Professional Documents
Culture Documents
Euro Disney
Euro Disney
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Startup
Opened in 1992 within budget Beginning (additional) influences Drop of shares due to first year loss After 5 years still problems with visitors Cultural Chernobyl
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Responsible for 71 % 21 % 8%
$ 2,593 $ 724
Case: Euro Disney
WDC resorts:
Walt Disney World Resort (Orlando, 1971)
Magic Kingdom Disney MGM Studios Theme Park Epcot Center
Visitors
50 million 90 % repeat customers, 5 % from Europe Adults in late twenties with young children
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Success factors
Creative imagination:
Park set-up Cartoons come alive Participation of visitors Parks are continually updated
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Hiring process:
a peer interview process to select cast members a 45-minute interview session with a Disney personnel manager extensive orientation program in Disneys service standards
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Service standards:
safety courtesy show efficiency
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Certain messages reinforced throughout the training: happiness measured differently by every guest and challenge to create customers perceptions are extremely fragile employees are on stage at every moment and should look to provide service fixing costumers problems is very important
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The reasons why Tokyo Disneyland worked: Young Japanese are very clean cut. Japanese are generally comfortable wearing uniforms Obeying their bosses Like to be part of a team. They are very patient. Japanese are always very polite to strangers.
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Location of the Euro Disney site 1981: Bidding process involving Germany, Spain and France 1987: Agreement with the French government Central location Highly popular vacation destination The only disadvantage seem to be the inclement weather
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Contractual concessions with the French government The French government agreed to extend highways and the railway The French government agreed to build a high-speed TGV train extension The French government would reduce the value-added tax The French government provided over $700 millions in loans
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Financial Facts
Euro Disney was 49 % owned by The Walt Disney Company and 51 % owned by Euro Disney S.C.A Admission to the park cost $41 for adults and $27 for children The capacity of the park was 50,000 visitors Cost estimates were determined by the consulting firm ADL
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Financial Goals
Attracting 11 million visitors in the first year of operation Achieving operating income of $373 million at April 12,1992
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Phase II
Disney MGM studios Park and additional hotel rooms Attracting 8 million visitors Disney budgeted $3 billion to complete Phase II
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French Intellectuals proposed ideas about: Cultural requirements Park design Grooming standards Eating habits
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Research concluded that Europeans were interested in: New York Disney land The Western United States
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Actions taken:
Add 3 western theme hotels French was first language
Signs & employees were bilingual
Characters altered to meet French ideas Disney did not offer wine within the park Disney had many entertainment shops and foods Disney was thought of as an Imaginary Place, a culture without sin
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Start Up Process
Employment Marketing Disney Service and operations Problems
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Employment
Hire and train employees 14000 people to fill 12000 jobs Another 5000 people for peak season
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Marketing
Give the park a European flavor Advertised in magazines throughout Europe Sleeping beauty Castle Nestle
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Problems
Dress code Housing shortage Employees are leaving or being laid off Examples of employees
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Visitors
9% Other 18%
18%
8%
40% 3.5%
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3.5%
Case: Euro Disney
Decisions
Big issues prioritizing objectives:
Revenue outlook Cost problems Service delivery system
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Decision sets
1st set of decisions:
Service system up to the standards and cost levels of the other Disney Parks
A day at Eurodisney
Trains on Strike; Tourists Unable to Reach Park Euro Disney Visitors Complain of Long Lines and High Prices Guests find Euro Disney Employees Rude Visitors Claim Euro Disney is a Fairy Tale come True Europeans not Impressed with American Fast-Food Disney Shows Lack of Appreciation for French CultureWine not Served in Park Euro Disney not up to Standards of American Theme Parks Europeans Discover the Old West at Frontierland
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Disneys concerns
Disney does not fit traditional French entertainment Competition from Paris entertainment industry Linguistic barriers Europe is multilingual Cultural barriers food habits, alcohol a part of diet, long lines Europe is multicultural with differences in perceptions for entertainment Lack of housing accommodations for staff Acceptance of Disney as part of American culture by the French? Cold weather could be a deterrent Expensive by European standards
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Questions
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Assess Disneys decision to build a theme park in Europe. How can such a decision be evaluated and was it a wise one?
To answer question divide it into parts: Is Europe a good (new) market? What possibilities were there? How was it executed?
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What is Euro Disneys target Market? What are the implications for the development and organization of the park?
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Needs
Fantasy world
Have fun
families
Grandparents
Consumers
Young families. Young couples Middle/Upper class Walt Disney figures Entertainment High Services Level The park Other facilities around and in the park, such as hotels, restaurants Other Disney fans
Technology
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Customers
Children Young families families Grandparents with grandchildren Disney fans People that can afford spending money on the park (middle class and upper class) People who just want to go so badly that they put other things aside to be able to go to Euro Disney European people
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Target Market
The majority of Disney visitors are adults many of them are in the late twenties and have young children. The rest are people from four to sixty years who have enough money to spend, to have a good time with Walt Disneys entertainment
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What issues must a company think through before extending a successful service overseas?
What is the expected service for Europeans? What is expected out of design and service standards? Are employees sufficiently screened and have the issues of supply and demand been worked out to suit European demands? Does the company deliver these services properly and efficiently? Have they done the proper research to make these conclusions? Does the level of service delivery and/or exceed the expectations of Europeans?
Does the company have the correct expectations about European consumers? Have they done the proper research to make these conclusions?
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Does the company know what the expected standards are? Have they done the proper research?
Does the company live up to its promises and communicate in a satisfactory way to Europeans? Have they done the proper research to make these conclusions?
Service delivery:
Disney standard Disney University Treatment of employee's Integrate the cultures
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Should Euro Disney proceed with the next step of development? Euro Disney should first solve their problems before they expand Euro Disney could apply the lessons they have learned from the Phase I experience to Phase II
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Treat customers fairly Learn from recovery experiences Learn from lost customers
Project teams can be assigned to a problematic area to develop a solution Difficult for Euro Disney to identify lost customers
What lessons has Euro Disney learned which could be applied to the development of the second park?
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Expected Service
Customer Gap
Customer
Perceived Service
Service delivery External communications to customers
Company
Gap 3
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Evaluation
Inadequate marketing research orientation Lack of upward communication Insufficient relationship focus Inadequate service recovery
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Adapt for the local market from the US model and if so, how?
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Recommendations
Adapt to French standards & expectations Employee involvement in Euro Disney planning & operations Single theme for Euro Disney; focus on French culture Promote winter attendance through reduced costs and package plans Identify additional target markets (i.e., student groups) Before expanding, understand Disney fit with European cultures Package Euro-Disney with other Paris destinations Prepare to contract buses if public transport is disrupted. Leave some memorial for any villages/ people displaced by park. Give displaced people lifetime pass.
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Questions
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