INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH, BHOPAL

PGDM Trimester-V Cross Cultural Management Case Analysis-1 Disney in France

About Disney: The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media. The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media corporation headquartered in Walt Disney Studios, Burbank, California. It is the largest media conglomerate in the world in terms of revenue. Disney was founded on October 16, 1923, by Walt and Roy Disney as the Disney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and travel. Taking on its current name in 1986, it expanded its existing operations and also started divisions focused upon theater, radio, music, publishing, and online media. In addition, Disney has created new divisions of the company in order to market more mature content than it typically associates with its flagship family-oriented brands. Disney in France: The Walt Disney Company had experienced nothing but success in the theme park business. Its first park, Disneyland, opened in Anaheim, California, in 1955. Its theme song, "It's a Small World After All, promoted "an idealized vision of America spiced with reassuring glimpses of exotic cultures all calculated to promote heartwarming feelings about living together as one happy family. Disney executives in 1986 turned their attention to France and, more specifically, to Paris, the self-proclaimed capital of European high culture and style. The following were the reasons for selecting France: Paris was chosen because of demographics and subsidies. About 17 million Europeans live less than a two-hour drive from Paris. 310 million can fly there in the same time or less. French government was so eager to attract Disney that it offered the company more than $1 billion in various incentives. Disney wanted to become number one in Europe. Disney thought that they can succeed in France as well by imposing the American Entertainment style.

There were issues in the beginning but Disney ignored. One of the French Intellectuals quoted Cultural Chernobyl New Beachhead of American Imperialism Terrifying step towards world homogenization It symbolizes transformation of craft into industry

There were many problems which Disney ignored & Disney pushed ahead with the planned summer 1992 opening of the $5 billion Park. The main problem was that Disney had not done proper market research before entering France. Disney didnt properly understood the culture of France especially of Paris. The park did not fitted to the local culture because culture which is followed in France is completely different which is followed in America. Disney didnt analyzed the cross cultural difference before entering France. Also Euro Disneyland was named in France which was also created problem for Disney. As Americans the word Euro is believed to mean glamorous or exciting but for Europeans Euro is associated with business, currency and commerce. There were errors made by Disney which hampered the profit. The following were the errors: No alcohol in the park. Wrong assumption in considering Friday a busy day No breakfast facilities (only 350 serving seats) French breakfast of croissants and coffee Wrong lunch timing. Pricing was according to Europeans. It was too expensive for them. In staffing, Disney used American team work model in France which was success in other countries but failed in France because of cultural differences. As a result of these errors, by the end of 1994 Euro-Disneyland had cumulative losses of $2 billion. At last following solutions were opted by Disney: The company changed the name to Disneyland Paris in an attempt to strengthen the park's identity.

Food and fashion offerings changed. The prices for day tickets and hotel rooms were cut by one-third.

Questions and Answers: Q1. What assumptions did Disney make about the tastes and preferences of French consumers? Which of these assumptions were correct? Which were not? Ans1. Assumptions of Disney: Disney thought that Monday would be a light day for visitors and Friday a heavy one. Disney thought Europeans dont take breakfast. Disney thought the European people want the French breakfast of croissants and coffee. Reducing the prices of the hotel room and day tickets will attract more consumers.

Assumptions of Disney which were not correct: Disney thought that Monday would be a light day for visitors and Friday a heavy one, but the reality was reverse. Disney thought Europeans dont take breakfast, but everybody showed up for breakfast. They thought that the Europeans want the typical French breakfast of croissants and coffee, instead they wanted bacon and eggs. Assumptions which were correct: When they reduced the prices of the hotel room and day tickets by 1/3rd the attendance increase from 8.8 million in 1994 to 11.7 million in 1996. This assumption made by Disney was correct. Q2. How might Disney have had a more favorable initial experience in France? What steps might it have taken to reduce the mistakes associated with the launch of Euro-Disney? Ans2. For favorable initial experience in France, Disney should had opted following steps: Disney should had analyzed the food consuming pattern of French people before entering the France market. Disney should had studied more of the European culture first before setting up their project. Disney should had studied about the spending pattern of European people especially when they are on holiday.

Q3. In retrospect, was France the best choice for the location of Euro-Disney? Ans3. France was the best choice for the location of Euro-Disney. France was best choice because of following points: Paris was chosen because of demographics and subsidies. About 17 million Europeans live less than a two-hour drive from Paris. 310 million can fly there in the same time or less. French government was so eager to attract Disney that it offered the company more than $1 billion in various incentives If Disney had done: Proper market research Proper deep study of France Culture & work place culture which was followed in France, Incorporating more European Culture and less American Culture Made park more French oriented i.e. made more romantic because of the essence of Paris City Then Disney could had generated maximum revenue as France was ideal location for Euro Disney.