In other words, Ownership advantage relating to the possession and exploitation of monopoly power,which undoubtedly created an entry barrier. B)resource&capability Pixar Animation Studios”a subsidiary of The Walt Disney Company, is an American computer animation film studio based in California. The studio is best known for its CGI(Computer Graphics Interface)-animated feature films. Pixar has produced thirteen feature films, beginning with Toy Story (1995). It was followed by A Bugs Life (1998), Toy Story 2(1999), Monsters. Inc. 2001), FindingNemo (2003), The Incredibles (2004), Cars(2006), Ratatouille (2007), WALL-E(2008), Up (2009), Toy Story 3 (2010), Cars 2 (2011), and Brave (2012). Twelve of the films have received both critical and financial success. The sudio has earned 27 Academy Award,seven Golden Globe Awards, and eleven Grammy Awards,among many other awards and acknowledgments. In other words,ownership advantage relating to the possession of scarce,unique and sustainable resources and capabilities, which helped Disney to attain market power and cost advantage.
One of the major risks of joint ventures is the probability of a partner stealing the others capabilities in order to later compete on its own. Nonetheless, Disneys resources and capabilities are so rare and inimitable that this risk should not be reason enough for considering other options. In other words, technology risk is almost non-existent for Disney, since other companies might copy the rides, but they will never be able to copy the Disney experience, which is attributed to its resource;amp; capability. 2,The human resource is another key ownership advantage of Disney. ecruiting the right and instilling in them Disney culture ”an essential part of building a unified workforce. we hire for attitude, not aptitude. Disney recruits, selects, and trains everyone who works with the company in the same way”whether cast members or third-party employees. Disney uses its unique corporate culture to unite all workers in a common goal: to help the guest. Competencies of managers Disney cast members arent just hired for a job; they play a role in the show. Every aspect of the casting (hiring) process is a presentation of the Disney culture.
In essence, Disney begins the training process even before a new cast member is hired. For example,the whimsy of the casting building is designed to ease the minds of anxious applicants, while communicating the rich Disney heritage. Early in the process, candidates can view a film depicting what it is like to work at Disney. The film also communicates conditions of employment. After viewing it, a small percentage of candidates self-select out of the process. This is a good thing, since those candidates might not be right fit for the culture”and Disney might not be right-fit for them.
This process not only saves time and money, but it leaves the applicants feeling good about themselves and Disney company. During the interview process, casting professionals will base the hiring decision on work experience, personality and educational background. By the time they go through their interview, candidates will have a basic picture of the Disneys culture and expectations. Disney shows their employees how their efforts affect the overall resident experience”even if they dont interact with residents directly.
When the staff sees the big picture, they also see how vital their roles are in the business. Teaching employees how they fit into Disneys overall operation and demonstrating how their role contributes to Disney facilitys overarching goal breeds unity and solidifies the corporate culture. At Walt Disney World® Resort alone, there are over 2,000 job classifications, but everyone understands the goal and operates on the same page. Disney trains every cast member in the same way, no matter what job, and goes to great lengths to ensure that cast members understand the companys heritage and purpose.
This helps them feel connected to the company, and to their jobs. Disney has a Center for Excellence which is geared to help cast members succeed in their role of delivering exceptional quality service. In addition, Centers for Excellence serve as local learning sites that offer a variety of technical, job skill, and interpersonal training courses which cast members can take online free of charge. The end result is a team of cast members that is equally skilled and guest-focused.
Training is reinforced through ongoing efforts, such as mentoring, continuing education, and leadership training, contributing greatly to a culture of excellence. Location advantage As global as possible,as local as necessary. First,In the case of Disney, it is a horizontal FDI, thus it may be profitable for Disney to be close to their consumers. The reasons are as follows: the existence of trade barriers in the form of tariff quotas, transport costs etc. on-site provision of the services is an inherent part of the Disney business (e. g. recreation facilities)
Second, production costs is lower in Hong Kong, the reasons are as follows: lower wages in developing countries(In Hong Kong Disneyland case, there is cheap labor force flow from Eastern coastal provinces) better infrastructure and close ties to external input suppliers from mainland China. Third, demand related variables (market potential) China has the worlds largest population and one of the fastest growing economies, which makes it an extremely attractive market for Disney. Disneys animated characters are popular throughout the country; Mickey Mouse Magazine is the number one childrens magazine in China.
According to the statistic in Chinese government, The population under 15 years old child is around 221,640,000 in 2011, which means there is a large market potential in China. (In 2005, its a major milestone in their approach to China, with the successful grand opening of Hong Kong Disneyland. This phenomenal new theme park introduces Disney to a broad new audience. ) In theory Disney should be capable of running the park by itself, but the power and influence of the Chinese government is so high that a joint venture seems to be the less risky option .
Asia is a complicated market and it usually pays to not only have the government on your side, but to have it as a major investor. It also benefits the venture to have a local partner with deep knowledge of traditions and customs. Thus, from an institutional and cultural point of view the selection of a joint venture was justified. Internalization advantage For Disney, In-house production is more profitable than outsourcing, licensing, etc. The reasons are as follows: Contractual imperfections induce Disney to exploit its ownership advantage internally rather than licensing its product/process to a third party. ”To capture coordinating