Eurodisney Case Analysis

In: Business and Management

Submitted By soccerkimber3
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Case #3

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?
The biggest factors that contributed to EuroDisney’s poor performance during its first year of operation were: a poor understanding of the marketplace, the cultural differences between the two countries, and the different approaches to business and life. One major factor was the ethnocentrism, or the viewing of a foreign culture through the lens of your own culture, displayed by American leaders offset by French national insecurities. But, the problems spanned beyond arrogant leadership. Disney assumed people would travel from all over the Europe to visit the park, but really did not cater to the diversity of the guests. Even though the countries are united as the European Union, they are distinct and sovereign culturally.
Put simply, EuroDisney was marketed poorly. Disney built, promoted, and communicated EuroDisney as a piece of America in Europe. Cultural differences were neglected. In the case, we see that Fresh culture also has its own cartoon characters such as Asterix, who has a theme park not far from EuroDisney. Furthermore, Disney banned alcohol in a culture that has a deep appreciation for wine.
Disney failed to understand French national character, their insecurities over cultural invasion, and their deep commitment to maintaining their identity.
Hong Kong Disney faces cultural problems as well, but in a different way. Many Chinese people were not familiar with Disney characters prior to the entrance of Hong Kong Disney. It was hard for Disney to create this familiarity and recognition without that long term relationship. Advertisements were run to create recognition but they were unfit and offensive to the Chinese market. Ads showed families of four…...

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...Jacob Skinner Case 2-1: Disney MARK4050 1. Factors that contributed to EuroDisney's poor performance during its first year of operation: * French visitor's stayed away. They were expected to make up 50% of attendance figures. "The French see EuroDisney as American imperialism-plastics at its worst." The case mentions that French culture has "its own loveable cartoon characters" one of which (Asterix) has a theme park located near EuroDisney. Initial advertising of the park also aggravated the local populous, many of them felt that Disney was emphasizing glitz and size rather than the amenities they offered. * Initial construction of the park also facilitated the financial burden of Disney. Expensive trams were built to take guests from the hotels to the park, but visitors preferred walking, these additional add-ons cost Disney an additional $340 million. * Economic impact, external factors, and competition: High interest rates and the devaluation of several currencies against the franc. The 1991 Gulf War crisis limited vacation travel for the rest of that year. In 1992, the opening of EuroDisney also had to contend with European's desire to travel to the World's Fair in Seville and the 1992 Olympics in Barcelona. Factors that contributed to Hong Kong Disney's (HKD) poor performance during its first year: * Perhaps being overly cautious of making the same mistakes as EuroDisney, HKD was developed to be a much smaller amusement park. Chinese consumers......

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...Kong had very few rides compared to the theme park in Paris. · Did not offer current or hit movie theme based rides that were popular in China at that time. 2. to what degree do you consider that these ffactors were (a) foreseeable and (b) controllable by EuroDisney, Hong Kong Diisney, or the parent company, Disney? I believe that most of the mentioned factors were very foreseeable and controlable. It just depends on how hard the Disney companies were willing to look and observe the countries behaviors. When conducting business over seas, Disney should have hired some specialist in that specific country and scout out all of the possible aspects and new trends that are happening. If they would have done this, then they would have been able to minimize the failure rate tremendously. Also, Disney failed to adapt to their new countries environment from one market to the other, once they figured Paris out, they just assumed that Hong Kong was going to have the same hardships, when they are two complete different cultures with different backgrounds. 3. what role does ethnocentrism play in the story of Euro Disney's launch? I believe that ethnocentrism did play a huge role in Euro Disneys launch and bad streak. When EuroDisney launched their big break, they expected their the French visiting population to make up 50 percent of the attendance figures; when in reality, the French stayed away, because they are basically anti-american in a sense. The reason why France did not......

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Eurodisney Spain and the Olympics in Barcelona in 1992 attracted holiday visitors hence, EuroDisney did not have many guest visiting it that year. Hong Kong Disneyland faced different issues. Firstly, people were not familiar with the characters since Disney was banned for 40 years in China. The park was small, with just a few rides compared to other Disneyland's, therefore customers were not interested. Despite these issues, it fared better since it incorporated a lot of Chinese culture. 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? Since the cost of Disney World Florida was cheaper, customers preferred to fly to the US. This meant that prices in Paris could also be controlled. There were several other mistakes made by the management; for instance, alcohol was banned although consuming wine with meals was a French tradition. The reason for banning alcohol in the park could be justified but it was not acceptable by the French due to their tradition. These factors should’ve been foreseeable to everybody else except the owner of Disney because he was starting to believe that everything he touched was a masterpiece. These factors were definitely controllable if they would’ve research and received help from an outside source with knowledge about different cultures. Previous analysis of Europeans vacations habits, like pets, overnight days, is amazing to think......

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...or twice in a lifetime. It is also noteworthy that Disney did not take the same precautionary methods with Europe that it did with Japan. Disney Japan was very successful, because the market was very receptive to Disney in Tokyo. Disney also used a Japanese research group, Japanese construction companies, basically outsourced every part of the project they could to Japan which is arguably the reason for its success. The Japanese know best what they want, so it was right for Disney to delegate certain responsibilities to Japan. With EuroDisney, however, Disney decided use a US research group instead of a French research group. Had they used a French research group, they would have noticed that the market in that company was not as receptive to Disney. Disney should have delegated as much responsibility to France as possible in order to get the desired results. It seemed as if Disney had a cookie-cutter mentally in regards EuroDisney. Disney felt that since it had success in Japan, a country far different from their own culturally, then success would be assured in a European country that is culturally parallel to the US. This was hubris on the part of Disney. The company should treat each cultural as an independent unit. It is the cultural issue European predilection misconstrued by Disney's organization in regards to the construction of the park and delivery of services and goods that made the company unique to American society was absent in the design of the......

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...In April 1992, Disney opened the door of EuroDisney at 30 kilometers east of Paris. During that time, it was designed to be the biggest and most impressive theme park that Disney has ever built in the world. Before the EuroDisney, Disney has built up theme park in California, Florida and Japan. When Disney saw the success of Tokyo Disneyland, they wanted to build other theme parks outside America and after choosing from over 200 potential sites included Spain, Italy and Greece; Paris was the chosen one. The management of Disney has expected to receive the same behaviour in EuroDisney as their Japanese counterparts in Tokyo Disneyland but they actually experienced the exact opposite of what they experienced in Japan. At EuroDisney, families were unwilling to spend the US$280 a day which was only to enjoy the attractions of the park with a milkshake and a hamburger. Staying overnight was not even in their mind as the prices were very high. Paris was chosen due to its location and also that it is the Europe’s most popular city for tourist destination. The management planned to received 11 million visitors and generate more than US$100 million during the first year but the attendance reached only 9.2 million and by summer 1994, they made a loss of more than US$900 million. The financial losses were so huge that the President had to put in place a rescue package to make EuroDisney back on firm financial ground. They had to revise their marketing plan and made new strategic and......

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