Euro DisneyJoin now to read essay Euro DisneyINTRODUCTIONMany companies throughout the United States and beyond are resorting to developing their business abroad. This is due to numerous factors such as the ability to cut costs through cheaper building material or labor, which leads to increg their revenues, functioning with more advantageous tax and labor laws, and expanding their market, just to name a few. The Walt Disney Company was one of those many American organizations to expand on foreign soil. Its first foreign venture proved to be so successful that the decision was made to further expand abroad. This next foreign expansion experience, named Euro Disneyland did not prove to be the successful venture that had been anticipated by its creators.
A Disney-related investment in a foreign country is a risky business. In fact, it almost always yields the financial returns to an international venture, but it also risks making the foreign investment an expensive investment by not only attracting the desired foreign market, but also making the foreign country the destination after all. By making the trip and its activities international, an international company can also reduce its costs for the local customer base. For example, a Disney-themed ride can create $1.8 billion or a dollar per day at a Disney office in Mexico City, much greater than the initial $400,000 cost at the time.
For other Disney vacation destinations, such as San Diego and Orlando, the risk could be quite high because all companies that are outside of a Disney-themed operation must be considered for U.S. residency. Also, the travel on one-way ticket can exceed the cost of admission in other nations.
Evaluating the risks associated with a Disney-themed trip
Finding some of the best possible tourist attractions in your travel plan is a big challenge. Not only do we need to know more about each type of tourist attraction, but we also have to give a full account of what it would cost you to buy a ride to one vacation destination and what kind of trip would be expensive. So let’s explore some of the things that can make Disney- and company-focused travel an easier journey. These are of course not all of the answers mentioned above, but suffice it to say, the factors here are not as daunting as they might seem.
Some of the factors to consider include:
Cost.
While there are many destinations that take advantage of global travel, the costs of transportation to one vacation destination can be quite extreme. For example, you would often find that at a Disney-themed holiday destination, most travel costs run much higher than you would expect. So the value you pay to a company to operate one or more Disney-themed resorts is far greater if it is based in the Philippines and some other country than you would consider to be home. While most of those destinations offer hotels and resorts throughout the country, one of them for this reason is not always available in the U.S. It is especially difficult to come to the Philippines, where most of the public transportation is limited and the average trip takes many hours. It helps to have good facilities that will allow you to stay in the country with a good quality of food, a good car or hotel.
While there are many destinations that take advantage of global travel, the costs of transportation to one vacation destination can be quite extreme. For example, you would often find that at a Disney-themed vacation destination, most travel costs run much higher than you would expect. So the value you pay to a company to operate one or more Disney-themed resorts is far greater if it is based in the Philippines and some other country than you would consider to be home. While most of those destinations offer hotels and resorts throughout the country, one of them for this reason is not
Euro Disneyland a theme park comprised of an updated, state of the art Disneys Magic Kingdom, is a subsidiary of the Walt Disney Company located outside Paris, France, and has experienced numerous complications from its inception. Because the Walt Disney Company executives were determined to adhere to American philosophies, they did not thoroughly investigate all aspects of the European environment. This failure to do adequate research caused the Walt Disney Company executives and visionaries to construct their American dream theme park on foreign soil with little if any regard for the practical reality of the physical, financial, and/or cultural environment of their chosen site. More specifically, the Walt Disney Companys “biggest mistakes were its overambitious plans to develop the site, plus Euro Disneylands financial structure itself, which depended on a highly optimistic financial scenario with little room for glitches” (Gumbel & Turner, 1994, p. A 12). These massive oversights were contributing factors to the problems faced at Euro Disneyland.
As a company planning on expanding abroad, it is helpful to study the history of companies which previously have developed in other countries. For example, studying the Walt Disney Companys venture into France will allow other companies to learn from the Walt Disney Companys experiences. Recognizing, understanding and avoiding their mistakes will allow a company entering a new country increased opportunity to succeed. Reviewing the Euro Disneyland venture from the site research investigation to the present day operation will be beneficial to a company considering expansion abroad.
THE HUMAN RESOURCE CONNECTIONThe human resource professional often is involved in determining the optimum site for a business and is responsible for many other aspects of an international expansion, such as cultural evaluation of the site, employee selection, training, development, compensation, and evaluation, just to name a few. Thus, as a human resource professional it is pertinent to research companies which have succeeded and those which have not, in order to better prepare. Furthermore, human resource professionals must comprehend the laws, traditions, culture, and people of a country in order to minimize problems which can occur.
THE BEGINNINGIn order to understand the issues involved in the Walt Disney Companys international expansion in Europe it is pertinent to review the background of Euro Disneyland. This can be done by looking at how the site, Paris, France, was chosen, at the signed agreement, at the risk management issues, and at the opening.
Why Paris?The Walt Disney Company choose Paris, France, as the site of Euro Disneyland for many reasons. On April 15, 1983, the Walt Disney Company opened in Tokyo, Japan, their first theme park outside the United States. This theme park, Tokyo Disneyland became an instant hit. In fact, since the Walt Disney Company executives believed they learned so much about operating a theme park in another country, and since Tokyo Disneyland was an instant success, they began immediately to search for a site for a fourth park (Scimone, 1989).
To find a site for their fourth theme park, the Walt Disney Company looked to Europe where Disney films historically have done better than in the United States. Because of this film success, the Western European audience already was familiar with Disney entertainment and merchandise (Scimone, 1991). From 1983 through 1987 the company searched for sites in the United Kingdom, France, Germany, Spain, and Italy. Finally the possibilities were narrowed down to Costa del Sol in Spain and Paris in France. Although Spain had the edge due to its climate, France had a larger population and a spectacular transportation network (Scimone, 1989). The Walt Disney Company executives believed since Tokyo Disneyland located in a cold-weather climate and virtually the same latitude as Paris,
The Walt Disney Company began to use its new search to locate more specific sites that didn’t involve children either. When Disney’s search was finished, the company began its search on top of the search engine website.
Citizenship: The Walt Disney Company was able to find sites across most of Europe. The French had a large population, with an average age of 45 and the English and Spanish combined population of 35 and above, respectively. By far the largest European country for Disney films was the Czech Republic, where the average age for adults was 50 and 30 respectively. Germany, Austria, Sweden, Austria-Hungary, and Switzerland were large locations for Disney films with a combined population of about 8 million people. At the largest French Disney film, in Paris, France, the average age of adult was 45, with a median age of 43. An average of 1.4 million tourists visited the French Disneyland in 1995 (Pf. A. H. Schatzfeld, Disney in Paris, Europe, 1985).
France
France is the only country with a population of 20 million people that was not affected by the recent closure of the Walt Disney film, Disneyland in France. The government said that “France must make every effort to give back”. Although France was considered to be one of the most socially backward countries on Earth, in fact the country was relatively strong, with some significant social and economic reforms in place. The government said that “we must strengthen our public education programmes in schools, to make children understand the role of Disney culture in society, to make them understand the need for a well-defined Disney culture that is in balance with all these social commitments. We must raise our children to the highest possible standards, and create more beautiful, educational spaces to offer for everyone to enjoy”. They also increased the number of local schools in the district and built local parks and playgrounds, especially in the area where Mickey Mouse is a part of Mickey Kingdom.
According to Disney, this meant that in a country with a declining population of around 1 million people, France had the greatest number of Disney activities available on mobile phones. Despite Disney’s efforts, this was still only a small part of the movie’s success. The Disney company did not offer any more detail on this other than that “The film is still on release through the Disney Film Festival and we are taking precautions to try and ensure that we can put more focus on the film.”
In a short and blunt fashion, the Walt Disney Company spent a record $200 million on its new attractions to help boost the Disney film’s revenues, and even as tax rates skyrocketed, Disney was forced to lower its prices and cut fares to try to maintain its global status (Federici, 1990). Moreover, the company closed its Mickey Kingdom amusement park in 1993 (Pf. A. H. Schatzfeld, Disney in Paris, Europe, 1994). This was followed by World’s End (Named after the English word for “land” in America) which Disney closed in 1995 (M.A. Hausmann, Walt Disney in Montauk