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why did Disney take an ownership position in the firm rather than simply licensing some other...

why did Disney take an ownership position in the firm rather than simply licensing some other firm to build and operate the park ans settling for a royalty on all sales ?
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Answer #1

There are various reasons why Disney took ownership of the firm rather than licensing. These are mentioned below.

  • By having an ownership position in the firm, they will get all the profits. This was not possible in the licensing arrangement.
  • Direct control- They can better manage operations and make the decisions. Disney as a brand is very concerned about what it projects and very cohesive in its decisions and path taken. A direct control will help them maintain that.
  • Prospect of success- The Tokyo project was extrememly lucrative and Disney didnt want to share the profits with someone else. The Paris project looked full of potential too.
  • Expertise sharing- Disney has expertise in running such parks. With a direct control they will have able to better integrate and run this park too from their past expertise.
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