Case Study: Disney in France
Q2: How might Disney have had a more favorable initial experience in France? What steps might it have taken to reduce the mistakes associated with the launch of Euro-Disney? ANS:
This case focuses on the miscues that characterized the opening of Euro Disney in France. 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. 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. 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 the length of time that people would stay at the theme park and adjacent resort. As a result, its new hotels stood half empty most of the time. Eventually, Disney changed its strategy and things are now going more smoothly. The company changed the name of the park from Euro Disney to Disneyland Paris in an attempt to strengthen the park's identity. The early operational miscues have been straightened out, and the park now accommodates European tastes and preferences. Attendance at the park was 11.7 million in 1996, up sharply from 8.8 million in 1994.
EURO DISNEYLAND CASE ANALYSIS
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.
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