Walt Disney Company's

Euro Disneyland Venture

A study in corporate foreign expansion
by
Lyn Burgoyne

INTRODUCTION
Many companies throughout the United States and beyond are resorting to developing
their business abroad. This is due to numerous factors such as the ability to cut costs
through cheaper building material or labor, which leads to increg their revenues,
functioning with more advantageous tax and labor laws, and expanding their market,
just to name a few. The Walt Disney Company was one of those many American
organizations to expand on foreign soil. Its first foreign venture proved to be so
successful that the decision was made to further expand abroad. This next foreign
expansion experience, named Euro Disneyland did not prove to be the successful
venture that had been anticipated by its creators.
Euro Disneyland a theme park comprised of an updated, state of the art Disney's
Magic Kingdom, is a subsidiary of the Walt Disney Company located outside Paris,
France, and has experienced numerous complications from its inception. Because the
Walt Disney Company executives were determined to adhere to American
philosophies, they did not thoroughly investigate all aspects of the European
environment. This failure to do adequate research caused the Walt Disney Company
executives and visionaries to construct their American dream theme park on foreign
soil with little if any regard for the practical reality of the physical, financial, and/or
cultural environment of their chosen site. More specifically, the Walt Disney
Company's "...biggest mistakes were its overambitious plans to develop the site, plus
Euro Disneyland's financial structure itself, which depended on a highly optimistic
financial scenario with little room for glitches" (Gumbel & Turner, 1994, p. A 12).
These massive oversights were contributing factors to the problems faced at Euro
Disneyland.
As a company planning on expanding abroad, it is helpful to study the history of
companies which previously have developed in other countries. For example, studying

the Walt Disney Company's venture into France will allow other companies to learn
from the Walt Disney Company's experiences. Recognizing, understanding and
avoiding their mistakes will allow a company entering a new country increased
opportunity to succeed. Reviewing the Euro Disneyland venture from the site research
investigation to the present day operation will be beneficial to a company considering
expansion abroad.

THE HUMAN RESOURCE CONNECTION

The human resource professional often is involved in determining the optimum site
for a business and is responsible for many other aspects of an international expansion,
such as cultural evaluation of the site, employee selection, training, development,
compensation, and evaluation, just to name a few. Thus, as a human resource
professional it is pertinent to research companies which have succeeded and those
which have not, in order to better prepare. Furthermore, human resource professionals
must comprehend the laws, traditions, culture, and people of a country in order to
minimize problems which can occur.

THE BEGINNING
In order to understand the issues involved in the Walt Disney Company's international
expansion in Europe it is pertinent to review the background of Euro Disneyland. This
can be done by looking at how the site, Paris, France, was chosen, at the signed
agreement, at the risk management issues, and at the opening.
Why Paris?
The Walt Disney Company choose Paris, France, as the site of Euro Disneyland for
many reasons. On April 15, 1983, the Walt Disney Company opened in Tokyo, Japan,
their first theme park outside the United States. This theme park, Tokyo Disneyland
became an instant hit. In fact, since the Walt Disney Company executives believed
they learned so much about operating a theme park in another country, and since
Tokyo Disneyland was an instant success, they began immediately to search for a site
for a fourth park (Scimone, 1989).
To find a site for their fourth theme park, the Walt Disney Company looked to Europe
where Disney films historically have done better than in the United States. Because of
this film success, the Western European audience already was familiar with Disney
entertainment and merchandise (Scimone, 1991). From 1983 through 1987 the
company searched for sites in the United Kingdom, France, Germany, Spain, and
Italy. Finally the possibilities were narrowed down to Costa del Sol in Spain and Paris

in France. Although Spain had the edge due to its climate, France had a larger
population and a spectacular transportation network (Scimone, 1989). The Walt
Disney Company executives believed since Tokyo Disneyland located in a coldweather climate and virtually the same latitude as Paris, was so successful, they would
be able to operate in similar weather conditions in Paris. In fact, Disney executives
admit that "...without the cold-climate (Tokyo) Disneyland success, they would never
have picked Paris, which has the same or worse weather than Tokyo" (Anything but a
'Mickey Mouse', 1989). Thus, Paris was selected to be the site of their fourth theme
park.
The site for Euro Disneyland is a "...parcel of prime suburban real estate in a
mushrooming region called Marne-la-Valle" (Tully, 1986, p. 172). In fact, the land
is one-fifth the size of Paris itself (Scimone, 1991). When the French government
used its right of eminent domain to sell Disney the 4,400-acre (1,943-hectares) site at
a fraction of its market value for approximately $7,500 an acre, there were bitter
protests by the local farmers whose sugar beet fields had been farmed by the same
families for a hundred years or more (Tully, 1986; Toy, Maremont, & Grover, 1990).
The Walt Disney Company worked with the local farmers to avoid any potential
problems. Their efforts were successful. The farmers were proud of the fact that
people from many nations would be coming to their area of the world (Tully, 1986;
Toy, Maremont, & Grover, 1990).
Marne-la-Valle is located in an ideal geographic location since it is 20 miles (32
kilometers) due east of the center of Paris and is halfway between the two
international airports of Orly and Roissy-Charles-de-Gaulle. The French railway
regional express network connects Marne-la-Valle with the Paris metro system, and
major highways are nearby (Scimone, 1989). In fact, of more than 350 million
Western Europeans, 17 million can reach the Euro Disneyland resort within two hours
by car (Scimone, 1991) and 310 million can fly creating a "...denser market than the
United States" (Toy, Maremont, & Grover, 1990, p. 61). With the scheduled opening
(which took place May 1994) of direct rail links to Great Britain via the English
Channel there were countless additional potential guests. Thus, due to its
transportation availability, Paris offers Euro Disneyland a wealth of potential guests
and employees (Grey, 1989).
The Agreement
On March 23, 1987, the Walt Disney Company signed a contract with the French
national, regional and local governments, which promised Disney: favorable loan
terms; that the rapid transit railway system would be extended to the theme park from
Paris; that two interchanges would be built to link Euro Disneyland with a main
highway; and that a special station for high-speed trains would be constructed at the

park (Shapiro, 1989; Introducing Walt d'Isigny, 1992). Unlike the Walt Disney
Company's wholly-owned American theme parks, and Tokyo Disneyland where
Disney receives license fees from Mitsui and Oriental Land Corporation, Euro
Disneyland is a public company with 51% of equity owned by EC individuals and
institutions (Anything but a 'Mickey Mouse', 1989). The other 49% of the shares are
owned by the Walt Disney Company who maintains management control of the
company (Grey, 1989).
The Walt Disney Company promised new jobs and contracts for local suppliers which
resulted in red carpet treatment from France. More specifically, Euro Disneyland
planned on hiring 12,000 new Cast Members (employees). About 6,000 would work
in Euro Disneyland's Magic Kingdom, 5,200 in hotels on the property, and the
remainder in recreation and support facilities. The area was suffering high
unemployment at the time and the Walt Disney Company executives believed the
economic benefits to the region would be great since they would employee so many
local citizens and since tourism generates revenue without requiring such costly social
services as schools and hospitals (Scimone, 1989).
Risk Management
Once the Walt Disney Company executives chose Paris, France, as the site for their
fourth theme park, they had to integrate American risk management techniques into a
French environment. This integration of differing management techniques is typical
with any company doing business abroad (Shapiro, 1989). However, a great deal of
time, patience, understanding, education, and willingness to accept and/or
compromise are needed from all parties involved in order to make this integration
successful. The Walt Disney Company has been known for their strict construction
and risk management requirements which they wished to impose upon the French
workers. Likewise, the Walt Disney Company had to cope with language barriers and
an unfamiliar French legal framework derived from the Napoleonic code (Shapiro,
1989). Thus, this joint venture caused many conference sessions to determine how to
best integrate American and French risk management practices covering a multitude
of diverse risks (Euro Disneyland combines American, 1989). It was important to
each side for them to join their philosophies and requirements into a system which
would work for Euro Disneyland.
A good example of the blending of two different systems is the difference in insurance
laws in France and the United States. A ten-year owner/contractor insurance policy
that covers property damage and third-party claims stemming from constructionrelated defects was required by French law. The Walt Disney Company would have
preferred to purchase a three-year contract as would be allowed by American

standards, but could not since they were developing in another country (Shapiro,
1989). Instead, the Walt Disney Company had to abide by the laws of France.
An issue which the French were against was the installation of sprinklers in the hotels
(McIntyre, 1990b). Such an installation is not mandated by French law. The French
believe the sprinklers are not necessary since "...their hotels are built with superior
construction, building materials and compartmentalization, and are equipped with
smoke alarms that would quickly summon firefighters" (McIntyre, 1990b, p. 143).
Thus, since Euro Disneyland was a French Company, the French did not believe they
needed to install sprinklers. The Walt Disney Company believed in such sprinkler
installation and embarked on an education program to explain why they wanted the
French contractors to install the sprinkler system. Once the Walt Disney Company
presented a film on fires depicting how quickly flames can spread, explained about
potential delays in firefighters arriving at a hotel, and discussed the difficulties in
finding the location of the fire, the French approved the installation of the sprinklers.
These are only two examples of many situations which were discussed by the Walt
Disney Company and the French during their risk management meetings. In a wrapup meeting of risk management issues in the construction of Euro Disneyland Stephen
M. Wilder, director of corporate risk management at The Walt Disney Company
believed, "The result of compromise and learning is a program that is far superior to
what an American company or a French company would have done in isolation"
(McIntyre, 1990a, p. 141).
Opening Day
On April, 12, 1992, despite a few protests, the Walt Disney Company's fourth theme
park, Euro Disneyland opened its doors to the public with essentially the same
attractions as in the other Disney theme parks in California, Florida, and Japan
(Introducing Walt d'Isigny, 1992). Euro Disneyland executives hoped to attract 11
million guests a year, more than twice the number that visit the Eiffel Tower
(Introducing Walt d'Isigny, 1992). Half of the guests were excepted to be French.
Euro Disneyland was confident that with its superior investment, professionalism and
French government assistance, it would succeed. If it did not, it would most likely be
the fault of the weather and not of any French cultural chauvinism (Introducing Walt
d'Isigny, 1992). Unfortunately, the dream of succeeding did not become a reality and
eventually Euro Disneyland brought in new management and made other changes in
order to save Euro Disneyland (Gumbel & Turner, 1994).

THE PROBLEMS
Although Disney believed they had hit a "gold mine" by developing their fourth
theme park just outside of Paris, in time they would learn this was not the case. Euro
Disneyland's target of 11 million guests in the first year was met, but revenues did not
roll in as had been planned. In fact, Euro Disneyland reported a $905 million loss for
the fiscal year that ended in September 30, 1993 (Sterngold, 1994), and by December
31, 1993, Euro Disneyland had amassed cumulative loss of 6.04 billion French francs
or 1.03 billion US dollars (Gumbel & Turner, 1994).
It should be noted, Euro Disneyland's first chairman, Robert Fitzpatrick, an American,
won kudos for setting up the park, yet he stumbled over day-to-day operations.
Fitzpatrick spoke French, knew Europe well and his wife was French. But he seemed
to be "...caught in the middle and quickly came to be regarded with suspicion by some
on both sides" (Gumbel & Turner, 1994, A 12). Numerous times he attempted to warn
Disney executives that France should not be approached as if it were Florida, but his
warnings were ignored. He was replaced in 1993 by Frenchman Philippe
Bourguignon. The all-American enterprise suddenly had raced to put on a European
face. Bourguignon was responsible to "...ensure the park goes native without losing
the American feel that is its main draw" (Sasseen, 1993, p. 26).
Although there was a change in the head of Euro Disneyland there are problems
which it faced with the old management and still faces problems with the new
management. Among these problems are included their optimistic assumptions,
staffing and training, cultural issues, interest rates, marketing, communication, and
convention business.
Optimistic Assumptions
The Walt Disney Company, overly ambitious in their venture, made several strategic
and financial miscalculations. In addition it gambled, incorrectly, that the 1980's
"...boom in real estate would continue, letting it sell off assets (discussed below) and
pay down the debt quickly" (Gumbel & Turner, 1994, p. A 1). Further, it relied too
heavily on debt when the interest rates were beginning to increase. Another costly
assumption was that Disney believed it could change certain European habits.
Budget - Breakers
The Walt Disney Company wanted to build a state of the art, as near to perfect as
possible, theme park. In order to meet this goal the company frequently attempted to
build and rebuild, with no regard for the "bottom-line" construction cost. Michael
Eisner, the Chief Executive Officer of the Walt Disney Company, ordered several

last-minute construction changes, known as budget-breakers, which further increased

Euro Disneyland's debt (Gumbel & Turner, 1994). For example, one cold day before
Euro Disneyland opened Eisner warmed himself by a Paris hotel lobby fireplace and
ordered more than a dozen wood-burning fireplaces for Euro Disneyland despite the
added construction cost and upkeep (Solomon, 1994). Another example of an Eisner
budget-breaker was his decision to remove two steel staircases from Euro
Disneyland's Discoveryland. He wanted them removed because they blocked a view
of the Star Tours ride. It was estimated the cost to remove the staircases was
approximately $300,000 (Gumbel & Turner, 1994).
European Recession
Euro Disneyland executives and advisors failed to see the signs of the approaching
European recession. "Between the glamour and the pressure of opening and the
intensity of the project itself, we (the executives) didn't realize a major recession was
coming" (Gumbel & Turner, 1994, p. A 12). As the recession began to develop the
French real-estate market tumbled (discussed below), thus, destroying Euro
Disneyland's hopes of selling their assets and receiving revenues. In addition, the
recession caused French and European disposable incomes to shrink, causing families
to think twice about taking an expensive trip to Euro Disneyland (France: Disney
gears up, 1992).
Furthermore, Euro Disneyland did not realize the magnitude of the impending
recession and when given numerous opportunities to sign partners who would share
the risk or buy the existing hotels, Disney refused. Euro Disneyland did not want to
give up any of the potential revenues once the recession was over (Gumbel & Turner,
1994).
Real Estate Market
The Walt Disney Company executives involved in the development of Euro
Disneyland were determined they would not repeat two mistakes which they had
made in past ventures. One mistake was allowing other companies to build lucrative
hotels surrounding their theme park, as happened at Walt Disney World in Orlando,
Florida, where the Walt Disney Company owns only 14% of all hotels. The other
mistake was in letting another company own a Disney theme park, as in Tokyo, Japan,
where Disney just collects royalties from an immensely profitable attraction
(Solomon, 1994). Thus, in France the Walt Disney Company bought far more land
then it needed in order to eventually build 700,000 square meters of office space, a
750,000 square meter corporate park, 2,500 individual homes, a 95,000 square meter
shopping mall, 2,400 apartments and 3,000 time share apartments (de Quillacq, 1994).

Euro Disneyland planned to develop the land and then sell it to prospective buyers,
making a large profit. In addition, this would allow Euro Disneyland stringent control
over designing and building of future areas within the resort and then the ability to sell
off the completed commercial properties in due course and at a large profit. In fact,
Disney budgeted for real estate to account for 22% of revenues in 1992, 32% of
revenues in 1993, 40% of revenues in 1994, and 45% in 1995 (de Quillacq, 1994).
Euro Disneyland executives must have known rather rapidly that the financing
structure for the resort was in trouble. Unfortunately, this revenue generating plan
never really "got off the ground" due to the collapse of the real-estate market which,
in turn, caused the demise of the planned development around the theme park (Turner,
1993, December; de Quillacq, 1994). Thus, Euro Disneyland did not receive revenue
from property development as had been anticipated.
Operational Errors
There were numerous errors made regarding the overall operation of Euro Disneyland.
For example, from its American experience the Walt Disney Company thought
Monday would be the light day for guests and Friday a heavy one, and allocated staff
accordingly. In reality the reverse was the case. In fact to this day, the company still
struggles to find the right level of staffing at a theme park where "...the number of
visitors per day in the high season can be 10 times the number in the low season"
(Gumbel & Turner, 1994, p. A 12). Furthermore, to add to the operation problem is
the difference in employee acceptance of conditions of employment. In Orlando Cast
Members are accustomed to and have learned to accept being sent home if they are
not needed. However, in Paris, French Cast Members feel extremely irritated by and
have a very difficult time accepting the inflexible scheduling (Gumbel & Turner,
1994).
Another example of operational assumptions at Euro Disneyland involved the bus
drivers. The Walt Disney Company built the French bus parking spaces much too
small. Bus drivers were unhappy as they had a very difficult time fitting their busses
into their designated spots. In addition, the Walt Disney Company provided only 50
restroom facilities for bus drivers and on peak days there would be 2,000 drivers
(Gumbel & Turner, 1994).
A final example of the operational errors made by Euro Disneyland involved the
computer stations at the hotels. Euro Disneyland executives assumed guests would
stay at the park for several days (Treichler, 1991). This in fact did not happen. Many
guests arrived early in the morning, spent the day at the park, checked into the hotel
late that night, and then checked out early the next morning before heading back to the
park. Since there were so many guests checking-in and checking-out, additional

computer stations had to be installed at the hotels in order to decrease the amount of
time the guests stood in line.
Labour Costs
Before the opening of Euro Disneyland executives had estimated labour cost would be
13% of their revenues (Meltdown at the cultural, 1994). This was another area where
the executives were wrong in their assumptions. In 1992 the true figure was 24% and
in 1993 it increased to a whopping 40%. These labour cost percentages increased Euro
Disneyland's debt.
Staffing and Training
Before Euro Disneyland opened the Walt Disney Company built offices in Marne-laValle in order to recruit their Cast Members. In just 12 months 12,000 Cast
Members had to be recruited, hired, trained, and housed (Bakos, 1991). This is a
challenge for any company, "...but it is more complex for Disney, whose employees
(Cast Members) become more like members of a theater troupe" (Bakos, 1991, p.
102). Euro Disneyland recruited through job fairs, a popular European recruiting
technique. In two days, 1,000 applied. However, since the Walt Disney Company's
requirements for employment are so high, for every 10 candidates interviewed only
one was hired (Bakos, 1991). To complicate the hiring process, there were language
requirements since the official languages of Euro Disneyland are French and English.
Preferences were given to trilingual applicants because it was hoped that the park
would draw guests from all over Europe.
Once the candidates were hired Euro Disneyland's challenge was to train the
Europeans, half of them French, to be Disney Cast Members (Toy, Maremont, &
Grover, 1990). "Every employee goes through human resource training, then
additional training in requirements of specific jobs" (Bakos, 1991, p. 102). The
success to Disney parks' repeat guest visits is the employee-customer rapport. Thus,
the largest challenge Euro Disneyland encountered was implanting a "have a nice
day" mentality and teaching 12,000 European employees to smile the "Disney smile"
all day (Anything but a 'Mickey Mouse', 1989).
Throughout training and employment ALL Cast Members learn they must adhere to
the company's strict 13 page manual of dress codes, known to Cast Members as the
"Disney Look." The Europeans did not understand this "Disney Look" (Toy, Grover,
& Maremont, 1992; Phillips, 1993). The "Disney Look" is a rigid code of Cast
Member appearance that imposes a well-scrubbed, all-American look. It details the
size of earrings to the size of finger nails to the no tolerance rule regarding facial hair
and dyed hair. It is difficult for the Europeans to adhere to an "American look" since

they are not American and they believe this requirement has stripped them of their
"individualism" (Leerhsen & Gleizes, 1992, p. 67). Furthermore, the French "...were
hardly specialists in service" (Solomon, 1994, p. 36). In December 1994 Euro
Disneyland was taken to French court contesting the Walt Disney Company's strict
dress code. The Europeans believed the dress code violated French labor law (Du
Bois, 1994). As a result Euro Disneyland restructured their French dress code.
However, the French believed that the Walt Disney Company just instituted a new
policy not as a result of being taken to court but in an attempt to patch up the rocky
labor relations at the theme park.
Cultural Issues
Although European public acceptance of the theme park itself has not been a problem
for Euro Disneyland there has been a different type of cultural clash. Most Europeans
believe there is cultural imperialism (Turner, 1993, November). Europeans have not
taken to the "...brash, frequently insensitive and often overbearing style of Mickey's
American corporate parent" (Gumbel & Turner, 1994, p. A 1). Disney executives'
contentious attitudes exacerbated the difficulties it encountered by alienating people
with whom it needed to work. "Its answer to doubts or suggestions invariably was: Do
as we say, because we know best" (Gumbel & Turner, 1994, p. A 1).
Cultural Operational Errors
There were various errors made in the operations of Euro Disneyland which affected
the French culture. An example if this is the Walt Disney Company's policy of serving
no alcohol in its parks in California, Florida, and Tokyo which it extended to France.
This caused astonishment and rebellion in France where a glass of wine for lunch is a
given. After much consideration, in May 1993, the Walt Disney Company changed its
policy and allowed wine and beer in the Euro Disneyland theme park (Wentz &
Crumley, 1993).
Another example is the Walt Disney Company's belief that it understood European
breakfast norms (Gumbel & Turner, 1994). Disney was told Europeans did not eat sitdown breakfasts. This resulted in Disney downsizing their restaurants before Euro
Disneyland opened. Once it opened the restaurants were bombarded with breakfast
eaters. In fact, they were "...trying to serve 2,500 breakfasts in a 350-seat restaurant at
some of the hotels" (Gumbel & Turner, 1994, p. A 12). Further, guests wanted bacon
and eggs rather than just coffee and croissants. Disney reacted quickly with
prepackaged breakfasts delivered to rooms and satellite locations (Gumbel & Turner,
1994).

In much the same vein, the Walt Disney Company had difficulty realizing that the
Europeans were accustomed to eat at a set time every day (Solomon, 1994). Where
Americans are content to wander around the parks with lunch in their hands, a large
majority of the European guests would converge on the restaurants at 12:30 p.m.
expecting to be seated for a leisurely lunch. This caused the lines to be very long. To
complicate matters further, once the Europeans reached the front of the line they were
told they could not have wine or beer with their lunch (Solomon, 1994). Thus, the
Europeans did not have a positive "Disney experience" while eating their meals. In
addition, it was difficult for Euro Disneyland's managers to staff for these one or two
hour "rush hours."
A final example of a cultural error is the Europeans approach to vacation time. The
Europeans are reluctant to take their children from school for a vacation in midsession whereas Americans do it frequently. Also, the Europeans prefer a few longer
holidays rather than several short breaks. The Walt Disney Company was convinced
that it would be able to "Americanize" the European habits. Unfortunately for the
Walt Disney Company, this was not the case.
Per-capita Spending
There also were miscalculations made by the executives regarding the per-capita
spending of the guests at Euro Disneyland. The Walt Disney Company had assumed
that guests visiting Euro Disneyland would spend large amounts of money as they did
in the United States and Tokyo (Turner, 1993, December). More specifically, the Walt
Disney Company calculated that each guest would buy $33 worth of food and
souvenirs per day. This did not happen. In fact, spending is about 12% less then
predicted (Toy, Oster, & Grover, 1992). Further, Europeans' per-capita income is
lower than the Japanese, and they are likely to spread their money over long
vacations, not four-day spending sprees (Solomon, 1994).
European guests came to the theme park paying the steep entry fees ($43 for adults
and $30 for children), but spent less per-capita on food and merchandise than
Americans (Wentz & Crumley, 1993). This may be due in part to the fact that many
guests spend as much time on the rides as possible because of the high admission
price (30% more than Disney World in Florida) and less time shopping for souvenirs
(Euro Disney: The not-so-magic, 1992). American and Japanese consumers do not
leave the theme parks empty handed, whereas Europeans do. This resulted in lowerthan-expected revenue by Euro Disneyland (Coleman & King, 1994).

Interest Rates
The total construction cost of Euro Disneyland was $4 billion. Disney put in just $170
million in equity capital, while public shareholders, who own 51% of the shares put in
$1 billion in equity capital. Thus, the remaining $2.9 billion was borrowed, at high
rates running as much as 11% (Gubernick, 1994). "Thus, from the start, the project
was highly leveraged" (Gubernick, 1994, p. 42). To further complicate the matter, due
in part to Michael Eisner's budget-breakers (as discussed above), there was an
additional necessity to borrow more money. This second set of loans increased the
amount of money owed which is what ultimately "...handcuffed Euro Disney"
(Gumbel & Turner, 1994, p. A 12). With high interest rates, large loans, and lower
than expected revenue Euro Disneyland was in financial trouble.
Marketing
Euro Disneyland was marketed with the assumption that it was "...a complete vacation
destination that offers enough to keep a family happily occupied for a week"
(Scimone, 1991, p. 18). This marketing strategy was obsessed with depicting the park
as large and completely eliminating the emotional aspect of the park (Wentz &
Crumley, 1993). As discussed above, French guests only stayed at the resort for a
night or two and did not stay a week. Instead of marketing the park in the Americanstyle appeal of "...bigness and extravagance" (Wentz & Crumley, 1993, p. I 23), Euro
Disneyland should have concentrated on the emotional aspect, marketing that guests
would have a unique, extraordinary family experience they would never forget. The
American-style bigness approach insulted Europeans (Crumley & Fisher, 1994).
Furthermore, the marketing was flawed in emphasizing glitz and size over attractions
(Crumley & Fisher, 1994). There was little showcase of the exciting adventures and
characters explaining to the guests what they could do and see in the park. Rather the
French saw Euro Disneyland as "American imperialism-plastics at its worst...It
showed tremendous arrogance on Disney's part" (Crumley & Fisher, 1994, p. 39).
Euro Disneyland made a huge mistake not considering the views of the French when
developing their marketing strategies. The Walt Disney Company agrees there may
have been marketing mistakes, but it blames the mistakes to lack of data on how
Europeans would react to the "Disney Magic" (Euro Disney: The not-so-magic,
1992).
Communication
Investors believe they are victims of Euro Disneyland since the Walt Disney
Company poorly communicated its difficulties. For example, as of July 1994 the Walt

Disney Company executives were communicating to the investors they still planned
on building Phase II, a second theme park at Euro Disneyland. That following
November the executives reported a $905 million loss and Disney itself took a $350
million write-off (Gumbel & Turner, 1994). Shortly after that announcement and to
the total astonishment of the investors, Eisner casually mentioned in a French
magazine interview that Euro Disneyland might close due to its losses.
Additionally, communication with the media has been very poor by the Euro
Disneyland executives (Crumley & Fisher, 1994). Those managers who dealt with the
media would not return phone calls, much less answer questions. Realizing they made
a huge error, it has become Euro Disneyland executives' goal to improve their
reputation with the media.
Convention Business
According to Turner & Coleman (1994), one of the few pieces of good news about
Euro Disneyland is that its convention business exceeded expectations from the
beginning. In fact, convention space at Euro Disneyland's themed New York Hotel,
located adjacent to the park, was overbooked and more capacity was needed. Euro
Disneyland did not anticipate the success of its convention facilities. Had it done so, it
could have increased its conference groups and revenue. Euro Disneyland is now
frantically trying to increase its convention facilities.

THE RESOLUTIONS
Much has happened with Euro Disneyland since its opening. Although there have
been successes at Euro Disneyland the high debt incurred along the way has caused
the financial problems to become the number one priority. In order for the park to
remain operational the debt must be lowered.
Disney's Rescue Package
On March 14, 1994, Walt Disney Company proposed a restructuring "rescue" plan
which would decrease the amount of Euro Disneyland's debt. The centerpiece of the
plan is a 6 billion francs rights issue where 51% would be underwritten by 61 banks
and the rest taken up by Walt Disney, which has a 49% stake in Euro Disneyland
(Euro Disney's wish, 1994; Euro Disney creditors, 1994). A rights issue is an offering
which allows rights to purchase shares, usually at below market prices, to existing
shareholders in the same proportion as their present ownership. Thus, the banks would
spend about $500 million and make other concessions for their 51% shares, where as,
the Walt Disney Company agreed to spend about $508 million to bail out its 49%
shares as well as buy certain Euro Disneyland park assets for 1.4 billion francs (about

$240 million) and lease them back at terms favorable to Euro Disneyland (Coleman &
King, 1994).
In return, the Walt Disney Company agreed to waive royalty and management fees for
five years, saving Euro Disneyland about 450 million francs a year. Following the five
years, the original royalty fee will be cut in half (Euro Disney's wish, 1994). The plan
would lower Euro Disneyland's debt to about 10 billion francs (about $1.69 billion),
from the current 20 billion francs. In addition, the bank agreed to forgive 18 months
of interest payments on the debt and would defer payments for three years saving
Euro Disneyland about 1.9 billion francs. This plan increases Walt Disney Company's
tie to the theme park since its initial investment in Euro Disneyland was just $160
million (Coleman & King, 1994).
It should be noted that at the time the "rescue" plan was instituted, the Walt Disney
Company continued to own 49% of the shares. At that same time the Walt Disney
Company was discussing with Prince Al-Walid bin Talal bin Abdul-Aziz Al-Saud,
from Riyadh, Saudi Arabia, the option of investing about $500 million in Euro
Disneyland and buying as much as 24% of Euro Disneyland shares of stock (Rossant,
Harbrecht, & Grover, 1994). In January 1995, Brian Coleman wrote that the Walt
Disney Company now owned 40% of Euro Disneyland shares, indicating that the
parties had completed the deal (Coleman, 1995, January).
As of January 25, 1995, Coleman (1995, January) reported Euro Disneyland's
"rescue" plan had sharply narrowed its losses for the fiscal first quarter due to
financial restructuring and higher revenues which gave a large boost the theme park.
During that same time period, the theme park had a 3% rise in its revenue from 828
million francs to 854 million francs. For the fiscal year ended in 1994, Euro
Disneyland reported a net loss of 1.8 billion francs (Coleman, 1995, January).
Furthermore, on July 26, 1995, Coleman (1995, July) reported that Euro Disney
posted its first profit. During Euro Disneyland's third quarter its profit was $35.5
million.
Disneyland Paris
Euro Disneyland unofficially changed its name in September 1994 to Disneyland
Paris in order to adapt to "...European tastes and turn around continued losses and
reported slumping attendance" (Crumley, 1994, October, p. 2). Through the emphasis
on the name recognization of Paris, Disney executives hoped to capitalize on its
proximity to the French capital (Euro Disney mulls renaming park, 1994). It was
hoped that this would result in increased attendance and revenues.
Downsizing

In order for Euro Disneyland to hold down costs and increase revenues it has cut 950
administrative posts, or 8.6% of its overall work force (Euro Disney plans to slash,
1993). In addition, responding to complaints regarding high entrance fees and hotel
prices, Euro Disneyland has broken a Walt Disney Company taboo by introducing
cut-rate entry and room rates for the off-season (Sasseen, 1993). Another first is that it
is offering a lower-priced 'After 5' evening entrance ticket (Sasseen, 1993).
Marketing Changes
The Walt Disney Company is changing its marketing philosophy in order to expand
its efforts to countries such as Israel and Africa. Rather than market Euro Disneyland
as vacation destination for a period of time, the Walt Disney Company decided to
market it as one of many stops on a month-long European itinerary (Euro Disney
weathers fickle, 1993). Furthermore, Euro Disneyland executives believe it is
pertinent to turn consumer attention away from its balance sheets and back to Disney
characters and attractions so they are down playing the financial difficulties and
emphasizing what to see and do at the park (Crumley, 1994, March).
Labour Disputes
To end numerous labour disputes over long-hours and poor pay, Euro Disneyland has
"...shifted away from imported American working practices and towards a more
French approach" (Sasseen, 1993, p. 27). This new approach set a maximum working
week and annualized hourly work schedules. In addition, it reclassified jobs using the
French method which allowed French citizens the ability to recognize their standard
French job classifications. As a result, Euro Disneyland won greater acceptance and
willingness to be flexible from its work force (Sasseen, 1993).

CONCLUSION
The Walt Disney Company's venture of Euro Disneyland is an excellent source of
study, training, and learning for human resource professionals involved in possible
foreign expansion. Although Euro Disneyland is located in Europe, the lessons
learned and experiences gained can apply to any country on the globe. For example,
the Walt Disney Company failed to properly understand the eating habits of the
Europeans. The lesson learned is that any meal providing company contemplating
expansion into any foreign market should be intensely indoctrinated on all aspects of
the eating habits of people in and near that country. On the other hand, not all lessons
learned are based on Disney's negative experiences. The human resource professional
could profit by studying the methods used by the Walt Disney Company and the
French in their integrating different risk management procedures into one, resulting in

a far superior program. The astute human resource professional can learn from this
process and apply these newly acquired skills in similar situations anywhere in the
world.
A move by any company to any foreign market should not be made without an
extensive, in-depth study based on exhaustive research into every applicable aspect of
the economy, laws, culture, climate, interests, customs, life-style habits, geography,
work habits, just to name a few. The list could go on and on with one area leading to
another.
In order to determine the best way for a business to enter a new foreign market it
should review past business experiences which have settled in that particular market.
Through these past experiences the business contemplating entering the market would
have the ability to increase its chances of success as well as decrease its chances of
failure.
In the case of Euro Disneyland a new business entering the European market would
learn various problems the Walt Disney Company encountered during negotiations,
construction, and operation of the theme park. The human resource professional can
use this increased knowledge regarding Euro Disneyland's problems in conjunction
with the other businesses which entered the European market in order to optimize
his/her business chances of succeeding. Furthermore, the information from Euro
Disneyland and other companies will allow the human resource professional the
ability to make adjustments and have an edge in his/her negotiations, construction,
and operation in order to decrease potential problems and increase financial revenues.