Disneyland Paris Overview

First Question:

Disneyland Paris was one of Disneyland's Global projects. Please discuss its advantages and disadvantages, and from reading and understanding the case suggest what was/were the mistake/s that Disney committed from the beginning till now.

Answer:

Advantages:

1. New site serving the 67millions population in France and 79 millions of tourists there, as Paris is the most-popular city destination among tourists of all nationalities.
2. 310 million people in Europe live within two hours’ air travel of EuroDisney, and 17 million could reach the park within two hours by car.
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3. Famous characters to people in all over the world which have thrills.
4. The high experiences.
5. High average of per capita income of European.
6. Sufficient acreage of land was available for development.
7. French government’s generous incentives.
8. Better demographics than at any other Disney site.

Disadvantages:

1. Europeans are much more independent and value deeply their own cultural habits and traditions. This would require the design of a theme park that is more in keeping with French and European cultural norms.
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   Allow the French to put their own identity on the park.

2. Europeans in general and the French in particular are sensitive about American cultural imperialism. The former Chairman of Eisner was pelted with eggs in Paris, he should have suspected that market entry might not be that easy.
3. French culture has its own lovable cartoon characters such as Astérix, the helmeted, pint-sized Gallic warrior, who has a theme park located near EuroDisney.
4. There are pockets of active dislike of America among Europeans, left over from the 1960s when American firms were investing heavily in Europe.
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5. Poor winter weather of northern Europe.
6. Hotel rooms were so high priced.

Mistakes:

1. Entering by FDI mode of entry, it was better to be by JV as it is in Hong Kong or licensing as it is in Japan.
2. It`s clear that managers and planners involved in the EuroDisney project were infected with over-confidence so they fall in Over-ambitious forecasts. Disney management expected some 50% of park attendance to include French visitors. The French people in general proved to be reluctant in their response to this example of “Americana” in Europe. EuroDisney’s management seriously underestimated negative attitudes among the French. Visitors of other nationalities were also unwilling to pay the high prices of EuroDisney or to stay more than one or two days (instead of the expected three days). Clearly, perceptions of the park’s benefits among tourists differed from those of the American.
3. Real-estate investments.
4. Expensive or inappropriate park design and construction. Total park construction costs were estimated at FFr 14 billion ($2.37 billion) in 1989 but rose by $340 million to FFr 16 billion as a result of all these add-ons. Hotel construction costs alone rose from an estimated FFr 3.4 billion to FFr 5.7 billion.
5. Flawed initial marketing, pricing, staffing, and park management policies.
6. Disney’s management decision to pursue a market skimming policy to earn a fast return, might have led to poor attendance levels.
7. Disney’s management was being insensitive to cultural differences, as Europeans are much more independent and value deeply their own cultural habits and traditions. This would require the design of a theme park that is more in keeping with French and European cultural norms. Allow the French to put their own identity on the park.
8. Disney’s management has its lake to insight, sensitivity, and basic information about the French market and environmental events in France (e.g., recession, currency swings).
9. Rigid imposition of Disney rules and unwillingness to consider adaptations.
10. Expensive trams were built along a lake to take guests from the hotels to the park.