EURO DISNEYLAND CASE

STUDY
BY- KAJAL ARORA (FA19023) NIPUN MEHTA (FA19034)
PRIYANSHI RAJORA (FA19039) RAJAT JINDAL (FA19040)
RISHABH GOYAL (FA19041) SIMRAN (FA19052)
SRISHTI SHARMA (FA19055
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 Corporate History of Walt Disney

 The Walt Disney Company, commonly known as Disney , is an

American multinational mass media and entertainment conglomerate
headquartered at the Walt Disney Studios complex in  California.

 Disney was originally founded on October 16, 1923, by

brothers Walt and Roy O. Disney as the Disney Brothers Cartoon
Studio; it also operated under the names The Walt Disney
Studio and Walt Disney Productions before officially changing its
name to The Walt Disney Company in 1986.

 The company established itself as a leader in the American animation

industry before diversifying into live-action film production,
television, and theme parks.

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 1923–1928: Founding and silent film era
• In early 1923, animator Walt Disney created a short film entitled Alice
comedies. After the bankruptcy in 1923 of his previous firm, Disney
moved to Hollywood to join his brother, Roy O. In January 1926, the
Disney Brothers Studio's name was changed to the Walt Disney Studio.

• After the demise of the Alice comedies, Disney developed an all-cartoon

series starring a character named Oswald the Lucky Rabbit. Disney
completed 27 Oswald shorts before losing the contract in March 1928

1928–1934: Mickey Mouse 

 In 1928, to recover from the loss of Oswald the Lucky Rabbit, Disney
came up with the idea of a mouse character named Mortimer while on a
train headed to California, drawing up a few simple drawings.

 The mouse was later renamed Mickey Mouse. Disney's first sound, a

cartoon starring Mickey, was released on November 18, 1928.

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1934–1950: Snow White and the Seven Dwarfs, World War II

 Disney began production of his first feature-length animated film in

1934 Snow White and the Seven Dwarfs by 1939 became the
highest-grossing film of that time.

 After World War II began, box office profits declined when the
United States entered the war at the same time, the studio began
producing live-action films and documentaries.

1950–1966: Television, Disneyland, and Walt Disney's

death

o In December 1950, Walt Disney Productions and the Coca-Cola

Company teamed up for Disney's first venture into television. Walt Disney at the grand
opening of Disneyland, July 1955
o In 1955, Disneyland opens in California. In 1966, "Winnie the Pooh
is released, and Walt Disney is diagnosed with lung cancer, and dies
in Dec.

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 1966–1986: Roy O. Disney's leadership and death , new leadership

 After Walt's death, Roy O. Disney took over as chairman of the company. One of his first acts was to
rename Disney World as "Walt Disney World" in honor of his brother and his vision .

 In 1971, Roy O. Disney died of a stroke. He left the company under the control of Donn Tatum, Card
Walker, and Walt's son-in-law Ron Miller, each trained by Walt and Roy.

 In 1983, the Disney Channel begins production, and Tokyo Disneyland opens in Japan.

 In 1984 , Roy E. Disney and his business partner Stanley Gold managed to remove Ron W. Miller as
CEO and President, replacing him with Michael Eisner as CEO and Frank Wells of Warner Bros. as
president.

 In 1986 Walt Disney Productions name changes to The Walt Disney Company.

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BUSINESS ENVIRONMENT

It refers to all the internal and

external factors that affect how the
company functions including
employees, customers,
management, supply and demand
and business regulations

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Internal Environment
The internal environment "consists of those relevant physical and social
factors within the boundaries of the organization or specific decision unit
that are taken directly into consideration in the decision-making behavior
of individuals in that system". These factors are generally controllable.

This includes all departments such as management, finance, research

and development, purchasing, Business operations and accounting.

External Environment
The external environment "consists of those relevant physical and social
factors outside the boundaries of the organization or specific decision unit
that are taken directly into consideration.”

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Micro External Environment

CUSTOMERS PARTNERS COMPETITORS

Consumer Marketing
Market Intermediaries
Companies with
Business similar offerings
Financers
Market for goods and
services
Government Advertising
Market Agencies

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 Macro Business Environment

TECHNOLO ENVIRONM
POLITICAL ECONOMIC SOCIAL LEGAL
GICAL ENTAL

Competitive Employment
Taxation Policy Interest Rate Values, Beliefs Internet Law
Advantage
Trade Health and
Regulations
Inflation Rate Language E-commerce Waste Safety

Recession or
Disposal
Govt Stability Boom Religion Social Media Product Safety
Energy
Unemployment Customer Electronic Consumption Product
Policy Liquidations Lifestyle Media Labelling

Growth in Research and Pollution

Political Policy
spending power Literacy Development Monitoring Labour Laws

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10
Relevance of Business Environment

 Enables to Identify Business Opportunities

 Helps in Tapping Useful Resources

 Coping with Changes

 Assistance in Planning

 Helps in Improving Performance

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Relevance of Business Environment

 Enables to Identify Business Opportunities

 Helps in Tapping Useful Resources

 Coping with Changes

 Assistance in Planning

 Helps in Improving Performance

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 • After the success of Disneyland in California and
DISNEYLAND PARIS Walt Disney World in Florida, plans to build a
similar theme park in Europe emerged In 1972.
Under the leadership of E. Cardon Walker, Tokyo
Disneyland opened in 1983 in Japan with instant
success, forming a catalyst for international
expansion.
• Disney land chose France over 200 other locations
after carefully analyzing the details like temperature,
proximity of the location.
•  A site in the rural town of Marne-la-Vallée was
chosen because of its proximity to Paris and its
central location in Western Europe. This location was
estimated to be no more than a four-hour drive for 68
million people and no more than a two-hour flight
for a further 300 million.
• Michael Eisner, Disney's CEO at the time, signed the
first letter of agreement with the French
government for the 20-square-kilometre (4,940-acre)
site and was opened on 12th April 1992.

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 • Einser was so keen on Euro Disneyland that it kept 49% stake in the
project with remaining 51% distributed through the London, Paris
and Brussels stock exchange.
FINANCIAL • Initial offer price was FFr 72 which was considerably high
STRUCTURE • Walt Disney company management was putting an investment of
$2.4 billion , French national and other local authorities were
providing about $800 million.
• Other sources of funding were park’s 12 other corporate sponsors
and Disney would pay them back in kind.

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 MAJOR PROBLEMS
 There were issues from the beginning, people quoted it “cultural Chernobyl”, also the farmers
over there had to cultivate some where else.

 Labor problems i.e. 9 weeks after opening 3,000 people left the job as American model was being
followed and dress policy violated the French labour laws and there were some very strict
appearance dress code which conflicted with their social customs.

 There was no alcohol allowed and no breakfast services.

 Prices were too expensive for Europeans and that was the recession period too in Europe.

 The communication and advertising plan wasn’t really good as the first ad was in English making
people feel that foreigners had owned there land.

 Monday was supposed to be the light day and Friday was supposed to be the heavy day rather it
was other way round and made financial projections based on American vacationing habits.

 The waiting line system was really bad and English people found it difficult to cope up with it.

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OTHER PROJECTS
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 HONGKONG
Tokyo Disneyland was established in 1983 at this time Japanese economy was undergoing a boom in
the 1980s.

• Should Disneyland Choose Hong Kong?

Hong Kong’s recent reinstatement as the world’s freest economy reconfirmed its claim as a central
hub for international business travelers. Hong Kong was especially a unique shopping experience for
visitors from China mainland and the world. The market: Hong Kong Disney’s target market
consists mainly of family-oriented Asian tourists, primarily those from mainland China, Taiwan, and
Southeast Asia. Taiwanese and Southeast Asian tourists who were interested in visiting Disneyland
would be more likely to travel to Hong Kong because of its proximity and lower costs relative to
Tokyo. Hong Kong represents a less formidable language barrier that the U.S., Japan, or France.
Tourists from Other Countries.

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 HONGKONG
What does Hong Kong Disneyland need to reverse its slide?

• The park last year posted its eighth annual loss in its 11 years of existence, with attendance in 2016
dropping to 6.1 million visitors.

• Hong Kong Disneyland can't rely on its domestic audience,it needs international visitors,

• currency disadvantage against the yuan and competition from Shanghai Disneyland, it's unlikely that
those visitors will be coming from mainland China anytime soon.

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HONGKONG

• RECOMMENDATION

1) To entice more international visitors, Hong Kong Disneyland is adding a Frozen-

themed land in 2020 and a major new Avengers-themed attraction in 2023. In the
meantime, the park will change its Buzz Lightyear ride to a Marvel-themed shooter,
build a Moana theater in Adventureland. To house those international visitors, the
park is opening its third on-site hotel, Disney Explorers Lodge, which opens April 30

2) Hong Kong Disneyland needs to find a niche — whether that's pricing value, unique
attractions, or just a clever marketing campaign.

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 TOKYO-JAPAN
On 15 april 1987 the Disneyland was formed in Tokyo .The final cost of Tokyo
Disneyland was 180 billion yen.

• Why Was Tokyo Disneyland A Success And Not Disneyland Paris?

Tokyo had more than three times as many inhabitants as Paris (8.5 vs. 2.3 million).
Tokyo's average per capita income was 43 percent greater than Paris's ($10,300 vs.
$7,200). Tokyo Disneyland is only six miles from downtown Tokyo; Euro Disney is 20
miles outside Paris.

Perhaps the most dramatic difference affecting winter attendance between Tokyo and
Paris is the weather. The average number of rain days during the winter is three times
greater in Paris than Tokyo, averaging 15 days per month for Paris and only 5 days a
month for Tokyo. Temperature wise, Tokyo's highs are an average 5 degrees warmer
(52°F versus 47°F). Overall, Paris's combination of cold temperatures and frequent
rainfall would seem to be an off put for winter attendance, especially for families with
small children.

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Orlando, Florida
• Most popular vacation destination in the United states.

• Built in 1971.

• In October 1982, Disney made a new addition to the theme park – the experimental
prototype community of tomorrow, or EPCOT Centre.

• This new park consists of two large complexes:

• Future World, a series of pavilions designed to show the technological advances of

the next 25 years, and World showcase, a collection of foreign “villages”.

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LESSON LEARNED

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LESSON LEARNED
 Market Analysis and Market Research

Market analysis and Market Research are the first and most vital steps that a company
must take before entering a new market. Each country, each city has its own
individualism, its own culture, and it is vital for company to appreciate the culture and
the people they will deal with. Disney lacked accurate information about French
culture.

 Develop Alternatives

The Second step that Disney should have undertaken was formulating and developing
alternatives plan. Decision for one Plan after developing
several business scenarios and analyzing them 
Disney should be able to select one, or make  
combination with the best aspects of all of them Japan success, seeing Disney theme
park as a monopoly due to its quality. All those assumptions made Disney’s expectation
way to high, with overpriced admission fees, food and beverages, merchandise.

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LESSON LEARNED
 Operational Plan

Disney should have developed an effective operational plan. The operational Plan
should have focused on, who will run the park?. Who will be responsible for the staff?.
Who will make the decisions?. They should have employed the French human resource

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CONCLUSION
• A move by any company to establish itself in a foreign market should not be made
without an extensive, in depth study into every applicable aspect of the new country
which includes the laws, culture, climate, interests, life style, food habits etc. This
would increase the chances of its success.

• Culture was not the only aspect that led to the downfall of Euro Disneyland. But it
played a major role and its imperative for the management of Disney to take control
of this aspect in their future ventures.

• Euro Disney had a very poor initial performance due to its lack of knowledge about
French and Europeans preferences and culture, also its optimistic assumptions based
on past experiences led Disney to believe they will sell anything to the customer.

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CONCLUSION
• They were wrong and paid a high price for it.

• The primary purpose of the Euro Disney case is to point out
the fundamental problems with exporting an American business model internationally
without taking into consideration the differences in culture that the business will face.
Disney’s case may be a good cross-culture lesson for any student and any business
men that intends to work in a foreign environment, it is easier to guard than to
remedy.

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