Completion of Corporate Social Responsibility Report 2022

[Type the document title]

Management 2
Executive Summary

Management 3
Executive Summary
This report explores the possibilities of expansion for the Wanda Group of Companies
in a new area. With six possibilities, this report recommends the best possible option for
them. The company wants to expand into the Asia-Pacific Region, with no organic growth
and fulfilling social responsibility.
It provides the internal analysis, external analysis, financial reports, the risk
management matrix, and the competitor’s matrix and tries to provide the best possible
recommendation. The Wanda Group of companies is engaged in 3 key business activities
- business properties, culture, and finance. In 2015, its assets amounted to 634 billion yuan
with revenue of 290.16 billion yuan. Wanda business Properties is the world's
largest assets enterprise and also the biggest five-star edifice owner within the world. Wanda
Cultural trade cluster, meanwhile, is the largest cultural enterprise in China, and also
the world's largest cinema operator. it's conjointly the world's biggest sports company.
Elsewhere, the Wanda money cluster is the largest net finance enterprise in China.
The final choice after this report came out to be the collaboration of Wanda Group of
Companies with Forcce to build a theme park in New Delhi, India. Tapping the new and open
market, expanding into the Asia Pacific region, fulfilling the social responsibility by
providing a huge number of jobs, and creating non-organic growth opportunities, help the
Wanda Group of companies achieve their objectives.
This report can be further done for more external analysis of the environment based
on more models other than those undertaken. India is a very diverse nation, analyzing it on a
few bases is not enough to open a new business, let alone the huge undertaking of building a
theme park.

Management 4
Contents
1. Introduction............................................................................................................................5
2. Situation Audit.......................................................................................................................5
3. Issue Statement.....................................................................................................................12
4. Alternatives..........................................................................................................................12
5. Evaluation Criteria...............................................................................................................15
6. Analysis of final three Options.............................................................................................18
7. Recommendation..................................................................................................................18
8. References............................................................................................................................20

Management 5
1. Introduction
The Wanda group of companies, China, has to expand itself. It has six options, and it
has chosen the third one, that is opening a theme park in New Delhi, India, in collaboration
with Forrce. The basic aim is to cover three requirements; Non -Organic growth, A Business
in Asia-Pacific region and completion of the Corporate Social Responsibility. This report
helps the Wanda Group to explore those options and chose the best one.
The evaluation is done on the basis of internal analysis and finding out what the
company is best at, external analysis of the environment that the company is trying to explore
for the best suitable option.
Further, this report does the risk assessment using a risk assessment matrix and tries
to do a competitor analysis, analysing what case could be the most powerful and lead to the
maximum profits for the company.
2. Situation Audit
Internal Analysis
The company was founded in Dalian, Liaoning, in 1988 as a residential real estate
company by Wang Jianlin. The internal analysis of the Wanda Group of Companies includes
their financial report as stated:
Financial report
31 Dec 2018 (’000
CNY)
31 Dec 2017 (’000
CNY)
Change rate
Totalasset 43,632,031.3 41,774,446.3 4.45%
Net asset 21,476,807.8 18,808,539.7 14.19%
Operation revenue 41,853,589.4 35,918,488.4 16.52%

Management 6
Net profit 2,609,708.6 2,605,023.4 0.18%
EBITDA 5,617,240.7 5,917,435.2 -5.07%
Turnover 2.3 times 1.69 times /
Acid test rate 1.8 times 1.32 times /
Debt to asset ratio 49.01% 53.44% /
(resource: gu.sina.cn/bd/hq/notice.php?annid=10737791)
gu.sina.cn/bd/hq/notice.php?annid=10737791)
Kay’s model
Architecture  The general meeting of shareholders and the board of
directors have the highest power.
 Shareholders' meetings and boards of directors are
overseen by regulatory authorities.
 The President is directly accountable to the board of
directors.
 Different administration is run by a different vice-
president.
(Wanda Group, 2019)
Reputation  In 2018, Wanda cinema had the highest box office and
the highest attendance in China (Wen, 2019).
 With 99% recommendation index and 4.8 user
evaluation, Pullman Weifang Wanda hotel won the gold
award of the most popular hotel in 2016 by Ctrip-Travel
reputation list (Li, 2016).
 Wanda also has a good reputation among local people

Management 7
because of its poverty alleviation efforts
Strategic assets  Abundant resources
 Asset-light
 Super executive ability
Innovation  Wanda is one of the earliest Chinese entities to embrace
the Internet.
 Wanda has been rated as one of the top 50 digital
innovation enterprises in the world for many years.
 The cloud building system is the first management mode
in the world.
(Wanda Group, 2019)
Wanda group performs well in Kay's model. As for architecture, Wanda group has
completed architecture which could ensure the good operation of the system and create
substantial income. Furthermore, Wanda group also has a good reputation. Since Wanda is
involved in many fields such as hotel and movie industry. They all perform well and be
advocated by their fans. As for strategic asset, Wanda is also in the lead. Wanda has signed
up more than 40 international and domestic top brand strategic alliances, and at present
Wanda plaza around the business and brand has reached more than 1,000 (Li, 2016). Asset
light transformation is also one of Wanda's strategic advantages, which could reduce the risk
of investment. Moreover, Wanda has always attached great importance to innovation. Wang
Jianlin (2018) pointed out that innovation is the driving force of development. Under his
ideas, Wanda actively innovates including Hui cloud system and Build cloud system which is
in the lead of industry (Wanda Group, 2019).

Management 8
Dunphy’s model ():
Rejectio
n
Non-
response
Compliance Efficiency Proactivity Sustaining
Not
known
yet
Not
known
yet
Not known
yet
·Creating
working
opportunities
·Social welfare
·Building green
building
·Financial
performance
well
·Poverty
alleviation
Auditing
report
Systems
Design
Innovative
Capability
Partnering of
renewal
1. Social
(1)Poverty alleviation (sustaining organization): Wanda group invested 1.3 billion yuan to
build the Danzhai Wanda Resort, which attracted more than 5 million tourists, driving the
county's tourism revenue to exceed 3.7 billion yuan, helping 12,800 poor people to increase
their income in 2018 (Wanda Group, n.d.). Meanwhile, Wanda also built a Poverty
Alleviation Fund to succor the impoverished, disabled and parentless people in Danzhai
County.

Management 9
(2)Social welfare (proactive): Wanda invested 50 million yuan each year to support 10
primary schools in Dalian to build a campus football venue, and to build 6 football teams of
different age for these schools (Wanda Group, n.d.).
(3)Creating work opportunities (Efficiency): Wanda group created 202,000 new jobs in the
service industry in 2018. Totally, until 2018, Wanda shopping plazas have created more than
1.2 million jobs in China (Wanda Group, n.d.).
2. Environment (proactive)
Wanda Enterprises promotes green buildings and uses a large number of
environmentally-friendly and energy-saving materials and systems (including water recycling
system) in Wanda's investment buildings, and these buildings have been environmentally
friendly certified by relevant Chinese authorities.
3. Economic (proactive)
Wanda Group has exceeded its financial targets in 2017 and 2018, and Wanda's cultural
industry (movies, tourism, etc.) has become their new pillar industry. In the past three
decades, Wanda has been gradually diversified by a real estate construction company, and
this year has transformed into the rapid development of light assets, attaching importance to
the establishment of cultural industry investment and brand honor (Wanda Group, 2018).
The Wanda Group has responded positively to social contribution, environmental
protection, and economic development. While developing itself, Wanda establishes long-term
sustainable economic goals and establishes a new brand of Chinese enterprises. Therefore, in
Dunphy's model, the Wanda Group can locate the proactive stage.

Management 10
External Analysis
Porters 5 Forces Analysis:
Threat of Potential Competition:
The threat of new competition for any theme parks is very low due to the large
overhead cost of creating it.
Substitutes
Theme parks provde entertainment, and for entertainment, there are a lot of
substitutes, like a movie theatre
Buyers
With a market as huge as New delhi, buyers are in abundance, and fixed pricing
applies no area for bargain.
Suppliers
Suppliers are also available in abundance, thus there is choice for low cost and high
quality
Rivalry
There is no competition for a huge theme park in New Delhi, there is a theme park
called Kidzania, but it is not suitable for all ages.
SWOT analysis

Management 11
Choosing to build a theme park in Collaboration with Forrce in New Delhi has been
the preferred option. Doing an external analysis on the same with Wanda group of companies
starts with the SWOT analysis.
Strengths
The advantages that Wanda group will have are; that New Delhi in an untapped
market of adrenaline junkies. A maximum number of Indians specifically from New Delhi,
visit the theme parks abroad as there is none present there.
Wanda Group has excelled in the field of entertainment and architecture, and thus, can build
a great theme park.
Chinese manufacturing is very cost-effective and the Indian labour costs are very low.
Thus, this is a very good profit gaining opportunity. The people in the market know that the
Wanda group have created excellent theatres and have great hospitality services. Thus,
creating a theme park similar to Disneyland is a great opportunity.
We can get the sale as New Delhi is a huge market of people with different economic
backgrounds. Also, being the capital city, New Delhi has a lot of tourism which will also get
attracted to the theme park.
Weaknesses
The quality of products being exported to India from China is low. This can be
improved when being supplied to a theme park.
The relationships between India and China have been very controversial owing to the
attitude towards Pakistan. This has also affected the mindset of the crowd. Thus, Marketing
this as a Chinese venture can be avoided or we might lose sales.
Opportunities

Management 12
This is an untapped market, with a lot of local low-income crowd which can work in
the theme park. Thus, both customers and staff are available in abundance.
The Indian capital celebrates every festival from every religion and thus has a lot of
holidays and celebrations, which are a great opportunity for a theme park (Park, 2012).
Threats
The major threat is the governments changing the attitude towards foreign market
invasion, any change in the foreign policy could cause damage. Also, the Indian political
system is full of malfeasance, permissions can take a lot longer, and might prove much more
expensive.
There are no big theme parks as of now in New Delhi. There is one outside of it,
called Kidzania, but does not suit all ages. None of the threats threaten the business.
3. Issue Statement
After the risk assessment analysis, the sixth option, it also has less competition, but
fails the objective of entering into Asia Pacific.
4. Alternatives
CAA
Option1 Wanda Group and CAA plan to build a movie city
which is like Hollywood in Qingdao, Shandong,
China.
 The rapid development of the Chinese film industry
could bring huge economic growth. (Objective1)
 China doesn’t have many movie citie, this program

Management 13
could fill the market gap. (Objective2)
 It could boost the local economy and create a lot of
jobs for the community. (Objective3)
Option2 Wanda film group teams up with stars from CAA to
create a film about environmental protection
 Famous stars from CAA could bring huge revenue for
Wanda film group. (Objective1)
 The theme of the film is environmental protection,
which can enhance people's awareness of
environmental protection. (Objective3)
Forrce
Option3 Wanda teams up with the Forrce to build a large
theme park in Delhi, India
 A reference to Disneyland, successful theme parks
and surrounding products can generate huge revenues
for the company. (Objective1)
 As the capital of India and a major tourist destination,
New Delhi has not had a successful theme park for
local family and tourists. (Objective2)
 The theme park and surrounding industries could
create many jobs for local people and boost new
Delhi's tourism industry. (Objective3)

Management 14
Option4 Wanda teams up with FORRCE to build a large theme
park in Sydney, Australia.
 Sydney has the most population in Australia, the
family and tourists would bring huge income to the
park. (Objective1)
 Theme park and its products create jobs for local
people and boost the local economy. (Objective3)
Multiplex
Option5 Wanda group rents a Multiplex high-rise apartment in
Sydney to develop an asset-light long-term rental
apartment project.
 Long-term rental apartment projects can bring long-
term stable benefits to Wanda and Multiplex,
especially in big cities like Sydney. (Objective1)
 Many people in Australia live in rented houses, but
there are no strong long-term rental apartment
projects in Australia. Wanda and Multiplex could fill
the market gap. (Objective2)
 A comprehensive long - term rental apartment project
requires sound physical management, which could
create may job for local. Furthermore, adopting
energy-saving buildings will save more resources.
(Ojective3)

Management 15
Option6 Wanda needs Multiplex to build a brand new, world-
class football stadium and training ground for Dalian
football team.
 World-class football stadiums bring in more
spectators and therefore more revenue and It can also
lead the team to better results. (Objective1)
 The new venue is built with energy-saving and
environmental protection. (Objective3)
5. Evaluation Criteria
The evaluation criteria are to complete the three objectives stated in the very
beginning.
1. Non-Organic Growth
2. Corporate social responsibility
3. A business in the Asia-Pacific Region
Wanda group are considering the above six alternative options to choose the best one.
As for option 1, 3 and 5, they all could meet the three objectives which are the necessary
condition. As for cooperation with CAA, there is no doubt that the movie city could bring
more profit than a single movie. Furthermore, the social impact brought by the movie city is
not a single film can be compared, which could bring long-term and positive impact. As a
result, option 1 is better than option 2.

Management 16
Wanda also has two options with Forrce. However, New Delhi is a much larger and
untapped market than Sydney, which means that New Delhi has a more potential benefit
(Michaels & Grüning, 2018). In addition, it is difficult to make further development in
Sydney which is a highly developed city. So, option4 weeds out.
SYDNEY is turning into a city of renters as rising prices force more people to ditch
the home-owning dream (Hennessy, 2016). The huge rental market and rising house prices
are bound to lead to the positive development of long-term rental apartments, which is much
better than setting up a new venue for one team in China (Suseno & Rowley, 2015). So,
option 5 looks better than option 6.
Competitor’s matrix
Non-organic
growth
Competition Corporate
social
responsibilities
Expansion into
Asia-Pacific
Option 1 None Huge Few jobs
allocated
NO
Option 2 None Huge Filled NO
Option 3 Yes None Filled Yes
Option 4 Yes Huge Filled No
Option 5 No Less Yes No
Option 6 Yes Less No No

Management 17
Risk Management Matrix
Shutting down in
Mid
Failure hazards
Option 1 Low probability There are many
multiplexes
Low probability
Option 2 Low probability A lot of such
documentaries have
failed
Low probability
Option 3 Medium Probability Low probability Theme parks have
high hazard risks
Option 4 Medium Probability Huge competition Theme parks have
high hazard risks
Option 5 Low probability Medium probability Low probability
Option 6 Low probability Low probability Low probability
6. Analysis of final three Options
The risk probabilities show that the sixth option is the best, but it is the worst
according to the competitor's matrix. The 5th option also does not farewell. The fourth option
is a very high-risk option and the third had come out to be the best on both SWOT and
competitors matrix. The first and second option, do not complete the objective of expansion
in Asia pacific.
The best options are 3, 6, and 1.

Management 18
1st option of building a movie city, sounds great, glamorous and new, but the rise of
Chinese cinema is slow, and might take up many years, thus slowing down the growth for the
company. Plus, this would require continuous re-work as the sets need to be changed
regularly.
The 6th option, of building a football stadium, is also good, and will motivate the
national team, but, the Chinese people are more inclined towards athletics and badminton, the
craze of football has not grown to that level. Plus, the competitors are many.
The third option, of building a theme park, would require more external analysis of a
vibrant nation, but has a large and untapped market. Also, it has no competition, and fills the
three objectives the Wanda Grou is trying to achieve.
7. Recommendation
The final proposition of building a theme park in New Delhi is very effective as it has
no or very little competition, the weaknesses are outweighed by strengths and fulfill the
objectives of non-organic growth, corporate social responsibility and an expansion in the
Asia Pacific region.
Before the project can be started, there needs to be an analysis of the political system
that allows the construction and permission of the theme parks. This process if full of
corruption, and confusion. Also, the country has many festivals and religions, the theme park
should not choose any of those as the country has been known to be violent for hurting such
sentiments.
Appendix
The porter’s 5 forces model

Management 19
Porter's 5 Forces may be a framework for analyzing a company's competitive setting.
The number and power of a company's competitive rivals, potential new market entrants,
suppliers, customers, and substitute merchandise influence a company's profitableness.
Analyzing these parts is wont to guide business strategy to extend competitive advantage.
8. References
LI, XB 2016, What are the marketing management advantages of Wanda group? Viewed 19
February 2016, <https://news.mbalib.com/story/102121>
Wen, Q 2019, Top 10 cinema chains in China 2018, viewed 9 February 2019,
<http://www.enet.com.cn/article/2019/0209/A20190209059844.html>
Li, X 2016, Pullman Weifang Wanda hotel won the gold award for the most popular hotel in 2016,
viewed 15 December 2016, <http://www.wanda.cn/2016/2016latest_1215/34230.html>
Wanda Group: Overview of scientific and technological innovation. (2019). Retrieved from
http://www.wanda.cn/about/technologicalInnovation/

Management 20
Kim, S. H., Noh, S., & Lee, S. K. (2019;2018;). Asset-light strategy and real estate risk of
lodging C−corps and REITs. International Journal of Hospitality Management, 78,
214-222. doi:10.1016/j.ijhm.2018.09.004
Michaels, A., & Grüning, M. (2018). The impact of corporate identity on corporate social
responsibility disclosure. International Journal Of Corporate Social
Responsibility, 3(1).
Park, J. (2012). Effects of Theme Park Environmental Cues on User Satisfaction. The Journal
Of The Korea Entertainment Industry Association, 6(3), 48.
Suseno, Y., & Rowley, C. (2015). Asia Pacific Business ReviewSpecial Issue: Asia Pacific
Business Review, 22(2), 351-352.
Wanda Group: Social responsibility. (n.d.). Retrieved from
http://www.wanda.cn/about/responsibility/
Wanda group: Cultural industry group. (2018). Retrieved from https://www.wanda-
group.com/coreindustries/Cultural_Industry_Group/