International Business Student Collaboration Project

International Business Student Collaboration Project

Team # 131

Client (Company): Walt Disney Company

Product/Service: Disney Family Fitness Center

Team members:

Name	Country	Did Not Participate (please make a note if this teammate did not contribute during the project, has not replied to emails, etc.)
Sharon Grefiel	USA
Seo-Young Byun	Korea
Daniel Mauricio Triana Sanchez	Colombia	Stopped replying to e-mails after we chose tasks; did not submit work for proposal
Selby Gokiyeva	UAE
Michael Untono	Indonesia	Stopped replying to e-mails; did not help with proposal
César Rico Gonzalo	Spain
Caitlyn Ybarra	Spain
Liviu Marius	Romania
Ilie Andreea Mihaela	Romania	Never replied to any e-mails

 

Table of Contents

Executive Summary………………………………………………………………3

General Company Description…………………………………………………..4

1. Company Overview……………………………………..…………4
2. Mission and Vision…………………………………………..…….4
3. Strengths and Core Competencies……………………………..…..4

Services Overview………………………………………………………………...5

1. Services……………………………………………….……………5
2. Benefits and Features……………………………………..………..6
3. Why People Need this Service?........................................................6

Target Market……………………………………………………………....…….8

1. Consumer Segment………………………………………………....8
2. Target Market Strategy………………………………………….….8

Service Location………………………………………………………………...…9

1. Background…………………………………………………………9
2. Location…………………………………………………………….9

Entry Mode…………………………………………….………….………………11

1. Background……………………………………………...…………11
2. Direct Investment…………………………………………………..11
3. Direct Investment Advantages……………………………………..12
4. Direct Investment in Texas……………………………..………….12

Staffing…………………………………………………………………………….15

1. Staffing Plan……………………………………………………….15

Market Plan………………………………………………………………….……16

1. Environmental Variables…………………………………..………16
2. Market Analysis…………………………….………………….…..17
3. Market Strategy……………………………….………..…………..17
4. Market Strategy Analysis……………………………….……….…18
5. Marketing Mix……………………………………………..………20

Payment Arrangements…………………………………………………….…….22

1. Payment Arrangements………………………………….…………22
2. Payment Methods……………………………………….………….24

Capital……………………………………………………………………………..25

1. Initial Stage……………………………………...………………….25
2. Expansion Stage………………………………....………………….25

Challenges………………………………………………………………………….27

1. Likely Challenges…………………………………….…………….27
2. Solutions……………………………………………………………27

Executive Summary

 

The Walt Disney Company is a worldwide known family entertainment enterprise.  As a parent company, the Disney Family Fitness Center will provide top of the line fitness facility while maintaining the Disney image. The Disney Family Fitness Center will provide families with a fun way to workout. The target market for this facility will be middle and upper class families with children between the ages of 3 to 16. The facility will be located in San Antonio, Texas. The motivation for choosing this city is documented in section 4.2. The Walt Disney Company will have the most success joining a new business market by taking a direct investment entry. The staff for this new facility will bring new faces as well as old employees who have worked for Walt Disney Company. The marketing strategy for the new facility will be a differentiation strategy because no other businesses offer the same services. As well there are plenty of different payment methods for customers. The Disney Family Fitness Center is unique and fun. Walt Disney Company would be smart to take this chance to use the Company’s own capital and open a new business in San Antonio, Texas, that will be sure to thrive with success.

 

 

 

General Company Description

1. Company Overview:

The Walt Disney Company is a worldwide known family entertainment and broadcasting enterprise with four business sections: consumer products, studio entertainment, parks and resorts and media network. Walt and Roy Disney founded the Walt Disney Company in 1923. The Walt Disney Company’s headquarters can be found in Burbank, California. The Walt Disney Company provides love and happiness to families all over the world. Opening a Disney Family Fitness Center, means the Walt Disney Company could provide families with a fun way to stay healthy (The Walt Disney Company, 2011).

2. Mission and Vision:

Mission: “The Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. The company's primary financial goals are to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value.” (Walt Disney Company, 2011)

Vision: “We seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.” The company wants to make people happy (Walt Disney Company, 2011).

3. Strengths and Core Competencies:

• Very aware of the safety of products and facilities
• All employees are trained in the areas of health, safety and environmental issues
• Takes pride in bringing happiness to families in as many ways as possible

Services Overview

1. Services:

Disney Family Fitness Center geared towards the needs of a family who wants to stay fit and healthy.

The center will provide health related services:

• Family Activities

• Basketball

• Soccer
• Softball
• Tennis
• Volleyball
• Racquet Ball
• Swimming

• Children’s Activities (ages 2-5)

• Swimming

• Soccer
• T-ball

• Children’s Activities (ages 6-12)

• Swimming

• Soccer
• Softball
• Tennis
• Basketball

• For parents with younger children (1 month-24 months), a daycare center is available

• Parents may leave their children for up to 3 hours

• Children will have an indoor and outdoor playground
• Various age appropriate activities will be available for the children
• Each day there will be a new Disney character to play with them

2. Benefits and Features:

• State of the art facility with latest equipment from quality manufacturers

• Children ages 13-17 must be accompanied by their parent(s) in the workout room

• Multiple television screens will be available for viewing while exercising

• There will be 2 locker rooms equipped with showers and changing rooms:

• Men

• Women

• Disney Environment

• Each sport activity would be accompanied with a Disney character

• Every two hours several Disney characters will walk around the Fitness Center and interact with all the guests
• The interior and exterior of the fitness center will be decorated Disney style

• For families who are just visiting the city of San Antonio, Texas, they can pay for a weekend or week membership so they can experience the Disney Family Fitness Center

3. Why people need this service?

In the United States, obesity is a major issue. About one-third of U.S. adults are obese. Approximately 17% or 12.5 million children and adolescents aged 2-19 years are obese (National Health and Examination Survey, 2008). Being overweight and obese result from an energy imbalance. This involves eating too many calories and not getting enough physical activity. Behavior and environment play a large role causing people to be overweight and obese. These are the greatest areas of prevention and treatment actions (U.S. Surgeon General’s Call to Action to Prevent and Decrease Overweight and Obesity, 2001).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Target Market

1. Consumer Segment:

Most Americans consider themselves middle class. A 2005 New York Times survey found that only 1% of respondents considered themselves to be ‘upper class’ and only 7% considered themselves part of the ‘lower class.’ The remainder said that they were either ‘middle class’ or ‘working class’ (Cashell, 2008). Due to this survey, our team will target middle class families with children between the ages of 3 to 16; especially in San Antonio, Texas because of the high obesity rate. According to the 2010 Census Bureau, the total population for Texas is 25,145,561 persons, meaning that San Antonio will be a great location to start Disney’s new business.

2. Target Market Strategy:

The strategy our team has chosen is the differentiation strategy. The Disney Family Fitness Center provides a service that no other gym in San Antonio provides. We put great emphasis on teaching a healthy lifestyle to our customers and working out in a fun way. We want entire families to become fit while having fun. Other competitors in San Antonio: Spectrum Clubs, 24 Hour Gym, Planet Fitness Gym, Bally Total Fitness, Joe’s Gym, Life Time Fitness, and Custom Fitness Center. These competitors offer different deals and discounts, but none offer the entire package that the Disney Family Fitness Center has to offer.

 

 

 

Service Location

1. Background:

A research conducted by Centers for Disease Control and Prevention (CDC) reveals an ever-increasing rate of obesity among United States citizens. In the last twenty years (1990-2010), the percentage of obese United States adults increased threefold. At the beginning of the 90’s some of the states had less than 10% obese adults, whereas in 2010 most of the states are now dealing with rates of obese adults higher than 30%. Studies show that obesity is a national problem increasing equally throughout the United States. However, it seems that the Southeastern part of the country is most affected. For example, the state with the highest obesity rate in 2010 was Mississippi (34%).

2. Location:

Our suggestion for the Disney Family Fitness Center is in San Antonio, Texas for a number of reasons:

• It is easily accessible from all over the United States
• San Antonio has 1.33 million residents and a metropolitan area of 2.2 million people (U.S. Census Bureau)
• According to CNN, San Antonio is the fourth fastest growing city in the United States (Christie Les, 2007)
• Texas is one of the cheapest states in terms of land price (City of San Antonio)
• Texas has an obesity rate of 31%
• San Antonio has mild weather in the winter and doesn’t get too hot in the summer. According to National Oceanic and Atmospheric Administration (NOAA), the average high during summer is 97 degrees Fahrenheit, which is 34 degrees Celsius
• San Antonio has world class hotels and restaurants along the Riverwalk and plenty of tourist attractions such as, Fiesta Texas and Sea World Texas

 

 

 

 

 

 

 

 

 

 

 

 

 

Entry Mode

1. Background:

Today the globalization of the world’s economy pushes companies to enter foreign markets. International markets introduce new opportunities for selling products and services, if a company decides to enter foreign markets; it has to know that it requires purposeful planning and practical reasoning of the chosen direction. The company is required to make decisions about entering foreign markets in the form of export, import or other foreign economic activity, enterprise management of the firm must consciously go for extension of its function and carry out serious preparatory analytical work on the feasibility and potential effectiveness of economic activity in foreign markets (Foreign Market Entry Modes, 2010).

Despite all the difficulties involved in entering foreign markets, development of an international strategy for output of products to external markets is an essential to the success of modern businesses in a tough international competition.

When choosing an entry strategy for a foreign market the company has four options: exporting, licensing, direct investment, and/or franchising. Firms choose one option or a combination, in order to achieve their goals and to adapt to current market conditions.

2. Direct Investment:

The Direct Investment strategy was chosen for the Disney Family Fitness Center. Foreign direct investment provides the highest level of control that the company may have when entering a foreign market. There are two methods of direct investment:

• First, the company can create a new company on a foreign market. With this method the company has to create new contacts and sales channels, select the location for the new company, hire employees, and acquire equipment.
• Second, the company may acquire an existing foreign company. In this case, the company only has to make changes in the organizational structure of the foreign company (Foreign Market Entry Modes, 2010).

3. Direct Investment Advantages:

Direct Investments have a number of advantages over other methods of entering foreign markets:

• The company can completely determine marketing and sale policies. This may be especially important for large enterprises such as Disney who wants to pursue a common policy in all its markets.
• The company would also have a direct contact with customers in the foreign market and therefore may better meet their requirements. This will definitely increase the company’s competitiveness.
• Another benefit is that Disney would create new jobs, as a result promoting a positive image of the company in its host country.
• Maintaining good relations with government, consumers, local suppliers and distributors, the company tailors its products to the needs of this market (Foreign Market Entry Modes, 2010).

4. Direct Investment to Texas

Texas is one of the leading global locations for foreign direct investment (FDI). The bright state of the economy, perfect conditions for business, centrally located and comparatively low production costs lured foreign multinationals corporations. Texas also has a diversified manufacturing base and technological challenges (Foreign Investment in Texas, 2011).

• Texas is the top destination city for inter-state investment in 2010. An interstate of projects in Texas rose by 33 percent, with 227 projects located in Texas
• Texas’ two cities - Houston and Austin, where Disney is planning to launch its Family Fitness Center – were on FDI magazine’s "Top 10 Overall U.S. cities of the future
• Texas is the second place for jobs available at U.S subsidiaries of international firms. Subsidiaries play a vital role in the economy of Texas by providing 439,400 jobs; an increasing of 24.5 percent over the past six years
• The latest publicity available date states that, Texas led the country with more than $119.25 billion FDI assets in 2007. The majority FDI assets of the state are headed by Europe, Britain, Germany and France (Texas Foreign Direct Investment, 2010).