Euro Disney
The first 100 days
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Case: Euro Disney
Startup
Opened in 1992 within budget
Beginning (additional) influences
Drop of shares due to first year loss
After 5 years still problems with visitors
“Cultural Chernobyl”
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Case: Euro Disney
Structure of Walt Disney
Revenue in
1991
Theme park
$2,865
Filmed
entertainment
$ 2,593
Consumer
products
$ 724
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Responsible
for
Theme park
71 %
Hotels
21 %
Other
8%
Case: Euro Disney
WDC resorts:
Walt Disney World Resort (Orlando, 1971)
Magic Kingdom
Disney MGM Studios Theme Park
Epcot Center
Disneyland (Los Angeles, 1955)
Others
Tokyo Disneyland: designed by WDC but
owned and run by Oriental Land Company
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Case: Euro Disney
Visitors
50 million
90 % repeat customers, 5 % from Europe
Adults in late twenties with young
children
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Case: Euro Disney
Success factors
Creative imagination:
Park set-up
Cartoons come alive
Participation of visitors
Parks are continually updated
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Case: Euro Disney
Disney’s stated goal is
To exceed its customers’ expectation every
day.
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Case: Euro Disney
This goal is supported by:
standard of service,
park design
operating details
human resource policies and practices
Disney “play” would be flawlessly performed day
in and day out at each location.
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Case: Euro Disney
Service delivery has been under
constant refinement.
“Disney University.”
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Case: Euro Disney
Hiring process:
a peer interview process to select cast
members
a 45-minute interview session with a
Disney personnel manager
extensive orientation program in Disney’s
service standards
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Case: Euro Disney
Service standards:
safety
courtesy
show
efficiency
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Case: Euro Disney
Certain messages reinforced
throughout the training:
happiness measured differently by every
guest and challenge to create
customer’s perceptions are extremely
fragile
employees are on stage at every moment
and should look to provide service
fixing costumers problems is very
important
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Case: Euro Disney
Employees were evaluated
based upon:
energy
enthusiasm
commitment
pride
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Case: Euro Disney
Success of Disney in Tokyo:
strong Japanese appetite for Americanstyled popular entertainment
increasing trend in Japan toward leisure
country which actively resisted many U.S.
products
appeal for Disney’s brand of entertainment
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Case: Euro Disney
The reasons why Tokyo
Disneyland worked:
Young Japanese are very clean cut.
Japanese are generally comfortable
wearing uniforms
Obeying their bosses
Like to be part of a team.
They are very patient.
Japanese are always very polite to
strangers.
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Case: Euro Disney
Location of the Euro
Disney site
1981: Bidding process involving
Germany, Spain and France
1987: Agreement with the French
government
Central location
Highly popular vacation destination
The only disadvantage seem to be the
inclement weather
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Case: Euro Disney
Contractual concessions with
the French government
The French government agreed to
extend highways and the railway
The French government agreed to
build a high-speed TGV train extension
The French government would reduce the
value-added tax
The French government provided over
$700 millions in loans
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Case: Euro Disney
Financial Facts
Euro Disney was 49 % owned by The Walt
Disney Company and 51 % owned by Euro
Disney S.C.A
Admission to the park cost $41 for adults and
$27 for children
The capacity of the park was 50,000 visitors
Cost estimates were determined by the consulting
firm ADL
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Case: Euro Disney
Financial Goals
Attracting 11 million visitors in the
first year of operation
Achieving operating income of $373
million at April 12,1992
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Case: Euro Disney
Phase II
Disney MGM studios Park and
additional hotel rooms
Attracting 8 million visitors
Disney budgeted $3 billion to complete
Phase II
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Case: Euro Disney
Theme Park Design
Phase 1
Theme Park
29 Rides and Attractions
6 Themed Hotels
Davey Crockett Campground
414 Cabins
27 hole Championship Golf Course
Restaraunts, shops, and
entertainment options
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Case: Euro Disney
French Intellectuals proposed
ideas about:
Cultural requirements
Park design
Grooming standards
Eating habits
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Case: Euro Disney
Research concluded that
Europeans were interested in:
New York
Disney land
The Western United States
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Case: Euro Disney
Actions taken:
Add 3 western theme hotels
French was first language
Signs & employees were bilingual
Characters altered to meet French ideas
Disney did not offer wine within the park
Disney had many entertainment shops and foods
Disney was thought of as an “Imaginary
Place, a culture without sin”
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Case: Euro Disney
Start Up Process
Employment
Marketing Disney
Service and operations
Problems
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Case: Euro Disney
Employment
Hire and train employees 14000 people
to fill 12000 jobs
Another 5000 people for peak season
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Case: Euro Disney
Marketing
Give the park a European flavor
Advertised in magazines throughout
Europe
Sleeping beauty Castle
Nestle
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Case: Euro Disney
Service and Operations
Euro Disney University
Disney Standards
Diversity of Nationalities
270 managers and supervisors were cross trained
200 managers were imported
employees
paid $6.50/hour
generally worked 169 hours a month
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Case: Euro Disney
Problems
Dress code
Housing shortage
Employees are leaving or being laid off
Examples of employees
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Case: Euro Disney
Visitors
9% Other
18%
18%
8%
40%
3.5%
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3.5%
Case: Euro Disney
Decisions
Big issues prioritizing objectives:
Revenue outlook
Cost problems
Service delivery system
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Case: Euro Disney
Decision sets
1st set of decisions:
Service system up to the standards and cost levels
of the other Disney Parks
2nd set of decisions:
How to market for achieving winter attendance
targets
3rd set of decisions:
Phase II
The level of investments
Timing of investments
Nature of investments
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Case: Euro Disney
A day at Eurodisney
‘Trains on Strike; Tourists Unable to Reach Park’
‘Euro Disney Visitors Complain of Long Lines and
High Prices’
‘Guests find Euro Disney Employees Rude’
‘Visitors Claim Euro Disney is a Fairy Tale come True’
‘Europeans not Impressed with American Fast-Food’
‘Disney Shows Lack of Appreciation for French CultureWine not Served in Park’
‘Euro Disney not up to Standards of American Theme
Parks’
‘Europeans Discover the Old West at Frontierland’
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Case: Euro Disney
Disney’s concerns
Disney does not fit traditional French entertainment
Competition from Paris entertainment industry
Linguistic barriers – Europe is multilingual
Cultural barriers – food habits, alcohol a part of diet,
long lines
Europe is multicultural with differences in perceptions for
entertainment
Lack of housing accommodations for staff
Acceptance of Disney as part of American culture by the
French?
Cold weather could be a deterrent
Expensive by European standards
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Case: Euro Disney
Questions
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Case: Euro Disney
Assess Disney’s decision to build a theme
park in Europe. How can such a decision be
evaluated and was it a wise one?
To answer question divide it into parts:
Is Europe a good (new) market?
What possibilities were there?
How was it executed?
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Case: Euro Disney
What is Euro Disney’s target Market?
What are the implications for the
development and organization of the
park?
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Case: Euro Disney
Needs
Fantasy world
Being together with family
Vacation
Have fun
families
Grandparents
Consumers
Young families. Young couples
Middle/Upper class
Walt Disney figures
Entertainment
High Services Level
The park
Other facilities around and in the park,
such as hotels, restaurants
Technology
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Case: Euro Disney
Other
Disney
fans
Customers
Children
Young families
families
Grandparents with grandchildren
Disney fans
People that can afford spending money on the
park (middle class and upper class)
People who just want to go so badly that they put
other things aside to be able to go to Euro Disney
European people
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Case: Euro Disney
Target Market
The majority of Disney visitors are
adults many of them are in the late
twenties and have young children. The rest
are people from four to sixty years who
have enough money to spend, to have a
good time with Walt Disney’s entertainment
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Case: Euro Disney
What issues must a company think
through before extending a successful
service overseas?
What is the expected
service for Europeans?
What is expected
out of design and
service standards?
Are employees
sufficiently
screened and have
the issues of supply
and demand been
worked out to suit
European
demands?
Does the level of
service delivery
and/or exceed the
expectations of
Europeans?
Does the company have
the correct expectations
about European
consumers?
Does the company
know what the
expected standards
are?
Does the company
deliver these
services properly
and efficiently?
Does the company
live up to its promises
and communicate in a
satisfactory way to
Europeans?
Have they done the
proper research to make
these conclusions?
Have they done the
proper research?
Have they done the
proper research to
make these
conclusions?
Have they done the
proper research to
make these
conclusions?
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Case: Euro Disney
Service delivery:
Disney standard
Disney University
Treatment of employee's
Integrate the cultures
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Case: Euro Disney
Should Euro Disney proceed
with the next step of
development?
Euro Disney should first solve their
problems before they expand
Euro Disney could apply the lessons
they have learned from the Phase I experience
to Phase II
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Case: Euro Disney
Service recovery strategies
Fail-safe the service
Welcome and encourage
complaints
learn from Phase I experience
Satisfaction surveys and employees as
listening posts
Empower employees to act quickly
Act Quickly
Fair interpersonal treatment
Treat customers fairly
Learn from recovery
experiences
Learn from lost customers
Project teams can be assigned to a
problematic area to develop a
solution
Difficult for Euro Disney to identify
lost customers
What lessons has Euro Disney
learned which could be applied
to the development of the
second park?
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Case: Euro Disney
Expected Service
Customer
Gap
Perceived
Service
Customer
Service delivery
Company
Gap 4
Gap 3
Customer-driven
Service designs and
standards
Gap 2
Company perception
of consumer
expectations
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Case: Euro Disney
External
communications
to customers
Evaluation
Inadequate marketing research
orientation
Lack of upward communication
Insufficient relationship focus
Inadequate service recovery
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Case: Euro Disney
Adapt for the local market from
the US model and if so, how?
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Case: Euro Disney
Recommendations
Adapt to French standards & expectations
Employee involvement in Euro Disney planning &
operations
Single theme for Euro Disney; focus on French culture
Promote winter attendance through reduced costs and
package plans
Identify additional target markets (i.e., student groups)
Before expanding, understand Disney fit with European
cultures
Package Euro-Disney with other Paris destinations
Prepare to contract buses if public transport is disrupted.
Leave some memorial for any villages/ people displaced
by park. Give displaced people lifetime pass.
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Case: Euro Disney
Questions
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Case: Euro Disney
Thank you for your
attention
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Case: Euro Disney