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EuroDisney(final2)

EuroDisney(final2)

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Published by jojo_p_javier

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Published by: jojo_p_javier on Jun 15, 2011
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06/18/2013

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I.
Background
1
EuroDisney SCA formallylaunched its theme park toEuropeans in April 1992near river Marne, 20 milesEast of Paris. It was thebiggest and most lavishtheme park that Walt Disney(Disney) had built biggerthan any of its Disney parksaround the world. The location was chosenover 200 potential sites inEurope from Portugal through Spain, France, Italy and Greece. Spainwas the strongest contender for the park location but its inadequateacreage of land around Barcelona paved way for Paris to be thechosen location, add to that the generous incentives and impressiveregional demographics presented by the French government.Disney Management expected Europeans to receive the themepark in the same behavior that their Japanese counterparts forDisneyland-Tokyo did for Mickey Mouse and other famous Disneycharacters but the projected operating of S100 million during thefirst year of operation became aloss of $900 million by summerof 1994.
1
Case 2-1 p.614, Cateora & Gram, International Marketing (13
th
Edition)
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EuroDisney failed to attract the expected number of Europeanvisitors especially French visitors because the theme park was seenas American imperialism where American fairy-tale characterscompeted and lost over loveable French cartoon characters likeAstérix, the helmeted, pint- sized Gallic warrior who has a themepark beside EuroDisney.
II.
Problem/s
a.
EuroDisney has lost $900 million from 1992-1994;b.Europeans failed to “go goofy” over Mickey Mouse unlike their Japanese counterparts;c.French cartoon themed parks compete with EuroDisney;d.Construction costs ballooned from $2.37 billion to anadditional $340 million as a result of theme-park add-onswhich failed to attract visitors( e.g. expensive facilities liketrams were built to ferry visitors inside the theme park whenmost visitors prefer walking);e.A “barnstorming, kick-the-door-down attitude” of US decisionmakers alienated many EuroDisney and Disney managersfrom their counterparts in government, banks, ad agenciesand other concerned organizations.f.Disney planners failed to foresee external threats such assigns of European recession, effect of the Gulf War onvacation behavior, high interest rates and the devaluation of other currencies against the franc.
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g.
Disney planners also failed to study the European culture andbehavior (e.g. wine drinking among French with meals,preference for redder than red nail polish among women);
h.
EuroDisney was on the verge of bankruptcy in 2005.
III.Discussion Questions
1.What factors contributed to Euro-Disney’s poor performanceduring its first year of operation?
a.Visitors to the park were reluctant to spend $280.00 a day toenjoy the park attractions. Its hotel rooms were much moreexpensive than top hotels in Paris.b.Airfares were cheaper to Disneyworld in Orlando Floridacompared to Paris. The weather was also much better in sunnyFlorida.c.French visitors stayed away because of the historical animositybetween the French and Americans.d.Disney executives failed to see the approaching recession at theend of the 1980s and the halt on planned vacations after the Gulf War in 1991.
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