Euro Disney Case Study
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Case Analysis # 1
EuroDisney- Disney Land Paris
1. What factors lead to EuroDisney’s poor performance during its first year of operation?
EuroDisney had a disastrous first year in Paris, France. There were many reasons that contributed to the horrible start. I am going to discuss six reasons why I think EuroDisney had such a hard time adjusting in Europe.
It was cheaper for European families to travel to Disney World in Orlando, FL. Not only was the trip to Orlando going to be cheaper, but it was almost guaranteed that the weather was going to be spectacular. People go on vacation to have a good time, but more importantly to enjoy the weather. People in Europe and around the world are not going to vacation at a spot where the weather is going to be unpredictable. 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.
The French culture did not like the American Fairy-tale characters. The French had their own fairy-tale characters; one even has a park located near EuroDisney. Starting up a company internationally is an extremely hard task. Researching the culture of the country in which the company is going to be located is extremely important. When the plans to bring EuroDisney to Paris were finalized, they should have begun extensive research on the culture and history of France. By not doing that Disney may have insulted the French, but more so they hurt their chances of making money.
The whole Disney idea was not sitting well with the French people. For example, during a trip to France in 1989 Michael Eisner was hit with eggs by a French columnist. When a culture shows somebody this much disrespect, take it as a hint and get out. The French people were extremely upset at the thought of having an American tourist attraction arrive onto their land. When Japan got Disneyland they welcomed it with open arms. Each culture and country is different as it pertains to other cultures. Japan’s successful adaptation to an American tourist attraction all but guaranteed its success in Europe.
Disney’s had a reputation of maintaining a quality park for its customers to enjoy. The French people got upset when Disney began to market EuroDisney by referring to its size and glitz, instead of by the variety of attractions and rides that were available. By making EuroDisney so extravagant, they ended up alienating many potential customers. When it was all said and done, the people of Europe, but more specifically France, did not show up in the first year of business. Those potential customers may have chosen to go to another tourist attraction or they may have ended up in Orlando at Disney World for a fraction of the cost.
Europe was headed into a recession. There were signs of it during the late 1980’s, but nobody on the Disney planning team paid any attention to it. When a country is headed into a recession that means the economy is not doing that well and people are not spending their money as many would hope. European’s avoided spending their money foolishly, but in essence it affected EuroDisney. During a recession people are going to save money, but the executives in the United States obviously did not take that into consideration when choosing France as the spot for the next Disney Park.
Competition was extremely high the year EuroDisney opened its doors. The World’s fair was in Seville and the 1992 Barcelona Olympics were occurring all in the same year EuroDisney opened. These two competitors took away quite a bit of potential business to EuroDisney. In 1992 Europe was a tourist’s heaven; it had everything the people could want. Disney executives were so anxious to open EuroDisney that it cost them about $900 million dollars in the first year. If the opening could have been delayed for another year, they may have had more visitors and not have lost the ungodly amount of money that they did.
2. To what degree do you consider that these factors were (a) foreseeable and (b) controllable by
either EuroDisney or the parent company, Disney?
The cost of a vacation to EuroDisney Paris compared to Disney World in Orlando Florida was astonishing. I see this factor being foreseeable for this reason. Before a company goes abroad they must complete an extensive research project on the history, culture, and economics of the specific region in which they are going to operate. The people in charge of the economics of Europe obviously did not calculate the amount of money a family was going to need in order to visit EuroDisney. It is mind