EuroDisney (Final2)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)
Globma, 21 May 2011 Group 2 Quincey Huang Jojo Javier January Mamauag Agnes Villarivera
I.
Background1 EuroDisney SCA formally launched its theme park to Europeans in April 1992 near river Marne, 20 miles East of Paris. It was the biggest (Disney) and most lavish bigger theme park that Walt Disney had built than any of its Disney parks around the world. The location was chosen over 200 potential sites in Europe from Portugal through Spain, France, Italy and Greece. Spain was the strongest contender for the park location but its inadequate acreage of land around Barcelona paved way for Paris to be the chosen location, add to that the generous incentives and impressive regional demographics presented by the French government. Disney Management expected Europeans to receive the theme park in the same behavior that their Japanese counterparts for Disneyland-Tokyo did for Mickey Mouse and other famous Disney characters but the projected operating of S100 million during the first year of operation became a loss of $900 million by summer of 1994.
Case 2-1 p.614, Cateora & Gram, International Marketing (13th Edition)
Page 1 of 22

EuroDisney failed to attract the expected number of European
visitors especially French visitors because the theme park was seen as American imperialism where American fairy-tale characters competed and lost over loveable French cartoon characters like Astrix, the helmeted, pint- sized Gallic warrior who has a theme park beside EuroDisney.
II. Problem/s a. EuroDisney has lost $900 million from 1992-1994;
b. Europeans failed to go goofy over Mickey Mouse unlike their Japanese counterparts; c. French cartoon themed parks compete with EuroDisney; d. Construction costs ballooned from $2.37 billion to an
additional $340 million as a result of theme-park add-ons which failed to attract visitors( e.g. expensive facilities like trams were built to ferry visitors inside the theme park when most visitors prefer walking); e. A barnstorming, kick-the-door-down attitude of US decision makers alienated many EuroDisney and Disney managers from their counterparts in government, banks, ad agencies and other concerned organizations. f. Disney planners failed to foresee external threats such as signs of European recession, effect of the Gulf War on vacation behavior, high interest rates and the devaluation of other currencies against the franc.
Page 2 of 22

g. Disney planners also failed to study the European culture and
behavior (e.g. wine drinking among French with meals, preference for redder than red nail polish among women);
h. EuroDisney was on the verge of bankruptcy in 2005.
III.Discussion Questions
1. What factors contributed to Euro-Disneys poor performance during its first year of operation? a. Visitors to the park were reluctant to spend $280.00 a day to enjoy the park attractions. Its hotel rooms were much more expensive than top hotels in Paris. b. Airfares Florida. c. French visitors stayed away because of the historical animosity between the French and Americans. d. Disney executives failed to see the approaching recession at the end of the 1980s and the halt on planned vacations after the Gulf War in 1991.
Page 3 of 22
were
cheaper
to
Disneyworld
in
Orlando
Florida
compared to Paris. The weather was also much better in sunny

e. There were high interest rates and the devaluation of several currencies against the franc. f. They competed against the World Fair in Seville and the 1992 Barcelona Olympics. g. They banned alcohol in a wine loving culture. h. Disney executives also did not invite investors to a share in the project. They wanted to design and build themselves with a view to selling at a profit. They were influenced by their experience in Tokyo Disneyland when they licensed its name and image to another company who raked in all profits and left the parent company with a meager share. i. They downsized breakfast service because they were erroneously informed that Europeans dont eat breakfast. 2,500 customers showed up in 350 seat hotels. j. Europeans spent only 1 or 2 days to visit the park compared to their American counterpart who spent at least 3 days. k. They also failed to consider the vacation customs of the Europeans. Europeans enjoyed month long vacations while Americans preferred short but several vacations in a year. l. Disney stressed the size and sheer magnitude of the park rather than the entertainment value it offered in its marketing campaigns. This reportedly ruined the magic Disney parks were known for.
2. To what degree do you consider that these factors were

Page 4 of 22

foreseeable and controllable by either Euro Disney of the parent company, Disney? Most of the mentioned factors were mostly foreseeable and controllable. It was a matter of looking more deeply into the cultural aspects of the business. They should have hired a mix of European executives that knew the culture. If they were involved from the initial conception and had a large hand in managing the park, it could have mitigated the risk factors that caused their harrowing experiences. They only realized in the end that Guests need to be welcomed on the basis of their own culture and travel habits. Disney failed to adapt to the environmental differences of one market to another. Adaptation is a conscious effort to anticipate the influences of both foreign and domestic uncontrollable factors on a marketing mix and then to adjust the marketing mix and minimize the effects of cultural diversity.
3. What
role
does
ethnocentrism
play
in
the
story
of
EuroDisneys launch? Ethnocentrism is the tendency to believe that one's ethnic or cultural group is centrally important, and that all other groups are measured in relation to one's own. The ethnocentric individual will judge other groups relative to his or her own particular ethnic group or culture, especially with concern to language, behavior, customs, and religion. This is a particular problem for American managers who believe that their ways are always right without respect to anothers culture, values and beliefs.
Page 5 of 22

As a former Disney executive
cited Disney Chairman Michael Eisner and President Franck Wells had never made a single misstep, never a mistake, never a failure. There was a tendency to believe that everything they touched would be perfect. The roots of Disneys problem in EuroDisney may be traced to their tremendous success in Tokyo Disneyland. The park was a success from the first day and has been visited by millions of Japanese who wanted to capture as they perceives as the ultimate U.S. entertainment experience. France is undoubtedly the first response that comes to mind when asked which country in Europe is the most anti-American. Even before the days of De Gaulle and Chirac, it seems that France has always been at the forefront of anti-American animosity. However, polling data in the early 2000s reveal that France is not drastically more anti-American than other European countries even less so on a variety of dimensions.
4. How do you assess the cross-cultural marketing skills of Disney? In the early stage of EuroDisney, POOR would be the most appropriate assessment for the cross-cultural marketing skills of Disney. The Disney management team had failed to conduct a thorough research on the culture, values and behavior of their European customers. The team made poor assumptions that affected the construction design, marketing and pricing policies,
Page 6 of 22

park management and initial financing of the park. Disney has always prided itself on quality of service that its visitors will experience but it fell short of being sensitive to the cultural differences between Americans and French people such as:
Eating habits of Europeans. Unlike Americans who were used to snacking many times in a day, French people have a more fixed schedule wherein leisurely lunch starts at 12:30 in the afternoon resulting in long queues in restaurants due to the inadequate seating and staffing to accommodate the influx if diners.2 French people are also knows to enjoy their meals with wine while Disney banned alcohol consumption inside the premises.
Personal Grooming. French women liked to wear redder nail polish in the United States so the Disney rules on nail polish for women employees was relaxed a little but the grooming for the parks male employees facial hair to have a clean-shaven, neat and tidy look was maintained.
Walking versus Riding. Expensive trams were built along a lake in the theme park to bring hotel guests to their destination but the guests prefer walking.
Vacation Customs. Unlike their American counterparts who enjoy weekend trips, the French prefer month-long vacations which usually happen only every August.
Almost a decade after its poor cross-cultural marketing strategy, EuroDisney has learned its lesson and made appropriate
2
http://www.fundinguniverse.com/company-histories/Euro-Disney-SCA-Company-History.html
Page 7 of 22

changes in their marketing strategy to adjust to the needs of the location:
Blend
of
European
influence
in
Disney
entertainment. The new-movie themed park in Paris designed to be a tribute to moviemaking blends Disney Entertainment and attraction with the history and culture of European film.
Revamp of Disney Characters and Props. The characters in the new theme park speaks 6 different languages and utilizes backdrops inspired by French towns.
Food
Variety.
When
visitors complained of the lack of choices for sausages in EuroDisney, the park revamped its menu to cater to the multiple indigenous tastes of various European cultures.
5. Why did success in Tokyo predispose Disney management to be too optimistic in their expectation of success in France? Discuss. The first Disney theme park to be built outside the United
Page 8 of 22

States was Tokyo Disneyland in Japan. Between 1990 and 1992, 14 million people had visited Tokyo Disneyland, three-fourths of who returned to visit. An ordinary family of four would also send $600 a night to stay in a Disney hotel. This international and instant success for a theme park had rendered management to be very optimistic of their expectation in success in France. In the company history of EuroDisney SCA found at http://www.fundinguniverse.com/company-histories/Euro-DisneySCA-Company-History.html, the article mentioned that Walt Disney company intends to capitalize on the experienced gained from its international exposure in
Tokyo and saw that Europe was the next logical choice due to its long established acceptance of Disney products and films, the latter having wider audience in Europe than in America. Its population of 320 million with airplane distances of less than 3 hours also made the option very lucrative. Disney also intended to correct the business opportunities it lost by failing to foresee potential money-makers. In Orlando, Florida, the development of hotels and other theme parks and recreation centers outside the limited area of Disneyland, reduced to Disneys hotel to occupy only 14% of its total land area. On the other hand, Tokyo Disneyland was not owned by the Disney company and had to settle with receiving royalties on the massive revenues of the park. Given the potential opportunities of the European market and it international success in Japan, it was very hard for Disney management not to try and expect a huge return of their
Page 9 of 22

investment.
6. Do you think the new theme park would have encountered the same problems if a location in Spain had been selected? Discuss.
Yes.
The theme park would have encountered the same Spain is
problems if a location in Spain had been selected.
geographically seated next to France. As such, both are inclined to have similarities in many respects, in terms of origins and culture, climate, experiences in economy, and history. Being common with France in these aspects should pose similar problems had EuroDisney broken ground in Spain. Below are some traits inherent to both France and Spain:
Page 10 of 22

More importantly, history will show that Spains relation with the United States of America is not quite welcoming.
Both France and Spain share common sentiments towards the United States of America. Spains indifference towards the U.S. have stemmed from their rivalry over the control of the New World countries in the 19th century. Spain lost to America in the Spanish-American war, and thus the Treaty of Paris was drawn in 1898. Under the agreement, Spain had to relinquish its control over Cuba, and surrendered Guam, Puerto Rico, and the Philippines to the U.S.A. for US$20 Million.
(http://en.wikipedia.org/wiki/Spanish-American_War) Page 11 of 22

After
the
war,
Spains
relationship
with
the
U.S.
was
predominantly for the countrys economy and national defense. The increased commercial trade operations in Spain as a result of trade agreements with the U.S., has improved Spains domestic economy. The 1953 Pact of Madrid between Spain and the United States provided for mutual defense as well as for United States military aid, and it brought to an end Spain's post-war isolation. It did not however, end anti-Americanism This in Spain. (http://countrystudies.us/spain/89.htm) anti-Americanism
attitude has dragged on to the early 1990s. It was during these times that the Partido Socialista Obrero Espaol (Spanish Socialists Workers Party) campaigned against the U.S. military bases which led to the decision of Spain to reduce the presence of the military bases in its territory. It would have also (http://www.photius.com/countries/spain/national_security/spain_nat ional security_military_cooperation~8066.html) would have been opened to Spain. More recently, in 2005 the German Marshall Fund of the US Transatlantic Trends report shows the following coldness of France and Spain towards the United States: been during these times in 1992, that the gates of Euro Disney
Page 12 of 22

Given all these similarities between the cultures of France and
Spain, the recession in Europe during the early 1990s, and taking extra consideration the cold relationship between Spain and America that dates back to the 19th century, we believe that Spains welcoming committee for a supposedly Euro-Disney Spain is no more hospitable than France. It is also interesting to know how Europeans view Americans (in %):
Source of tables: Anti-Americanism in Spain: The Weight of History by William Chislett (WP) submitted to Real Instituto El Cano, 2005.
Page 13 of 22

7. In light of the near-bankruptcy in 2005, evaluate the proposed plans to strengthen Disneys appeal to the French market.
The case cited several action plans by Disney for the year 2005, as follows:
a. Make Euro Disney a cheaper vacation destination.
Following the European recession in the early 2000s, most of the European Union (EU) members, including France, suffered from high unemployment rates in 2005 and onwards:
Source: http://en.wikipedia.org/wiki/Economy_of_the_European_Union
Disposable income per household may be constricted and as a result, Europeans would think twice in spending for leisure and entertainment. Therefore, selling the park by retail, like the issuance of the one-day pass could better entice the Europeans to go and experience the magic rather than packaging a 3-day
Page 14 of 22

wholesale more expensive tour. The plan to lobby for the use of the Charles de Gaulle airport for low-cost airlines would bring the park closer to a larger number of Europeans.
b. Introduce a new Disney character tailored for the European
audience.
The debut of the Pumpkin Man in Disneyland Paris is a simple but very effective way of capturing French enthusiasm to enter the park, mainly because, he is French. He is a European character citizen in an American park in France, which hopes to invite and entertain European guests. This is something Mickey and
c.
d. Introduce the one-day pass that would be valid in both parks.
The one-day pass would increase the parks visitors. Aside from it is cheaper to go on a day-tour, the French prefers to stay at home during their vacation and leisure times. Visitors that just pass by Paris may now opt for this one-day pass. c. New rides Construction of new rides may not be the best solution to attract
Page 15 of 22

Europeans.
As stated in the case, the problem is the lack of Not the lack of rides.
attractions to justify the entrance fee.
Perhaps an option may be the remodelling of certain rides that are not attractive and are not contributing enough to net income. For example the ArmageddonSpecial effects: Since it was too American, it flopped. Disney may transform that part of the Walt Disney Studio into a French attraction such as The City of Lost Children, based on the 1995 fantasy/adventure French movie La Cit des Enfants Perdus about a mad scientist who steals childrens dreams. This would definitely be a hit to Europes The Pumpkin Man could be the children and the roller coaster chase could be made heart pounding for adults as well. perfect host for this city. We believe that improving existing attractions to suit to the preferences of the French and other Europeans may be the better way of attracting the market than installing new rides at that time in 2005. Aside from the economic slump experienced by the whole of Europe, the capital expenditure required to build additional rides would definitely be prohibitive. d. Additional Recommendation Ethnocentrism should have no part in the management of Euro Disney. An additional way of attracting the target market of Euro Disney is by giving equal importance to the development of the parks human resources. People giving out entertainment should also be happy with what they are doing. Meeting halfway between the Clark Kent look and the Captain Jack Sparrow look may
Page 16 of 22

be challenging but the results would be rewarding in terms of better service to the visitors, livelier performances, more enthusiastic hosts, and being able to deliver a truly magical experience.
8. Now that Disney has opened Hong Kong Disney and begun work on the Shanghai location, where and when should it go next? Assume you are a consultant hired to give Disney advice on the issue of where and when to go next. Pick three locations and select the one you think will be the best new location for Disneyland X. Discuss. For the short term, Disney is recommended not to select its next location because it already has seven (7) Disneyland theme parks around the world and Disney Shanghai will be sufficient to attract the expected amount of people given the Chinese population.
Page 17 of 22

However, for the long term such as in 5 years, it is
recommended that Disneyland select from three possible locations: Sydney (Australia), Seoul (Korean), and even Dubai (The United Arab Emirates).
Seoul : Location: In the northwest is found the capital and largest city of South Korea, Seoul. Seoul is considered to be a leading global city, ranking among the top ten global cities in the Global Cities Index of 2010. Economy: Seoul is considered a major business/ financial hub. Culture: Traditional Korean and Asian culture. Advanced transportation: There are several modes of transportation to get you to your destination such as bus, subway, train, airports (planes).
Sydney: It is the largest and most populous city in Australia. It has a reputation as an international centre for commerce, and arts, fashion, making it culture, one of entertainment, music, education tourism,
Globalization and World Cities Study Group and Networks
(GaWC)
Alpha + world cities. As the financial and economic hub of Australia, Sydney has grown to become a wealthy and prosperous city. Economy: According to The Economist Intelligence Unit's Worldwide Cost of Living Survey, Sydney is the sixteenth most expensive city in the world, while a UBS survey ranks Sydney as 15th in the world in terms of net earnings.
Page 18 of 22

Globma, 21 May 2011 Group 2 Quincey Huang Jojo Javier January Mamauag
Culture: Opening and multi-culture. Tourism: In the year ending March 2008, Sydney received 2.7 million international visitors. Transportation: Bus, LRT and Sydney Airport is Sydney's main airport.
Agnes Villarivera
Dubai: It is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi. The oil economy led to a massive influx of foreign workers, quickly expanding the city by 300% and bringing in international oil interests. Today, Dubai has emerged as a global city and a business hub. Dubai has recently attracted world attention through many innovative large construction projects and sports events. In Dubai, 80% people come from other countries or are foreigners, so it is also considered as an open city. Tourism is an important part of the Dubai government's strategy to maintain the flow of foreign cash into the Emirate. Dubai is expected to accommodate over 15 million tourists by 2015. The city draws large numbers of shopping tourists from countries within the region and from as far as Eastern Europe, Africa and the Indian Subcontinent. Transportation: Dubai has a very convenient transportation system and the airport was the 15th busiest airport in the world by passenger traffic. In contrast, the city of Dubai is a highly cosmopolitan society with a diverse and vibrant culture. Food: Continental Cuisine (Arabic, Fast foods, South Asian, and Chinese). Comparing the three cities as proposed location for the new Disney theme park, all have their own strengths and weaknesses such as thriving economy and consumption capacity, convenient transportation and the
Page 19 of 22

Globma, 21 May 2011 Group 2 Quincey Huang Jojo Javier January Mamauag
world location (capacity to attract tourists). Seoul in Korea has a very small land area compared to the other two locations and in Asia alone, there are already 3 Disney parks: Disney Tokyo, Disney Hongkong and Disney Shanghai. If Disney will settle in Korea, it will no longer have any competitive advantage. Sydney located in Australia is multi-cultural and attracts a large number of tourists there is no Disney park in Oceania. Locating Disney in Sydney may be at a disadvantage because Sydney is a famous tourist city and if Disney locates in the area, its hotel will become one of the many that will have to compete with the other hotels already located in the area. Dubai is a fast growing country which welcomed nearly 15 million tourists by 2010. Its location is a very important position of The United Arab Emirates since its highly sophisticated city attracts large amounts of investors and tourists. Unlike Australia, visitors in Dubai normally stay for several days so Dubai develops its hotel and other tertiary industry. Arab States are fond of many fables such as Ali Baba and the Forty Thieves and Aladdin so if Disney chooses to locate in Dubai, it can combine Western and Middle Eastern Culture which can prove to be attractive to tourists.
Agnes Villarivera
Assuming that Disney chooses its financial partner, Dubai will be the best new location for a Joint Venture since it will never fall short of businessmen who will be willing to support the idea as long as thorough marketing and research will be undertaken by Disney on the socio-political and cultural behaviors of the United Arab Emirates and its neighboring Muslim countries.
Page 20 of 22

9. Given your choice of locale X for the newest Disneyland, what are the operational implicational implications of the history of EuroDisney and Disney Hong Kong for the new park?
Before undertaking another large venture such as DisneyDubai, Disney Management should refer to the lessons of EuroDisney and Disney Hong Kong as reference: Customers and culture should be given attention. The first fault made by EuroDisney is that the planners neglected the local culture and customers and focused only on delivering the American experience. For instance, the eating habits of Europeans, personal grooming, preference for walking instead of riding and vacation practices. In HongKong Disney, planners studied the local culture and practiced the art of Fengshui in the arrangement and lay-out of the development plans for the park. Disney Dubai should learn from the lessons of these two theme parks. Dubai has the influence of Islamic and Arab culture on its architecture, music, attire, cuisine and lifestyle which are very prominent and should be considered by Disney planners. Disney will probably benefit more if it considers using Arab legend into the new theme park, such as Aladdin's lamp, Alibaba, not only in the castle, but also in its cartoon characters. For the holiday, Eid al Fitr is the biggest Muslim holiday that lasts for almost a month per year. So Dubai Disney should build a hotel that will
Page 21 of 22

consider such occasions and cater Halal foods its Muslim visitors. Environment and Location: In EuroDisney, the choice was to locate the park in the Nordic central which provides only six (6) months for outdoor activities, a lot of room for the Disney structures, but has a low tourist rate during the off peak season which reflects its location error. For Dubai, it is recommended to be built in one of the areas in Palm Island, Dubais most beautiful and luxurious places thereby increasing tourist attraction and strengthening the Arab mythologies of Disney. Risk Management: Compared to the two theme parks cited in the example, the following factors should also be considered: a) Uncertainty in the number of the tourists, b) Possibility of Cost overruns resulting in debt , and c) Composition of theme park management (i.e. Arab or Foreigners or what combination) in the new site.
Page 22 of 22

EuroDisney (Final2)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

EuroDisney (Final2)

Uploaded by

Copyright:

Available Formats

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

EuroDisney failed to attract the expected number of European

II. Problem/s a. EuroDisney has lost $900 million from 1992-1994;

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

g. Disney planners also failed to study the European culture and

compared to Paris. The weather was also much better in sunny

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

2. To what degree do you consider that these factors were

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

As a former Disney executive

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

changes in their marketing strategy to adjust to the needs of the location:

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

The theme park would have encountered the same Spain is

problems if a location in Spain had been selected.

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

Given all these similarities between the cultures of France and

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

b. Introduce a new Disney character tailored for the European

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

attractions to justify the entrance fee.

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

However, for the long term such as in 5 years, it is

Globalization and World Cities Study Group and Networks

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

CASE PAPER #1 (THE NOT-SO-WONDERFUL WORLD OF EURODISNEY)

You might also like