The Euro Disney Company

The Euro Disney Company
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(10, July, 2011)
Q1. How could the company have erred so badly in its estimates of spending patterns of European customers?
The very first mistake made by Euro-Disney in its estimation of spending patterns of European customers was that they forgot the geographic and cultural differences between Europeans and Americans. They projected their revenue at France relevant to that of America. However the acceptability level and spending pattern of Europeans is far different from that of Americans. Despite the conservative style spending of Europeans, Euro-Disney followed a very high price strategy as they thought of them as monopolists who can set the price as much as they want. This extra optimism without prior research and study of European lifestyle and cultural became one of the reasons of their failure. Moreover, despite all the hatred and hostility against Euro-Disney at France, the American officials of Euro-Disney continued their extravagant expenditures on the establishment and did not work on the root cause of the problem which was the cultural conflict. Thus they estimated wrong spending pattern of European customers and paid off a great deal at the end.
Q2. Could a better reading of the impact of cultural differences on revenues have been achieved?
Impossible is nothing. Good managers can have the shrewdest clients to accept their terms. If the officials of Euro-Disney had done their early homework and have understood the minor cultural differences and societal norms of European cultural, problems would not have been so severe. A low price strategy with an understanding of eating and drinking habits as well as an accurate judgment of peak seasons along with other cultural insights might have proved a savior for Euro-Disney.
Q3. What suggestions do you have for fostering a climate of sensitivity and good-will in corporate dealings with French?
In order to have a climate of sensitivity and wellbeing with the French, the company should have fostered much cooperation, understanding and willingness of smooth process. This could be achieved by trying not to alienate the French. They should have involved them in the whole process, but not treat them like their subjects. They had to stop the principle which stated “Do as we say because we know best”
Q4. How do you account for the great success of Tokyo Disneyland and the problems of Euro Disney? What are the key contributory differences?
Euro Disney contrasted Tokyo in a number of ways. Disney invested heavily in the Euro initiative while it never invested any funds in the Tokyo Park since the Tokyo Disneyland was owned and operated by the Oriental Land Company. Tokyo Disneyland was a major success with a turnover of over 16 million in 1991 as compared to the low turnover in the Euro Disney which never even clocked the target. An increasing trend in Japan towards leisure along with increasing appetite for the American diet as opposed to the French who never valued the American diet contributed a lot to the success of Disney land in Tokyo.
Q 5. Do you believe that Euro Disney might have done better if located elsewhere in Europe rather that just outside Paris? Why or why not?
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