The Walt Disney Company: Mickey Mouse Visits Shanghai

Abstract

The strategic and tactical problems of managing the operations function in a service environment can be examined through the context of the Walt Disney Company (DIS) opening Shanghai Disneyland. The company and its investors were excited about the Shanghai opening for a good reason: demographics. The resort would be located in the Pudong district of Shanghai, easily the wealthiest of all of China's districts. A massive 330 million people lived with a three-hour driving radius of the resort site, compared with 19.6 million who lived within the same radius at DIS's most profitable park, Walt Disney World in Orlando, Florida. Still, risks remained. Construction complications had delayed the opening almost a year longer than expected and cost overruns and alterations had increased the final price tag of the project. The Chinese economy had also hit a rough patch following the Chinese stock market slump in the summer of 2015. With the world watching, could the classic Disney theme park experience be delivered with the right cultural balance to appeal to its largely Chinese customers? Could DIS get it right? Excerpt UVA-OM-1545 Rev. Oct. 3, 2016 The Walt Disney Company: Mickey Mouse Visits Shanghai We're building something that's authentically Disney and distinctly Chinese. It definitely will be Disneyland in China, but we'll obviously be respectful of the Chinese culture and relatable to the people of China. —Walt Disney Company (DIS) Chairman and CEO Robert A. Iger Even for a company built on the creative risk-taking culture instilled by founder Walt Disney, the 2016 opening of Shanghai Disneyland (SDL) was an audacious bet. The sixth global Disney resort would occupy nearly 1,000 acres of land in Shanghai, China—twice the acreage used in the Anaheim, California, Disneyland (DL) and almost eight times the size of Hong Kong Disneyland (HKDL) at its launch in 2005. The Shanghai resort, the first in mainland China, would feature several themed lands such as Tomorrowland, Treasure Cove, Disneytown, and the Enchanted Storybook Castle, which would be the biggest and tallest Disney castle ever. Indeed, it wasn't just the exhibits that were large: “We've never built a park as big as this to open on opening day,” said Chairman and CEO Robert Iger. “This is the biggest.” . . .