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Expansion of Disneyland Park to Brazil
Expansion of Disneyland Park to Brazil
Abstract
This business venture is based on the expansion of Disneyland in emerging countries. Although it is a
move against the odds but once the expansion is successful new grounds will be broken by Disney by
going into the unexplored territories. This expansion will open doors for many new opportunities by
showing the potential of developing countries and the investors will become interested in funding projects
like these once these type of projects take off successfully.
Introduction
No doubt, Nostalgia is a strong asset. Since its creation, Walt Disney Company has given such products
and services that it has made a special connection with people’s childhood all over the world. Disneyland
opened in 17th of July 1955 in California under the supervision of Walt Disney himself. After that it
ventured in other territories like Tokyo, Hong Kong and Paris. Disneyland has expanded to North
America, Asia and Europe but it has yet to find its roots in South America. Brazil is a great option for this
venture as it has been in the spotlight for the past years for hosting World Cup of 2014 and the Olympics
of 2016. Brazil is an emerging country and building a theme park of this magnitude there will be
beneficial for the both parties involves. There will be boost in economy of Brazil due to creation of new
jobs, increased tourism and infrastructure development.
Pestle Analysis
Brazil is the largest country in Latin America. It has an area of 3,28,796 square miles. It is the fifth largest
country in the world in terms of area and 6 th largest county in terms of population (210 million approx.).
The Pestle analysis of Brazil will discuss the micro environmental factors that may impact any new
project being developed in the country.
Political Environment: Brazil has democratic system of government and it has 2 states. It falls under the
category of middle income country. Brazil has one of the largest democracies of the world due to which
the country has a big consumer market and therefore a great potential in the business world. The country
has diplomatic relations with US and neighboring countries like Argentina and Venezuela. It is a member
of UN and World Bank. But corruption is a severe issue as the country falls at 94 th position out of 180
countries according to the Transparency International Ranking.
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Expansion of Disneyland Park to Brazil
Economic Environment: In 2022, Brazil has GDP of 1.833 Trillion Dollars which is among the top 10
largest economies in the world. The GDP per Capita was 8750 Dollars per inhabitant. Coffee and sugar
are the most powerful industries in Brazil. The unemployment rate in Brazil is 8.9 percent and the
personal income tax of country as per 2022 is 27.5 percent.
Social Environment: Brazil is a very diverse country and the dominant religion in the country is
Christianity. The major social issues in Brazil include poor housing schemes, inadequate education
system, child labor and poor healthcare system. Race and gender bias is also a big problem in the country.
Technological Environment: Technology has become really common in Brazil. E commerce and web
sectors are really booming as industry is expected to keep growing. The consumer market for information
and communication technology is very large. Brazilian people are highly active on social media
platforms.
Legal Environment: Brazil operates under civil law. The legal system of the country does not require
businesses to have an employment contract. Writing a contract and signing it is a more common practice.
The government is very keen in promoting foreign investments. Foreign Investments in nuclear energy,
transport, security and postal services is prohibited.
Environmental Analysis: Brazil has a tropical climate due to its location and does not face extreme
weathers or natural disasters like hurricanes. Brazil is ecologically diverse and has tons of natural
resources. Despite having strict environmental laws, the country is facing environmental problems like
deforestation, wildlife smuggling, land erosion, oil spill and pollution.
CAGE Analysis
Cultural Distance: There is a significant cultural distance between both countries. There is a high level
of individualism in US and a low power distance. While Brazil is a hierarchical country with low level of
individualism. One trait that is common in both countries that can help a business is a strong sense of
indulgence. Both countries are racially and ethnically diverse in their own ways and the major difference
is the Language Barrier.
Administrative Distance: The US comes from British Colony and this is reflected in their political and
legal policies. Brazil has inherited its legal system and language from Portugal. Brazil’s political
environment is unstable due to corruption scandals. There is a difference of currencies and while both
countries don’t have same trade agreement but they often collaborate with one another on different
projects like recently they did on climate change.
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Expansion of Disneyland Park to Brazil
Geographic Distance: Both countries lie in different time zones and have a distance of 7301km from
each other. Both countries have more populated cities on the coastal areas and less population in the
center. The climate in Brazil is tropical. The climate in US is very diverse but unlike Brazil US faces
rough winters.
Economical Distance: The GDP of US is considerably higher than Brazil and inflation is also lower is
US. The currency of Brazil (Real) is lower than the US dollar and the infrastructure of Brazil is also not
on par with the US.
Hofstede’s Analysis
Traits Analysis
Individualistic/Collectivistic • This country people from birth onwards are integrated
into strong, cohesive groups which continues protecting
its members in exchange for loyalty.
• In business it is important to build up trustworthy and
long lasting relationships
Masculine / Feminine • Brazil has an intermediate score of 49 in this trait
meaning that it has both masculine traits like competition
achievement, success and also the feminine traits like
caring for others and quality of life.
Uncertainty Avoidance • These societies show a strong need for rules and
elaborate legal systems in order to structure life.
• The individual’s need to obey these laws, however, is
weak. If rules however cannot be kept, additional rules
are dictated.
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Expansion of Disneyland Park to Brazil
Power Distance • Brazil reflects a society that believes hierarchy should be
respected and inequalities amongst people are
acceptable.
• The different distribution of power justifies the fact that
power holders have more benefits than the less powerful
in society.
Time Perspective • Brazil has intermediate score of 44 which means that
past traditions and future endeavors are given almost
equivalent values in the country.
Indulgence / Restraint • It as an Indulgent society. People in societies classified
by a high score in Indulgence generally exhibit a
willingness to realize their impulses and desires with
regard to enjoying life and having fun.
Strength and Weakness of the Theme Park Industry (SWOT)
Brazil has good relations with United States and therefore the American Culture and Products can be
easily accepted in the country. As Brazil is looking for macroeconomic stability so Disney can really
benefit from the economic potential that this country has to offer. The legal conditions will also be in the
favor as Brazil is looking to cultivate a healthy relationship with US. A family oriented culture exists in
the country so the idea of establishing a park of this scale is really feasible because the indulgence of such
society will certainly increase the chances of success. Although the political and economic instability are
a little alarming in the country right now but the construction of park could prove as a great opportunity
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Expansion of Disneyland Park to Brazil
by creating jobs, increasing tourism and infrastructure development. The boost in the economy will
certainly have a positive impact in decreasing the poverty rate in the country.
The main weaknesses include the political and economic instability in the country. There has been a lot of
recent corruption scandals associated with the country. Infrastructure in the country is not its strong suit
and the transportation facilities are not up to the mark which is important factor for the Disneyland Theme
Park. The high poverty rate and safety index are also the hurdles which the country is facing in terms of
Business expansion of foreign companies. These type of problems can pose a threat to the ease of
International companies looking for business. Other than that, the theme park industry will also have to
compete with the beautiful beaches and tourist destinations in the country.
Current Analysis of Market Competitors
If we consider the unique experience given by Disneyland, no other park even comes close in terms of
innovation and magnitude. Although the theme park industry in brazil is expanding due to family oriented
society but there are only two major theme parks in the country that can compete with Disneyland.
Hopi Hari is the largest park in the country and the sixth largest in the world. It opened in 1991 and is
located in Penha, Santa Catarina. Due to the close proximity of the park with beaches and major cities, the
business in the park is booming and it is attractive more and more tourists every year. The park offers
nine different themes all in their specific assigned areas in the extensive piece of land. The park has a
contract with Universal Studios and DreamWorks Animation to use their film characters and themes as
tourist attraction.
Hopi Hari is the largest park in the country and is 70km from the State’s Capital. The park is themed as
the country and has its own president, language, culture and capital. Many agreements have been signed
with Warner Brothers Company of America to showcase their intellectual property in the park like Justice
League and Looney Tunes Characters. This will certainly increase attendance in the park due to
popularity of the characters among the children as well as teenagers.
Both parks offer wide variety of entertainment and the common ground that both parks share with Disney
land is the use of US culture in them in the form of film characters. These parks also give the benefit of
payment in installments and also give the students special discounts so that they can afford to come in the
parks. Location of these parks is also a plus point as both are located in areas in close proximity with big
cities and a wider audience. These are a few challenges that Disneyland will have to face in the
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Expansion of Disneyland Park to Brazil
competition. Disneyland will have to drive innovation and creativity in order to gain a good position in
the park.
Location
During our search for an appropriate location, we followed a similar criteria used on the existing
Disneyland parks. The criteria used were a location with high tourism traffic, in close proximity and with
easy access to a major city/metropolitan area. As it is the case in the two parks in the US, the park will be
located in Rio de Janeiro, a state with high traffic of tourists. Moreover, as it is the case of all of Disney
parks, the new park will be located outside a major city, the capital, and with an easy access via highway
and possibly via railway. Another criterion used was the level of development and investment in
development of the city; as such projects can indirectly and directly support the future of the park
Rio de Juneiro is approximately 50 km from the capital. The exact location of the park is strategically
right across the highway so that there is an opportunity for infrastructure development to make a quicker
access to the park. As it is located outside the capital so the infamous traffic march will be much less.
Suppliers
Walt Disney Company will provide the suppliers needed for the building and maintenance of the park. All
the raw materials and the rides needed for the park will be imported from these suppliers. Highest quality
of products and services will be ensured because of Disney’s International Labor Standard Program (ILS).
This program makes sure to provide a safe and productive work environment and also improves the
working conditions in the facilities producing products under this brand. ILS program has a diverse team
of 120 dedicated professionals working from 12 countries across the world.
Marketing Strategy
The demographic of the park will be the young adults having age up to 30 and the children less having
age up to 10. Although Brazilians are the target audience but people from South America and Europe who
want to visit Brazil will also be included in the demographic. The expense of the park will target the
middle class and upper class of Brazil. These group constitute of 9.8 percent of the population of Brazil.
Product Strategy: The main aim of the strategy will be to provide products and services with better
quality than the competitors in the market to attract a wider audience. This can be done by differentiated
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Expansion of Disneyland Park to Brazil
prices of tickets for children, young adults and elders. The products and services should also be catered to
the foreign audience so that they may not feel alienated by the cultural setup of the park. The product
offered by the Park will include themed rides, occasional celebrity guest appearances, foods and drinks
that go with the theme of the park. Toys, Clothing and souvenirs will also be a big part of the revenue.
Different programs, concerts, live shows and parades will be arranged to keep the show interesting.
Celebrations will be arranged according to specific occasions like Birthdays and other Festivals.
Pricing Strategy: The prices of Disneyland has always been higher as compared to other amusement
parks due to the immersive and unique experience it provides. This would be no different as people will
have to pay a little higher price for a better experience. But ticket system of Disneyland will vary with
age. Children under the age of 4 will not be required to have a ticket to enter Disneyland. The prices may
also vary on the basis of seasonality in order to earn higher margins in peak seasons like Christmas.
The pricing strategy that might be adopted after thorough analysis in the future is given as follows.
Age Demographic Regular Season Peak Season
Kids (4-9) R$100 R$120
Adults R$140 R$160
Seniors R$90 R$95
Annual Pass R$600
Discounts Offered
Children under the age of 4 will have free admission
Students will be offered 20 percent discount
Groups of more than 5 adults will be offered 25 percent discount
Marketing and Sales Budget
In 2015, the marketing and sales budget of Disneyland Paris was 131 million Euros but for Brazil the
Budget will be 200 million Euros. The hike in the budget is justifies keeping in mind the inflation and
considering that it is a new business and the population of Brazil is considerably larger. So a high budget
will make sure that the services are in high demand after a noteworthy performance.
Communication Policy
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Expansion of Disneyland Park to Brazil
Disneyland’s communication policy is an important component that creates brand awareness among both
existing and potential customers. In order to increase this brand awareness, the communication budget
will be distributed among very diverse communication campaigns. The policy includes mass marketing in
TV campaigns, emailing campaigns, and newspapers and magazines for the local customers. Online
advertising is also a part of this policy where the international customers or tourists will be targeted. Mass
marketing through ads will be very important as survey shows that 73 percent population watches TV
daily.
Placement Strategy
Digital marketing should be done by both online and offline channel. This would make it easier for the
people who do not have internet access. There are millions of internet users in Brazil which according to
internet stats are a little over 60 percent. Tourists may want to book the tickets in advance so easily
accessible online portals will be made that would be displayed on websites with the most user friendly
interface. On the other hand the offline distribution will be done by travel agents and the company’s
helplines and different mobile codes.
Finance Analysis
Keeping in view the previous business venture of Walt Disney Company in the Parks Industry, I have
analyzed that this subsidiary will require investment of 1 Billion Investment out of which 30 percent will
be taken from Walt Disney Company, 45 percent from public shares by Initial Public Offering (IPO) and
the remaining 25 percent will be taken in the form of loan from the Brazilian Development Bank. The 30
percent Equity from the Walt Disney Company gives it the management Control and IPO will leverage
the rest of the money.
Conclusion
The expansion of this venture to Brazil is a risky business however this may open doors for an unknown
territories that the company have yet to explore. Considering the social dynamic of Brazil this will prove
fruitful as the people have family oriented minds and the motto of Disney has always been about Family.
I also reflected upon the idea that how the emerging countries have great potential for global expansion
and might be the pinnacle of new business ventures. These countries are the solution to diversify risks.
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Expansion of Disneyland Park to Brazil
The emerging countries will also benefit from the boost in their economy as a result of such business risks
given that the business risk turns into a success.
References
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Expansion of Disneyland Park to Brazil
Hill, C. W. (2000). International Business, Competing in the Global Marketplace. In C. W. Hill,
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Hong Kong Disneyland. (2016). Corporate Information. Retrieved June 1, 2016, from Hong Kong
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Peck, H., Christopher, M., Clark, M., & Payne, A. (2011). Euro Disney. In H. Peck, M. Christopher,
M. Clark, & A. Payne, Relationship Marketing: Strategy and Implementation (p. 359). New York:
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Ira Kaufman and Chris Horton (2015) Digital Marketing: Integrating Strategy and Tactics with
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4/5, 2009
