Lovely May O. Rile BSBA-4 March 4, 2014

1. What factors contributed to EuroDisney's poor performance during its first year of operation? What factors contributed to Hong Kong Disney's poor performance during its first year?
Many factors contributed to Euro Disney' poor performance during the first year of operation and many of these factors could have been alleviated if the proper factors would have been previously considered. The first year for EuroDisney was unpleasant and devastating because of various poor decisions taken by the management besides some external factors. Major aspects involve location, foreign exchange rates, management problems, poor understanding of the marketplace and the cultural dissimilarities between the two nations and their distinct ways to business and life.
The Gulf war in 1991 had a negative impact and during the same period, Europe was facing a recession. The opening of the park in 1992 with huge events such as the Olympic Games in Barcelona during the summertime and the World’s Fair in Seville was disadvantageous to EuroDisney. Besides this entertaining occurrence, the currency movement made going abroad for vacation is a cheap option for Europeans and gets an additional benefit of enjoying the weather. This resulted in just a minimal difference between going to Disneyland Orlando and EuroDisney for the holidays. Hence, EuroDisney did not have many guests visiting it that year. Almost none of its targets were met and with costs rising, they faced severe challenges ahead.. In order to attract customers, they lowered their prices and introduced new rides that ultimately improved its performance.
Another factor was the vacation behaviors of Europeans. Europeans enjoys month long vacations while American preferred short but several vacations in a year. On the other hand, in the European mindset, hotels was too high. Hotel rooms at the park were charging rates comparable to luxurious hotels. In the case, we can see that French inspired culture theme park is located near EuroDisney. Also, Disney did not allow alcohol in a wine loving culture which resulted not only in unfavorable experiences by customers, but also in massive criticisms from France, which is traditionally contradictory to’ Americanism’. Disney failed to understand the French national character, their uncertainty over cultural invasion after having been an occupied nation twice in the last century and their deep commitment to maintaining their identity and liberty. The arrogance of the French is based on insecurity as a global minority and the arrogance of the Americans was based on a wide open optimism and global success. The collision of the two was “formidable” as the French say. The managers of Disney and Euro Disney used their way of doing business, their cultural belief and ethics, and what they know and are used to in order to try and get another country to do the same. Generally as management, it is important to have a general knowledge of domestic activities and policies, and to understand the various cultures and operations of the sales force outside of the United States. This can only be accomplished by using human resource from which are familiar with the culture of French, how business is handled in different parts of the world, varying company policies and operations, language and cultural differences, various sales methods, training, customer service and so on. The management of Euro Disney had difficulties due to cultural and lack of understanding of the French culture. Operational errors that easily could have been avoided accounted for more troubles than were expected in the Euro Disney. In regards to employees, alcohol, admission and hotel prices, and breakfast in the hotel, staffing problems, and regulations regarding pets, many problems cause the Euro Disney misfortune in the first year.
The major factor that contributed to their poor performance, during their first year of operation can be simplified to poor understanding of the marketplace and ethnocentrism.

2. To what degree do you consider that these factors were (a) foreseeable and (b) controllable by EuroDisney, Hong Kong Disney, or the parent company, Disney?
Euro Disney’s determinant of poor performance marketing misstep was present throughout the whole outset of Euro Disney. Euro Disney were confronted with several factors that contributed to the failure of the company, factors such as location, price, changes in exchange rate, as well as the style of the theme park all added a part in the lack of success experienced by Euro Disney.
The mistakes made by EuroDisney were partially foreseeable and can be entrusted on the management team that made the decision for the European park. The hotel pricing is probably the most controllable and foreseeable factor of all. The fact that a very good hotel in the center of Paris costs as much as a stay at a good, but not exceptionally well Disney hotel, so this should have been taken into consideration by the EuroDisney management team.
The factors that happened into the failing first year could have been anticipated by Euro Disney or the parent company, alike for having capacity to handle them. Antagonism among French people exists even as the plans were just being decided, that they are against Americanism invading their country and culture. A study of the history and understanding of the individuality of European people and the European market place would have enabled the Disney executives to predict many of the problems. Some problems were controllable and others cannot be avoided.

Factors I mentioned are not categorized as the unforeseen. Rather they are being classified as the expected factors, which Euro Disney or the parent company Disney should have detected. Looking at sophistication, the parent company can able itself on another people, considering the cultural profile of the French.. Culture is wide and change occurs when opposition slowly yields to acceptance, so the basis of opposition becomes of no real worth or abandoned, which means that on the part of the European community, we are certain to see agreement and compromise, but over a period of time. Disney too has to adjust with the environment it has settled in, we read in the case that Disney does ultimately correct its approaches. Making room for constant change is the finest way to go about its business.