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CASE STUDY PRESENTATION ON

FACTS OF THE CASE

The $ 4.4 billion project was to be located on


5000 acres from 20 miles east of Paris.

The city seemed to be an excellent location


there were
17 million people within a 2 hr drive
41 million within a 4 hr drive
109 million within a 6 hr drive
Disney Officials were Optimistic About the
Project. their UK parks, Disney land &
Disneyworld were extremely successful

Tokyo Disneyland was so popular that on some


days it could not accommodate there large
pool of visitors.
However the Tokyo park was franchised to
others & the Disney management felt that it
had given up too much profit with the
arrangement. This would not be the case at
Euro Disney land.
DISNEY’S FINANCIAL PLAN
FOR EUROPE ENTRY
The Company’s share of the venture was to be
49% for which it would put up $160 million.

Other investors put in $1.2 billion, the french


govt provided a low intrest $900 million loan,
banks loaned to business $ 1.6 billion, & the
remaining $400 million was to come from spl
partnerships formed to buy properties & to
lease them back.
REASERCH OF
LOCATION OF
AMUSEMENT PARK
FRANCE OFFER
Central location in the heart of europe.

Considerable financial incentives.

The french govt promised to build a train line


to connect the amusement park to the
european train system.
Finally amongst
france & spain
france was
choosen as the
site for the park.
POST LAUNCH PROBLEMS FACED BY
DISNEYLAND

According to french ppl “ Euro Disney was


nothing more than a transplanting of Disneyland
into Europe. The park didn’t fit into the local
culture.”

French press accused Disney of “ Cultural


Imerialism”
They also objected that french govt, as
promised in the contract had
expropriated the necessary land & sold it
without profit to the Euro Disneyland
development people.
IMPACT

Signs reading “ Don’t gnaw away our National


Wealth” & “Disney go home” began appearing
along roadways.

Due to which on opening day 50,000 visitors


showed up, in contrat to 500,000 that were
expected.
Many visitors were upset about the high
prices.
e.g:- B’coz of franc excahnge rate it was
cheaper for them to go to Florida than to
Euro Disney.
also, many of the employees objected to
the pay rates & the working conditions.
Employees also raised concerns about the
variety of company policies ranging from
personal grooming to speaking in English in
co meetings , even if most ppl in attendance
spoke french.
As a result within 1 month 3,000 emplyees
quit.
SOME OF THE OTHER
OPERATING PROFITS WERE.......

In U.S liquor was not sold outside of the


Hotels or Specific areas.

In japan this policy was accepted & worked


very well.
However Europeans were used to having
outings with alcoholic beverages.
YEAR 1994 THE YEAR OF REFORM…….

PUMPING LIQUIDITY
A major investor purchased 24.6% of the co
& injecting $500 million of cash.

Also Disney waived its royalty fees & worked


out a new loan repayment plan with banks &
new shares were issued.
In Oct 1994, Euro Disney officially changed
its name to “Disneyland Paris”

Also park changed its most offensive labor


rules, reduced prices, & began being more
culturally conscious.

Alcohol beverages were not allowed just


about any where.
The co also began making the park more
appealing to local visitors by giving it a “
European” focus.
Disney Tomorrowland, with its dated images
of the space gae, was replaced by a brass &
wood complex called discoveryland. Which
was based on the themes of Jules Verne &
Leonardo da Vinci.

The co also shot a 360 degree movie abt


French Culture & showed it in a
“Visionarium” exhibit.
SUCCEESS OF REFORMATION
STRATEGIES

Disneyland Paris reported a slight profit in


1996 & park has continued to make money
since than. Although not a great deal (abt
50m annually).
Thank you….
Q1:- what are some of the
characterstics of Multinational
Enterprises that are displayed by
the walt disney company?
Q2 :- Why did Disney take an
ownership position in the firm
rather than simply licensing some
other firm to build & operate the
park & setting for a royalty on all
sales?
Q3 :- in what way did Euro
Disney reflect the dtrategic
philosophy of Walt Disney as a
multinational enterprise?
Q4 :- Did Disney management
conduct an external enviornmental
analysis before going forward
with Euro Disney? Expalin.