Ghulam Hasnain

EXECUTIVE SUMMARY Euro Disney a new theme park failed to generate profit for the first time in Paris because it failed to attract visitors. For the visitors it was too expensive, highly gathering place most importantly it ignored the French culture. Then Euro Disney changed its name to “Disney land Paris” and revised its management plan and cut the prices low. They took further loans and investment and increased its attributes and surprisingly finally it got the visitors attraction. Now it is one of the most profitable theme parks of Disney around the world. Euro Disney had a very hard initial experience in France. There were various errors made in the operations of Euro Disneyland, which affected the French culture. An example of this is the Walt Disney Company's policy of serving no alcohol in its parks in California, Florida, and Tokyo, which it extended to France. However by implementing this American strategy, it caused astonishment and rebellion in France where a glass of wine for lunch is a given. It failed to recognize that alcohol is viewed as a regular beverage with meals and a part of daily life. After much consideration, in May 1993, the Walt Disney Company changed its policy and allowed wine and beer in the Euro Disneyland theme park. The decision of breakfast was another cultural mistake, but in the opposite way. Disney assumed that French customers would want to eat French breakfast while they wanted American one. Operational errors were also committed for Disney, for example Disney assumed that Monday would be a light day and Friday a heavy day, so they arrange the staff accordingly, turned out to be the opposite and Disney had a big problem with that. Another assumption such as optimistic assumption about attendance was also made. If Disney had conducted a primary research and learned from their potential customers, French and Europeans, they would have forecasted those mistakes and prevented them from happening. Also if Disney had controlled better the controllable forces, price and promotion for example, they would have a better initial experience. France was the best choice for Euro Disney, because it presented the best geographic location and also had many incentives from the French Government, cheap land, and easy bank loans. It is notable that culture has a great influence to French customers; Disney’s case is a great example of that. As many French saw Disney’s approach as offensive and an insult to French culture, they created protests and the attendance of the park was very low. To conclude, Disney had a very poor initial performance due its lack of knowledge about the French and European preferences and culture. If Disney had followed the steps proposed above they could have had a better initial experience. Therefore, Disneyland is a great cross-cultural lesson for students and business man around the world. OBJECTIVE The main objective of this report is to understand how Euro Disney had this initial failure. How it could have a better initial experience, and to provide recommendations to students and business men don’t committee the same errors. 1 | Page PART 1; SUMMARY OF DISNEYLAND CASE: ● In 1955, a brand new theme park was built in Anaheim, California. This park was the idea of Walt Disney and became known as Disneyland. At the time it was one of the biggest and most innovative parks in the world. The ideals behind Disneyland were that Disney could create a place where both kids and adults can go and have fun. From the time of opening, Disneyland became an immediate success. ● In the mid-1960's, Walt Disney wanted to build another park in Florida, based on the concept started in Disneyland. Unfortunately, Walt Disney passed away in 1966, and never had the chance to see his vision for the park come to fruition. ● In 1971, the concept became a reality when Disney World opened in Florida, which becomes most popular vacation destination in US. ● The original ideas was to create a new park similar to Disneyland, but with other aspects such as lodging areas and other novel ideas. One of the most creative and innovative ideas that Disney had was the creation of the Experimental Prototype Community of Tomorrow. This area, known as EPCOT was opened in 1982 to be an area that served as a testing ground for ideas which could be used in cities in the future. ● April 15, 1983 Tokyo Disneyland, the first international Disney theme park, opens in Japan. ● The 204 acre Tokyo Disneyland is owned & operated by Oriental land under license from Walt Disney Co. 45 years contract gives Disney 10percent of admissions & 5% of food and merchant sales plus license fees. ● Even Disney has faced monumental challenges and made some strategic mistakes when expanding internationally. To be successful Tokyo Disneyland took several steps. Such as Japanese restaurants are added, more areas are covered to protect show & rain, walking ways are redesigned. ● Following on from the success of the Disneyland theme park in Anaheim, Florida & Tokyo, Disney plans to build a European version first started around 1975, nine years after Walt Disney died. Initially Britain, Italy, Spain and France were all considered as possible locations. ● Eventually the French location won, and a site was duly investigated at Marne-la-Vallee, partly because of its close proximity to Paris, and also its central positioning within Western Europe. A factor that was thought to be crucial to the park's future success if it was to attract sufficient visitors. The proposed location put the park within 4-hours drive for around 68 million people, and 2 hours flight for a further 300 million or so. ● On March 24, 1987 Disney signs an agreement with the French authorities to create Euro Disney in France for the building of Disneyland theme park at marne-la_vallee. ● The park was built 4460 acres of farmland. Planned to open early 1992. Approximate budget was 2.5 billion to build the park. 2 | Page ● But company face problems building park from political leaders & local farmers. Local farmers posted protest signs along the roadside featuring “Disney go home” “stop the massacre” etc. ● But company managed all problems by lunching an aggressive community relations program to calm the fears of politicians, farmers, villagers. Also start broadcasting two hour dubbed Disney program in national television networks. ● During construction of Euro Disneyland company also forced to bail out 40 subcontractors who were working for the Gobay-Eremco construction contracting group., which had been unable to honor all of its commitments. ● Euro Disneyland kept 49% stake in the project & remaining 51% of stock was distributed through London, Paris & Brussels stock exchanges. ● Walt Disney Company put $160 million of its own capital to fund the project & $ 800 million loan from French nation & local authorities. ● Walt Disney will get management fee, incentive fees & 49 of profit from euro Disney operation. ● Disney expected to serve- meals per hour, excluding snakes. Recipes were adapted for European taste. Euro Disneyland has six hotels consists of 5200 rooms, 181 camping sites. ● Disney started training of 12000 people to maintain customers. A handbook of detailed rules on acceptable clothing, hairstyle, and jewelry among other things embroiled the company in legal & cultural disputes. ● Euro Disneyland was expected to generate up to 28000 job, proving measure of relive for an area that suffered 10% unemployment rate. ● But some French labor unions began protesting when Disneyland opened its casting centre & invite applicants to “play the role model” and to take a “unique opportunity to marry work & magic” They told it was violation of human dignity. ● After two year long negotiation between Disney & French govt. the final agreement called for Disney to make a maximum effort to tap into the local labor market. Casting centre were setup to Paris, London, Amsterdam & Frankfurt. ● Main sponsors and their families were invited to visit the new park. The formal press preview day was held on April 11th 1992, and the park finally opened to visitors on April 12th 1992 ● The opening day crowds expected to number up to 500,000 visitors, failed to materialize, however, and at close of the first day barely 50,000 people had passed through the gates. This may have been partly due protests from French locals who feared their culture would be damaged by Euro Disney, but whatever the cause the low initial attendance was very disappointing for the Disney company. ● The first phase of development (the theme park, hotel complex and golf course) had gone massively over budget, and had eventually cost 22 billion French Francs to complete. Over the next few months attendance figures failed to improve much ● By August 1992 estimates of annual attendance figures were being drastically cut from 11 million to just over 9 million. Euro Disney’s misfortunes were further compounded in late 1992 when a European recession caused property prices to drop 3 | Page ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● sharply, and the massive interest payments on the startup loans taken out by Euro Disney forced the company into serious financial difficulties Euro Disney was also over-populated with hotels, especially for a park that can be reasonably well explored within a full day. Coupled with high prices for food and souvenirs, the Euro Disney Company started to close hotels during the winter months. On January 18, 1993 Euro Disneyland chairperson Robert announced that he will leave the post on April 12 to begin his own consultancy company. in October 1994 the park's name was officially changed from Euro Disney to "Disneyland Paris", in order to more closely link the park with the romantic city of Paris After its success in Tokyo Disneyland, Disney began to realize the vast potential of the Asian Market. Disney continued to pursue plan in both Shanghai & Hong Kong. Disney made an agreement with Hong Kong govt to build a park. Agreement was signed in November 1999, a joint venture Walt Disney company & Hong Kong SAR government. The park was built in Lantau Island at Pennys Bay & it was estimated that 36000 new job will created upon opening of this park. So far park has occupied only 126 hectors & had only four lands. Disney plans to opening of Hong Kong Disneyland in September 2005. But due to small in size Disney Hong Kong failed to attract guests. So Walt Disney has made plan to expansion it by help of local govt financial support. Unable to come into agreement with Hong Kong Govt Disney has indicated to hold plans to expansion. By the same time Disney was negotiating with China govt to built a new park in China But in June 2009, Disney & Hong Kong govt finally reached a deal to expand the territories of Disneyland theme park at a cost of about $465 million. Disney theme park in Shanghai would mutually beneficial for Disney & china. It’s around $ 1 billion project built around across the Huanpu River. Disney planned to open park prior to World Expo in 2010. But the project stalled due to change in Beijing approval. In Nov 2009 Disney finally received an approval from Chinese govt. to proceed with this park. According to proposal Disney would take 443% equity stake in Shanghai Disneyland & 57% owned by the Shanghai govt forming a joint venture company. In April 2010 company receive approval for land. Over 2000 household & 297 companies have to relocate for new construction. The proposed plan will create 50000 new jobs. Total area 371 acres will span four square km with the theme park covering 1 square km. he project would take 5-6 years to finish. Over the course of time, Disney World has become one of the most popular destinations for tourists in the world. In fact the Magic Kingdom which is at the heart of Disney World is the most popular theme park in the world. In addition, 4 | Page EPCOT, Animal Kingdom and the Hollywood Studios attractions are also ranked in the top ten for visitor PART: 2: QUESTION ANSWER OF EURO DISNEYLAND 1. Using Hofstede’s four cultural dimensions as a point of reference, what are some of the main cultural differences between the United States and France? Ans: Hofstede's cultural dimensions theory is a framework for cross-cultural communication, developed by Geert Hofstede  Power distance index  Individualism vs. collectivism  Uncertainty avoidance index  Masculinity vs. femininity  Long-term orientation vs. short term orientation Power distance: Power distance is defined as the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally. United States: The fairly low score on Power Distance in combination with the most individualistic culture in the world. The American premise of “liberty and justice for all.”. France: France scores fairly high on Power Distance. Children are raised to be emotionally dependent, to a degree, on their parents. This dependency will be transferred to teachers and later on to superiors. It is, therefore, a society in which a fair degree of inequality is accepted. Power is not only centralized in companies and government, but also geographically Individualism Vs Collectivism The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”. In Individualist societies people are only supposed to look after themselves and their direct family. In Collectivist society’s people belong to “in groups” that take care of them in exchange for unquestioning loyalty. US scores higher on Individualism. They just think of their own family. France is shown to be an individualist society. Parents make their children emotionally independent with regard to groups in which they belong. This means that one is only supposed to take care of oneself and one’s family. 5 | Page Masculinity Vs Feminine A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the “winner” or “best-in-the-field”. A low score (feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. US: US on Masculinity are high. This can be seen in the typical American behavioral patterns. This can be explained by the combination of a high Masculinity drive together with the most individualistic drive in the world. In other words, Americans, so to speak, all show their masculine drive individually. This American combination reflects itself in the following: France: France has a somewhat feminine culture. At face value this may be indicated by its famous welfare system (securité sociale), the 35-hour working week, five weeks of holidays per year and its focus on the quality of life. French culture in terms of the model has, however, another unique characteristic. The upper class scores feminine while the working class scores masculine. Uncertainty avoidance The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. US: The US scores well below average on the Uncertainty Avoidance dimension. . As a consequence, the perceived context in which Americans find themselves will impact their behavior more than if the culture would have either scored higher or lower. France French culture scores high on Uncertainty Avoidance. The French don’t like surprises. Structure and planning are required. Pragmatism (long term orientation) This dimension describes how people in the past, as well as today, relate to the fact that so much of what happens around us cannot be explained. In societies with a normative orientation, most people have a strong desire to explain as much as possible. In societies with a pragmatic orientation, most people don’t have a need to explain everything, as they believe that it is impossible to fully understand the complexity of life. The challenge is not to know the truth but to live a virtuous life. US Americans are prone to analyze new information to check whether it is true. Thus, the culture doesn’t make most Americans pragmatic, but this should not be confused with the 6 | Page fact that Americans are very practical, being reflected by the “can do” mentality mentioned above. France in this dimension, making it pragmatic. In societies with a pragmatic orientation, people believe that truth depends very much on situation, context and time. They show an ability to adapt traditions easily to changed conditions, a strong propensity to save and invest thriftiness, and perseverance in achieving results. 2. In what way has Trompenaars' research helped explain cultural differences between the United States and France? Ans: Trompenaars’ research assisted to explain cultural conflicts among both the USA and France. According to Trompenaars’ Cultural Dimensions, the cultural conflicts between France and the USA were because of these four cultures: 1. Universalism versus Particularism (What is more important, rules or relationships?); 2. Individualism versus Communitarianism (Do we function in a group or as individuals?); 3. Specific versus Diffuse (How separate we keep our private and working lives); 4. Achievement versus Ascription (Do we have to prove ourselves to receive status or are it given to us?). (Trompenaars' Model of National Culture Differences) Universalism versus Particularism- It talks about three major differences: 1. Universalistic cultures are focusing on the rules, but Particularism cultures are focusing on relationships. 2. Universalistic is only one truth or reality, while Particularism is a number of perspectives on reality. 3. Universalistic people “treat all cases in the same way”, whereas in Particularism people “treat cases on their special merits and create private understandings”. Based on above rules, it was believed that the rules, regulations and policies are universal and can be applied anywhere without modification. On the other hand French perceives distinct rules and regulations as part of their culture. Motivated by the success of its three theme parks, Disney did not realize that French were a part of a distinct culture and its methods may not work there. Individualism versus Communitarianism: There are three different points between Individualism and Communitarianism in business decisions: i. People are living in “a communitarian society” in France while Americans are staying in the individual society. 7 | Page Lithe French prefer to work together and take part in social relations mutually, whereas people from the USA adore the individualism. Iii.It is normal phenomenon for Americans to make ranks between bosses and employees; however, the French people refuse it. In brief, the two prime dimensions could explain hardly the ethics in different cultures. Specific versus Diffuse: This dimension mentions two differences between the USA and France 1. The USA’s culture is belonging to Explicit national cultures, which make a decision with “a low context manner”; while France is focusing on Implicit national cultures, which take a command with “a high context manner”. 2. The USA pays attention to a negotiation clearly, logically and persuasively, whereas France stresses on a discussion inaccurately and indirectly. Achievement versus Ascription: This dimension mentions two differences between the USA and France: “achievement versus ascription” and “doing versus being”. Americans focus on “achievement” and “doing” in the culture of their country, such as dividing their individualities from their jobs. In contrast, the French people prefer to stress “ascription and being”. Moreover, they are not only attending on “the highest esteem”, but also distinguishing features or ascribing to the single. So, there is no doubt that the USA stress the bloodline of the family and which school you graduated but the French emphasis the factors of their history. This dimension measures the method through which social status is accorded to a person. U.S. is certainly an achievement culture where a person is regarded based on his achievement. Example: Walt Disney. 3. In managing its Euro Disneyland operations, what are three mistakes that the company made? Explain. Ans: Operational Errors Disney committed many different operational errors that affected directly their performance. For example, as in America Monday was a light day for guests and Friday was a heavy one, Disney assumed that in France would be the same, so they allocated staff accordingly, but the truth was that the inverse happened, and Disney had a big problem. Staffing and Training In just 12 months Disney had to recruit, hire, train, and house 12,000 cast members. It would be a challenge for any company, especially for Disney because its cast members would be more like members of a theatre troupe. A big problem was to train the cast members after hire them, all employees were giving a human resource training and a training specifically job requirements, a big challenge for Disney was to implement the “have a nice day” mentality and teaching 12,000 European employees to smile the “Disney 8 | Page smile” all day . But the major staffing problem that Euro Disney found was the “Disney Look” , Disney’s dress code, which was a rigid code, a well-scrubbed, all-American look, that defined size of earrings, size of finger nails, prohibit of facial hair and dyed hair. The European employees simply did not adhere to the American look, because they thought it was against their “individualism”. Disney instead of try and imposed their own rules, it should take the decision to analyze and see if it was legal at first, and if it wouldn’t affect the employees satisfaction and performance. If Disney had taken those decisions, all those problems with staff would be prevented and the outcome would be much better for Disney. Cultural Operational Errors were a major problem for Euro Disney; it affected Disney’s performance and attendance. For example not serving alcohol, it caused astonishment for French customers, because it is normal in French having a glass of wine in their lunch. Another error was the breakfast in Euro Disney’s hotels, based on assumptions Disney downsized the restaurants, because they assume that Europeans didn’t eat breakfast, when the truth was that they ate. If Disney instead of decide to make assumption to base their operations had research and tried to understand the Europeans preferences (instead of trying to make them change their habits), Disney would fix those problems even before the theme park was launched, it would increase customer satisfaction. 4. Based on its experience, what are three lessons the company should have learned about how to deal with diversity? Describe each. Ans: There are some steps that any company should contemplate before entering a new market in order to flourish. Unfortunately for Euro Disney, those footsteps were not followed, instead Disney tried to “force” the entry of its product (the theme park), and anticipated it to be easy money. The lesson is there for Disney and any other company that wants to succeed. The lesson that Disneyland management must have learned are as categorized into the following broader aspects. 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 in the world has its own individualism, its own culture, and it is vital to companies to appreciate the culture and the people they will deal with. Disney lacked of accurate information about French culture and French customer’s preferences, instead of doing a Market Research and learns from its potential customers. If Disney would have done a proper Market Analysis and Market Research they would have been able to anticipate many cultural divergences they had. Develop Alternatives 9 | Page The second step that Disney should have undertaken was formulating and developing alternative plans. Disney was so blind by their success in Japan that they didn’t stop to consider their previous experiences and how they need to adjust them in order to better attend its French and European customers. Decision for one Plan After developing several business scenarios and analyzing them Disney should be able to select one, or make a combination with the best aspects of all of them. Disney should have considered all uncontrollable forces that was around them; for example French (as well as other European culture), over-valued Franc due to recession. If a business plan was made considering all of those factors, Disney would probably had more realistic numbers (attendance, revenues) and should be able to deal with the cultural differences between American and Europe, especially in France. Instead Disney chose a business plan that underestimated the influence of cultural differences, and saw Disney’s theme park as a monopoly due its quality and uniqueness. They just ignored and didn’t give enough attention to the competitors offering different type of entertainment. All those assumptions made Disney’s expectation way too high, with overpriced admission fees, food and beverages, merchandise and with an attendance too high. Operational Plan After gathering information about French and European customers, their preferences, their culture, their age, their income, their expectations, and to develop a business plan on how to run the business and which scenario they think was the most accurate one, 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? As Disney was entering in France and most of the employees would be French or Europeans, the ideal was to put key French managers, to deal with the staff, and probably a French chairman, as well as human resources managers. Those managers would have more experience and know-how, how to deal with the staff, with investors and executives, and with the media, that could be a Disney’s marketing tool instead of an “attack base”. Decision Making is something that most of the times should be taken quickly and efficient, so those decisions should be taken in France, not on US as Disney did. If Disney had these aspects they would probably have foreseen most of the cultural and operational, problems that occurred and could have easily avoided it. QUESTION ANSWER: BEYOND TOKYO: DISNEY’S EXPANSION IN ASIA 10 | Page 1. What cultural challenges are posed by Disney’s expansion into Asia? Ans: With its large population, and relatively low number of theme parks, Asia is a tremendously attractive location for Disney. Already, the company has been successful in Tokyo. While its park in Hong Kong has been less profitable, the company believes that further expansion into the region is worthwhile. However, the company faces a number of cultural challenges that must be overcome. Certainly language poses a problem for the company. At Hong Kong Disneyland, the company has chosen to be trilingual for example. In addition to dealing with language differences, Disney must also tailor other components to meet the local needs. . Language differences: At least three languages will be supported by consumer facing personnel The Hong Kong location includes more covered space to allow people to enjoy the park without dealing with the region’s rainy weather, special gardens for picture taking that appeal to the preferences of tourists visiting the park have been created, and the menu has been adapted to local preferences. Plans for the Shanghai location will incorporate Chinese cultural features as well as more traditional Disney themes. On premise menus have been adapted to local tastes. In addition to these, Disney must address the typical US vs. China differences in both their employees and customers: ♣ Communitarianism (China) vs. Individualism (USA) ♣ Ascription (China) vs. Achievement (USA) ♣ Diffuse (China) vs. Specific (USA) ♣ Affective (China) vs. Neutral (USA) B. How are these different from those in Europe? Ans: Disney seems to be learning greatly from their European experiences. In Europe, Disney found that in many ways, the consumer did not behave as expected: O Wanted a different breakfast menu than planned O Did not change vacation behaviors O Did not check in & out of hotels at the expected times O Did not have a relaxed eating schedule. Given these problems, and their experiences in Tokyo and Hong Kong, there seems to be a much better approach to understanding probable consumer desires, and adapting the experience to fit those consumer expectations. 2. How do cultural variables influence the location choice of theme parks around the world? Ans: Disney’s parks first and foremost promote Disney characters and themes. Visitors to the parks want to experience the Magical Kingdom. In Asia, Disney has encouraged acceptance and desire for all things Disney by exposing the population to its characters, 11 | Page films, and other products over time. This type of strategy facilitates the company’s efforts to then market its theme parks and reduces the need to customize its products and services. Disney does adapt some aspects of its park to meet the needs of locals, but is committed to standardizing other elements across cultures. There are many aspects of this exercise that can be brought back to a single statement: Know your customer. When picking a park location, cultural variables affecting location could include: O Ability to recruit employees for language and corporate image O Ability to provide the ‘Disney Experience’ within a non-US cultural paradigm O Consumer willingness to accept some US/Western flavor. 3. Why was Disney’s Shanghai theme park so controversial? What are the risks and benefits of this project? Ans: One major controversy was as the project was under consideration b y Beijing, Shanghai's Communist Party boss was implicated in a big corruption investigation. This put project approval at risk, and threatened to lengthen the approval process. Delays could have meant that the park would not open as planned, in time for the 2010 Worlds Expo. Schedules have dragged, and costs have escalated. Risks: Failure could mean not only lost investment, but could also cause brand damage that could inhibit other international plans for Disney Parks. Success could mean that attendance at Disney’s Tokyo and Hong Kong ventures could be cannibalized. Benefits: Getting this right could be a big feather in Disney’s cap, showing that they have learned their lessons with their previous international projects. Success could mean that the lessons learned could be applied to Tokyo, Hong Kong, and Paris to improve their performance. Success could mean that Disney will find it easier to repeat the ‘right recipe’ in future international endeavors. 4. What location would you recommend for Disney’s next them park in Asia? Why? Ans: I believe that Disney should continue to expand in Asia. Demographic considerations regarding population and income growth, existing tourism, positive attitude towards American influence, and regional habits regarding vacation & leisure would all be important. A suitable distance from Tokyo, Hong Kong, and Shanghai is important to maximize growth in all venues. A different language from the existing Chinese and Japanese centric venues could help growth. Malaysia 12 | Page Malaysia is a constitutional monarchy headed by the Yang di-Pertuan Agong. Malaysia practices parliamentary democracy and has a three-tier government structure: federal, state and local. Federal executive power is vested in the Cabinet led by the Prime Minister. Malaysia ensures free, clean and fair elections (Bearish 2012). However, it does not affect the political stability in the country. Malaysia still remains as a safe country for foreign investment. In 2011, its GDP, as measured by purchasing power parity is US $447 billion which rank at number thirty in the world as measured by the CIA World Factbook. The total population in Malaysia is 29,179,952 (CIA 2012). Malaysia citizens are very familiar with the Disney characters as the cartoon is aired on national television. The Disney merchandise is also widely available for sale in the shopping complex. Malaysia has a lot of theme parks and comparing with other country, the admission fees are a lot cheaper. The most popular theme park in Malaysia is the Genting Theme Park at Genting Highlands while Cosmo’s World is the only indoor theme park in Malaysia. PART 3: EXTERNAL ANALYSIS 13 | Page 1. MACRO ENVIRONMENT (P.E.S.T) The components of the macro environment are the political-legal environment, the economic environment, the socio-cultural environment, and the technological environment in which Disneyland operates. Political-legal environment: Euro Disney decision to open its Theme Park near Paris has caused a negative publicity in the sight of many French politicians, they have objected the existence of Theme Parks in the center of their French culture since the park has been viewed as a visible symbol of the U.S. culture. Although Euro Disney marketers probably choose this location, in particularly France, due to the fact that is the center of Europe and could most probably be the most convenient place for people to arrive and settle in their hotel to be entertained. For instance, people from all over Europe could travel quickly to Paris due to short distance and travel convenience like people from Germany or Spain could quickly and conveniently arrive in Paris. Socio-cultural environment: Euro Disney marketers have recognized a trend. People are going to theme parks during the weekends for adults as well as children entertainment. Euro Disney mistake has been the failure to recognize the cultural differences between Americans and French people. Locating the Theme Park near Paris and acquiring agricultural land as well as imposing the U.S spirit undeniably negatively affects French citizens. The French people’s lifestyle deeply depends on the gratitude to their traditional agriculture. Thus, the land takeover by an American Company mainly does not provide pleasure to them. Economic Environment: Euro Disney mainly failed to recognize the recession period in Europe. Recession usually means higher level of unemployment. The unemployment further changes the way people spend their money since they have less disposable income, particularly when people are unemployed they do not spend money on luxury especially on entertainment. Indeed, this should have been considered as a factor that could lower the number and spending power of customers. I addition, the European recession Euro Disney marketers have made significant mistake by over pricing its products and tickets. The higher price forced consumers to switch to its lower priced competitors. Indeed, Euro Disney has missed consumer price sensitivity, thus have failed to attract customers. Technological environment: The major technological problem has been the particular location where the Theme Park has been built. The climate has brought to a standstill the operation of the business. Although the idea to build a Theme Park has been in correspondence with the existing need on the market the weather should have been considered. In practical terms, the transfer of the idea 14 | Page to fit the market needs indeed could not been suitable since the weather conditions have not been considered. Probably, a closed type of Theme Park could have been suitable for the weather changes. 2. PORTER'S 5 FORCES Competition: Intense, Walt Disney competes with several large players such as Merlin Group, Universal Studios and Parquets Reunidos along with some regional players. Substitutes: Low, Substitutes include zoos and museums which don't match the theme park emergence. Threat of entry: Medium, It takes significant investment to enter the market. Suppler Power: Medium, Suppliers include equipment manufacturers, construction companies and vendors. Bargaining power for technology suppliers and construction companies is medium as technologies are capital intensive and require support and maintenance. Food, toys and doting vendors have low power. Buyer Power: Low, low end-consumers. Their power is low as prices are controlled by theme parks. Conclusion: The industry requires significant investment to enter but attracts some competitors due to high revenue generating opportunities. 3. KEY SUCCESS FACTORS Disney Brand: Famous characters, stories, settings, etc would immediately attract attention without as much advertising known for customer and employee focus and outstanding service Capital: Vast financial resources allowed rapid development on a large scale. Experience: Disneyland now operation 6 theme park in around the world. Which is largest market player in world? Running this entertainment business more than 60 yards. So they know how to manage difficult situation. Top management had previous knowledge of things to expect. Disney had improved its technologies used in theme parks to further improve the quality of the customers visit INTERNAL ANALYSIS: 15 | Page 1. SWOT Analysis: Strength 1. The parent company is the world pioneer in amusement parks and theme parks and has an unparalleled brand presence in the entire world. 2. It is the most visited theme park in France as well as Europe. 3. The Disney characters that feature in the park have a tremendous merchandising capacity and are a great source of income. 4. It is the second Disneyland to be opened outside USA and the first to be operated by the Walt Disney Company 5. Top-of-the-mind tourist destination in Europe with excellent brand presence due to association with Walt Disney 6. Over 15 million visitors on an average visiting per annum Weakness 1. The Disney ³culture´ does not fit with the culture of all foreign countries 2. Incidents and accidents over the years have been problematic Opportunity 1. Huge market. No gigantic competitors in this sector 2. There are fewer amusement parks in France and Europe as compared to the USA; hence Disneyland, Paris has a lot of growth potential 3.The location of Disneyland, Paris is easily accessible to a large proportion of its potential customer base 4. Growing tourism and increasing spending power in the emerging economies Threats 1. Economic recession 2. Cultural difference among nations 3.If the park does not keep on adding new attractions, it would lose its charm Competition Competitors PART 4 LEARNING’S 16 | Page 1. 2. 3. 4. ParcAsterix, France 2. Futoroscope, France Santosa, Singapore Universal Studio. The desire of a company to expand overseas is becoming more and more popular, buts sometimes it comes at the expense of bad research and non attentiveness. The executives made many errors including lack of cultural research, last minute changes to the project which increased the costs and assuming that one park was successful so would the others. Unfortunately all of these items led to disaster for Disneyland but they were able to come back and make the park relatively successful. When a company expands in another country, the company must review all aspects of culture, risks, economics and lifestyles. Not doing this leads to project failure. The failure of Euro Disney can be used as a learning tool of what not to do for other companies that are considering expansion to a foreign market. RECOMMENDED COURSE OF ACTION 1. Pay more attention to national and local famous characters from video, comics and cartoons; use their images and “reputation” in advertisement to promote a new, more European style of Disney’s park along with traditional American culture. 2. Revise target audience, stake on category 16-28 as more profitable and solvent than families with children. 3. Develop a clear strategy of discounts, special season offers. It’ll be a good idea to develop a loyalty program to stimulate customers to come back again and spend more money. Run strong advertisement company in Internet; create interactive online Adventure Planner, where all potential guests can in advance create a clear map of activities, interesting places, reserve tickets, etc 4. According to the needs and demand of customers allow low-alcohol drinks on the territory of the part, offer more European food. French culture views activities like smoking, drinking, and eating. The French are far more tolerant of cigarette smoking and the over emphasis on the no smoking policy of Disney made both the employees and consumers unhappy. Disney also did not serve wine at their nicer restaurants which was upsetting too many patrons because it was expected of such a pricey restaurant to cater to cultural norm of wine drinking. Also, things like selling Coke-A-Cola with ice were seen as exotic and unfamiliar to French culture. 5. US businesses are prone to thinking that if their business strategy is wildly successful in America then that success will carry over to an international audience. In the case of Disneyland, this type of thinking led them to perform very little market testing when preparing for the move to Europe and ultimately to neglect the market research that was acquired. 6. To keep and enlarge their customer audience they should pay more attention to customer satisfaction, providing new services and find a suitable way to implement a mix of traditional American style & culture with European one. CONCLUSION 17 | Page 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 for its success. A careful and tactful planning keeping in mind the whole cultural dimensions deduced from the researches made by Hofstede and Trompenaars would enable an enterprise to perform effectively across the globe. 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 its lack of knowledge about French and Europeans preferences and culture, also its optimistic assumptions based on past experiences led Disney to believe they had a gold mine in their hands and could just put it there, so the customers would buy it. They were wrong and they paid a high price for it, huge debts were acquired in the first years of Euro Disney, which even changed its name to Paris Disney in an attempt to recovery. Disney could have avoided most of the problems it found in Paris. 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. REFERENCES: * Fred Luthans & Jonathan P.Doh- “International Management- culture, strategy and behavior” * Patrick Zimmer“Why Euro Disney Failed” [Online www.patrickzimmer.com/why_eurodisney_failed.htm Accessed on: 7th February 2014 18 | Page Web] URL: