Question

Until 1992, the Walt Disney Company had experienced nothing but success in the theme park business. Its first park, Disneyland, opened in Anaheim, California, in 1955. Its theme song, “It’s a Small World After All,” promoted “an idealized vision of America spiced with reassuring glimpses of exotic cultures all calculated to promote heartwarming feelings about living together as one happy family. There were dark tunnels and bumpy rides to scare the children a little but none of the terrors of the real world . . . The Disney characters that every- one knew from the cartoons and comic books were on hand to shepherd the guests and to direct them to the Mickey Mouse watches and Little Mermaid records.”44The Anaheim park was an instant success.

In the 1970s, the triumph was repeated in Florida, and in 1983, Disney proved the Japanese also have an affinity for Mickey Mouse with the successful
opening of Tokyo Disneyland. Having
wooed the Japanese, Disney executives
in 1986 turned their attention to
France and, more specifically, to Paris,
the self-proclaimed capital of European
high culture and style. “Why did they
pick France?” many asked. When word
first got out that Disney wanted to
build another international theme
park, officials from more than 200 loca-
tions all over the world descended on
Disney with pleas and cash inducements to work the Dis- ney magic in their hometowns. But Paris was chosen because of demographics and subsidies. 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. Also, the French government was so eager to attract Disney that it offered the company more than $1 billion in various incentives, all in the expectation that the pro- ject would create 30,000 French jobs.

From the beginning, cultural gaffes by Disney set the tone for the project. By late 1986, Disney was deep in negotiations with the French government. To the exasper- ation of the Disney team, headed by Joe Shapiro, the talks were taking far longer than expected. Jean-Rene Bernard, the chief French negotiator, said he was astonished when Mr. Shapiro, his patience depleted, ran to the door of the room and, in a very un-Gallic gesture, began kicking it repeatedly, shouting, “Get me something to break!”

There was also snipping from Parisian intellectuals who attacked the transplantation of Disney’s dream

world as an assault on French culture; “a cultural Cher- nobyl,” one prominent intellectual called it. The minis- ter of culture announced he would boycott the opening, proclaiming it to be an unwelcome symbol of American clichés and a consumer society. Unperturbed, Disney pushed ahead with the planned summer 1992 opening of the $5 billion park. Shortly after Euro-Disneyland opened, French farmers drove their tractors to the entrance and blocked it. This globally televised act of protest was aimed not at Disney but at the US govern- ment, which had been demanding that French agricul- tural subsidies be cut. Still, it focused world attention upon the loveless marriage of Disney and Paris.

Then there were the operational errors. Disney’s pol- icy of serving no alcohol in the park, since reversed, caused astonishment in a country where a glass of wine

for lunch is a given. 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. Another unpleasant surprise was the hotel breakfast debacle. “We were told that Europeans ‘don’t take breakfast,’ so we downsized the restaurants,” recalled one Disney executive. “And guess what? Everybody showed up for breakfast. We were trying to serve

2,500 breakfasts in a 350-seat restaurant at some of the hotels. The lines were horrendous. Moreover, they didn’t want the typical French breakfast of croissants and cof- fee, which was our assumption. They wanted bacon and eggs.” Lunch turned out to be another problem. “Every- body wanted lunch at 12:30. The crowds were huge. Our smiling cast members had to calm down surly patrons and engage in some ‘behavior modification’ to teach them that they could eat lunch at 11:00 AM or 2:00 PM.”

There were major staffing problems too. Disney tried to use the same teamwork model with its staff that had worked so well in America and Japan, but it ran into trouble in France. In the first nine weeks of Euro-Dis- neyland’s operation, roughly 1,000 employees, 10 per- cent of the total, left. One former employee was a 22-year-old medical student from a nearby town who signed up for a weekend job. After two days of “brain- washing,” as he called Disney’s training, he left follow- ing a dispute with his supervisor over the timing of his lunch hour. Another former employee noted, “I don’t

think that they realize what Europeans are like . . . that we ask questions and don’t think all the same way.”

One of the biggest problems, however, was that Euro- peans didn’t stay at the park as long as Disney expected. While Disney succeeded in getting close to 9 million visitors a year through the park gates, in line with its plans, most stayed only a day or two. Few stayed the four to five days that Disney had hoped for. It seems that most Europeans regard theme parks as places for day excursions. A theme park is just not seen as a destina- tion for an extended vacation. This was a big shock for Disney. The company had invested billions in building luxury hotels next to the park—hotels that the day-trip- pers didn’t need and that stood half empty most of the time. To make matters worse, the French didn’t show up in the expected numbers. In 1994, only 40 percent of the park’s visitors were French. One puzzled executive noted that many visitors were Americans living in Europe or, stranger still, Japanese on a European vaca- tion! As a result, by the end of 1994 Euro-Disneyland had cumulative losses of $2 billion.

At this point, Euro-Disney changed its strategy. First, the company changed the name to Disneyland Paris in an attempt to strengthen the park’s identity. Second, food and fashion offerings changed. To quote one manager, “We opened with restaurants providing French-style food service, but we found that customers wanted self-service

like in the US parks. Similarly, products in the boutiques were initially toned down for the French market, but since then the range has changed to give it a more defi- nite Disney image.” Third, the prices for day tickets and hotel rooms were cut by one-third. The result was an attendance of 11.7 million in 1996, up from a low of 8.8 million in 1994.

http://www.disney.com

Sources: P. Gumble and R. Turner, “Mouse Trap: Fans Like Euro Disney But Its Parent’s Goofs Weigh the Park Down,” The Wall Street Journal,March 10, 1994, p. A1; R. J. Barnet and J. Cavanagh, Global Dreams(New York: Touchstone Books, 1994), pp. 33–34; J. Huey, “Eisner Explains Everything,” Fortune, April 17, 1995, pp. 45–68; R. Anthony, “Euro: Disney: The First 100 days,” Harvard Business School Case # 9-693- 013; and Charles Masters, “French Fall for the Charms of Disney,” Sunday Telegraph, April 13, 1997, p. 21.

Case Discussion Questions

1. What assumptions did Disney make about the tastes and preferences of French consumers? Which of these assumptions were correct? Which were not?

2. How might Disney have had a more favorable ini- tial experience in France? What steps might it have taken to reduce the mistakes associated with the launch of Euro-Disney?

3. In retrospect, was France the best choice for the location of Euro-Disney?

Answer 1

1.

Assumptions

Disney thought that Monday would be a light day for visitor and Friday a heavy one

Disney thought European don't take breakfast

Disney thought that European want the typical French breakfast of croissant and coffee

Another assumption is that reducing the price of the hotel room and day ticket.

Assumption which are not correct

Disney thought that Monday would be a light day for visitor and Friday a heavy one, but the reality was reverse

Disney thought European don't take breakfast , but everybody thought for breakfast.

They thought that the European want typical French breakfast of croissant and coffee, but instead they want bacon and egg.

Assumptions which are correct

When they reduc 1/3rd price of hotel room and day ticket the attendance increased from 8.8 million in 1994 to 11.7 in 1996. . This assumptions was assume correct.

2. the mistakes associated with the launchof Euro-Disney?Disney failed to recognize the existence of Cultural Differences in Europe. They justthought because France wanted Disney to open their location there, they should havestudied more of the European culture first before setting up their project and Disney couldhave also studied about the spending nature of Europeans, especially when they are onholiday. We can also say that Disney had a culture shock with the opening of EuroDisney.“

In May 1992, entertainment magazine The Hollywood Reporterreported that about 25%of Euro Disney's workforce – approximately 3,000 people – had resigned from their jobsbecause of unacceptable working conditions. It also reported that the park's attendancewas far behind expectations. The disappointing attendance can be at least partly explainedby the recessionand increased unemployment, which was affecting France and most ofthe rest of the developed world at this time.” [Dis]

At the worst point, Disney changed their strategy. First, they changed name to DisneylandParis in an attempt to strengthen the park’s identity. Disneyland Paris and its assets havealso been subject to a number of name changes, initially an effort to overcome thenegative publicity that followed the inception of Euro Disney. Moreover, Euro Disney was renamed Disneyland Paris in order to help locate the theme park more easily on themap. In 2002, Disney's CEO noted,

As Americans, the word ‘Euro’ is believed to mean glamorous or exciting. For Europeansit turned out to be a term they associated with business, currency, and commerce.Renaming the park ‘Disneyland Paris’ was a way of identifying it with one of the mostromantic and exciting cities in the world.— Michael Eisner [Dis]

Second, food and fashion offerings also changed. Disney opened own restaurants withproviding French-style food service, but customers still prefer self-service like in the U.S.parks. Similarly, products in the boutiques were initially sensible to the French market,but since then they strengthen experience marketing-Disney a more definite Disneyimage. Next, Disney had cutted one third of the prices for day tickets and hotels. WhenDisney cut the prices for day tickets and hotel rooms by one-third, the result was anattendance of 11.7 million in 1996, up from a low of 8.8 million in 1994.

3. Not truly. because of the Europeans didn’t stay at the park every bit long as Disney expected. While the Disney succeeded in acquiring close to 9 million visitants a twelvemonth through the park Gatess. in the line with its programs. most stayed merely a twenty-four hours or two. Few stayed the four to five yearss that the Disney had hoped for. It seems that most Europeans regard subject parks merely as topographic points for twenty-four hours jaunts. A subject park is merely non seen as a finish for an drawn-out holiday. Which is besides intending the Gallic people did non pass much in the Disney hotel. This was a large daze for the Disney. because the company had invested one million millions in constructing luxury hotels next to the park-hotels that the day-trippers didn’t demand and that stood half empty in the hotel in the most of the clip.

To do the affairs worse. the Gallic didn’t demo up in the expected Numberss. In the 1994. merely 40 per-cents of the park’s visitants were Gallic. One puzzled executive noted that many visitants were Americans populating in Europe or. alien still. What is more surprising was that most of the visitants were the Nipponese travelling to Europe. In the consequence by the terminal of the 1994. the Euro-Disneyland had cumulative losingss of $ 2billion. The entire sum of money spent on epicurean hotels and the loss they had of $ 2 billion by the terminal of 1994. it can clearly state that the France is non a best pick for location of Euro Disney.