Eurodisney Case Analysis
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EuroDisney Case Analysis
EuroDisney, currently named Disneyland Paris, opened for business in April of 1992. Much to Disney’s surprise this theme park did not attract the expected number of visitors necessary to allow for profits. By 1993, after announcing their fourth-quarter results, losses were reported to be $517 million. In 1994, Prince Al-Walid agreed to invest up to $500 million for a 24 percent stake in the park. This cash infusion along with a change in local management led Disney back to the road of recovery. By 1996, Disneyland Paris became France’s most visited tourist attraction.
With the recovery of Disneyland Paris, Disney’s management has embarked on an ambitious growth plan. Their plans include the addition of the California Adventure Park at Anaheim and three new theme parks in Tokyo, Paris, and Hong Kong. Having a learned a lesson with Disneyland Paris, Disney plans on spending only $400 million of its own money for their new projects.
Disney’s management failed to adapt to the French environment. They failed to anticipate the influences of the foreign and domestic uncontrollable factors and to adjust accordingly. Management relied on their own cultural values, experiences and past successes, and knowledge (Self-Reference Criterion), which accompanied by ethnocentrism, caused several kinds of losses.
Where did Disney’s management fail? Disney failed by ignoring the climate given the parks geography, the culture, the competition, and the economic climate. By making erroneous assumptions regarding the financial and commercial services infrastructure as well, Disney’s management helped make matters worse.
Even though the location for the new theme park had its advantages (a combination of incentives from the French government as well as remarkable data on regional demographics)
the reputed dismal winters did not affect their decision.
Disney’s management didn’t feel that the weather was an issue because their other theme park, although in a completely different market (Tokyo), had done well – despite the cold winds and snow. They failed to recognize that differences existed between the two markets.
In 1994, an International Theme Park Services consulting firm stepped in. It seems that Disney’s management exhibited ethnocentrism and completely ignored the French culture.
Disney’s management felt that they were a successful company and they knew best. If left to conduct business using their methods, once again they would be successful and profitable.
Dennis Spiegel, president of the consulting firm found that the French