The Walt Disney Company was originally founded in 1923; a company committed to providing quality and wholesome entertainment experiences to people of all ages. The company is known for the following four segments, which consist of Studio Entertainment, Parks and Resorts, Consumer Products and Media Networks. The Walt Disney Company consists of five (5) Disneyland and Disney Park Resorts, in total. Two are located in the United States, one in Europe and two in Asia Pacific. The original Disneyland Resort was built in 1955, in Anaheim, California; followed by Disney World Resort, Lake Buena Vista, Florida in 1971. After the success of these two large theme parks in the United States, Disney decided to expand internationally. First Tokyo Disney Resort built in 1983, secondly, Disneyland Resort Paris (EuroDisney) which opened its doors in 1992, and thirdly, Hong Kong Disneyland, opening its doors in 2005.
Case Study Questions
1.The factors that contributed to EuroDisney, now called Disneyland Resort Paris, poor performance during its first year of operation was the lack of knowledge of their target market, cultural differences between the USA and Europe, and the failure to take into account that “Paris is Europe’s most-popular city destination among tourist of all nationalities”. Disney did a bad job at understanding Europeans and their lifestyles. Unfortunately, for Disney the French were neither happy nor receptive to having what they called “America Cultural Imperialism”. Many specially the children welcomed Mickey and his character friends, but there were many against the “cultural Chemobyl”, such as the French Communist Party and many demonstrator who with the following action, of throwing eggs and ketchup at Disney President, Michael Eisner upon his arrival to Paris in 1989, let Disney know they were not welcome.
1 The prices were much higher in EuroDisney, than in any other Disney park. The hotels and park entrance were considered high, especially by the French, causing low attendance. The staff was low, and the park did not run effectively. An example was erroneous assumptions by Disney management, that European’s do not eat breakfast. Disney in turn did not prepare well, they were under staffed, and breakfast items were lacking. 2500 people showed up for breakfast, in a 350 seat restaurant, and they did not just want coffee and croissants, they wanted bacon and eggs.
Disney went wrong by force feeding American culture, with a mixture of what they thought the French would like. The Europeans did not take well to the oversized designs and the “American” attitude of everything needing to be bigger, bolder, than in other European theme attractions. The French wanted quality within the rides, service, and overall experience; instead they got over sized designs, high prices, and lack of service. Management was a huge issue because foreign shareholders owned Euro Disney and they did not have a full understanding of the European culture.
1B.In Hong Kong some of the startup problems, and reason why the park failed in the first year, was once again cultural differences, such as the lack of knowledge of Chinese culture. Low amount of rides within the park (16 rides, versus 52 in EuroDisney). Environmental problems and lack of knowledge of their target market. For example, there was a lack of American characters within the park, something the Chinese wanted in order to take pictures with them and document their holiday vacations. Environmental issues, four weeks prior to opening of Hong Kong Disneyland was a sign of a “rocky start” as the local press reported.
During the trial period, where 30,000 selected groups of individuals were asked to visit the park to test the rides and environment, a dark misty fog and cloud covered the entire theme park. A result from the pollutants, passing from mainland, China. In addition, it was noticed that the original 30,000 park capacity, may have been too high. In a visit of approximately 29,000 visitors, the lines were an average of 2 hours for rides and 45 minutes to be seated at the restaurants. Furthermore, when inspectors from the Hygiene Department were asked to remove their official caps and badges, while conducting an official investigation of a recent food poising case, was viewed as the park not cooperating and respecting authority.
Local police was denied access, even when necessary, unless it was pre-arranged by park officials. Denying access to the police, defeats the purpose of emergency calling, should something go wrong. Finally, and probably the worst propaganda result for Hong Kong Disney, was when officials failed to fully educate themselves on local Chinese holidays. Unfortunately for HKD, they were aware of Chinese Lunar New Year, but they were oblivious to the fact that it was not just the two days, as local calendars read, but the country benefited from four days of holiday.
This cause a huge problem for HKD, as they over booked their online sales and their local visitors’ sales. When the park closed its door at their full capacity, the folks with tickets left outside the metal gates were infuriated, and cause a huge riot, causing even worst press then ever. Guest was quotes by local papers, as “I will never come again”. The press also wrote on the park having few rides, and being too small compared to other theme parks. Threats of lawsuits, and customer complaints of negligence, did not put HKD in a good situation.
2.I consider that these facts were foreseeable and controllable by EuroDisney, Hong Kong Disney, and the parent company, Disney. Just like any major 500 company, prior to opening an entity in any other country. Research of cultural differences, intense market benchmark and analysis is done, to ensure there’s no room for error. These are considered basic details that must be done. Even when relocating a family from one country to another, companies offer “cross cultural training” for the family to hit the round running, in addition, before an employee is relocated, the entire potential relocating family is interviewed by a third party company to ensure they are the right fit for the assignment.
Disney, should of done a better job at educating themselves with both French and Hong Kong’s culture, important holidays, ways of living, vacationing analysis, hired a third party company to review their market plans, and ensure Disney was on the right track to be successful from day one. Disney should have taken the time to better understand their end user, customer; every culture is unique, every sector is unique, thus the needs to better understand what your market target wants. The proper research, benchmark, cultural analysis, cultural values, cultural dynamics, to include the history, local holidays, was a must, and for this reason alone, I strongly feel both EuroDisney and Hong Kong Disney failed within the first year. It was their job to ensure they met the required adaptation, especially cultural imperative.
4 3.The role of ethnocentrism in the story of EuroDisney’s launch played a huge part in first year’s failure. Every culture thinks they are unique, and the best. It’s human nature to believe in the superiority of one’s own ethnic group. However, we US American’s have a tendency to not only think it, but impose it upon other nations. Many businesses or groups make the mistake of thinking “our way is the best way”. In EuroDisney, the failure was because Disney wanted to bring their “Americana” presence to France. Something that was not well received. I don’t think it should have been a surprise, as the French tend to have a reputation for not liking “American’s”. The French felt Disney was imposing their airs of grandness onto the French culture.
The French are simple in their way of living. They believe in quality of life, and not quantity. It’s all about their personal relationships. Long lunches with friends and family with a nice glass of wine and quality food, is the norm. This way of living, and thinking cause the American Theme Park design to not be well accepted in France. The French resented the big center piece in the middle of the park, the “American need” to be bigger and better in size, while not paying attention to service, quality of food, not having wine at the park, etc. Bringing an American mentality theme park to a European country with engraved European mentality and way of living was a huge mistake.
4.In my opinion, specially coming from a Global Mobility career, the cross-cultural marketing skills of Disney left much to be desired. As an expanding international company, you must first do your homework. Every company has different departments, and if you do not possess the quality employees needed to do the international marketing analysis, then the marketing department should have hired an international marketing consultant specializing in Europe and Asia Pacific.
Cross Cultural differences are simple, every country behaves in certain ways, do to their history and evolving markets. As a Company looks to expand to international waters, it’s imperative for that company to fully understand why people of certain countries, behave in personal and business ventures the way they do. Damage control, of failed assignments is hugely expensive. Getting it right the first time is not only cost effective, but it allows you to hit the ground running.
In order to be successful, companies must understand their target market, and segment markets. In any business, a failed assignment, or business venture is three times the cost of the original assignment or venture estimate. This extra money “wasted” would be put to better use, by increasing marketing ventures in these countries, and or taking case of small oversights, within original business plans. Marketing is essential within domestic ventures, it’s even more essential to better understand and research your international ventures. Preparation is the key factor in any successful career, business, personal development, etc. This offers a chance to better manage expectations, in both the entering country and the departing country.
Pre-and-post departure intercultural training help companies prepare for and deal with cultural differences, such as recognizing the priorities of the Chinese people and the fact that “yes” doesn’t always mean “yes.”3 An important fact, when dealing with employees of other countries/cultures.
Let’s hit the round running, by successfully implementing and creating marketing teams, to include domestic team members, and international team members. Let’s partner with third party companies, who specialize in international market research and analysis. Key items to look for when hiring these companies are: Cultural difference analysis methods and result driven, country specialist for marketing, law and human relations, country survey data, and customization abilities to effectively market and promote your international expansion business endeavors.
1. The BaltimoreSun, April 19, 1992, “MagicKingdom or Cultural Chernobyl?” Retrieved February 10, 2013 from http://articles.baltimoresun.com/1992-04-19/news/1992110078_1_mickey-mouse-cultural-chernobyl-amusement#.USky18QWcBI.email
Philip R. Caterora, Mary C. Gilly, & John L. Graham. International Marketing: The Cultural Environment of Global Markets. Fifteenth Edition (pp. 63-82; pp 96-157 McGraw-Hill/Irwin.
3. Mobility Magazine, March 2013, “Creating an Expat Ecosystem” pp 48-54. M. Diane McCormick, freelance writer in Harrisburg, PA.
Case 2-1 The not so Wonderful World of EuroDisney
4. Philip R. Caterora, Mary C. Gilly, & John L. Graham. International Marketing: The Cultural Environment of Global Markets. Fifteenth Edition – Pg 126-129