ANSWERS TO CASE STUDY

3.1 Question 1

Factors that contributed to Euro Disney’s poor performance during its first year of
operation.

Euro Disney’s factors of poor performance marketing mistakes were present throughout
the whole inception of Euro Disney. Euro Disney were faced with several affecting
factors which contributed to the failure or poor performance of the company, the
factors came along with location, price, and lack of research in exchange rate, as well as
the style of the theme park all played roles in the lack of success experienced by Euro
Disney. The factors that played into the unsuccessful first year could have been foreseen
and somewhat easily by Euro Disney or the parent company, the same goes for their
being able to control them. Hostility among the French had risen even as the plans were
being set as it was stated earlier, that they did not want American imperialism invading
their country and culture. Cateora & Graham, p.614 reports, “Paris theatre director
Mnouchhkin” descried Euro Disney as a “cultural Chernobyl.” In fall 1989, during a visit
to Paris, French columnist pelted Michael Eisner with eggs. The joke going around at the
time was, “for Euro Disney to adapt properly to France, all seven of snow white’s dwarfs
should be named Grumpy …”

 Location

Many factors contributed to Euro Disney’ poor performance during the first year of
operation and many of these factors could have been alleviated if the proper factors
would have been looked at previously. The first problem was the demographics and
subsidies, and because the French government made Disney an offer it could not refuse,
they located Euro Disney 20miles outside of Paris, a location that was thought to be very
convenient. It played a negative role in the success in the success for Disney. How many
people go to Paris to get glimpses of American theme parks? Most of the tourist going
to Paris would spend time travelling the city and its wonders. About 17 million lives less
than two hour drive from Paris and another 310 million can fly there at the same tie or
less. The French government offered the company more than $1billion in various
incentives; all in the expectation that project would create 30,000 French jobs. “The land
came at rock bottom prices, cheap loans were made available, and a dedicated high
speed TGV and suburban railway link was also offered by the French. France gave Disney
an offer they could not refuse, overlooking the over value franc, bad weather, French
people not being known for their hospitality and occasional anti-American
demonstration by angry farmers because French agricultural subsidies had been cut,
Paris was still chosen to be home of Euro Disney. The climate in Paris was also
unsuitable and off-season attendance was way below expectation. Many landmarks
events were competition to Euro Disney’s opening year, such event was the one held in
Spain. “Spain held the world fair in Seville and Barcelona was home to the 1992
Olympics which took tourists to area other than Paris.” All in all, 1992 was not looking
good for Euro Disney in terms of success.

 Foreign uncontrollable and Exchange rate.

In Paris in regards to economic forces, legal forces, competition, and culture can be held
accountable for Euro Disney misfortune. In opening in the summer of 1992, Europe was
entering into recession and this caused income from catering, merchandise, including
souvenirs and foods, hotels to be way below that was expected. High interest rates also
caused many currencies to devaluate against Franc leading to more financial difficulties
for Euro Disney. In negotiation with France, lawyers were used excessively. The rigid
legal approach was offensive to the French, who, like most Europeans consider
depending on lawyers to reach a conclusion to be last resort. Despite the foreign market
uncontrollable hindering the park from the beginning, when Euro Disney opened in the
summer of 1992 many marketing and operational errors factored into the parks
unsuccessful opening.

 Advertisement made by Euro Disney

Another controllable factor was the advert made by Euro Disney, which factored the
poor the poor performing by the Euro Disney in Paris. Euro Disney advertising had
emphasised Disney image as an alluring bit of American rather than an explaining to
potential customers what they can actually do for the park. France (2004) reports, “every
surface that could possibly have an advert placed on it clothing, buses, taxis, myriad
walls and billboards, even the snow you sky on now hawks something.” According to
Wikipedia encyclopaedia, ´Advertising is the promotion of goods and services,
companies and ideas, usually performed by an identified sponsor. Company are
bombarding us with thousand of advert with only one intention, to persuade us to buy
their product. Euro Disney’s image marketing did not explain to Europeans that the
theme park was or what attractions it had to offer the European consumer. The
company advertising focused on the size of the park and the glamour behind it that this
poor marketing strategy hurt over all business. No one in France cared that Euro Disney
had cost over $4 billion and that its 4,800 acres include five separate recreation areas, six
hotels with room for 5,200 people in all, an entertainment centre, a 27 hole golf course
and a wooded campground. The marketing strategy in America was used in France and
it backfired when the French visitors stayed away from the park. Yes advertising
bombards us everywhere, but it is not without control and regulation by the
government, businesses, and citizens. This opens one of the major issues in advertising,
“the question of law and ethics.” The sensitivity perceived by the French in relation to
the advert was that, it did not tell them what the citizens will benefit from the
EuroDisney, and also the French were not happy with how the Americans use their own
advertising style.

 Poor Management operation

The management of Euro Disney had difficulties due to cultural and lack of
understanding of the French culture. Operational errors that easily could have been
avoided accounted for more troubles than were expected in the Euro Disney. In regards
to employees, alcohol, admission and hotel prices, and breakfast in the hotel, staffing
problems, and regulations regarding pets, many problems cause the Euro Disney
misfortune in the first year. The employees dressed code enforced on employees
prohibited facial hair and limited the use of makeup and jewellery. The lack of
understanding by the parent country in regards to the dress culture of the French
affected customer patronage. The French did not think dress standards like that existed
outside the west military academy. Also the ban on alcohol caused astonishment in a
country where glass of wine is normally given for launch and it is necessary as a fork for
eating. However banning the alcohol in this theme park could have ever been a
consideration is unbelievable and since it was a major issue, this policy of not serving
alcohol in the park was also a hindering factor at Euro Disney. Another factor that leads
to poor operation was the price system. Prices involve around Euro Disney were also the
cause of it not performing well and not generating profit. “consultant who studied the
park say that its high admission price 30 percent more that Disney Orlando makes
visitors keen to take as many rides as possible, so they spend less time shopping for
Mickey Mouse ears and such”. Prices at the Disney hotel were high compared to other
hotels in Paris, the hotels in Paris ranges from $180 to $380 in the Paris metropolis.

 Staffing problem

One of the major factors in the customer relationship in the international marketing,
even at the domestic market is the customer- staff relationship. At Euro Disney, there
were staffing approach problems too. The company had tried using the same team work
model it did use either in America or Japan, which did not work in France. Within the
first nine weeks of Euro Disney’s operation, roughly 1,000 employees, 10 percent of the
employee left. People were leaving because they felt they were not being understood
and they were not being treated in an appropriate manner that was satisfactory to them.
The company actually taught that Monday would be a les busy day, while Friday a hectic
busy time, but the reverse was the case, Monday turned out to be very busy at the Euro
Disney.
  Unforeseen issues

Factors that really could not be seen by managers included the approach to European
recession, the Golf war in 1991, and increased interest rates. External factors that
affected business were also the devaluation of the Franc currency in the international
market, which lead to competitors to draw the attention of customers to the various
sites. These competitors were the world’s fare in Seville and the 199 Olympics, which
was held in Barcelona. (Cateora, & Graham, p.615)

 Ethnocentrism

The managers of Disney and Euro Disney used their way of doing business, their cultural
belief and ethics, and what they know and are used to in order to try and get another
country to do the same. Cateora & Graham describes in more detail, “A brainstorming,
kick the door down attitude seemed to reign amongst the U.S. decision makers.” The
authors referred to one former manager’s comment, “We were arrogant, it was like, we
were building the Taj Mahal and people will come on our terms.” Ethnocentrism is
usually referred to as “tunnel vision. This view says that one certain ethnic group beliefs
about morals is the right one and better than any group. The French saw the American
managers as bullies, arrogant, and workaholics. A search for the topic, “Business culture
Vs French” (n.d) refers to Laura Hampton, French ministry of Education as she explains
the views that the French have about American business and culture:

“The French have a love or hate relationship with the U.S. We are deeply admired for
many things (entertainment industry, our political system, our optimism as a people) but
they are also very critical of the role the U.S has played in globalisation which they see
threatening their own identity, culture, and language… (Regarding management
practices) the French are less direct about theory expectation and you have to pay closer
attention to the subtle cues given to you.,

Disregarding the French culture of being the world’s biggest consumers of wine, the
management of Disney still hung on their “we know best” conviction. Male employees
had to keep well groomed as the American managers wanted in this way. Their
insensitivity to the French culture led to a very bad start even though they did relent in
some areas such as allowing females employees to wear brightly coloured nails polish
and allowing kennels for the quest pets. The French would never dream of leaving their
pets when going on vacation. (Cateora & Graham, p 615)

CONCLUSION: the major factor that contributed to their poor performance, during their
first year of operation can be narrowed down to marketing surveysm, which lead to
ethnocentrism and self reference criterion.
3.1.2 RECOMMENDATION, PROPOSE STRATEGY AND SUGGESTION TO IMPROVE
THE SITUATION AT EURO DISNEY.

There are several means in which the controllable factors could be avoided in other to
present Euro Disney the success it needed at the first year of business. This means are
suggest and proposed as follows:

The deliverance of advertising to the customers, not on the physical composition of just
the area alone, but on the resources and service that a customer will get from
patronising the resort. Advertising should be careful controlled. Society needs to make
sure that people are not taken in by misleading advertisement. There is a set of
principles that all advertisers must follow (Roman & Mss, 2003, p.200):

 Tell the truth, show the truth- the product should look exactly the same way as
the consumers will purchase it
 Make the general impression truthful- “Advertising is judged not by what it says,
but what consumer’s thinks it says”. (p.201)
 Ban “weasels” and dangling companions- All sentences must be clear.
 Substantiate product claims- must provide evidenced that the claim is true.
 Back testimonials with research.

It is crucial that cross cultural communication, cooperative decision-making and

collaborative problem solving be implemented in multinational corporation
management like Disney. It is important that the management of a multinational
corporation work together to overcome boundaries and differences and to be able to
communicate, and collaborate in order to effectively work together, communicate, make
decision, and solve problems as a single entity as globalisation does simple that. This
brings the world together. The EuroDisney could use the help of the Disney in Turkey in
other to be able to handle the cultural difference in French. By understanding the French
culture, EuroDisney will be able to bring polices that will be accepted by the French
customers. The French cherish their culture that it is important for EuroDisney to able to
adapt the culture and avoid cultural self criterion, rather try to understand the culture of
the French.

Make use of their number one asset which is human resource in order to apply the best
approaches and method and focus on both macro and micro economics of the global
business. The management from the head quarters branch(in this case, management
from the United State) cannot do this alone but will achieve success if he learns from
those in the various parts of the world and learns from those who are experts in the
various locations and cultures in which they live and work. They will next, approaches
communication, sales, customers services, find solutions, developing innovative tactics,
and so on. The best way in managing a diverse sales team is to incorporate the sales
management from each area and empowering them and learning from them, this
system will help the Euro Disney to overcome the cultural differences and policies that
are not suitable for the French workers.

Generally as management, it is important to have a general knowledge of domestic

activities and policies, and to understand the various cultures and operations of the
sales force outside of the United States. This can only be accomplish by using human
resource from which are familiar with the culture of French, company, and cultures, how
business is handled in different parts of the world, varying company policies and
operations (although the company is an entity, policies and routines vary slightly, if not
extremely, in order to accommodate the differences), language and cultural differences,
various sales methods, training, customer service, account management, follow up
procedures, key account management, and so on. Can only be handled by working with
the various sales teams and using their expertise.

CONCLUSION: The above mentioned proposed recommendation will tackle the poor
performance at Euro Disney. The first recommendation should be the market research
and survey, which will tackle the staffing problem, cultural issues and drafting and
delivering of effective promotion,

3.2 Question 2

3.2.1 The factors that could have been foreseeable and controlled by Euro Disney or the
parent company.

Taking a look at the above mentioned factors that lead to the poor performance of Euro
Disney in their first year of operation, some of the factors were possibly foreseeable,
while some were not foreseeable and uncontrollable. A company reputation and size of
Disney is allowed no room for mistakes. The stakes involved are billions of dollars.
Complementary businesses like that of the hotel industry are reliant upon the success
on the success of this team park in Paris. Generous funds received from the government
and private institutions would have to be made well of. Disney should be able to
foreseen the unforeseen.

When Euro Disney was established the consideration taking into account is the
geographical area and culture as well. However Disney established the Euro Disney
based on the nature or American thinking, they expected the Europeans to act as
Americans and thrive over newly designed theme park. They forgot that they were
producing a massive theme park bigger than any other theme park in Europe for the
American mentality. They could have calculated the exchange rate, and did not calculate
the European culture. They could have foreseen the problems mentioned in the above
poor performance factors listed.

Factors such as those mentioned above are not categorized as the unforeseen; rather
they are being classified as the expected factors, which Euro Disney or the parent
company Disney should have detected. Economics, politics, culture complemented and
associated with in depth analysis of the 4P’s follow the basic principles of marketing.
Disney should have foreseen the changing economic scene in France with the
forthcoming European recession in 1991. The relationship with the French government
should have been handled with greater care and delicacy, because of the size of the
investment involved and ultimately, the number of jobs dependant on the success of the
Euro Disney. Looking at culture, the parent company can force itself on another people,
looking at the cultural profile of the French, which in this case was the European
continent. Disney promoted its product, the theme park similar to that of Tokyo
Disneyland in Japan believing Europeans wanted their piece of Americana. In
international marketing, the needs and wants of the consumer are being indentified, the
package presented by Disney to their customer meet neither their needs nor wants.
Disney true success lies in adapting to the surrounding culture of the French and Europe
as a whole, being marketing oriented in finding success in customer satisfaction. Disney
failed in both aspects. Culture is wide and change occurs when resistance slowly yields
to acceptance, so the basis of resistance becomes unimportant or forgotten, which
means that on the part of the European community, we are certain to see compromise,
but over a period of time. Disney too has to reconcile with the environment it has
settled in. we read in the case that Disney does ultimately mend it ways. Making room
for continuous change is the best way to go about its business.

CONCLUSION: most of the factors that lead to the poor performance of EuroDisney in
their first year of operation were foreseeable which are the staffing problem, advert
problem, and cultural differences and so on, where some factors were not, such as the
economic recession at that time in Europe.

3.3 Question 3

The cross-cultural marketing skills of Disney

The problem was that in the beginning, cross cultural marketing skills were not used and
employed. Taking for example, Disney executives were told that French did not take
breakfast in the morning, which lead to downsize but surprisingly, the French do eat
breakfast.
Cross cultural marketing would have let the managers know that the Europeans were
more energetic and covered more of the Euro Disney theme park and rides than those
in the western hemisphere. Therefore, instead of the normally three days stay at the
Disney American theme park, the stays were normally shortened to two days stay. The
European vacation customs were not being examined so the theme park did not see
profits and success as hoped. Americans take short breaks but they take the more often.
However, Europeans take one month for holiday. The American managers thought that
the Europeans would change their one month tradition and adopt the Americans
shorter yet more frequent time off but did not happen. The French schedule remains the
same and they would close the office and factory during the entire month of August,
which was contrary to what the American do. These factors should have been
considered. Cross cultural marketing would have been extremely useful but the parent
company executives were being quite ethnocentric and it cost a great price. (ibid, p.615)
needed to say, their cultural marketing skills were unsatisfactory, in fact, nonexistent.
Had they had any skills of this sort, the beginning would have been a success and not
such a failure at the start.

Therefore, we can say that the skills of Euro Disney cross cultural marketing skill was
poor, they did not have skills of cross cultural marketing skills which is the main key in
dealings in international trade like Euro Disney. They put an American theme park in the
middle of Europe with American mentality, American food, and this did not heed to the
cultural values of the Europeans. However, the new CEO in 1993, the park understood
their problem and made the changes. They then started their new marketing plan, which
included skills of cross cultural values, understanding. They started to include French
and European favourites like Zoro and Mary Poppins. They advertising campaign include
famous European characters with the magic kingdom. Within a year, they took off deals
boosted.

CONCLUSION: after the recognition of the problem facing Euro Disney which was the
cross cultural marketing skill, which was bad. After some time park understood the
pending problem and provided a solution, which was the use of French in their
advertising campaign and so on.

3.4 Question 4

3.4.1 New theme park in Spain

Spain is a country that accept and receive foreign cultures compared to France, the
southerners receive foreign culture with greater warmth compared to the central and
east Europeans, in which if Euro Disney would have launched in Spain, Disney would
have met less criticism. But we should bear in mind that, Euro Disney is actually built to
serve the entire Europe as a whole not just Spain. Therefore, criticism will likely come
from other part of Europe, even if Spain receives Americans with warmth.

Cultural profile is formed as the bases of international marketing relationship, how a

product is being marketed in the international market, in a foreign country is based on
the cultural variable present in the country. In other for Disney success in marketing the
theme park internationally, it will force them never over emphasise the importance of
understanding the culture of a foreign culture. A theme park in any part in Europe
generally, Spain not excluded will face a varying percentage of regal restraints, political
risk, culture conflict, and economic disruption as well.

Therefore, if Disney places a theme park in Spain, it is believed that the cultural
difference will lay a huge role in its success, as suggested earlier. Disney would have to
adapt to the customers culture and the culture of Spain generally, and incorporate them
into the development, implementation, and operation of a new theme park. The
workaholic habits of the Americans is opposite of not just Spain’s focus of life and family
first, but generally Europe as a continent. In the United States, people focus more on
themselves and individuality is the focus not group (Hofstede cultural dimension).

CONCLUSION: international marketing is the function associated with culture, what one
is able to do in marketing to a particular foreign product is shaped by the cultural
variables of the country. A theme park is Spain as in another part of Europe would face a
varying proportion of, legal restraints, political risk, culture conflict, and economic
disruption.

3.5 Question 5

3.5.1 The major considerations for the next Disneyworld

The consideration for the next Disneyworld should be in Dubai. Dubai should be
considers as the next Disneyworld location priority. Dubai (UAE) is the major commercial
business hub of the Arab world. Business horizons expand from the west coast of the
United States to the eastern Philippine archipelago. Business communities around
Europe have created a stronghold here as a gateway to most of Northern Africa, the
Middle East and to a limited extent the Asian Subcontinent. Dubai seems to be a good
strategic location for the Next Disney world to be established. Dubai is seen as the
portal not only to the minority communities from Europe, Asia and America’s but
specifically to the Muslim world of over one billion. Then underlying opportunities are
immense. The parent company Disney is already a recognise figure in households of the
respective location UAE. The relaxed social and cultural atmosphere Dubai possesses
over Muslim states should not pose a threat to the continuity of business at Disney in
Dubai, which will be called Disney Arabia.

Dubai reports a GDP (gross domestic product) per head of US$15,000 to $18,000, one of
the highest figures in Asia. The trade balance remains a surplus with over US$500
million. The infrastructure boasts access to telecommunication facilities and transport by
land, air and water as state of the art. The diverse ethnic communities level
communication barriers between the Arabs and expatriates. All in all, Dubai posses the
qualities and the right backdrop to promote the new “Disney Arabia” to a wider scope of
people, both the conservative and the more liberal, foreign and local. Thus, lunching the
new Disney subsidiary is obviously not an overnight or one day project, meticulous
planning will be needed in defining the eight P’s as pertinent to the Arab world.

CONCLUSION: it is important to learn from the mistakes that were made when
EuroDisnay was started. Having offices and managers from the country will be
detrimental. Incorporating Dubai culture and examining the tourist activities, practices
and trends will be crucial to the making of breaking of a Disney in Dubai.

CHAPTER 4
4.0 CONCLUSION

Euro Disney faces poor performance during their first year of operation, which makes it
important to learn from mistakes that were made when Euro Disney was started. Having
offices and managers from th