2. Keith Bergh Megan Carolin Chris Ramento 04.24.08BA 474

4. Country Overview 1.2 billion people Growth rate of 1.3% 15% of world’s population Mumbai – Largest city – 18M people Service Industry – 55% of GDP Large migration to city – 70% rural now

5. Economic Overview Growth rate – 8.5% Household income expected to double over the next two decades Significant growth in middle class 583M by 2025 Disposable Income rising Aggregate consumption 13x by 2025 Discretionary Spending Education & Recreation to grow 11% annually From US$19M today to US$152 in 2025

6. Cultural Overview Religion, Language – Hindu Food Choices: No Beef or Pork Family Values: Stressed Joint Families (Aunts, Uncles, Grandparents, etc. … live together More Independent Youth Today

7. Legal & Political Overview India has quasi-federal form and bicameral parliament system Less government control Environmental Regulations (Companies Act of 1956) Positive: The government would want Disney to come because of its popularity and benefits the company provides to the public and country

9. Company Strengths/Weaknesses 11 Theme Parks on 3 Continents – Over 50 Years of Experience Multi-Industry, International Company, Leader in many fields – Lots of resources Adapting to the Local Culture while still delivering an authentic Disney experience

10. Industry Factors Emerging theme park industry experiencing explosive growth Expected to grow by 6% each year until 2010 Indian Association of Amusement Park & Industries (IAAPI) No existing parks comparable to a Disney Resort

11. Distribution Issues Location is outside the city (Trombay) Advertisements in markets and transportation systems Transportation system adequate but crowded Ideas: Trains from the city to the park Trains from the airport directly to the park Bus system specifically from the city to the park

12. Consumer Issues Purchasing of Tickets Might be difficult Souvenirs Items must be somewhat inexpensive so families could purchase them Not much discretionary income

14. Target Market Indian Middle Class (Strivers) Earn.5-1 Million Rupees ($12.5K - $25K) Families (Joint Families) With young kids Family size close to 4.81 Youth (Consumer markets will shift because of mobile phones) Are starting to be more Independent in India Vacationers in the region Get middle to upper class families from neighboring countries and outside the region to come on family vacation

15. Relevant Company Info. Began with a cartoon studio and full-length films Disneyland Anaheim opened in 1955 International Expansion began with Tokyo Disneyland in 1983 Mission: “Dreams Come True” Jay Rasulo Chairman of Walt Disney Parks & Resorts

16. Strategic Goals 1.Create a park that is consistent with the Disney brand but also adapts to the local culture 2.Meet park attendance, ticket, and merchandise sales goals in order to make a profit on the incoming funds to the park over the daily operating costs. 3.Use the area’s resources in order to create an efficient supply chain and lower distribution costs, as well as boost the local economy. 4.Promote the Disney brand through characters and licensing, especially making use of mobile phone and Internet advertising, in order to increase favorability of the brand and the desire to attend Disneyland India. 5.Maximize leverage of the target market through continuous feedback from this demographic.

17. Product Strategy Create an authentic Disney experience while adapting to the local culture Adaptation through food, costumes, attractions, & entertainment Follow up with focus groups and surveys to get feedback on success

18. Pricing Strategy A ticket to a Disney park is a premium (price skimming), one-of-a-kind experience Consistent with other Disney Parks

19. Pricing Strategy (Cont.) Analyze park attendance figures & projections – adjust accordingly Use food & merchandise pricing as a way to increase profit without changing ticket prices Children (3-11) = 2000INR / $50 Adults (12-65) = 2400INR / $60 Seniors (65+) = 2200INR / $55 Children (3-11) = 2000INR / $50 Adults (12-65) = 2400INR / $60 Seniors (65+) = 2200INR / $55

20. Promotional Strategy GOALS Raise awareness of Disney India Not be viewed as westernized brand but international STRATEGY Slow implementation (service company) Plan events to present the Disneyland experience Adapt Advertisement to satisfy cultural needs

21. Promotional Action Steps Action:WhenBy WhoBudgetKPI’s  Advertisements through phones and visuals Pre-OpeningMarketing Dept.$15 Million (USD) Interests in festivals increasing  Advertisements specifically for festivals Pre-OpeningMarketing and Special Events$10 Million (USD) Reservations for admission to festivals  Festivals take place Pre-OpeningSpecial Events$20 Million (USD) High Attendance for festivals/popularity  Advertisements for Park Pre-OpeningMarketing Department/Park Management $15 Million (USD) Indians inquire more interests in park  Promotions to Park OpeningDisney Mumbai Customer Service and Park Growth $10 Million (USD) Discounts given and received through attendance.

22. Supply Chain Strategy GOALS A cost efficient strategy to provide merchandise, food, and materials for the attendees Produce own merchandise and materials Outsource for food product (local products and favorites) OVERALL Decrease holding costs, increase inventory turnover, decrease cost in operations, decrease handling costs, and make Disney more competitive as an amusement park

23. Supply Chain Action Steps Action:WhenBy WhoBudgetKPI’s Insourcing- Merchandise and Raw Materials Pre-Opening Strategic Sourcing and Procurement Organization $50 Million Decrease in logistical costs Outsourcing-Food Opening and Daily Operations of Park Department of Food and Drink $10 million Increase in sales for restaurants in parks

24. Distribution Issues GOALS Maximize coverage & outlets to keep ticket sales high Creative ways to draw customers to the park Expand coverage to neighboring countries Quick & easy database to maintain sales STRATEGIES Use Online ticket sales & other online sites Open up Disney retail stores in India and promote the park Open sales centers in large cities in region outside of India Effective management and updating of Database prevent overselling and keep customer satisfaction high

25. Expected Results Profits will take a while Park might have to make some adjustments/adaptations to the park because of cultural, language and legal differences ExpendituresCost (in millions of USD) Purchase of Property850 Research & Development12 Planning of Park10 Construction Costs of Park & Resorts880 Legal Costs14 Utilities11 Salaries & Wages Payable42 Transit Systems to Park23 Adjustments to Development8 Other Expenses150 Estimated Total Expenses2,000 Figure 2.1: Disneyland Estimated Costs of Development

26. Expected Results 30,000 occupancy rate average x 360 days per year = 10.8 million attendees per year $58 avg. ticket sale price x 10.8 million attendees = $626 million per year in ticket Revenue Year20122013201420152016201720182019 Debt $ 2,000 $ (1,474) $ (929) $ (363) Operating Costs $ 100 $ 103 $ 105 $ 108 $ 110 $ 113 $ 116 $ 119 Revenue $ 626 $ 648 $ 671 $ 694 $ 718 $ 743 $ 769 $ 796 Net Profit $ (1,474) $ (929) $ (363) $ 224 $ 608 $ 630 $ 653 $ 677 Figure 2.3: Disneyland India Financial Forecast (in Millions USD)