The resource based view as an entry option for a business in international markets seeks to analyze the connection between those resources available to a firm and their ability to sustain a competitive advantage in a foreign market. The basis of the resource based view therefore lies not on the current situation of the market but on the ability of the firm to manipulate it. On the other hand, the institutional theory is more concerned with the entry and operations of a firm in an institutional environment characterized by specific values, norms and rules. The key feature in the institutional theory lies in how best a firm can adhere to the concept of isomorphism, defined as the inclination towards imitating the operational modes of the local firms which has a tremendous impact on the selection of the entry mode into a foreign market.
In order for Disneyland to clearly outline its corporate strategy and integrate into the Brazilian market, there is need to define their competitive scope compromising of three main components including their geographic scope, the scope of the products offered, as well as the company’s’ vertical scope. Under the stipulations of the resource based view, there is need for a firm to compare its core competencies with that of the other direct competitors in the markets. In addition, this core competencies must never be outsourced from other institutions. The outsourced company’s’ core competencies must not also involve special strategies or skills. It is a company’s’ core competencies that define its competitive advantage and determines how best it could permeate a new market such as the Brazilian territory. To make the permeation into the Brazilian market more effective, Disneyland needs to opt for an internationalization strategy, one who success and mode of operation is firmly rooted upon the company’s’ ability to maximize on its available resources to generate value.
Under the RBV, Disneyland’s’ prospects in the Brazilian market are feasible based on the fact that the products the company offers are rare, non-substitutable, value, and imperfectly inimitable. In a bid to be successful, Disneyland must consider four major constructs in a bid to integrate the Brazilian market. These include the probability for establishing a competitive advantage in both their marketing and production operations in the Brazilian territory as well as the capacity to transfer the advantage of their generating resources in both marketing and production operations in the Brazilian market. The higher the likelihood of transfer or probability, the higher will be the chances of Disneyland integrating in Brazil. Nonetheless, in so doing, care must be exercised such that there is no to minimal erosion in the value of the company.
The institutional theory
As part of the institutional theory, Disneyland must consider the impact of the two primary forms of isomorphism; internal and the external isomorphism. The external isomorphism is the need to mimic or imitate the values of the foreign market, in this case the Brazilian territory while the internal isomorphism puts pressure on Disneyland to maintain its corporate culture as defined in its headquarters. In some instances, there will be need for Disneyland to strike a compromise and accept some level of external isomorphism as defined by the Brazilian market. This may be defined by the various regulatory or economic stipulations of the foreign market. However, the core guiding factor will be the amount of resources that the parent company is willing to disperse in setting up base in the foreign country. Normally, if the resources used are weighty, there will be increased pressure to maintain a form of internal isomorphism. Since as in the case of Disneyland, the parent company holds a controlling interest in all their expansion agendas, integration into the Brazilian market will be inclined towards an equity-based mode of entry.
Conclusively, the entry of Disneyland will require a joint entry method approach that takes into consideration both a resource-based view as well as the stipulations of the institutional theory. In a bid to be success, an equity-based mode of entry is advised since the parent company will still have a controlling stake in the management of resources even in the foreign market of Brazil.