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The first 100 days
Case: Euro Disney
Opened in 1992 within budget Beginning (additional) influences Drop of shares due to first year loss After 5 years still problems with visitors ³Cultural Chernobyl´
Case: Euro Disney
Structure of Walt Disney
Revenue in 1991 Theme park $2,865 Theme park Hotels Other Filmed entertainment Consumer products
Responsible for 71 % 21 % 8%
$ 2,593 $ 724
Case: Euro Disney
Walt Disney World Resort (Orlando, 1971)
Magic Kingdom Disney MGM Studios Theme Park Epcot Center
Disneyland (Los Angeles, 1955) Others
Tokyo Disneyland: designed by WDC but owned and run by Oriental Land Company
10/28/02 Case: Euro Disney
50 million 90 % repeat customers, 5 % from Europe Adults in late twenties with young children
Case: Euro Disney
Success factors Creative imagination: Park set-up Cartoons come alive Participation of visitors Parks are continually updated 10/28/02 Case: Euro Disney .
10/28/02 Case: Euro Disney .Disney¶s stated goal is To exceed its customers¶ expectation every day.
This goal is supported by: standard of service. 10/28/02 Case: Euro Disney . park design operating details human resource policies and practices Disney ³play´ would be flawlessly performed day in and day out at each location.
´ 10/28/02 Case: Euro Disney . ³Disney University.Service delivery has been under constant refinement.
Hiring process: a peer interview process to select cast members a 45-minute interview session with a Disney personnel manager extensive orientation program in Disney¶s service standards 10/28/02 Case: Euro Disney .
Service standards: safety courtesy show efficiency 10/28/02 Case: Euro Disney .
Certain messages reinforced throughout the training: happiness measured differently by every guest and challenge to create customer¶s perceptions are extremely fragile employees are on stage at every moment and should look to provide service fixing costumers problems is very important 10/28/02 Case: Euro Disney .
Employees were evaluated based upon: energy enthusiasm commitment pride 10/28/02 Case: Euro Disney .
S. products appeal for Disney¶s brand of entertainment 10/28/02 Case: Euro Disney .Success of Disney in Tokyo: strong Japanese appetite for Americanstyled popular entertainment increasing trend in Japan toward leisure country which actively resisted many U.
Japanese are always very polite to strangers. 10/28/02 Case: Euro Disney .The reasons why Tokyo Disneyland worked: Young Japanese are very clean cut. They are very patient. Japanese are generally comfortable wearing uniforms Obeying their bosses Like to be part of a team.
Location of the Euro Disney site 1981: Bidding process involving Germany. Spain and France 1987: Agreement with the French government Central location Highly popular vacation destination The only disadvantage seem to be the inclement weather 10/28/02 Case: Euro Disney .
Contractual concessions with the French government The French government agreed to extend highways and the railway The French government agreed to build a high-speed TGV train extension The French government would reduce the value-added tax The French government provided over $700 millions in loans 10/28/02 Case: Euro Disney .
Financial Facts Euro Disney was 49 % owned by The Walt Disney Company and 51 % owned by Euro Disney S.C.000 visitors Cost estimates were determined by the consulting firm ADL 10/28/02 Case: Euro Disney .A Admission to the park cost $41 for adults and $27 for children The capacity of the park was 50.
Financial Goals Attracting 11 million visitors in the first year of operation Achieving operating income of $373 million at April 12.1992 10/28/02 Case: Euro Disney .
Phase II Disney MGM studios Park and additional hotel rooms Attracting 8 million visitors Disney budgeted $3 billion to complete Phase II 10/28/02 Case: Euro Disney .
Theme Park Design Phase 1 Theme Park 29 Rides and Attractions 6 Themed Hotels Davey Crockett Campground 414 Cabins 27 hole Championship Golf Course Restaraunts. shops. and entertainment options 10/28/02 Case: Euro Disney .
French Intellectuals proposed ideas about: Cultural requirements Park design Grooming standards Eating habits 10/28/02 Case: Euro Disney .
Research concluded that Europeans were interested in: New York Disney land The Western United States 10/28/02 Case: Euro Disney .
a culture without sin´ 10/28/02 Case: Euro Disney .Actions taken: Add 3 western theme hotels French was first language Signs & employees were bilingual Characters altered to meet French ideas Disney did not offer wine within the park Disney had many entertainment shops and foods Disney was thought of as an ³Imaginary Place.
Start Up Process Employment Marketing Disney Service and operations Problems 10/28/02 Case: Euro Disney .
Employment Hire and train employees 14000 people to fill 12000 jobs Another 5000 people for peak season 10/28/02 Case: Euro Disney .
Marketing Give the park a European flavor Advertised in magazines throughout Europe Sleeping beauty Castle Nestle 10/28/02 Case: Euro Disney .
50/hour generally worked 169 hours a month 10/28/02 Case: Euro Disney .Service and Operations Euro Disney University Disney Standards Diversity of Nationalities 270 managers and supervisors were cross trained 200 managers were imported employees paid $6.
Problems Dress code Housing shortage Employees are leaving or being laid off Examples of employees 10/28/02 Case: Euro Disney .
Visitors 9% Other 18% 18% 8% 40% 3.5% 10/28/02 3.5% Case: Euro Disney .
Decisions Big issues prioritizing objectives: Revenue outlook Cost problems Service delivery system 10/28/02 Case: Euro Disney .
Decision sets 1st set of decisions: Service system up to the standards and cost levels of the other Disney Parks 2nd set of decisions: How to market for achieving winter attendance targets 3rd set of decisions: Phase II The level of investments Timing of investments Nature of investments 10/28/02 Case: Euro Disney .
A day at Eurodisney µTrains on Strike. Tourists Unable to Reach Park¶ µEuro Disney Visitors Complain of Long Lines and High Prices¶ µGuests find Euro Disney Employees Rude¶ µVisitors Claim Euro Disney is a Fairy Tale come True¶ µEuropeans not Impressed with American Fast-Food¶ µDisney Shows Lack of Appreciation for French CultureWine not Served in Park¶ µEuro Disney not up to Standards of American Theme Parks¶ µEuropeans Discover the Old West at Frontierland¶ 10/28/02 Case: Euro Disney .
Disney¶s concerns Disney does not fit traditional French entertainment Competition from Paris entertainment industry Linguistic barriers ± Europe is multilingual Cultural barriers ± food habits. alcohol a part of diet. long lines Europe is multicultural with differences in perceptions for entertainment Lack of housing accommodations for staff Acceptance of Disney as part of American culture by the French? Cold weather could be a deterrent Expensive by European standards 10/28/02 Case: Euro Disney .
Questions 10/28/02 Case: Euro Disney .
How can such a decision be evaluated and was it a wise one? To answer question divide it into parts: Is Europe a good (new) market? What possibilities were there? How was it executed? 10/28/02 Case: Euro Disney .Assess Disney¶s decision to build a theme park in Europe.
What is Euro Disney¶s target Market? What are the implications for the development and organization of the park? 10/28/02 Case: Euro Disney .
restaurants Other Disney fans Technology 10/28/02 Case: Euro Disney . Young couples Middle/Upper class Walt Disney figures Entertainment High Services Level The park Other facilities around and in the park. such as hotels.Needs Fantasy world Being together with family Vacation Have fun families Grandparents Consumers Young families.
Customers Children Young families families Grandparents with grandchildren Disney fans People that can afford spending money on the park (middle class and upper class) People who just want to go so badly that they put other things aside to be able to go to Euro Disney European people 10/28/02 Case: Euro Disney .
to have a good time with Walt Disney¶s entertainment 10/28/02 Case: Euro Disney . The rest are people from four to sixty years who have enough money to spend.Target Market The majority of Disney visitors are adults many of them are in the late twenties and have young children.
What issues must a company think through before extending a successful service overseas? What is the expected service for Europeans? What is expected out of design and service standards? Are employees sufficiently screened and have the issues of supply and demand been worked out to suit European demands? Does the company deliver these services properly and efficiently? Have they done the proper research to make these conclusions? Does the level of service delivery and/or exceed the expectations of Europeans? Does the company have the correct expectations about European consumers? Have they done the proper research to make these conclusions? 10/28/02 Does the company know what the expected standards are? Have they done the proper research? Does the company live up to its promises and communicate in a satisfactory way to Europeans? Have they done the proper research to make these conclusions? Case: Euro Disney .
Service delivery: Disney standard Disney University Treatment of employee's Integrate the cultures 10/28/02 Case: Euro Disney .
Should Euro Disney proceed with the next step of development? Euro Disney should first solve their problems before they expand Euro Disney could apply the lessons they have learned from the Phase I experience to Phase II 10/28/02 Case: Euro Disney .
Service recovery strategies Fail-safe the service Welcome and encourage complaints Act Quickly Fair interpersonal treatment learn from Phase I experience Satisfaction surveys and employees as listening posts Empower employees to act quickly Treat customers fairly Learn from recovery experiences Learn from lost customers Project teams can be assigned to a problematic area to develop a solution Difficult for Euro Disney to identify lost customers .
What lessons has Euro Disney learned which could be applied to the development of the second park? 10/28/02 Case: Euro Disney .
Expected Service Customer Gap Customer Perceived Service Service delivery External communications to customers Company Gap 3 Gap 4 Customer-driven Service designs and standards Gap 2 Company perception of consumer expectations 10/28/02 Case: Euro Disney .
Evaluation Inadequate marketing research orientation Lack of upward communication Insufficient relationship focus Inadequate service recovery 10/28/02 Case: Euro Disney .
Adapt for the local market from the US model and if so. how? 10/28/02 Case: Euro Disney .
e. focus on French culture Promote winter attendance through reduced costs and package plans Identify additional target markets (i. understand Disney fit with European cultures Package Euro-Disney with other Paris destinations Prepare to contract buses if public transport is disrupted. 10/28/02 Case: Euro Disney . Give displaced people lifetime pass.. student groups) Before expanding. Leave some memorial for any villages/ people displaced by park.Recommendations Adapt to French standards & expectations Employee involvement in Euro Disney planning & operations Single theme for Euro Disney.
Questions 10/28/02 Case: Euro Disney .
Thank you for your attention 10/28/02 Case: Euro Disney .