...In April 1992, Disney opened the door of EuroDisney at 30 kilometers east of Paris. During that time, it was designed to be the biggest and most impressive theme park that Disney has ever built in the world. Before the EuroDisney, Disney has built up theme park in California, Florida and Japan. When Disney saw the success of Tokyo Disneyland, they wanted to build other theme parks outside America and after choosing from over 200 potential sites included Spain, Italy and Greece; Paris was the chosen one. The management of Disney has expected to receive the same behaviour in EuroDisney as their Japanese counterparts in Tokyo Disneyland but they actually experienced the exact opposite of what they experienced in Japan. At EuroDisney, families were unwilling to spend the US$280 a day which was only to enjoy the attractions of the park with a milkshake and a hamburger. Staying overnight was not even in their mind as the prices were very high. Paris was chosen due to its location and also that it is the Europe’s most popular city for tourist destination. The management planned to received 11 million visitors and generate more than US$100 million during the first year but the attendance reached only 9.2 million and by summer 1994, they made a loss of more than US$900 million. The financial losses were so huge that the President had to put in place a rescue package to make EuroDisney back on firm financial ground. They had to revise their marketing plan and made new strategic and tactical...
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...EuroDisney's poor performance during its first year of operation: * French visitor's stayed away. They were expected to make up 50% of attendance figures. "The French see EuroDisney as American imperialism-plastics at its worst." The case mentions that French culture has "its own loveable cartoon characters" one of which (Asterix) has a theme park located near EuroDisney. Initial advertising of the park also aggravated the local populous, many of them felt that Disney was emphasizing glitz and size rather than the amenities they offered. * Initial construction of the park also facilitated the financial burden of Disney. Expensive trams were built to take guests from the hotels to the park, but visitors preferred walking, these additional add-ons cost Disney an additional $340 million. * Economic impact, external factors, and competition: High interest rates and the devaluation of several currencies against the franc. The 1991 Gulf War crisis limited vacation travel for the rest of that year. In 1992, the opening of EuroDisney also had to contend with European's desire to travel to the World's Fair in Seville and the 1992 Olympics in Barcelona. Factors that contributed to Hong Kong Disney's (HKD) poor performance during its first year: * Perhaps being overly cautious of making the same mistakes as EuroDisney, HKD was developed to be a much smaller amusement park. Chinese consumers felt the park was too small and had little to excite those unfamiliar with Disney's cast of...
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...Euro Disney: The First 100 Days The decision to open a theme park in France was not the best idea. There were many factors that proved to hinder the advancement of progress in regards to the European extension of Disney since its inception. The foremost would be that of the civil unrest that seemed to plague France at the time Euro Disney was scheduled to open. There were protests, transportation strikes, terrorist threats, etc. all which directly or indirectly affected the Euro Disney’s attendance. Also, the $10 million ad campaign seemed very costly, especially considering the fact that this was more than two decades ago. French critics seemed to be excessively harsh as well. On a positive note, it had a premier location. It was right outside of Paris, Paris being one of the most travelled to cities in the world. This creates the opportunity for a lot of traffic to come through Euro Disney. Also, Disney is a monument to the greatness of the US, so having that as the introduction into European culture is something to take pride in. The target market for Euro Disney was adults in their late twenties who had small children. They also had a share of the forty plus segment that have disposable income and usually take their grandchildren to the Disney themed activities. With this in mind, Euro Disney was developed for the kids as far as imagination was concerned, but provided a certain relief for the adults from the stress of the real world. An escape, if you will. The...
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...rooms at the park were charging rates comparable to luxurious hotels. People found it cheaper to fly to Disney World Florida and get an additional benefit of enjoying the weather. The Gulf war in 1991 also had a negative and during the same period, Europe was facing a recession. The French, for some reason, did not like the American culture while Disney tried to enforce this culture. The world fair in Spain and the Olympics in Barcelona in 1992 attracted holiday visitors hence, EuroDisney did not have many guest visiting it that year. Hong Kong Disneyland faced different issues. Firstly, people were not familiar with the characters since Disney was banned for 40 years in China. The park was small, with just a few rides compared to other Disneyland's, therefore customers were not interested. Despite these issues, it fared better since it incorporated a lot of Chinese culture. 2. To what degree do you consider that these factors were (a) foreseeable and (b) controllable by EuroDisney, Hong Kong Disney, or the parent company, Disney? Since the cost of Disney World Florida was cheaper, customers preferred to fly to the US. This meant that prices in Paris could also be controlled. There were several other mistakes made by the management; for instance, alcohol was banned although consuming wine with meals was a French tradition. The reason for banning alcohol in the park could be justified but it was not acceptable by the French due to their tradition. These factors...
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...Case Study EuroDisney 1. What factors contributed to EuroDisney's poor performance during its first year of operation? What factors contributed to Hong Kong Disney's poor performance during its first year? It was cheaper for European families to travel to Disney World in Orlando, FL. Not only was the trip to Orlando going to be cheaper, but it was almost guaranteed that the weather was going to be spectacular. People go on vacation to have a good time, but more importantly to enjoy the weather. People in Europe and around the world are not going to vacation at a spot where the weather is going to be unpredictable. France gets cold in the winter, therefore going to Disney World in Orlando would be more logical. It will be cheaper and the weather is going to be decent for whenever you choose to go. The French culture did not like the American Fairy-tale characters. The French had their own fairy-tale characters; one even has a park located near EuroDisney. Starting up a company internationally is an extremely hard task. Researching the culture of the country in which the company is going to be located is extremely important. When the plans to bring EuroDisney to Paris were finalized, they should have begun extensive research on the culture and history of France. By not doing that Disney may have insulted the French, but more so they hurt their chances of making money. The whole Disney idea was not sitting well with the French people. For example, during a trip...
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...Kong Disney's poor performance during its first year? Many factors contributed to Euro Disney' poor performance during the first year of operation and many of these factors could have been alleviated if the proper factors would have been previously considered. The first year for EuroDisney was unpleasant and devastating because of various poor decisions taken by the management besides some external factors. Major aspects involve location, foreign exchange rates, management problems, poor understanding of the marketplace and the cultural dissimilarities between the two nations and their distinct ways to business and life. The Gulf war in 1991 had a negative impact and during the same period, Europe was facing a recession. The opening of the park in 1992 with huge events such as the Olympic Games in Barcelona during the summertime and the World’s Fair in Seville was disadvantageous to EuroDisney. Besides this entertaining occurrence, the currency movement made going abroad for vacation is a cheap option for Europeans and gets an additional benefit of enjoying the weather. This resulted in just a minimal difference between going to Disneyland Orlando and EuroDisney for the holidays. Hence, EuroDisney did not have many guests visiting it that year. Almost none of its targets were met and with costs rising, they faced severe challenges ahead.. In order to attract customers, they lowered their prices and introduced new rides that ultimately improved its performance. Another factor...
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...There are many environmental issues that affect businesses when entering a foreign market, the main environmental factors that will be discussed is as follows: technological, economic, social, political, and demographic. Each factor will impact the business different and cause various degrees of impacts on the company and its decision to enter a foreign market. Euro Disney, a foreign division of Walt Disney Company; is located France and opened in 1992 to service the people of France. Researchers had discovered that like the many people in the United States, foreigners also were attracted to the whole them park idea. When Disney decided to launch Euro Disney, many issues were bough up and many environmental issues were faced; in this paper these issues will be briefly discussed. First off the cultural differences that existed between the US and France had to be discussed and worked out, for example the weather in France was an issue when determining rather the park would be a success or not along with the staff who would ultimately become family to the Disney Corporation. Fist off the economic factors, which are usually income, expenses, and resources; that Disney faced when deciding to build Euro Disney were easily noticed and overcame. Issues such as attraction and income it generated played a huge part in the economic factors, in the beginning Euro Disney estimated that during the first year it would attract 11 million visitors achieving operating income of $373...
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...1. What factors contributed to EuroDisney’s poor performance during its first year of operation? What factors contributed to Hong Kong Disney’s poor performance during its first year? Both Euro Disney and Hong Kong Disney suffered losses in its first year of operations due to several factors that stems from wrong marketing decisions and lack of research. The following are the said factors: Euro Disney * Location – While the demographics presented by the European government about the number of tourists that comes to Paris is true, Euro Disney failed to make further research on the reasons for this large number. Most tourists go to Paris to visit and wander in the streets of the city and not to visit theme parks. Moreover, the climate in Paris is unsuitable for a theme park thus the off-season attendance was way below target. The French government offered Euro Disney generous incentives that they chose to overlook cultural and weather barriers. * Pricing – Unlike the Japanese, Europeans are not willing to spend much to enjoy the attractions in the park. Euro Disney was confident that Europeans would come flocking to the park despite the premium price. * Euro Disney Marketing Strategy – Euro Disney’s advertising focused on the size of the park rather than the Disney experience. They were trying to sell an alluring bit of American which the European do not particularly like. Europeans do not care that the theme park had cost over $4 billion or that it is 4,800 acres...
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...1. What factors contributed to EuroDisney’s poor performance during its first year of operation? What factors contributed to Hong Kong Disney’s poor performance during its first year? The first year for EuroDisney was disastrous due to several bad decisions taken by the management as well as some external factors. The primary reason for the failure was its high cost. Hotel rooms at the park were charging rates comparable to luxurious hotels. People found it cheaper to fly to Disney World Florida and get an additional benefit of enjoying the weather. Hong Kong Disneyland faced different issues. Firstly, people were not familiar with the characters since Disney was banned for 40 years in China. The park was small, with just a few rides compared to other Disneyland's, therefore customers were not interested. Despite these issues, it fared better since it incorporated a lot of Chinese culture. 2. To what degree do you consider that these factors were (a) foreseeable and (b) controllable by EuroDisney, Hong KongDisney, or the parent company, Disney? Many of these factors were foreseeable such as the cross cultural ignorance, world fair in Sivelle and Barcelona Olympics in 1992 that attracted more tourists, ban on alcohol consumption despite the fact that French cannot have meal without wine and difference in Attitude of American tourists/parents and European ones. Controllable elements include mistaken assumptions, pricing policies and initial pricing. Also, early advertising...
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...The Walt Disney Company (Disney) conducted a series of financial operations in developing its Euro Disneyland project in the spring of 1989. The whole process is a typical example of using project financing to aid the success of the investment in face of significant risk. The project financing approach: Is it the right way to do this? Project financing creates a separate legal entity organized around a specific business or risk. Despite its relative expensiveness and operational complexity, project financing significantly reduces the risk of the parent company while capturing a reasonable return. Moreover, the key to these financial operations lies in more efficient risk distribution among different communities. From Disney’s perspective, Euro Disney project involved many uncertainties in aspects like foreign currency exchange risk, market risk, political risk, and so on. Among these risks, some of them were even without control of the parent company. In this way, conducting project financial is an appropriate solution for Disney In order to complete the project financing operation, the deal was structured in such a way that it catered to mainly four different parties: Disney, French government, Europe investors and Creditors. Disney significantly reduced the financing risk by cooperating with French government. At the same time, they still locked in an attractive return by stake in the new project, management fee, licensing and other incentives. The French Government...
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...October 1, 2014 MKT 608 Case Study 2-1 The Not-So-Wonderful World of EuroDisney Things Are Better Now at Disneyland Resort Paris 1. What factors contributed to EuroDisney’s poor performance during its first year of operation? What factors contributed to Hong Kong Disney’s poor performance during its first year? There were two major factors that contributed to EuroDisney’s poor performance during its first year of operation. The two factors include: market research and cultural competency. Within those two factors there were specific details that demonstrate where and why they failed poorly. There are listed below: * Instead of using French cartoon characters, American characters were used. * Europeans are known to enjoy drinking wine, but the park banned alcohol completely. * A misunderstanding regarding breakfast availability cause issues with the guest. * Disney was informed Europeans did not eat breakfast, which was not correct. * Pricing was an issue * Many Europeans believed the prices were too high and would not pay. * Other big events were occurring at the same time the parked open, which cause lots of issues as well At Hong Kong Disney, they had experienced the opposite of what EuroDisney experienced. Hong Kong tried to hard to make it fit. They conducted research and tried to make it work, but guest were disappointed. The park did not differ from other amusement parks in China and therefore consumers...
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...marketplace, the cultural differences between the two countries, and the different approaches to business and life. One major factor was the ethnocentrism, or the viewing of a foreign culture through the lens of your own culture, displayed by American leaders offset by French national insecurities. But, the problems spanned beyond arrogant leadership. Disney assumed people would travel from all over the Europe to visit the park, but really did not cater to the diversity of the guests. Even though the countries are united as the European Union, they are distinct and sovereign culturally. Put simply, EuroDisney was marketed poorly. Disney built, promoted, and communicated EuroDisney as a piece of America in Europe. Cultural differences were neglected. In the case, we see that Fresh culture also has its own cartoon characters such as Asterix, who has a theme park not far from EuroDisney. Furthermore, Disney banned alcohol in a culture that has a deep appreciation for wine. Disney failed to understand French national character, their insecurities over cultural invasion, and their deep commitment to maintaining their identity. Hong Kong Disney faces cultural problems as well, but in a different way. Many Chinese people were not familiar with Disney characters prior to the entrance of Hong Kong Disney. It was hard for Disney to create this familiarity and recognition without that long term relationship. Advertisements were run to create recognition but they were unfit and offensive...
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...1. What specific cultural problems has Disney experienced when communicating with external audiences (stakeholders such as the public, consumers, local community, etc) in France? Keep in mind a firm communicates not only with its (verbal) marketing messages but also with its products and services it launches in the market. List and explain. Disney when first arrived in Paris was concerned about different cultural problem. First of all with the location Paris become the site of the new Disney because of its location central and lots of people in less than two hours by car or plane. After getting implemented Disney had to face several problem due to consumers, most of them were coming from Europe and France, and all of them were different than what they were used to in Japan or US. For example we can site the problem they had to face with breakfast, they were told than French don’t eat breakfast, which was false, and French doesn’t only eat baguette but also different food at breakfast, and all the rooms were too small. Also with the food they were only proposing one type of sausage, a French one, and then German and Swiss start to complain because they couldn’t find their home food. In an other hand French like to drink a glass of wine with their meal in general, and alcohol was forbidden in the park. (VINCENDON, 2014) French are respecting the rules and take their holidays in August for the most part of them; as well they will not skip school to go at Disneyland as...
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...CASE 2-1 Ali Zein Kazmi February 1, 1999 THE NOT-SO-WONDERFUL-WORLD OF EURODISNEY -THINGS ARE BETTER NOW AT PARIS DISNEYLAND- 1. What are the factors contributed to EuroDisney’s poor performance during its first year of operation? Walt Disney overestimated the magic that was to be in introducing Europe's most lavish and extravagant theme park in April of 1992. The fiscal year 1992-1993 brought EuroDisney a loss of nearly $1 billion. Mickey, a major promotion tool of Disney management did not create reason or attraction enough for the European community, unlike at the sister theme park Tokyo Disneyland. European families found EuroDisney to be an “over-rated” promotion of American culture and lifestyle, contrary to what was seen by Disney's management as a family affair. In the initial years of operation this led to an overestimation of expected revenue and audience figures. Advertising messages had been miscommunicated, “emphasizing glitz and size…not the rides or attractions”. Disney remained unsuccessful in attracting customers just by vigorous brand name promotion communicated through Mickey and his friends. Moreover, families were reluctant to pay hefty price tags on accommodation and entertainment needed to enjoy the attractions of the park. Disney failed to manage a healthy relationship with partner organizations in the host country, which most importantly alienated them from their number one ally, the French government. Regional affairs in Eastern...
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...1. The first year of Eurodisney in Europe was disastrous for many reasons. Actually, the first one could be the weather. People who are going on vacations to have a good time, but more importantly to enjoy the weather. People in Europe or from everywhere are not going to vacation at a spot where the weather is going to be irregular; they choose a place where they have more chances to enjoy the journey. France get cold in the winter, therefore going to Disney World in Orlando would be more logical. It will be cheaper and the weather is going to be decent for whenever you choose to go. Secondly, European and other people haven’t got the same Fairy-tale culture. In France, they have their own characters and stories. Maybe it’s because of that Mickey did not create reason or attraction enough for the European community, unlike at the sister theme park Tokyo Disneyland. The diffenrence of price could be also a reason of this failure. For example, if we compare how much can pay a French and a Japanese family to enjoy a whole day in family in Eurodisney, the gap is really big ($280 and $600). The macro-environmental scanning of namely, the political, the cultural, and the economic aspects of Europe had been grossly miscalculated. They definitely had to change their way of seeing European people like American people and adapt Eurodisney to the European culture. For the Hong kong one, I think the most important thing is that the designers didn’t create the park as the population...
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