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The Not-So-Wonderful World of EuroDisney * —Things Are Better Now at Disneyland

ID: 331017 • Letter: T

Question

The Not-So-Wonderful World of

EuroDisney

*

—Things Are Better Now at

Disneyland Resort Paris

CASE 2-1

BONJOUR, MICKEY!

In April 1992, EuroDisney SCA opened its doors to European visi-

tors. Located by the river Marne some 20 miles east of Paris, it

was designed to be the biggest and most lavish theme park that

Walt Disney Company (Disney) had built to date—bigger than

Disneyland in Anaheim, California; Disneyworld in Orlando,

Florida; and Tokyo Disneyland in Japan.

Much to Disney management’s surprise, Europeans failed to “go

goofy” over Mickey, unlike their Japanese counterparts. Between

1990 and early 1992, some 14 million people had visited Tokyo

Disneyland, with three-quarters being repeat visitors. A family of

four staying overnight at a nearby hotel would easily spend $600 on

a visit to the park. In contrast, at EuroDisney, families were reluc-

tant to spend the $280 a day needed to enjoy the attractions of the

park, including les hamburgers and les milkshakes. Staying over-

night was out of the question for many because hotel rooms were

so high priced. For example, prices ranged from $110 to $380 a

night at the Newport Bay Club, the largest of EuroDisney’s six new

hotels and one of the biggest in Europe. In comparison, a room in a

top hotel in Paris cost between $340 and $380 a night.

Financial losses became so massive at EuroDisney that the

president had to structure a rescue package to put EuroDisney

back on firm financial ground. Many French bankers questioned

the initial financing, but the Disney response was that their views

reflected the cautious, Old World thinking of Europeans who did

not understand U.S.-style free market financing. After some acri-

monious dealings with French banks, a two-year financial plan

was negotiated. Disney management rapidly revised its marketing

plan and introduced strategic and tactical changes in the hope of

“doing it right” this time.

A Real Estate Dream Come True

The Paris loca-

tion was chosen over 200 other potential sites stretching from

Portugal through Spain, France, Italy, and into Greece. Spain

thought it had the strongest bid based on its yearlong, temperate,

and sunny Mediterranean climate, but insufficient acreage of land

was available for development around Barcelona.

In the end, the French government’s generous incentives,

together with impressive data on regional demographics, swayed

Disney management to choose the Paris location. It was calculated

that some 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—better demographics than at any other Disney site.

Pessimistic talk about the dismal winter weather of northern France

was countered with references to the success of Tokyo Disneyland,

where resolute visitors brave cold winds and snow to enjoy their

piece of Americana. Furthermore, it was argued, Paris is Europe’s

most-popular city destination among tourists of all nationalities.

Spills and Thrills

Disney had projected that the new

theme park would attract 11 million visitors and generate over

$100 million in operating earnings during the first year of

operation. By summer 1994, EuroDisney had lost more than

$900 million since opening. Attendance reached only 9.2 million

in 1992, and visitors spent 12 percent less on purchases than the

estimated $33 per head.

If tourists were not flocking to taste the thrills of the new Euro-

Disney, where were they going for their summer vacations in 1992?

Ironically enough, an unforeseen combination of transatlantic air-

fare wars and currency movements resulted in a trip to Disneyworld

in Orlando being cheaper than a trip to Paris, with guaranteed good

weather and beautiful Florida beaches within easy reach.

EuroDisney management took steps to rectify immediate prob-

lems in 1992 by cutting rates at two hotels up to 25 percent, intro-

ducing some cheaper meals at restaurants, and launching a Paris ad

blitz that proclaimed “California is only 20 miles from Paris.”

An American Icon

One of the most worrying aspects of

EuroDisney’s first year was that French visitors stayed away; they

had been expected to make up 50 percent of the attendance figures.

A park services consulting firm framed the problem in these words:

“The French see EuroDisney as American

imperialism—plastics

at its worst.” The well-known, sentimental Japanese attachment

to Disney characters contrasted starkly with the unexpected and

widespread French scorn for American fairy-tale characters.

French culture has its own lovable cartoon characters such as

Ast

é

rix, the helmeted, pint-sized Gallic warrior, who has a theme

park located near EuroDisney.

Hostility among the French people to the whole “Disney idea”

had surfaced early in the planning of the new project. Paris theater

director Ariane Mnouchkine became famous for her description of

EuroDisney as “a cultural Chernobyl.” In fall 1989, during a visit

to Paris, French Communists pelted Michael Eisner with eggs. The

joke going around at the time was, “For EuroDisney to adapt prop-

erly to France, all seven of Snow White’s dwarfs should be named

Grumpy (Grincheux).”

Early advertising by EuroDisney seemed to aggravate local

French sentiment by emphasizing glitz and size rather than

the variety of rides and attractions. Committed to maintaining

Disney’s reputation for quality in everything, more detail was

built into EuroDisney. For example, the centerpiece castle in the

Magic Kingdom had to be bigger and fancier than in the other

parks. Expensive trams were built along a lake to take guests from

the hotels to the park, but visitors preferred walking. 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 esti-

mated FFr 3.4 billion to FFr 5.7 billion.

*The Official name has been changed from “EuroDisney” to “Disneyland Resort Paris.”

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EuroDisney and Disney managers unhappily succeeded in

alienating many of their counterparts in the government, the

banks, the ad agencies, and other concerned organizations. A

barnstorming, kick-the-door-down attitude seemed to reign among

the U.S. decision makers: “They had a formidable image and con-

vinced everyone that if we let them do it their way, we would all

have a marvelous adventure.” One former Disney executive voiced

the opinion, “We were arrogant—it was like ‘We’re building the

Taj Mahal and people will come—on our terms.’ ”

STORM CLOUDS AHEAD

Disney and its advisors failed to see signs at the end of the 1980s

of the approaching European recession. Other dramatic events

included the Gulf War in 1991, which put a heavy brake on vacation

travel for the rest of that year. Other external factors that Disney

executives have cited were high interest rates and the devaluation

of several currencies against the franc. EuroDisney also encoun-

tered difficulties with regard to competition—the World’s Fair in

Seville and the 1992 Olympics in Barcelona were huge attractions

for European tourists.

Disney management’s conviction that it knew best was dem-

onstrated by its much-trumpeted ban on alcohol in the park.

This rule proved insensitive to the local culture, because the

French are the world’s biggest consumers of wine. To them a

meal without un verre de rouge is unthinkable. Disney relented.

It also had to relax its rules on personal grooming of the pro-

jected 12,000 cast members, the park employees. Women were

allowed to wear redder nail polish than in the United States,

but the taboo on men’s facial hair was maintained. “We want

the clean-shaven, neat and tidy look,” commented the director

of Disney University’s Paris branch, which trains prospective

employees in Disney values and culture. EuroDisney’s manage-

ment did, however, compromise on the question of pets. Special

kennels were built to house visitors’ animals. The thought of

leaving a pet at home during vacation is considered irrational by

many French people.

Plans for further development of EuroDisney after 1992 were

ambitious. The initial number of hotel rooms was planned to be

5,200, more than in the entire city of Cannes on the C

ô

te d’Azur.

Also planned were shopping malls, apartments, golf courses, and

vacation homes. EuroDisney would design and build everything

itself, with a view to selling at a profit. As a Disney executive

commented, “Disney at various points could have had partners to

share the risk, or buy the hotels outright. But it didn’t want to give

up the upside.”

“From the time they came on, Disney’s Chairman Eisner and

President Wells had never made a single misstep, never a mistake,

never a failure,” said a former Disney executive. “There was a ten-

dency to believe that everything they touched would be perfect.”

The incredible growth record fostered this belief. In the seven

years before EuroDisney opened, they took the parent company

from being a company with $1 billion in revenues to one with

$8.5 billion, mainly through internal growth.

Telling and Selling Fairy Tales

Mistaken assump-

tions by the Disney management team affected construction

design, marketing and pricing policies, and park management, as

well as initial financing. Disney executives had been erroneously

informed that Europeans don’t eat breakfast. Restaurant breakfast

service was downsized accordingly, and guess what? “Everybody

showed up for breakfast. We were trying to serve 2,500 breakfasts

in a 350-seat restaurant [at some of the hotels]. The lines were

horrendous. And they didn’t just want croissants and coffee, they

wanted bacon and eggs.”

In contrast to Disney’s American parks, where visitors typically

stay at least three days, EuroDisney is at most a two-day visit.

Energetic visitors need even less time. One analyst claimed to have

“done” every EuroDisney ride in just five hours. Typically many

guests arrive early in the morning, rush to the park, come back to

their hotel late at night, and then check out the next morning before

heading back to the park.

Vacation customs of Europeans were not taken into consider-

ation. Disney executives had optimistically expected that the

arrival of their new theme park would cause French parents to take

their children out of school in mid-session for a short break. It

did not happen unless a public holiday occurred over a weekend.

Similarly, Disney expected that the American-style short but more

frequent family trips would displace the European tradition of a

one-month family vacation, usually taken in August. However,

French office and factory schedules remained the same, with their

emphasis on an August shutdown.

In promoting the new park to visitors, Disney did not stress the

entertainment value of a visit to the new theme park; the emphasis

was on the size of the park, which “ruined the magic.” To counter

this, ads were changed to feature Zorro, a French favorite, Mary

Poppins, and Aladdin, star of the huge moneymaking movie

success. A print ad campaign at that time featured Aladdin,

Cinderella’s castle, and a little girl being invited to enjoy a “magic

vacation” at the kingdom where “all dreams come true.” Six new

attractions were added in 1994, including the Temple of Peril,

Story book Land, and the Nautilus attraction. Donald Duck’s

birthday was celebrated on June 9—all in hopes of positioning

EuroDisney as the number 1 European destination of short

duration, one to three days.

Faced with falling share prices and crisis talk among share-

holders, Disney was forced to step forward in late 1993 to rescue

the new park. Disney announced that it would fund EuroDisney

until a financial restructuring could be worked out with lenders.

However, it was made clear by the parent company, Disney, that it

“was not writing a blank check.”

In June 1994, EuroDisney received a new lifeline when a mem-

ber of the Saudi royal family agreed to invest up to $500 million

for a 24 percent stake in the park. The prince has an established

reputation in world markets as a “bottom-fisher,” buying into

potentially viable operations during crises when share prices

are low. The prince’s plans included a $100 million convention

center at EuroDisney. One of the few pieces of good news about

EuroDisney is that its convention business exceeded expectations

from the beginning.

MANAGEMENT AND NAME CHANGES

Frenchman Philippe Bourguignon took over at EuroDisney as

CEO in 1993 and was able to navigate the theme park back to prof-

itability. He was instrumental in the negotiations with the firm’s

bankers, cutting a deal that he credits largely for bringing the park

back into the black.

Perhaps more important to the long-run success of the ven-

ture were his changes in marketing. The pan-European approach

to marketing was dumped, and national markets were targeted

separately. This new localization took into account the differing

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tourists’ habits around the continent. Separate marketing offices

were opened in London, Frankfurt, Milan, Brussels, Amsterdam,

and Madrid, and each was charged with tailoring advertising and

packages to its own market. Prices were cut by 20 percent for park

admission and 30 percent for some hotel room rates. Special pro-

motions were also run for the winter months.

The central theme of the new marketing and operations

approach is that people visit the park for an “authentic” Disney

day out. They may not be completely sure what that means, except

that it entails something American. This approach is reflected in

the transformation of the park’s name. The “Euro” in EuroDisney

was first shrunk in the logo, and the word “land” added. Then in

October 1994 the “Euro” was eliminated completely; the park was

next called Disneyland Paris; and now Disneyland Resort Paris.

In 1996, Disneyland Paris became France’s most visited tourist

attraction, ahead of both the Louvre Art Museum and the Eiffel

Tower. In that year, 11.7 million visitors (a 9 percent increase from

the previous year) allowed the park to report another profit.

THEME PARK EXPANSION IN THE

TWENTY-FIRST CENTURY

With the recovery of Disneyland Paris, Disney embarked on an

ambi

tious growth plan. In 2001 the California Adventure Park was

added to the Anaheim complex at a cost of $1.4 billion, and Walt

Disney Studios Theme Park was added to Disneyland Paris. Through

agreements with foreign partners, Disney opened

Disney-Sea in

Tokyo and Disneyland Hong Kong in 2006, and plans are underway

for a theme park in Shanghai scheduled for 2016.

A decade after being slammed for its alleged ignorance of

European ways with EuroDisney, Disney is trying to prove its got-

ten things right the second time around. The new movie-themed

park, Walt Disney Studios adjacent to Disneyland Paris, is designed

to be a tribute to moviemaking—but not just the Hollywood kind.

The Walt Disney Studios blends Disney entertainment and attrac-

tions with the history and culture of European film since French

camera-makers helped invent the motion picture. The park’s gen-

eral layout is modeled after an old Hollywood studio complex, and

some of the rides and shows are near replicas of Disney’s first film

park, Disney-MGM Studios. Rather than celebrating the history

of U.S. Disney characters, the characters in the new theme park

speak six different languages. A big stunt show features cars and

motorcycles that race through a village modeled after the French

resort town of St. Tropez.

Small details reflect the cultural lessons learned. “We made

sure that all our food venues have covered seating,” recalling that,

when EuroDisney first opened, the open-air restaurants offered no

protection from the rainy weather that assails the park for long

stretches of the year.

On the food front, EuroDisney offered only a French sausage,

drawing complaints from the English, Germans, Italians, and

everyone else about why their local sausages weren’t available.

This time around, the park caters to the multiple indigenous cul-

tures throughout Europe—which includes a wider selection of

sausages.

Unlike Disney’s attitude with their first park in France, “Now we

realize that our guests need to be welcomed on the basis of their own

culture and travel habits,” says Disneyland Paris Chief Executive.

Disneyland Paris today is Europe’s biggest tourist attraction—even

more popular than the Eiffel Tower—a turnaround that showed the

park operators’ ability to learn from their mistakes.

The root of Disney’s problems in EuroDisney may be found in

the tremendous success of Japan’s Disneyland. The Tokyo Park

was a success from the first day, and it has been visited by millions

of Japanese who wanted to capture what they perceived as the ulti-

mate U.S entertainment experience.

Disney took the entire U.S. theme park and transplanted it in

Japan. It worked because of the Japanese attachment to Disney

characters. Schools have field trips to meet Mickey and his friends

to the point that the Disney experience has become ingrained in

Japanese life. In the book

Disneyland as Holy Land,

University

of Tokyo professor Masako Notoji wrote: “The opening of Tokyo

Disneyland was, in retrospect, the greatest cultural event in Japan

during the ‘80s.” With such success, is there any wonder that

Disney thought they had the right model when they first went to

France? The Tokyo Disney constitutes a very rare case in that the

number of visitors has not decreased since the opening.

2005—Bankruptcy Pending

In early 2005, Disneyland

Paris was on the verge of bankruptcy. The newest park attraction

at Disneyland Paris, Walt Disney Studies, featured Hollywood-

themed attractions such as a ride called “Armageddon—Special

Effects” based on a movie starring Bruce Willis, flopped. Guests

said it lacked attractions to justify the entrance price, and oth-

ers complained it focused too much on American, rather than

European, filmmaking. Disney blames other factors: the post-9/11

tourism slump, strikes in France, and a summer heat wave in 2003.

The French government came to the aid of Disneyland Paris with a

state-owned bank contribution of around $500 million to save the

company from bankruptcy.

A new Disneyland Paris CEO, a former Burger King executive,

introduced several changes in hopes of bringing the Paris park back

from the edge of bankruptcy. To make Disneyland Paris a cheaper

vacation destination, the CEO lobbied the government to open

up Charles de Gaulle airport to more low-cost airlines. Under his

direction, Disneyland Paris created its first original character tai-

lored for a European audience: the Halloween-themed “L’Homme

Citrouille,” or “Pumpkin Man.” He has also introduced a one-day

pass giving visitors access to both parks in place of two separate

tickets. He is planning new rides, including the Tower of Terror,

and other new attractions. If these changes fail to bring in millions

of new visitors, Disney and the French government might once

again be forced to consider dramatic measures.

Even though French President Jacques Chirac called the spread

of American culture an “ecological disaster” and the French gov-

ernment imposes quotas on non-French movies to offset the influ-

ence of Hollywood and officially discourages the use of English

words such as “e-mail,” Disneyland Paris was important to the

French economy. In light of France’s 10 percent unemployment at

the time, Disneyland Paris is seen as a job-creation success. The

company accounted for an estimated 43,000 jobs and its parks

attracted over 12 million visitors a year, more than the Louvre

Museum and the Eiffel Tower combined. By 2008 Disneyland

Paris was experiencing increases in park attendance, and the turn-

around appeared to be working.

DISNEY’S GREAT LEAP INTO CHINA

Disney’s record with overseas theme parks has been mixed.

Tokyo Disneyland is a smash hit with 25 million visitors a year,

and Disneyland Paris, opened in 1992, was a financial sinkhole

that just now is showing promise of a turnaround. Disney was

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Cases 2 The Cultural Environment of Global Marketing

determined not to make the same cultural and management mis-

takes in China that had plagued Disneyland Paris.

Disney took special steps to make Hong Kong Disneyland cul-

turally acceptable. “Disney has learned that they can’t impose the

American will—or Disney’s version of it—on another continent.”

“They’ve bent over backward to make Hong Kong Disneyland

blend in with the surroundings.” “We’ve come at it with an

American sensibility, but we still appeal to local tastes,” says one

of Hong Kong Disneyland’s landscape architects.

Desiring to bring Disneyland Hong Kong into harmony with

local customs from the beginning, it was decided to observe feng

shui in planning and construction. Feng shui is the practice of

arranging objects (such as the internal placement of furniture) to

achieve harmony with one’s environment. It is also used for choos-

ing a place to live. Proponents claim that feng shui has effects on

health, wealth, and personal relationships.

The park’s designers brought in a feng shui master who rotated

the front gate, repositioned cash registers, and ordered boulders

set in key locations to ensure the park’s prosperity. He even chose

the park’s “auspicious” opening date. New construction was often

begun with a traditional good-luck ceremony featuring a carved

suckling pig. Other feng shui influences include the park’s orienta-

tion to face water with mountains behind. Feng shui experts also

designated “no fire zones” in the kitchens to try to keep the five

elements of metal, water, wood, fire, and earth in balance.

Along with following feng shui principles, the park’s hotels have

no floors that are designated as fourth floors, because 4 is consid-

ered an unlucky number in Chinese culture. Furthermore, the open-

ing date was set for September 12, 2006, because it was listed as an

auspicious date for opening a business in the Chinese almanac.

But the park’s success wasn’t a sure thing. The park received

more than 5 million visitors in its first year but short of its targeted

5.6 million, and the second year was equally disappointing with

attendance dropping nearly 30 percent below forecasts. Many of

those who came complained that it was too small and had little to

excite those unfamiliar with Disney’s cast of characters.

Disneyland is supposed to be “The Happiest Place on Earth,”

but Liang Ning isn’t too happy. The engineer brought his family

to Disney’s new theme park in Hong Kong from the southern

Chinese city of Guangzhou one Saturday in April with high hopes,

but by day’s end, he was less than spellbound. “I wanted to forget

the world and feel like I was in a fairytale,” he says. Instead, he

complains, “it’s just not big enough” and “not very different from

the amusement parks we have” in China. Hong Kong Disneyland

has only 16 attractions and only one a classic Disney thrill ride,

Space Mountain, compared with 52 rides at Disneyland Paris.

After the first year’s lackluster beginning, Disney management

introduced five new attractions and added “It’s a Small World,”

the ride made famous at the flagship Disneyland in Anaheim,

California. A variety of other new entertainment offerings were

due in 2008.

Guests’ lack of knowledge of Disney characters created a

special hurdle in China. Until a few years ago, hardly anyone in

mainland China knew Mickey Mouse and Donald Duck even

existed. Disney characters were banned for nearly 40 years, so

knowledge of Disney lore is limited. China was the first market

where Disney opened a park in which there had been no long-term

relationship with attendees. It was the Chinese consumer who was

expected to understand Disney, or so it seemed. Chinese tourists

unfamiliar with Disney’s traditional stories were sometimes left

bewildered by the Hong Kong park’s attractions.

To compensate for the lack of awareness of Disney characters

and create the mystique of a Disney experience, Disney launched

numerous marketing initiatives designed to familiarize guests

with Disneyland. One of the first buildings upon entering the park

exhibits artwork and film footage of Disney history, from the cre-

ation of Mickey Mouse through the construction of Hong Kong

Disneyland. Tour groups are greeted by a Disney host who intro-

duces them to Walt Disney, the park’s attractions, characters, and

other background information. For example, the character Buzz

Lightyear explains

Toy Story

and the Buzz Lightyear Astro Blaster

attraction.

Even though there were complaints about the park size and the

unfamiliarity of Disney characters, there were unique features built

with the Asian guest in mind that have proved to be very popular.

Fantasy Gardens, one of the park’s original features, was designed

to appeal to guests from Hong Kong and mainland China who love

to take pictures. At five gazebos, photo-happy tourists can always

find Mickey, Minnie, and other popular characters who will sign

autographs and pose for photos and videos. Mulan has her own

pavilion in the garden, designed like a Chinese temple. Mickey

even has a new red-and-gold Chinese suit to wear. Restaurants

boast local fare, such as Indian curries, Japanese sushi, and

Chinese mango pudding, served in containers shaped like Mickey

Mouse heads.

All in all, Hong Kong Disney is Chinese throughout. It’s not so

much an American theme park as Mickey Mouse coming to China.

The atmosphere is uncomplicated and truly family oriented. It is

possible to have a genuine family park experience where six-year-

olds take precedence. However, early advertising that featured the

family missed its mark somewhat by featuring a family consist-

ing of two kids and two parents, which did not have the impact it

was supposed to have, because China’s government limits most

couples to just one child. The error was quickly corrected in a

new TV commercial, which the company says was designed to

“forge a stronger emotional connection with Mickey.” The revised

ad featured one child, two parents, and two grandparents together

sharing branded Disney activities, such as watching a movie and

giving a plush version of the mouse as gifts. “Let’s visit Mickey

together!” says the father in the commercial, before scenes at the

park set to traditional Chinese music.

Many other aspects of the park have been modified to better

suit its Chinese visitors. The cast members are extremely diverse,

understand various cultures, and, in many cases, speak three

languages. Signs, audio-recorded messages, and attractions are

also in several languages. For example, riders can choose from

English, Mandarin, or Cantonese on the Jungle River Cruise.

Disney runs promotions throughout the year. For example, the

“Stay and Play for Two Days” promotion was created mainly to

give mainland tourists a chance to experience the park for a longer

period of time. Because many Chinese tourists cross into Hong

Kong by bus, they arrive at Disneyland mid-day. With this promo-

tion, if a guest stays at a Disneyland hotel and purchases a one-day

ticket, the guest is given a second day at the park for free.

Special Chinese holidays feature attractions and decorations

unique to the holiday. For the February 7, 2008, New Year holiday

(the Year of the Rat), Disney suited up its own house rodents,

Mickey and Minnie, in special red Chinese New Year outfits for

its self-proclaimed Year of the Mouse. The Disneyland Chinese

New Year campaign, which lasts until February 24, features a logo

with the kind of visual pun that only the Chinese might appreciate:

the Chinese character for “luck” flipped upside-down (a New Year

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Part 6 Supplementary Material

tradition), with mouse ears added on top. Inside the park, vendors

hawk deep-fried dumplings and turnip cakes. The parade down

Main Street, U.S.A., is joined by the “Rhythm of Life Procession,”

featuring a dragon dance and puppets of birds, flowers, and fish,

set to traditional Chinese music. And of course there’s the god of

wealth, a relative newcomer to the regular Hong Kong Disneyland

gang, joined by the gods of longevity and happiness, all major

figures in Chinese New Year celebrations.

The Hong Kong park has been reducing its losses since open-

ing, from more than $170 million early on to $92.5 million in

2010 and only $30.5 million in 2011. However, plans to increase

the capacity of the park 23 percent are going forward, with the

new attractions to open in 2014. There are broader implications

for Disney from the performance of the Hong Kong theme park

than just its financial health. From the outset, executives at the

business’s Burbank headquarters viewed Hong Kong Disneyland

as a springboard to promote awareness of the Disney name among

the mainland Chinese population and cement ties with Beijing.

The next theme park is set for Shanghai, and the last thing they

want is a “turkey” in Hong Kong that would undermine their whole

China strategy. The new $4 billion park in Shanghai is scheduled

for completion, also in 2016. Disney will hold a 47 percent stake

there. The new park ultimately will be 50 percent larger than the

Hong Kong park. Even though 330 million Chinese live within a

three-hour drive of Shanghai, the company will have to work very

hard to repeat the successes of the U.S. and Japanese parks’ atten-

dance levels, at well over 20 million visitors per year. The most the

Hong Kong park has attracted is some 6 million visitors.

1. What factors contributed to EuroDisney’s poor performance

during its first year of operation? What factors contributed to

Hong Kong Disney’s poor performance during its first year?

2. To what degree do you consider that these factors were

(a) foreseeable and (b) controllable by EuroDisney,

Hong Kong Disney, or the parent company, Disney?

3. What role does ethnocentrism play in the story of

EuroDisney’s launch?

4. How do you assess the cross-cultural marketing skills

of Disney?

5. Why did success in Tokyo predispose Disney management to

be too optimistic in their expectations of success in France?

In China? Discuss.

6. Why do you think the experience in France didn’t help

Disney avoid some of the problems in Hong Kong?

7. Now that Hong Kong Disney is up and running, will

the Shanghai development benefit from the Hong Kong

experience?

8. Now that Disney has opened Hong Kong Disney and begun

work on the Shanghai location, 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

location for “Disneyland X.” Discuss.

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?

10. Think forward to 2020 and presume the rough politics and

violence of the MENA region settle down substantially.

Where would be the best location for a Disney park in that

region? Defend your choice.

Explanation / Answer

1. What factors contributed to EuroDisney’s poor performance

during its first year of operation? What factors contributed to

Hong Kong Disney’s poor performance during its first year?

The primary factor seems to be a failure in understanding the culture and consumer behavior of French consumers as well as the marketplace.

The company forced US customs and preferences onto the French consumer ( based on the welcome experience in Tokyo)

Others

Hong Kong poor performance

Here again, failure to understand the consumer played a key role

2. To what degree do you consider that these factors were (a) foreseeable and (b) controllable by EuroDisney, Hong Kong Disney, or the parent company, Disney?

Foreseeable

Several of the factors were foreseeable

Controllable factors

3. What role does ethnocentrism play in the story of

EuroDisney’s launch?

Ethnocentrism is the idea that one’s culture is superior to others and expecting others to adopt it. It played a key role in the failure in Paris and Hongkong. Failure to understand, accept and adopt, formed the root cause of Disney’s poor performing story in Paris

Disney management was affected by ethnocentrism. It though French would accept the way Disney built the park. It assumed that practices that succeeded in their country would also succeed in another country with a different culture

Even the French audience seem to be ethnocentric towards their own culture and hostile towards American culture

4. How do you assess the cross-cultural marketing skills of Disney?

They have exhibited poor cross-cultural marketing skills

Even famous customs of French such as having food with wine have been ignored. After the initial phase, they appointed a French guy as CEO and he brought in cultural adaptation and cross-cultural marketing. There have been improvements

Even after learning from Paris disaster, they seemed to have made silly mistakes (like in the commercial) in Hongkong as it is a widespread fact that one child is the norm there

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