DISNEY

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?
 EuroDisney

o Cultural misinterpretations: EuroDisney executives failed to adequately consider

the cultural differences between the United States and Europe. For example, they
assumed that Europeans would be just as enthusiastic about consuming large
quantities of fast food and sugary drinks as Americans.
o High prices: EuroDisney was priced significantly higher than other amusement parks
in Europe. This made it a less affordable option for many families.
o Lack of understanding of European vacation habits: EuroDisney executives failed
to understand how Europeans typically vacation. Europeans are more likely to take
shorter, more frequent vacations than Americans.
o Economic recession: EuroDisney opened in 1992 during an economic recession in
Europe.
o Negative publicity: EuroDisney was surrounded by negative publicity from the
beginning.

Because of these factors, EuroDisney’s first year of operation was a financial disappointment.
The park lost over $900 million in its first year, and it took several years for the park to become
profitable.

 Hong Kong Disney

o Cultural misunderstandings: Similar to EuroDisney, Hong Kong Disneyland

executives failed to adequately consider the cultural differences between the United
States and Hong Kong. For example, they assumed that people from Hong Kong
would be just as enthusiastic about meeting Disney characters as Americans.
o High prices: Hong Kong Disneyland was priced significantly higher than other
amusement parks in Asia. This made it a less affordable option for many families.
o Lack of understanding of local customs and traditions: Hong Kong Disneyland
executives failed to understand the local customs and traditions of Hong Kong. For
example, they scheduled the park’s opening ceremony on a day considered unlucky in
Chinese culture.
o Economic downturn: Hong Kong Disneyland opened in 2005 during an economic
downturn in Asia. This made it difficult for the park to attract visitors. In addition, the
 economic downturn led to a decline in consumer spending, which further impacted
Hong Kong Disneyland’s bottom line.
o Competition from other attractions: Hong Kong Disneyland faced stiff competition
from other attractions in the region, such as Ocean Park Hong Kong and Macau’s
casinos.

Because of these factors, Hong Kong Disneyland’s first year of operation was a financial
disappointment. The park lost over $350 million in its first year, and it took several years for the
park to become profitable.

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?
Foreseeability:
Most of the factors that contributed to the poor performance of EuroDisney and Hong Kong
Disneyland were foreseeable. For example, the cultural differences between the United States
and Europe/Hong Kong, the high prices of the parks, and the competition from other attractions
were all factors that could have been anticipated with proper research and planning.
Controllability:
Some of the factors that contributed to the poor performance of EuroDisney and Hong Kong
Disneyland were controllable, while others were not. For example, the parks could have
controlled their prices and staffing levels. However, they could not control the economic
recession/downturn or the cultural differences between the United States and Europe/Hong
Kong.
Specifically:
 Cultural differences: These factors were largely foreseeable, as Disney had experience
operating parks in different cultures. However, they were not entirely controllable, as it is
difficult to change deeply ingrained cultural preferences.
 High prices: These factors were both foreseeable and controllable. Disney could have
chosen to price its parks more competitively.
 Lack of understanding of local customs and traditions: These factors were largely
foreseeable, as Disney could have done more research on local customs and traditions.
However, they were not entirely controllable, as it is difficult to anticipate every potential
cultural mistake.
 Economic recession/downturn: These factors were not entirely foreseeable, as it is
difficult to predict economic trends. However, they were also not entirely controllable, as
Disney could not control the global economy.
 Competition from other attractions: These factors were foreseeable, as Disney could
have researched the competition in each market. However, they were not entirely
controllable, as Disney could not control the actions of its competitors.