Tokyo Disney Case

* Cost cutting through partnership with Benoix and cost structure change to start a price war with FunTours.

Tokyo Disneyland (TDL) was the Walt Disney Company’s first attempt at planning and developing an international theme park. In the 1970’s after Walt Disney’s death, the Walt Disney Company was not doing well financially when the Oriental Land Company (OLC) approached the company about opening a theme park in Tokyo. The Oriental Land Company, according to Raz (1999), author of Riding the Black Ship: Japan and Tokyo Disneyland, is a partnership between two large firms in Japan, the Mitsui Real Estate Development and Keisei Electric Railway (p.4). The Walt Disney Company was hesitant to open a new theme park in its current financial state, but the OLC offered them a deal that was hard to resist. The Oriental Land Company would own and operate the Tokyo Disneyland while the Walt Disney Company would receive “10 percent of admissions fees and 5 percent of the revenues from food and souvenir sales” (Raz, 1999, p. 27). The Walt Disney Company also received licensing fees up to 20 million dollars for their characters, attractions, and more, as well as control over the design of the park and control of park operations (Raz, 1999, p. 27; Eisner & Schwartz, 1998, p.263). Although the deal seemed alluring at the time, the Walt Disney Company would soon come to regret the deal they made with the Oriental Land Company.

Thank you for providing me with the opportunity to evaluate Disney and their international expansion, in particular, Hong Kong Disneyland. Disney’s international expansion over the past decades has been a mixture of successes and failures. When expanding globally, a corporation has to take into account many factors and work around the cultural, economic, and social differences for every region. Unfortunately, sometimes it is very difficult to satisfy and/or recognize all these factors. In the case study provided, insight was given on the ups and downs Disney faced during their global expansion and the different approaches that were taken.

Discounted cash flow methods measure all the expected future cash inflows and outflows of a project as if they occurred at equal intervals over the life of the project.

Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.

In March 2015, Japan’s Financial Markets Agency for the first time in its history set out Corporate Governance Code and a year earlier Stewardship Code. Even though some efforts towards corporate governance and transparency have been made in Japan previously, specifically introduction of dual system in 2003, they did not gain popularity. Only 40 out of 3,000 firms adopted this system immediately rising to 112 five years later. However, these codes were necessary due to the pressure from foreigners investing and doing business in Japan, several scandals such as Olympus 2011-2012 accounting scandal and ineffective, high cash holdings of Japanese companies (Eberhart, 2012).

Since Japan’s exit from isolation and entrance into global, cross cultural exchange, many aspects of the Japanese culture have been shaped and changed from their original traditionalism. Despite Western influence, however, Japan has been able to maintain a sense of cultural identity through unique practices that are rooted in the original culture. A prime example of this autonomy can be found when observing Japanese business culture and ethics, especially when the United States is used as a cornerstone of comparison. In observing the modern business practices of both nations one is immediately drawn to the manner in which business is both discussed and

Genentech Roche 28 Corporate Governance in Three Economies: Germany, Japan, and the United States C441 10,12 1,3,11 N/A N/A 29 United Technologies Corporation: Running a Global Ethics and Compliance Program C447 11,12

Financial Analysis The sensitivity analysis on IRR provided by the case in Exhibit 9 is demonstrated in Table 3 in Appendix. With reference to the calculated WACC, 11.22%, most of the circumstances considered in the sensitivity analysis suggest the acceptance of the 7E7 project. However, if the air travel demand worsened and sold only 1500 in the first 20 years, the project will be abandoned even if there is a 5% premium in price. If the unit volume sold is equal to

* 1955 Disneyland opened, huge risk for the company paid off because of vision and commitment to excellence. It is a park for

There are several advantages with this method : like the ARR it is very simple to calculate and easy to understand concept reducing the evaluation to a simple number of years; it has the advantage of concentrating on cash flows, which are more objective than profit ; it can be very useful for managers to make quick evaluation of projects with small investment and also it can be significant for companies with liquidity problems ( limited cash flow) that need to recover their money as quickly as possible. In addition, it is useful as screening tool when evaluating proposal, if a project pass the initial payback, then it gets further detailed analysis that use time value of money and

In fully investigating all of our calculations we are fully invested in using the Net Present Value figures we calculated as a means of ranking the eight projects. In doing so we found reasons in which why the Net Present Value was our benchmark for ranking the projects and why we did not use the Payback Method. The Payback Method ignores the time value of money, requires and arbitrary cutoff point, ignores cash flows beyond the cutoff date, and is biased against long-term projects, such as research and development and new projects. When comparing the Average Accounting Return Method to the Net Present Value method we found that the Average Accounting Return Method is a worse option than using the Payback Method. The Average Accounting Return Method is not a true rate of return and the time value of money is ignored, it uses an arbitrary benchmark cutoff rate, and is based on accounting net income and book values, not cash flows and market values. Plain and simply put, the Net Present Value method is the best criterion to use when ranking these eight

For my final paper I chose to discuss The Walt Disney Company. Since the Company is so large and made up of four primary business segments, I decided to focus on one particular segment: Parks and Resorts. This segment is composed of the theme parks, cruise-line, and vacation club resorts.

Group 7 Archana Menon 2008 09 A Chandan Pansari 2008 12 A Ranjani Mani 2008 43 A Sumita Das 2008 55 A

Project appraisal techniques are used to evaluate possible investment opportunities and to determine which of these opportunities will generate the best return to the firm’s shareholders. Therefore, it is vital for the firm if they wish to continue receiving funds from shareholders to employ the best techniques available when analysing which investment opportunities will give the best return. There are two types of project appraisal techniques: non-discounted cash flows and discounted cash flows. The Net Present Value and internal rate of return, examples of discounted cash flows, are in use in many large corporations and regarded as more effective than the traditional techniques of payback and accounting rate of return. In this paper, I