IB assignment

FACULTY OF BUSINESS AND MANAGEMENT FAKULTI PERNIAGAAN DAN PENGURUSAN

BBNG3103

INTERNATIONAL BUSINESS PERNIAGAAN ANTARABANGSA

SEPTEMBER 2010 SEMESTER SEMESTER SEPTEMBER 2010

Student Particular

Maklumat Pelajar

Name: BALA SIVACEYON @ BALAKRISHNAN A/L

SUPPIYAH

Matrix No: 590427085887001

Lecturer: SUKRI BIN HARON

Submission Date: 18th

December 2010

BBNG3103: International Business

Open University Malaysia

Bala Sivaceyon

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ASSIGNMENT QUESTION

PURPOSE:

This assignment is designed to provide learners with the opportunity to conduct research and analysis

on international markets for the purpose of an international firm’s business expansion.

CASE:

Since its founding in 1923, The Walt Disney Company has remained committed to produce

unparalleled entertainment experiences based on the rich legacy of quality creative content and

exceptional storytelling. The company, together with its subsidiaries and affiliates, is now a leading

international family entertainment and media enterprise with four business segments: media networks,

parks and resorts, studio entertainment and consumer products. The company's objective is to be one

of the world's leading producers and providers of entertainment and information, using its portfolio of

brands to differentiate its content, services and products. Its primary financial goals are to maximise

earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term

shareholder value.

The concept for Disneyland began when Walt Disney was visiting Griffith Park with his daughters,

Diane and Sharon. While watching his daughters ride the Merry-Go-Round, he came up with the idea

of a place where adults and their children could go and have fun together. Based on his idea, the

original Disneyland Park was opened in Anaheim, California in 1955 at a cost of US$17 million.

In 1971, The Walt Disney World Company was established as a subsidiary of the Walt Disney

Company based in Lake Buena Vista, Florida to own and operate the company’s theme parks and

resorts. Since then, it has grown to five resort locations encompassing 11 theme parks, including some

owned or co-owned by independent entities, on three continents. In 2009, the company's theme parks

hosted approximately 119.1 million guests, making Disney’s the world's most visited theme park

company.

You have been appointed to carry out a comparative analysis of potental countries considered suitable

for the Walt Disney World Company to expand its theme park business, and to present your findings

at the forthcoming management meeting.



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REQUIREMENT:

Using the Grid Analysis, select and analyse the suitability of five (5) potential countries where the

company can expand into and build new theme parks, then give conclusions on the one that holds the

highest promise.

Country Choosen:

Singapore

Australia

Argentina

Russia

South Africa



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Argentina

Background:

i) Location:

Southern South America, bordering the South

Atlantic Ocean, between Chile and Uruguay

ii) Climate:

Mostly temperate; arid in southeast; subantarctic in

southwest

iii) Population

41,343,201 (July 2010 est.)

iv) Age Structured

0-14 years: 25.6% (male 5,369,477/female 5,122,260)


65 years and over: 10.8% (male 1,819,057/female

2,611,800) (2010 est.)

STRENGTHS

* Abundant agricultural, energy and mineral resources, combined with rich tourist potential and

cultural heritage

* Level of education and human development indicators above Latin America’s average

* Comparative advantages in farm and food products (soybeans, meat, dairy products) and skilled

services (information technology, engineering)

WEAKNESSES

* Some dependence on raw materials

* Lack of investment in energy and infrastructure

* Relations with the IMF and all foreign creditors have yet to return to normal since the bond debt

restructuring in June 2005

* Business environment often affected by unpredictability

* Persistence of strong inequality and social unrest



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Australia

Background:

i) Location:

Oceania, continent between the Indian Ocean and

the South Pacific Ocean

ii) Climate:

Generally arid to semiarid; temperate in south and

east; tropical in north

iii) Population

21,515,754 (July 2010 est.)

iv) Age Structured



65 years and over: 13.5% (male 1,306,329/female 1,565,153)

(2010 est.)

STRENGTHS

* Mining resources (iron ore, coal) indispensable for global recovery

* Close geographic position to the emerging Asian economies

* Strong public finances before the crisis

* Sound banking system

* Immigration continues to boost the labour supply

WEAKNESSES

* High indebtedness of companies and households

* Shortage of qualified labour

* Strain on water resources

* Difficult annual negotiations in setting raw material prices



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Russia

Background: i) Location:

Northern Asia

ii) Climate:

Ranges from steppes in the south through humid

continental in much of European Russia; subarctic

in Siberia to tundra climate in the polar north;

winters vary from cool along Black Sea coast to

frigid in Siberia; summers vary from warm in the

steppes to cool along Arctic coast

iii) Population

139,390,205 (July 2010 est.)

iv) Age Structured




(2010 est.)

STRENGTHS

* Abundant natural resources including oil, gas, and metals

* Skilled labour force

* World’s third largest foreign exchange reserves

* Infrastructure development opportunities in the framework of the 2014 Winter Olympic Games in

Sochi

* Reasserted regional and energy power

* Political stability

WEAKNESSES

* Limited economic diversification, because the economy is highly dependent on raw material

prices

* Excessive private sector foreign debt

* Banking sector still very weak

* Persistent deficiencies in the business environment



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South Africa

Background:

i) Location:

Southern Africa, at the southern tip of the continent

of Africa

ii) Area:

total: 1,219,090 sq km

iii) Climate:

Mostly semiarid; subtropical along east coast; sunny

days, cool night

iv) Population

49,109,107 (July 2010 est.)

v) Age Structured




(2010 est.)

STRENGTHS

* 33% of sub-Saharan African GDP

* Extensive mining resources

* Diversified industry, efficient tertiary sector (banks, telecommunications)

* Public sector finances under control: leeway to resort to foreign debt

* Business environment among the most efficient in emerging countries

WEAKNESSES

* Significant social risk: a degree of income inequality among the highest in the world

* Human capital deficit (26% unemployment and 11% AIDS prevalence rates, consequences of the

apartheid education policy), the main obstacle to economic development

* Dependence on inflows of volatile capital, vulnerable to a crisis of confidence in the markets



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Singapore

Background:

i) Location:

Southeastern Asia, islands between Malaysia and

Indonesia

ii) Climate:

Tropical; hot, humid, rainy; two distinct monsoon

seasons - Northeastern monsoon (December to

March) and Southwestern monsoon (June to

September); inter-monsoon - frequent afternoon and

early evening thunderstorms

iii) Population

4,701,069 (July 2010 est.)

iv) Age Structured

0-14 years: 14.4% (male 348,382/female 324,050)


65 years and over: 8.9% (male 184,393/female 229,330)

(2010 est.)

STRENGTHS

* Very high quality-competitiveness

* Development of high value-added sectors (chemicals, pharmaceuticals, finance)

* Strong FDI inflows thanks to an advantageous tax regime, political stability and an excellent

business environment

* Major exporter of capital in Asia via the public holding company Temasek

WEAKNESSES

* Economy dependent on foreign demand

* Shortages of skilled labour

* Aging population

* Latent social tensions in a context of increasing inequality and growing durable unemployment

among the least skilled



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Market Size:

Argentina:

With a population of 41 million people, we can forsee good market from the people of Argentina

themselves. Not only that, the latin american countries can also come by to Argentina for a Disneyland

adventure thempark. Since the latin americans have their unique and multiple cultures, we can name

the theme of the park seasonally with their related cultures.

Australia:

Australians are very financially powerfull peoples. They are willing to spend in order to get what the

expect. Having built one themepark there would attract people from New Zealand and the other ocenia

regional countries. Australian prefer the beach by majority, so the encoopertated themepark should

have a beach related motive in order to attract and compete with other themepark organizers based in

Australia.

Russia:

Due to the winter nature of the country, the themepark can have brilliant ways of attractional

promotion using the cold concept, either with the ices, or with the snows. Making it built near the

Europe would be a boost for the Europian nations to come by for a visit thus creating a vast huge

global market right there.

Singapore:

Being reputated as the fasterst upcoming country among the South East Asian region, Singapore has

developed a high interest in the tourism industry. With many tourist attraction on the way, and with its

big new luxurious casinos recently opened, the country progession towards tourism sector is boon for

the themepark to be built there.

South Africa:

After recently hosting the world cup 2010, South Africa has a great exposure upon the world. Hence

with its current government still pron to foreign investments, we can settle down in the region pretty

well. Serving the entire African continent as a spot for Disney Themepark attraction, we can make it

into a regional concept themepark. The population is also very much oriented on the younger

generation which can attract them towards visiting this themepark.



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Infrastucture and Operation Stability

Argentina:

The Argentinian government are recovering from the recession that hit the countries economic badly

this recent years. Hence with interest from the foreign investors, the government should be giving out

their welcoming hand to receive aid from other countries in order to boost up their economic level.

Infrastructure aren’t a issue since Argentinians do have industries that use related raw material for a

themepark.

Australia:

Australia is a stable country with no threat or whatsoever to the stability of operations. The

infrastuctural capabilities aren’t an issue as well.

Russia:

Due to the communist aspect of the country, there might be some difficulties with the policies of the

government on allowing a US based company to do business there. As well as the extreme cold

climate, the infrastuctures need more endurance level to withstand the temperature fluxuations.

South Africa:

South Africa do not posses any threat to the political and infrastrutural factors as well.

Singapore:

Singapore has an added advantage for tourist related development and also the infrastucture are state

of the art facilities.



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Grid Analysis

Factors to look about: Leverage Argentina Australia Russia Singapore South Africa

Market Size

Domestic Current 0-5 3 2 1 5 3

Future 0-5 3 3 2 5 3

Foreign Current 0-5 4 3 2 2 4

Future 0-5 4 3 3 4 4

Infrastructure 0-7 3.5 5.2 3.6 6.6 4.6

Operation Stability 0-5 3 5 3 5 4

Source infrastructure and cost 0-5 2 3 0 4 3

Bureaucracy 0-5 3 2 3 5 1

TOTAL 25.5 26.2 17.6 36.6 26.6

Risk of investment

i) Uncertainty and

risk 0-5 3 1 3 0 2

ii) Competition risk 0-7 4.3 5.7 4.1 5.5 5

iii) Political risk 0-5 4 1 3 0 3

iv) Financial risk 0-5 3 2 3 0 2

TOTAL 14.3 9.7 13.1 5.5 12

Allowance of 100% equity hold 1 1 0 1 1



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From the grid analysis, we can see that Singapore has the best opportunities and advantages

with minimal risk factors. As a reason of it is because the country with a small base land has a

greater profits than some other countries. Despite that selling product at higher prices doesn’t

see any changes in shopping rate of Singaporeans people as money just comes in since the

globalization of financial markets .Singapore also have a number of services for the home

market. It is a good way to secure a country from an economical crisis. Singapore also has a

number of emerging markets especially of the tourism industry. Many tourist like to come to

Singapore especially during the winter season because of his tropical climate and clean

country. Singapore also is comparatively a better country compare to the other countries

chosen in term of legal matters, time spent establishing business is really less.

Besides that, the infrastructures in Singapore compared to the other country are state of the art

technologies. With ultra big and efficient port, we can import materials needed for building

this theme park really fast. The competition at the Singaporean market is big, but with

proactive marketing strategies, we can attract many tourists to come to this theme park. In

2009 alone, Singapore receive 9million tourist, a very big number for such a small country,

where the pie chart are mostly consist of South East Asians, with many Eurasian tourist as

well.

Hence with all the reason stated, Singapore certainly prevails itself as the most outstanding

country for the building of Disney Theme Park.



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References:

https://www.cia.gov/library/publications/the-world-factbook/geos/as.html

https://www.cia.gov/library/publications/the-world-factbook/geos/ar.html

https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html

https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html

https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

http://globaledge.msu.edu/countries/argentina/risk/

http://globaledge.msu.edu/countries/australia/risk/

http://globaledge.msu.edu/countries/russia/risk/

http://globaledge.msu.edu/countries/south-africa/risk/

http://globaledge.msu.edu/countries/singapore/risk/

http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

Professor Klaus Schwab (2010). The Global Competitive Report 2010-2011. Geneva,

World Economic Forum. Retrieved 4th

December 2010, from

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

https://www.cia.gov/library/publications/the-world-factbook/geos/as.html

https://www.cia.gov/library/publications/the-world-factbook/geos/ar.html

https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html

https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html

https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

http://globaledge.msu.edu/countries/argentina/risk/

http://globaledge.msu.edu/countries/australia/risk/

http://globaledge.msu.edu/countries/russia/risk/

http://globaledge.msu.edu/countries/south-africa/risk/

http://globaledge.msu.edu/countries/singapore/risk/

http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

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IB assignment