Essay On Analyzing Intellectual Capital And Management Of Disneyland Hong Kong

External, Internal, and Strategic Environment of Disneyland Hong Kong

Questions:

1. Conduct a web research to identify a real company in public domain (i.e. you are required to cite the source of reference). Conduct an analysis of the company’s external, internal and strategic environment and hence produce an Intellectual Capital (IC) model for the company in terms of the human capital, structural capital and relational capital. Discuss ONE example of the IC value chain in terms of people, process, technology and content. Highlight and briefly explain how the associated value creation and value extraction activities are articulating to convert IC to value.

2. Based on a real company you identified in public domain (i.e. you are required to cite the source of reference). Apply the Comprehensive Intellectual Capital Management (CICM) model for analyzing the status of the implementation of Intellectual Capital management of the company.

Disneyland Hong Kong is a project that Hong Kong government undertook in collaboration with Walt Disney in 1997. It took five more years to finally approve Walt Disney company to start its project in 2002 (West, 2016).

External environment: The commencement of Disneyland project had to account for several external factors. This project was undertaken by the Hong Kong Special Administrative Region (HKSAR). The project was approved by the government at Penny’s Bay, in Lantau island, located a little farther from the main city. The theme park was mainly built for the ‘family oriented’ tourists from mainland China, Taiwan and South East Asian countries. 29% of the incoming tourists were from China in 1999. People of China face a stringent travel policies, it is not feasible for them to travel to USA or Europe to experience theme park environment. Hong Kong is a tourist hotspot, hence, the economy is mainly dependent on the shopping destinations and tourism agencies. The theme park is technologically advanced with big rides and luxurious ambiences. Many places in Hong Kong had to go through urban development project. Disneyland project greatly affected the ecosystems of the adjacent islands (Woon & Lo, 2016).

Internal environment: Walt Disney had already opened a theme park in Europe to expand its business. But the Disney theme park located just outside Paris did not take into account several managerial issues as well as consumer preferences. Walt Disney found Chinese population very lucrative and wanted to open a theme park somewhere around China. After two American parks and one Japanese park, they wanted to avail of the Chinese market which was previously unexplored. Disneyland, after initial talks with Hong Kong government, eliminated any other possibility of majority ownership so that they could invest on management and fees of franchise from their first-cut profits. Finally, Walt Disney had a management team of long experience of dealing with almost all the large and developed markets around the world. With the unparalleled resources and capital they already had, they could easily conduct proper market research before diving into the market in Hong Kong.

Strategic environment: Pricing is a big issue when it concerned Asian population. They set the price as HK$640 for visitors but it was still beyond the reach of average visitors. The only rival to Disneyland was Ocean Park. Ocean park was an old entertainment park, though they had established themselves as an all rounder in Hong Kong with all sorts of rides (Higgins & Huque, 2015). The pricing was also quite affordable. The only way it could not compete Disneyland was accommodation and dining, in both of which Disneyland was much superior.

• It addresses unemployment problems employing Asian people.
• They have a Disney university to train their employees.
• Management board consisting of 5 people from HKSAR, and 4 people from TWDC.
• Stringent energy saving policies.
• Legal team is strictly focused on safety issues.
• Vivienne Tam, a renowned Chinese designer designed the known Disney characters in Chinese attire.

• Special service is also arranged for disabled customers.
• Not just through media channel promotions, but customer feedbacks also increases company revenues.
• Special events like Chinese new year and other local cultural events are organized to incorporate the Chinese customers.
• Ngong Pong 360 is a local attraction with which Disneyland jointly promotes.
• There is also an ambassador of Disneyland resort in Hong Kong.
• They have a policy of taking return of their products within 30 days since purchase if the customer is not satisfied.
• They deliver the product purchased to the customers living in Disneyland hotels.
• Hiring entertainers to entertain customers. This pertains to creative capital which is also intellectual in some sense (Business Analysis, 2018).

• Ride facilities.
• Newly expanded ‘Toy story land’ is the unique Asian inclusion, inaugurated in November 2011 (West, 2016).
• Unique Disney subway is built to ease transportation.

• Service is totally family-oriented.
• Planning for expanding the Hong Kong Disneyland project.
• Import some products from Tokyo Disneyland.
• Since 2011, night tickets or two-day tickets were introduced to give a fuller experience.

As a theme park of a big stature, Disneyland is aware of the importance of human capital and intellectual capital management in sustaining the growth of their business. Comprehensive Intellectual Capital Management model enables any company to delve into the status of intellectual capital and how that helps them strategize in different situations so that they can garner competitive advantage and generate revenue (Kianto, Andreeva & Pavlov, 2013).

There are chiefly three stages in which CICM model is described:

1. i) Knowledge management that enables creation of potential value through know-how and in-depth knowledge which is acquired through experience. Knowledge and brainpower that need to be employed to create values for real (Demartini & Paoloni, 2013).
2. ii) Innovation management which enables extraction of perceived value through product innovation and product differentiation. This includes realization of perceived value extracting activities.

Intellectual property management that maximize market value. This needs proper maintenance of intellectual property like trademark services and trading secrets. Copyright is also important factor for maximizing brand value.

There are mainly three kinds of capital at work in a company, namely, human capital, relational capital and structural capital.

These three kinds of capital play an important role in the formation of intellectual capital in each stage of CICM. Company assesses the rules, systems, managing techniques and strategies and value-creating strategies to conduct a thorough strategic plan of CICM.

(Please find the CICM in the page below.)

References:

Ahn, M. J., & McKercher, B. (2015). The effect of cultural distance on tourism: A study of international visitors to Hong Kong. Asia Pacific Journal of Tourism Research, 20(1), 94-113.

Demartini, P., & Paoloni, P. (2013). Implementing an intellectual capital framework in practice. Journal of Intellectual Capital, 14(1), 69-83.

Headlines (2010) The loss profit of Hong Kong Disneyland 2009. Available at https://news.stheadline.com/instantnews/news_content/201101/18/20110118a110747.html?cat=a (Retrieved 24^th February, 2018).

Higgins, C. D., & Huque, A. S. (2015). Public Money and Mickey Mouse: Evaluating performance and accountability in the Hong Kong Disneyland joint venture public–private partnership. Public Management Review, 17(8), 1103-1123.

Hong Kong Disneyland (2011) Press room. Available at https://www.hongkongdisneyland.com/ (Retrieved 24^th February, 2018).

Kianto, A., Andreeva, T., & Pavlov, Y. (2013). The impact of intellectual capital management on company competitiveness and financial performance. Knowledge Management Research & Practice, 11(2), 112-122.

West, M. I. (Ed.). (2016). Disneyland and culture: Essays on the parks and their influence. McFarland.

Woon, K. S., & Lo, I. M. (2016). An integrated life cycle costing and human health impact analysis of municipal solid waste management options in Hong Kong using modified eco-efficiency indicator. Resources, Conservation and Recycling, 107, 104-114.