Where the Second Disney Should Be Built in Asia, Shanghai or Hong Kong?

Where the second Disney should be built in Asia, Shanghai or Hong Kong?

Zheng Zhu

FIN689

Prof: Raymond Lopez

03/23/2011

Introduction

With the successful experience in aboard markets, such as in Paris and Tokyo, the Walt Disney Company is thinking about to develop a new Disney Theme Park in Asia, the big market with huge revenue growth potential. After comparing with geographic, political, climate, operating, financial strategies and structures factors, Shanghai and Hong Kong qualify to the last round of consideration by the management of the Walt Disney Company. In order to make the final decision of the site of the next Disney theme park, the management team of Disney is going to do separate SWOT analysis and NPV analysis on Shanghai and Hong Kong. The site with larger NPV to Walt Disney Company would be the final winner of this competition.

Background

Shanghai is the largest city in the world. It covers an area of approximately 2500 square miles and has a population of over 16 million. It occupies a central location along China's coastline. Shanghai has the most developed transportation system in China. Three railway lines come into the area from the South, West, and North. Shanghai is the largest and busiest seaport on the West Coast of the Pacific Ocean. In 2000, its second international airport will be opened, located in the Pudong New Area. Within 200 miles of the city live 250 million people, the most populous region in China. Shanghai is also the focal point of China's national development policies and is designated as the engine to drive economic development in the Yangtze River region. It has a well-established, diversified manufacturing base of heavy and light industries. It is projected that Shanghai will be a Far Eastern international financial, business, and trading center within the next 10 years.

Hong Kong is a bustling center of economic activity, with one of the world's highest population densities. It is located near the mouth of the Pearl River, about 90 miles southeast of Canton, China. It ranks among the major ports in Asia, and as a center of trade, commerce, manufacturing, and tourism. Hong Kong covers a total area of 1,126 square miles, but only 404 square miles of the total is land. It had a population of almost 7 million inhabitants in late 1998. Most of Hong Kong's economic activity takes place in the urban areas of Victoria and Kowloon, where a majority of the people live. Hong Kong's transportation system revolves around the airplane. A new, world class, international airport, recently completed on landfill from Landau Island, can handle in excess of 30 million passengers per year