Euro Disney did not enjoy the success it had come to expect from its earlier ventures, chiefly the most recent theme park in Tokyo. There were many challenges, most of them due to the skeptical nature of the French public in general and the media and government in particular. There were many issues that were addressed and factored in making the strategic plan. The major challenge with the labor itself was providing the quality and standard of customer service which is expected from a Disney theme park. The problem of bringing these people up to the standards was a problem as many of the requirements were criticized (Euro Disney p12).
The staff housing was another problem because the theme park as in Paris and the employees could not afford the higher rates prevalent. Still another problem with the labor was the working hours and working conditions, which cited by many European people as extremely stressing (Cateora and Graham 614). Apart from the labor problems, there were other challenges also like the food and beverages quality and types, which were pointed out by the press as against French culture (Anthony 12). Alcohol was forbidden, but this was a mistake since Europeans have a habit of drinking wine or beer with meals.
Also the Europeans preferred witting down at their meals, which were not factored at all. There was yet another major problem which was the core of the theme park itself. The park was supposedly Americanization of common people and was criticized by the government itself. The trams kept for the benefit of the tourists were also a huge loss since Europeans preferred walking. Also the spending on food and souvenirs by visitors were 12% less than expected (Anthony 10). All these factors contributed to major losses for the theme park. 2.
To what degree do you consider that these factors were (a) foreseeable and (b) controllable by either Euro Disney or the parent company Disney? Most of the problems faced by Euro Disney, as is seen above, were because of a lack of local knowledge and expectations, and the forecasts made due to these mistaken expectations. This fact is proven in the later dealings of the company. As soon as the company became aware of the issues, it began major restructuring and went on an aggressive PR and bridge-building spree with the local public.
The damage to the company, had it known the issues earlier on, would have been controllable to a large extent. However, the situation would not have been under total control, because the French media as well as the government were too much hostile, for the theme park to have a smooth sailing under the best of the conditions. 3. What role does ethnocentrism play in the story of Euro Disney’s launch? “Ethnocentrism is the habit of seeing things only from the point of view of one’s own group and creates a strong sense of group solidarity and group superiority” (Taylor and Andersen, p.
67). Ethnocentrism was present on the side of both parties in case of Euro Disney. Disney being an American company was conscious of only the money-oriented American style of working, which it was proud of and cared nothing of the local sensibilities. At the same time Europeans, chiefly French were entirely opposed to what they called Americanization of their cities, and preferred a more humanistic and leisure-paced lifestyle, which they did not wish to compromise on (Herbig 3). It could be said that in a way the root cause of the entire problems faced by Euro Disney was ethnocentrism.
4. How do assess the cross-cultural marketing skills of Disney? Euro Disney is the classic example of how not to cross-cultural business. Needless to say Disney failed rather badly in the area. In fact the theme park had been opened in Europe with the express interest of bringing American culture into Europe. This included not only the theme park, but the entire management and the programs offered, without a care for the requirements of the local public. Probably the only thing done to adapt the theme park into local colors was to make French the official language of Euro Disney.
The company had not even bothered to check and tailors the offers according to the habits of Europeans, for instance the financial projections 3-4 days stay over at the hotel, which is actually only two days in case of Europeans. The allocation of the staff according to the busiest days, meals served, prohibition on alcohol, the extremely conservative dressing style for the employees was also based on what was seen in America, which is totally the opposite of the real scenario. The problem was ultimately to an extent sorted when the new CEO joined in 1993, who prepared a cross-cultural marketing campaign and realistic projections (Herbig 4).
5. Why did success in Tokyo predispose Disney management to be too optimistic in their expectations of success in France? Discuss. The earlier venture of Disney had been in Tokyo, which had been wildly successful despite the huge differences between the cultures. Because of this, the Disney management assumed that Europe would be an easier location for their next venture, since the cultures were apparently similar. This is where the management went entirely wrong. In addition, there were several other differences which the management had not considered.
The first was the population density in Tokyo which was approximately three times that of Paris, the distance of the park from the downtown Tokyo that was just 5 miles instead of 20 miles in case of Paris, also the distance between the original Disneyland and Europeans was much closer than for Japanese, and finally the climate differences chiefly in the Winter season that had not been factored at all (Herbig 3, 4). The entire exercise was a classic example of what happens to a venture, even a new division of an already successful venture, when management fails to do a proper market survey.
6. Do you think the new theme park would have encountered the same problems if a location in Spain had been selected? Disney had passed over a site in Spain, for the location in Paris (Yu, Yu, and Chon 24). Had the Spanish location been selected, one definite advantage would have been that of the weather. However, apart from this the problems faced would have been essentially the same. The concept of time, the labor requirements, the expectations on the consumers, the park theme s a whole, would have met with similar resistance.
Whether or not it would have been this hostile, is a matter of mere speculation; however the resistance would definitely be there. 7. In light of the near-bankruptcy in 2005, evaluate the proposed plan to strengthen Disney’s appeal to the French market. The first problem that must be sorted out is the cultural differences which are the root cause of almost all the problems faced by Euro Disney. For the employees, the cross-cultural training has to extend to all the employees instead of just the managers (as was the case). In addition, the employee conditions instead of just following local laws should also focus on local culture.
Sudden and rigid impositions create a discordant note which may be hard to suppress in future. The park theme should have a European flavor and the local press should be taken into confidence. Many of the problems faced by Euro Disney were magnified by the press which does not create a good impression among the local public. Yet another change which should be made is regarding the travel packages, which should be affordable. They should be highlighted while promoting the park 8. Now that Disney has begun to work on the new Hong Kong and Shanghai locations, where and when should it go next?
Assume you are a consultant hired to give Disney advice on the issue of where and when to go next. Pick three locations and select the one you think will be the best location for “Disneyland X’. Discuss. Three possible locations for the next Disney theme park are – Canada/USA, Australia, and India. As a consultant the best bet of the location of such a park would be in India. The Canada/US location would have been an obvious first choice, but because of the current recession and turmoil in the US market, a high-cost entertainment venture is not such a bright idea.
Australian location would be advantageous. However given the track record of Disney in overestimating the ease of operations in western-culture countries, and ending up in a disaster, it would not be such a bright idea. The reason for this is the success of Disney in Asian turf, and India being a country with immense population and a taste for western culture, fits the bill to a T. The success of the Tokyo theme park means that similar strategies could be employed here, and this is corroborated by the statistics of successful US based ventures in the country. 9.
Given your choice of locale X for the newest Disneyland, what are the operational implications of the history of Euro Disney for the new park? The operations of a Disney theme park in India need to be toned down as per the conservative outlook of the local people, however the country has many precedents of a US company starting operations, and so a thorough case study of such ventures is a must. The bureaucracy and red-tape level is extremely high in India, as in many Asia countries, so the company must be aware of such factors. The quality is another factor, which the company must be extremely careful of while entering in India.
Anthony, Robert, Euro Disney: The First 100 Days, Boston: Harvard Business School, 1993. Cateora, Philip R. , and Graham John L. , International Marketing, (Case 2-1: The Not-So- Wonderful World of Euro Disney), Boston: Irwin McGraw-Hill, 2002. Herbig, Paul A. , Handbook of Cross-cultural Marketing, New York: Haworth Press, 1998 Taylor, Margaret L. , and Andersen, Howard F. , Sociology: Understanding a Diverse Society, 4th Edition, California: Thomson Wadsworth, 2006. Yu, Lawrence, Yu, Larry, and Chon, Kaye Sung, The International Hospitality Business: Management and Operations, New York: Haworth Press, 1999