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In: Business and Management

Submitted By bolekula
Words 2920
Pages 12
CASE 2-1

Ali Zein Kazmi
February 1, 1999



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 Europe and economic recession in the western half of Europe and Scandinavia contributed much to the poor performance of EuroDisney. Airfare wars during the period of time and disproportionate changes in exchange rate made spending for holidays in “Disneyland, Orlando…cheaper than a trip to Paris”. Of greater consequence was the Gulf War, which statistically reduced travel to and...

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