be sold in the theme park and also outside the theme park
(The Walt Disney Company, n.d). Besides that, Disney actually provide accommodation such
as Resorts and even parking lots for the convenience of local and foreign tourist, they take in
count in almost every section to ensure the tourists have a good memory in Disney land. For
example, they come out with different themes during different seasons so that tourists can
have different experience in different seasons (The Walt Disney Company, n.d).
4.4 Marketing Strategy (4P) (Hoo Chak Hou, 4534056)
Marketing strategy can be defined as the initiative to increase sales and sustain in the
market (Kurtz & Boone, 2006). One of the most common and important strategy is called
marketing mix, which is the 4Ps, price, place, promotion and product. Disney can start with
offering a new launch pricing, which should be cheaper than the actual price charged to
attract tourists, annual passes and special event tickets. For example, Mickeys Halloween
Party, Frozen theme, Mickeys Christmas Party and others (The Walt Disney Company, n.d).
Next, Disney can advertise Disneyland at Istanbul by using radio and television advertising to
attract local tourist attention. But in order to attract foreign tourist, Disney will need to use
internet advertising as it is more effective and the message could reach to the tourists (Mooij,
2010). Internet advertising is a very effective way as the internet is widely used and almost
everyone, the usage of internet to online among teenagers had been growing over the past 10
years (Becker, 2000). On the other hand, Disney can work together with tourism agencies so
that brochures can be easily reached to the hand of tourists with the help of the agencies.

(714 words)

5. Business,Disney and Culture


(Genevieve Lim Bee Ai, 4531879)
5.1 Cultural Profile of Istanbul (Genevieve Lim Bee Ai, 4531879)

Culture is defined as the beliefs, values and assumptions shared by a group of people
regarding how they should live and work together. (Schneider and Barbera, 2014) Istanbul is
both an ancient as well as a modern city and is made out of many different cultures as 20% of
Turkeys inhabitants has moved to the city. (Pektas, 2008) Istanbul is made out of diverse
cultures including Greeks,Jews, Armenians, Russians and Christians, but the majority of the
residents are Muslims. Hence, Istanbul practices mostly the Muslim code of conduct in terms
of dressing and behaviour.
In the Islamic culture, Muslims need to pray five times a day including working
hours. (Desplat and Schulz, 2012) Furthermore, Muslims are not allowed to consume alcohol.
In the Islamic culture, one must dress accordingly, where Muslims have to cover up their
bodies wearing a head-scarf for women, long sleeved tops and long trousers.
Lastly, the language most commonly spoken in Istanbul is Turkish. (Maxwell 2010)
However, at popular tourist destinations, English and German are used by locals as well.
5.2 Workforce Cultural Issues (Genevieve Lim Bee Ai, 4531879)
Disney has to be wary of the cultural issues that may be faced during this expansion
as it would affect the success rate of the new Disneyland. Disneyland originating from
America must learn to take into account the Turkish culture norms and values and incorporate
it into the expansion to avoid any miscommunication and mishaps.
Firstly, communication is key to a functioning company. The main language of
Istanbul being Turkey means that the translators would have to be employed to translate
Turkey to English and vice versa. Furthermore, foreign workers should be given a lesson to
be able to converse and understand Turkish. This will help both the internal management
team and the external team to communicate with Disneylands representatives.
Islamic citizens of Istanbul normally adhere to a dress code where it covers their
whole body parts. Foreign workers are advised to wear proper attire to work and avoid short
pants or skirts as it would be offensive. Moreover, shaking hands is a corporate culture for
Europeans after doing business. But for Muslim women, they are not allowed to shake hands
with the opposite gender according to the teachings of Islam. Certain gestures are also
offensive in Turkey such as the OK sign.

Disney must take into account holidays in Istanbul such as Ramadan as it would affect
customer and employee availability during this period. Ramadan is a Fasting periodand
employees may not be able to work usual long hours as they are tired and hungry. (Davies,
2015) Furthermore, Muslim workers need to pray five times a day which includes during
working hours.
5.3 Cultural Inclusiveness (Genevieve Lim Bee Ai, 4531879)
Disney must definitely include cultural considerations into every step of this
expansion project or it would end up being a failure such as how the Disneyland in Paris
turned out. Firstly, Disneyland can use dual-language sign boards in both English and Turkey
as Disneyland not only aims to have Turkish patrons but also customers from all over Europe
as Turkey is in between both Europe and Asia. (Uslu , 2003) Furthermore, Disneys foreign
employees should be given lessons on Turkish while Disneys Turkish employees should
learn the English language.
Taking into consideration that Turkey is dominated by Muslims, Disneyland must take
essential steps to make sure they are not offending people and have the full support of the
government. Due to popular Western culture of having alcohol to celebrate, Disney must not
celebrate any goals in this manner as alcohol is prohibited to be drunk by Muslims. If Disney
wishes to sell alcohol in their hotels or restaurants they need to request for a license from the
government. Disneyland staff must have a proper dress code whereby they do not wear any
short skirts or pants and Disneyland must allow Turkish workers to dress in their headscarves.
Prayer rooms have to be made easily accessible and available during the construction
of Disneyland as both Muslim customers and employees need to pray up to five times in a
day. During prayer time, there may be lack of employees thus Disney should employ a more
diverse group of workers to counter this problem. Disney must be wary of holiday dates in
Istanbul as employees may take leave and there would be lack of employees. More customers
are also expected during holiday season.
(701 words)

6. Conclusion (Foo Pei See 4532431)


In conclusion, Istanbul would be the best ideal city for Disneys expansion because
Istanbul gave a clear set of advantages that far outweighed the small areas that could be
further improvised. With so many Disneys successful expansion to other global countries
like Hong Kong and France, we believe that this project is highly likely to be potentially

successful if research into the scoping aspects as stated above or any other key areas is
researched more thoroughly than past endeavours.
[79 words]

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