1. What factors contributed to Euro Disney’s poor performance during its first year of operation? What factors contributed to Hong Kong Disney’s poor performance during its first year? The factors that led to Euro Disney’s poor performance were the lack of understanding of the French culture, mistaken assumptions, and ethnocentrism by the American management. Since the prices of the hotels and entrances were different and much higher in Europe, the park attendance was low. It was actually cheaper for European families to travel to Disney World in Orlando, FL than to EuroDisney. Eisner was a little arrogant when he assumed people from all over Europe would come to Paris, when there are many different cultures in Europe, each one expecting adaptation.
It isn’t like the U.S. where the culture is much the same throughout. Each country has its own culture. The guest expectations weren’t up to par, and the customer service wasn’t as expected. There was a ban on alcohol when the French are the biggest wine drinking country and the poor and underestimated arrangement of breakfast didn’t settle well with the French. It failed in Hong Kong because its service standpoint was below standards. The cultural factors also added to the failure of the theme park they did not adapt to the Chinese culture. They have improved however culture isn’t everything the rides weren’t the quality that guests expected it to be.
2. To what degree do you consider that these two factors were (a) foreseeable and (b) controllable by EuroDisney, Hong Kong Disney, or the parent company, Disney? In terms of the foreseeable factors, they should have taken into consideration cross cultural differences, the Gulf War of 1991, 1980’s European recession, high interest rates and devaluation of several currencies, World Fair in Seville and the Olympics in Barcelona, and the ban on alcohol consumption. Controllable factors were mistaken assumptions, initial pricing, design and marketing policies, early advertising that was more expensive, poor and underestimated arrangement of breakfast, and arrogance of Disney’s management.
3. What role does ethnocentrism play in the story of EuroDisney’s launch? Ethnocentrism is the belief in the inherent superiority of one’s own culture, and all other cultures are measured in relation to it. This happened when the Disney management did not try and understand the French expectations or wishes, and went ahead and implemented the Disney Park as per their wishes. The French, of course did not accept this since they never wanted the Americanized entertainment. Disney management had the resources available to get a marketing opinion from European sources that would have saved them from failure. However, since they were profitable with the other Disney parks, the management did not see as this park being any different. If only they had consulted with European marketers, they could have avoided pricing mistakes, food and drink mistakes, and entertainment mistakes.
4. How do you assess the cross-cultural marketing skills of Disney? In the beginning Disney’s cross-cultural marketing skills were far below par. Simply put, they did not do their homework, but when failure crept up they realized their mistakes. Now they have hired European management, who has a better idea of what they are doing. They not only changed their marketing and pricing strategies, but they also changed the food and drink as well. Therefore, in the end, Disney’s cross-cultural skills have improved significantly.
5. Why did success in Tokyo predispose Disney management to be too optimistic in their expectations of success in France? Discuss. In Japan Disney park was a huge success due to the fact that the Japanese had a sentimental attachment to American cartoon characters. The Japanese tourists enjoyed themselves at the park because they could automatically relate to these characters. This resulted in a profit not only in the first year, but in the second year as well. There were 14 million people that visited Tokyo Disney Park the second year and 3/4th of them were repeat customers. With these high figures and profits, Disney management had high hopes while constructing the park in Paris. They didn’t feel the need to do any research since the Japanese adapted so well to the American customs and Disney management figured the French would be no different. However, this was completely the opposite of what happened. The French did not accept the American customers and a failure resulted in Paris.
6. Why do you think the experience in France didn’t help Disney avoid some of the problems in Hong Kong? First are the cultural differences. In Hong Kong, they only considered Chinese style in the park design. Also, they still overpriced the park. They didn’t take into consideration the actual price level of the country and blindly set prices high so that visitors could not afford, and moved on to other amusement parks. Last is the marketing. Disney management did not market its entertainment concept. Like France, Hong Kong has their own cartoon image and was not familiar with Mickey Mouse or Donald Duck.
7. Now that Hong Kong Disney is up and running, will the Shanghai development benefit from the Hong Kong experience? Disney management will know exceptionally well that doing research is the first step. Familiarize the customer base with the characters first and foremost so that way when you “open the gates” it is a warm, relaxing feeling seeing familiar faces. They should also make sure and set prices at a fair level. Look into the income level of the population and make an educated decision.
8. Now that Disney has begun work on the new Hong Kong and Shanghai locations, where and when should it go next? Assume you are a consultant hired to give Disney advice on the issue of where and when to go next. Pick three locations and select the one you think will be the best new locations and select the one you think will be the best new location for Disneyland X, and discuss. India, Australia, and Brazil are three locations that I would advise Disney to consider next. I think the best location would be India. India is coming up as next big market is almost every field due to strong presence of customer base and more disposable income.
American culture is already so popular in India. Hollywood became so popular that India created its own Bollywood. India also has the second largest population in the world, so financially Disney would excel with that customer base. Again Disney would have to be careful with the food choices and pricing. Australia would also be a great choice for obvious reasons. There location from other countries would be ideal since it would not cannibalize other locations’ attendance.
Also, since they are an English speaking country there would not be a language barrier. Australia is such a compact nation that no matter where you placed the Disney park people would be able to easily access it. The third country I think would be ideal is Brazil. It is a powerful and emerging nature, and although they have a strong culture, with a lot of research could be very prosperous. They also have a very large population that would financially be beneficial to Disney. It would also be a good location to service Central America, the Caribbean, and South America.
9. Given your choice of locale X for the newest Disneyland, what are the operational implications of the history of EuroDisney and Disney Hong Kong for the new park? After the failed attempt at Disney Paris, Disney should have a lot of experience now in opening theme parks. I think with extensive research and a culturally intelligent management, Disney will excel in Disney India. This time the management will do their homework and find out the cultural differences, customs, traditions, food, drink, etc. Since there is a language barrier, they will also have a team of leaders who are fluent in the language to help the American team.
Courtney from Study Moose