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Euro Disney: The first 100 days

By:
Leandro de Mello
M. D. Hemandra
Devenathan
Athi Shankar
Rajamurthukarpagam
Sivakumar
Startup

Opened in 1992 within budget (April 12,


1992 of $4.4 billion)
Beginning (additional) influences
Drop of shares due to first year loss
After 5 years still problems with visitors
“Cultural Chernobyl”
Structure of Walt Disney
Revenue in Walt Disney
1991 Attraction
Theme park $2,865 Theme park revenues
71 % (‘91)

Hotels 21 %

Other 8%

Filmed $ 2,593
entertainment
Consumer $ 724
products
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
Visitors

50 million (1990)
90 % repeat customers, 5 % from Europe
Adults in late twenties with young
children
Success factors

Creative imagination:
Park set-up
Cartoons come alive
Participation of visitors
Parks are continually updated
Disney’s stated goal is
To exceed its customers’ expectation every day.

 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.


Service delivery

Service delivery has been under constant


refinement.
“Disney University.”
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
Service standards:

safety
courtesy
show
efficiency
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
Employees were evaluated
based upon:
energy
enthusiasm
commitment
pride
Tokyo Disneyland: The
Success Story
strong Japanese appetite for American-styled
popular entertainment
increasing trend in Japan toward leisure
country which actively resisted many U.S.
products
appeal for Disney’s brand of entertainment
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.
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
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
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
Financial Goals

Attracting 11 million visitors in the


first year of operation

Achieving operating income of $373 million


at April 12,1992
Phase II

Disney MGM studios Park and


additional hotel rooms

Attracting 8 million visitors


Disney budgeted $3 billion to complete
Phase II
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
French Intellectuals proposed
ideas about:
Cultural requirements
Park design
Grooming standards
Eating habits
Research concluded that
Europeans were interested in:
New York
Disney land
The Western United States
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”
Start Up Process

Employment
Marketing Disney
Service and operations
Problems
Employment

Hire and train employees 14000 people


to fill 12000 jobs
Another 5000 people for peak season
Marketing

Give the park a European flavor


Advertised in magazines throughout Europe
Sleeping beauty Castle
Nestle
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
Problems

Dress code
Housing shortage
Employees are leaving or being laid off
Examples of employees
Visitors

9% Other
18%

18% 8%

40%

3.5% 3.5%
Decisions

 Big issues prioritizing objectives:


Revenue outlook
Cost problems
Service delivery system
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
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 Culture-
Wine not Served in Park’
‘Euro Disney not up to Standards of American Theme
Parks’
‘Europeans Discover the Old West at Frontierland’
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
Case Study Analysis

10/28/02 Case: Euro Disney


 A few Questions we can ask

Is Europe a good (new) market?


What possibilities were there?
How was it executed?
Needs

Fantasy world

Being together with family

Vacation

Have fun

families Grandparents

Consumers
Young families. Young couples Other
Middle/Upper class Disney
Walt Disney figures fans
Entertainment

High Services Level

The park

Other facilities around and in the park,


such as hotels, restaurants
Technology
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
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


What issues will Disney face before it can
successful deliver service overseas?
What is the expected What is expected out Are employees Does the level of service
service for Europeans? of design and service sufficiently screened delivery and/or exceed
standards? and have the issues ofthe expectations of
supply and demand Europeans?
been worked out to
Does the company have Does the company Does the company Does the company live
suit European
the correct expectations know what the deliver these services up to its promises and
demands?
about European expected standards properly and communicate in a
consumers? are? efficiently? satisfactory way to
Europeans?
Have they done the proper Have they done the Have they done the Have they done the
research to make these proper research? proper research to proper research to make
conclusions? make these these conclusions?
conclusions?
Service delivery:

Disney standard
Disney University
Treatment of employee's
Integrate the cultures
Is Euro Disney proceeding
with the next step of
development good?
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
Service recovery strategies
 Fail-safe the service  learn from Phase I experience
 

 Welcome and encourage


 Satisfaction surveys and employees
as listening posts
complaints 

 Empower employees to act quickly
 Act Quickly 

  Fair interpersonal treatment


 Treat customers fairly 

  Project teams can be assigned to a


problematic area to develop a
 Learn from recovery solution
experiences 


 Difficult for Euro Disney to identify
 Learn from lost customers lost customers
Expected Service
Customer
Gap

Perceived
Customer
Service

Service delivery External


communications
Company Gap 4 to customers
Gap 3

Customer-driven
Service designs and
standards

Gap 2

Company perception
of consumer
expectations
Evaluation

Inadequate marketing research


orientation

Lack of upward communication


Insufficient relationship focus
Inadequate service recovery
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.
Thank you

NE
Questions?

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