...Case Discussion Questions 1-)What assumptions did Disney make about the tastes and preferences of French consumers? Which of these assumptions were correct? Which were not? Assumptions which are correct or not correct: * Disney thought that Monday would be a light day for visitors and Friday a heavy one. * One Disney executive thought that Europeans don’t take breakfast. * Disney thought that the Europeans want the typical French breakfast of croissants and coffee. * Disney reduces the prices of the hotel room and day tickets. * Disney opens own restaurants with providing French-style food service. * Euro-Disney changed its name. Assumptions which are correct: * When Disney cut the prices for day tickets and hotel rooms by one-third. The result was an attendance of 11.7 million in 1996, up from a low of 8.8 million in 1994. * Euro-Disney changed its strategy and the company changed the name to Disneyland Paris in an attempt to strengthen the park’s identity. Assumptions which are not correct: * They thought that Monday would be a light day for visitors and Friday a heavy one, but reality was reverse. * One Disney executive thought that Europeans don’t take breakfast, but everybody showed up for breakfast and the lines were horrendous. * Disney thought that the Europeans want the typical French breakfast of croissants and coffee, but instead they want bacon and eggs. * They open own restaurants with providing...
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...lavish theme park that Walt Disney Company (Disney) had built to date—bigger than Disneyland in Anaheim, California; Disneyworld in Orlando, Florida; and Tokyo Disneyland in Japan. Much to Disney management’s surprise, Europeans failed to “go goofy” over Mickey, unlike their Japanese counterparts. Between 1990 and early 1992, some 14 million people had visited Tokyo Disneyland, with three-quarters being repeat visitors. A family of four staying overnight at a nearby hotel would easily spend $600 on a visit to the park. In contrast, at EuroDisney, families were reluctant to spend the $280 a day needed to enjoy the attractions of the park, including les hamburgers and les milkshakes. Staying overnight was out of the question for many because hotel rooms were so high priced. For example, prices ranged from $110 to $380 a night at the Newport Bay Club, the largest of EuroDisney’s six new hotels and one of the biggest in Europe. In comparison, a room in a top hotel in Paris cost between $340 and $380 a night. Financial losses became so massive at EuroDisney that the president had to structure a rescue package to put EuroDisney back on firm financial ground. Many French bankers questioned the initial financing, but the Disney response was that their views reflected the cautious, Old World thinking of Europeans who did not understand U.S.-style free market financing. After some acrimonious dealings with French banks, a two-year financial plan was negotiated. Disney management rapidly revised...
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...paper introduces some thoughts about the Disney strategy choosing the place for its European park and about the beginnings of its operations; in some way related to cultural factors. It constitutes a personal answer to a case study placed in the book "International Marketing" 13/e by Philip C. Cateora and John Graham, McGraw-Hill 2007. Factors that contributed to Euro Disney's poor performance during its first year of operation. There are several different in nature factors that joined together and contributed to a disastrous beginning of operations. Most of them were management mistakes and others, although external factors, if considered, could have result in different management decisions leading to a better start. In my view these are the most important ones: The timing. EuroDisney opened in 1992, just when two other international events had place: the Olympics games in Barcelona and the World's Fair in Seville; both in Europe and relatively close to Paris. It's obvious that been unrepeatable events, available only for a certain limited amount of time they were a strong competition. A huge amount of people choose attend to these events instead visiting EuroDisney. Suffice it to say that more than 40 million people visited the Seville Expo during the 6 months it was open (versus 9 million EuroDisney visitors accounted for 1992 all year around). To add insult to injury, an economic recession was starting in Europe and Disney management failed to see the signs of it...
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...lavish theme park that Walt Disney Company (Disney) had built to date—bigger than Disneyland in Anaheim, California; Disneyworld in Orlando, Florida; and Tokyo Disneyland in Japan. Much to Disney management’s surprise, Europeans failed to “go goofy” over Mickey, unlike their Japanese counterparts. Between 1990 and early 1992, some 14 million people had visited Tokyo Disneyland, with three-quarters being repeat visitors. A family of four staying overnight at a nearby hotel would easily spend $600 on a visit to the park. In contrast, at EuroDisney, families were reluctant to spend the $280 a day needed to enjoy the attractions of the park, including les hamburgers and les milkshakes. Staying overnight was out of the question for many because hotel rooms were so high priced. For example, prices ranged from $110 to $380 a night at the Newport Bay Club, the largest of EuroDisney’s six new hotels and one of the biggest in Europe. In comparison, a room in a top hotel in Paris cost between $340 and $380 a night. Financial losses became so massive at EuroDisney that the president had to structure a rescue package to put EuroDisney back on firm financial ground. Many French bankers questioned the initial financing, but the Disney response was that their views reflected the cautious, Old World thinking of Europeans who did not understand U.S.-style free market financing. After some acrimonious dealings with French banks, a two-year financial plan was negotiated. Disney management rapidly revised...
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...Resort Paris: Mickey Goes to Europe Case Study Prenae George January 21, 2012 MGT Organizational Theory Walt Disney opened in 1983, Disney US theme parks and had great success. Tokyo Disneyland soon became the most profitable Disneyland in the world. Because of the enormous success of Tokyo, and because Paris was the most visited tourist area in Europe The Walt Disney Company decided to open Euro Disneyland near Paris. Amidst intense criticism form Europe’s cultural elite, Euro Disney opened the Disneyland part and hotels to the public on April 12, 1992. The Walt Disney Company has such great success in the past with their other theme parks in Florida, Japan, and California; this was a recipe for greatness. Regrettably, Euro Disney story did not follow the Florida, Japan, and California drafts for success. After opening Euro Disney they were faced with much opposition such as financial difficulties. These oppositions forced the company to reassess their formula for success. Disney must produce techniques that will densely fit the needs of the European market in order for the Euro Disney to survive. Because Management practices are influenced by cultural valued, global management learning must recognize that successful practices in one culture may work less well in others (Erez, P. and Christopher, E.) Although Disney has been very successful in other countries they appear to have a lot to learn about management and organization practices...
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...flexibility (step 2) for Euro Disney Key accounting policies • Euro Disney Associés has opted for financial lease. The firm leases the Disneyland Park from Euro Disneyland S.N.C. EDL Hotels S.C.A., which is owned for 99,99% by Euro Disney Associés, leases the hotels from a specialpurpose financing company. • The special-purpose financing companies are fully consolidated in Euro Disney’s financial statements. The substance of the relationship between the group and these financing companies is such that they are effectively controlled by the group. Areas of accounting flexibility • The personnel is transferable between the park and the hotels and vice versa. This way, the company copes with the fact that 90% of the employees have a permanent contract. • Euro Disney can defer the payments of interest, royalties and management fees that it has to pay to The Walt Disney company, when the actual performance is less than the contractually agreed benchmark. • The debt covenants limit the amount of new debt capital that Euro Disney can attract to $50 million. 2. What incentives may influence managing reporting strategy (step 3)? • The CEO of the Gérant, Philippe Gas, could obtain a discretionary annual bonus based on the individual performance relative to the objectives of the company. Moreover, he also obtains discretionary grants of the company’s stock options, The Walt Disney Company’s stock options and The Walt Disney Company’s restricted...
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...The Not-So-Wonderful World of EuroDisney—Things Are Better Now at Paris Disneyland Bonjour, Mickey! In April 1992, EuroDisney SCA opened its doors to European visitors. Located by the river Marne some 20 miles east of Paris, it was designed to be the biggest and most lavish theme park that Walt Disney Company (Disney) had built to date—Bigger than Disneyland in Anaheim, California; Disneyworld in Orlando, Florida; and Tokyo Disneyland in Japan. In 1989, EuroDisney was expected to be a surefire moneymaker for its parent, Disney, led by Chairman Michael Eisner and President Frank Wells. Since then, sadly, Wells was killed in an air accident in spring of 1994, and EuroDisney lost nearly $1 billion during the 1992-1993 fiscal year. Much to Disney management’s surprise, Europeans failed to “go goofy” over Mickey, unlike their Japanese counterparts. Between 1990 and early 1992, some 14 million people had visited Tokyo Disneyland, with three-quarters being repeat visitors. A family of four staying overnight at a nearby hotel would easily spend $600 on a visit to the park. In contrast, at Euro Disney, families were reluctant to spend the $280 a day needed to enjoy the attractions of the park, including les hamburgers and les milkshakes. Staying overnight was out of the question for many because hotel rooms were so high priced. For example, prices ranged from $110 to $380 a night at the Newport Bay Club, the largest of EuroDisney’s six new hotels and one of the biggest...
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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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...Euro Disney SCA formally launched its theme park to Europeans in April 1992 near river Marne, 20 miles East of Paris. It was the biggest and most lavish theme park that Walt Disney had built bigger 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. 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, in 1992, amount of visitors reached only 9.2 million and spent 12% less on purchases than the estimated $33 per head, and the projected attracting 11 million visitors and operating of S100 million during the first year of operation became a loss of $900 million by summer of 1994 since opening. Development Crisis looms and rescue was put on October 1994. The park's name was officially changed from Euro Disney to "Disneyland Paris", in order to more closely link the park with the romantic city of Paris, and to disassociate itself with the poor reputation that has become linked with the phrase "Euro Disney". The tide turnaround in 1996, Disneyland Paris became the most visited tourist attraction in France with 11.7 million (increase 9% from the previous year), being one of Europe's leading tourist destinations. Later entering Hong Kong, although, Disney was determined not to make the same cultural and management mistakes in China that...
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...What are the Disney resorts and parks aiming for? 1) The Disney resorts and parks were aiming for a market that focused on creating images, experiences and products to customers that emphasized fun, imagination and service. It aimed to provide a place where customers could escape the cares of the real world through the "magic" of legendary fairytale and familiar Disney characters. The market targeted families and children and the company had already built a popular brand that was associated with wholesome family entertainment. 2) Was Disney's choice of the Paris site a mistake? Yes, the choice of the Paris site was a mistake because the lifestyle, culture and ideas of Paris were very different from the culture of the Americans which caused many of the people of Paris to be in opposition with one critic referring to it as "a horror made of cardboard, plastic, and appalling colors...taken straight out of comic book written for obese Americans". The site initially seemed ideal because of the location could provide access to millions of people. Paris was a highly attractive destination and Europeans generally take more vacation time than Americans. Disney however did not anticipate the backlash they faced due to significant cultural differences such as eating behaviors were different, French visitors were highly intolerant of long lines, Disney's grooming standards for employees were deemed too strict and excessive by the French and were met with protest and the area that Disneyland...
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...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 million; this would show that the estimated revenue could be met. The resources were there to make the park a success, people were ready to enjoy the park and revenue was sure to be met by the cost of admission into the park. A difference between the Euro Disney of France and the Disney parks in the US is that admission is never...
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...Disney set up a system that has worked in the United States and Tokyo. This system sets forth a set of guidelines that requires all Disney “cast members” to act as one unit and provide the standard of excellent guest service one has come to expect from Disney. Some of the different aspects of this service standard include: • Dress Code: A standard that does not include brightly colored socks, what type of undergarments are appropriate, and their “costume” to be worn appropriately. • Grooming Standards: No facial hair, no outlandish hair styles, clean fingernails, and proper grooming at all times. • Treating others as they were treating you. Sounds like a “golden rule” as of sorts. But Walt Disney had a vision that when you stepped across the gate, you were entering a land where dreams come true, and worries were left behind. By applying this “golden rule” to all guests, it appears that he was intending to have everyone leave happy and want to come return. However, I believe that the system that worked in the U.S. may not have been received well with their European counterparts. It is a widely known stigma that Europeans are not the nicest population in the world. With that, I believe that Disney had a more difficult changing their innate apprehension to buying into the Disney way of doing things. Going along with that, without the proper managers that can sell that ideal to the new employees of Euro Disney, it posed a problem with the delivery of such a service...
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...After making some unsuccessful and some successful attempts in different locations Disney gained a large amount of experience on management, marketing and promotion. The path that they have gone through has a strong impact on their way of becoming a better international business organization. Firstly , now they have an idea about the factors that should be taken into consideration while entering a particularly different environment. The values, attitudes , beliefs , tastes and traditions of the local people occupy the first stage among these. When they opened Disneyland Paris ,they only offered a French sausage, in spite of the fact that most people that visit the park are foreigners and prefer different cuisines . It caused decrease in the number of visitors . After such a mistake now they have learned a lesson and for example ,if they are going to open new Disneyland in a location where there is a strong restrictions on food based on the religion or the preferences of the people , they will be much more careful about it. The attires that are worn by the people and their appearance now can be graded due to their cultural and environmental background. Some great experiences like putting feng shui signs to the entrance of the park showed that they respect the local people's values . They can apply this experience to become more successful in other new countries. Also using special Chinese attractions and decorations on holidays was extremely effective and gave them a hint to...
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...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 wanted to. Actually, the park wasn’t as big as they expected and not very different from the other parks they had. Plus, there were only 16 attractions instead of 52 in Eurodisney Paris, which is a huge mistake. 2. To begin, we have to know that mistakes are not allowed to a company named Disney. Disney could be able to foresee the unforeseen. Disney should have foreseen the changing...
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...Until 1992, the Walt Disney Company had experienced nothing but success in the theme park business. The parks in California, Florida, and Japan were busy and profitable. In the mid 1980s, Disney turned its attention to Europe, and specifically to France. When word got out that Disney wanted to build another international theme park, officials from over 200 locations around the world expressed interest. But Disney settled on Paris, largely because about 17 million Europeans live less than a two-hour drive from Paris. Another 310 million can fly there in the same time or less. In addition, the French government seemed like a willing host and offered Disney more than $1 billion in various incentives, all in the expectation the project would create 30,000 new jobs. Unfortunately, from the beginning, the project was troublesome. Negotiations with the French government were difficult. Disney committed a string of cultural miscues. There was a backlash in France, particularly from Parisian intellectuals, who attacked the transportation of Disney's dream world as an assault on French culture. French farmers used the opening of the park as an occasion for staging a protest against the U.S. government for its insistence that French agricultural subsidies be cut. In addition, there were operational errors. For example, Disney thought that Monday would be a light day for visitors and Friday a heavy one and allocated staff accordingly, but the reality was the reverse. Disney also miscalculated...
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