The Cultural Environment

1
The Cultural Environment

• Case in Point Disney and Internationalization
• Model Recontextualization

2
David Lettermans Top Ten Rejected New Names for
Euro Disney
From the Home Office in Wahoo, Nebraska... 10.
Euro Disaster 9. El Biggo Mistake-o 8.
Never-Never-Profit Land 7. La Veal de Guys in
Big Smelly Costumes 6. Gumpworld 5.
Beaucoup de Crap Americain 4. Johnny Depp's
Hotel of Destruction 3. Boutros Boutros-Goofy
2. Have-You-Forgotten-We-Saved-Your-Ass-In-The
-World-War-Two-Land 1. Ooh-La-Lame
3
Prerequisites for International SuccessorHow
does a firm overcome its"Liability of
Foreignness"?

• Motivation
• Strategy
• Organization
• People

4
Disneys Internationalization Strategy

• Tokyo Disneyland Global Integration (?)
• 125 million visitors since opening
• 8 out of 9 visitors are repeat customers

• Euro Disney Local Responsiveness (?)
• Net loss 87 million
• Hong Kong Disneyland (??)

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The Ten Most Visited Amusement Parks
6
Euro Disneys Central Location
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Understanding Culture

• Artifacts On the surface, that can be sensed
  easily
• Values That can be inferred or articulated
• Assumptions Hidden -- about man and the
  environment, about human nature, human roles
  relationships, reality, time, risk-taking..

8
The Case of Disney

• Artifacts
• Values
• Assumptions
• How do each of these affect
• internationalization?

9
RECONTEXTUALIZATION
Evolution of meaning within a new cultural
environment.
10
RECONTEXTUALIZATION OF FIRM OFFERINGS
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RECONTEXTUALIZATIONS OF THE DISNEY FORMULA
Products
FRANCE
US
JAPAN

• SouvenirsCustom

Low Sales Child-rearing moves
High Sales Materialist norm
Highest Sales Senbetsu Gift-giving needs

• Mickey MouseImage

Low Profile Minnie, Boop
Disney Symbol All-American Boy
High Profile Kawaii-- Mickey Minnie as Best
Couple

• CowboyImage

Carefree Independent
Rugged Individualist John Wayne
Team Player Rawhide Karaoke
Practices

• PersonnelManagement

Invasive
Hypernormal
Normal

• ServiceOrientation

Abnormal
Hypernormal
Cultural Norm

• Crowd Control/Queuing

Totalitarian
Efficient
Paternal/Social
12
Recontextualization and The Three Levels of
Culture

• How are these related?
• Examples??

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MESO CONTEXT OF CULTURE

• CULTURE AND STRATEGY

14
CULTURE IN CONTEXT
MICRO Integration/ Transformation
MACRO Mapping Input
Culture
Output
MESO Bridging
Environment Culture Politics Economy Legal Resourc
es History
Organizational Group Individual
Task
Formal Organizational Arrangements
Individual
Feedback
From Nadler Tushman, A General Diagnostic
Model for Organizational Behavior
15
The Porter Diamond
Firm Strategy Structure, and Rivalry
chance
Factor Conditions
Demand Conditions
government
Related and Supporting Industries
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Implications for Company Strategy

• Setting corporate goals
• Building an innovative organization
• Selecting industries and segments
• Upgrading the home base
• Designing a global strategy
• Locating and relocating the home base

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Setting Corporate GoalsLong-term competitive
positionNOTCurrent return on investment
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Building an Innovative Organization

• Internal prerequisites
• Aggressive investment
• Leaders that create pressure to innovate
• External prerequisites
• Demanding customers
• Respected competition
• Strict product safety and environmental standards

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Selecting Industries and Segments

• Consider home base characteristics
• Diversify only within strong clusters

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Upgrading the Home Base

• Invest aggressively
• Develop a critical mass of suppliers
• Strengthen local industry associations

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Designing Global Strategy

• Need for clear home base
• Roles of global strategy
• Source low cost inputs
• Gain access to foreign markets
• Selectively tap into specialized advantages of
  other countries
• Separate home bases for particular product lines
• Celebrate national identity

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Lessons of the New Global Paradigm for Companies

• Competitiveness grows out of the capacity for
  innovation and upgrading
• Companies must seek pressure and challenges, not
  avoid them
• Many of a companys competitive advantages reside
  in its local environment
• The home base is where the critical information
  and skills for innovation reside
• Companies must continually invest to upgrade
  their home base
• Companies must leverage home base advantages with
  a global strategy