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Euro Disney Case Study Solution Format

Euro Disney Case Study

Problems & Sub-Problems

Euro Disney opened its park in April 12, 1992. The company had many problems when it entered European market. In the opening day of Euro Disney attendance at the event was less than expected, commuter trains leading to the park were on strike, protesting staffing and security problems were evident, residents of the nearby villages demonstrated against the noise, and a terrorist bomb just missed disabling nearby electrical facilities the night before. Additionally, the research showed that the attendance of nearby French residents, who were projected to account for half of the park's attendance, was running below expected rate. In New York, the shares of The Walt Disney Company dropped 5% following the June attendance announcement. In July, Euro Disney announced that revenues for its first quarter were $489 million; however, it would incur a loss for the fiscal year. The company blamed the loss on the fact that it had geared up for a higher level of operations than had actually been attained. As well, shares of Euro Disney, which traded on the French Bourse, dropped 2.75% following the announcement, capping a 31% drop since the opening of the park. Moreover, the capacity of the park was 50 000 visitors and admission gates were closed after this figure was reached. For instance, on one occasion in the three months opening, the gates of the park were closed from 11 a.m. to 3 p.m. because the park reached its capacity. Consequently, the capacity issue was unsatisfactory to the people who came to the park, because they were not able to enter the park. In addition, Disney imbued the park with a European flavour. The design of the complex departed in some ways from the traditional formula, and Disney characters had their roots in European mythology due to concerns that the experience would be too "Americanized"; although, French was the first language of the park. France's intellectual community voiced especially harsh criticisms. They felt that Euro Disney would encourage in France an unhealthy American brand of consumerism. For others, Euro Disney became a symbol of America within France. In July, a group of French farmers blockaded Euro Disney in protest of farm policies in the US supported at the time. Also, French press expressed other concerns, one of the most noted was the fact that Disney decided not to serve wine in the park. Many people felt that this was a departure from important French tradition and lunch habits, as well as a snub to the country's reputation for excellence in winemaking. Visitors who wanted alcoholic beverages had to go outside the theme park. Besides, Disney addressed a concern that French visitors would not tolerate long waiting lines, and American eating habits. As well, a sample of...

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EURO DISNEYLAND CASE ANALYSIS

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INTRODUCTION

Euro Disney, nowadays Disneyland Paris, is a holiday and recreation resort located in Mane-la-Valle, a new town close to Paris (Euro Disney, 2009). When the International offer of shares for the Euro Disneyland was issued in October 1989 the strategies for this new enterprise of the Walt Disney group were very optimistic. The financial plans for the first year of operation estimated total revenues of FF 5,482 million and a net profit after tax of FF 204 million. For the subsequent years the development was projected to be even more impressive. Just within a short time after Euro Disney was unwrapped in April 1992, it was noticeable that reality would not encounter the plans. In November 1992, the financial reports for the year ended in 30 September 1992 were published which included the first 172 opening days of Disneyland Paris. There the management had to announce a loss of FF 188 million. The second year was even worse. Although Euro Disney nearly met plans for guest attendance, they confronted a loss of FF 5,337 million whereas total turnover was FF 5,725 million. Plans for the second year of operation (1 April 1993 to 31 March 1994) predicted a turnover of FF 6,801 million and a profit of FF 359 million. (Recklies, n.d.)

Euro Disney started to have problems early, on 1980’s problems with negotiation and construction, on the 1990’s with French figures started to voice

against the park, with phrases

like “Cultural Chernobyl”

 (Euro Disney, 2009) .Euro Disney also had problems in the beginning of its operations, since the first day, problems related to cultural issues and operational issues oc

curred massively, affecting directly Euro Disney’s performance and attendance.

Objective

The main objective of this report is to understand how Euro Disney had this initial failure. How it could had a better initial experience, and to provide recommendations to students and

business men don’t committee the same errors.

Hofstede's cultural dimensions theory

Hofstede's cultural dimensions theory is a framework for cross-cultural communication, developed by Geert Hofstede. It describes the effects of a society's culture on the values of its members, and how these values relate to behavior, using a structure derived from factor analysis. The theory has been widely used in several fields as a paradigm for research, particularly in cross-cultural psychology, international management, and cross-cultural communication. (Hofstede's cultural dimensions theory, n.d.)

Dimensions of national cultures

Power distance index

Individualism vs. collectivism

Uncertainty avoidance index

Masculinity vs. femininity

Long-term orientation vs. short term orientation

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