Case Study of Euro Disney (mgmt 322)

Case Study of Euro Disney (Mgmt 322)

To this day, EuroDisney struggles to keep its doors open, while the American and European theme parks continue to thrive. My paper for my International Business course deals with the many problems that marked the opening of EuroDisney ...

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For years, the Disney theme park empire was built upon three crown jewels located in California, Florida, and Japan. Combining the familiar, family-friendly characters and images upon which the Disney reputation was built, with clean and well-operated theme parks helped Disney set new standards for efficient, friendly customer service in the theme park industry, with its parks becoming major international tourist attractions. When Disney expanded its theme park empire across the Atlantic, many expected Disney winning streak would continue.

However, when Euro Disney opened in Paris in 1992, the standard model of Disney theme parks, long considered to be a recipe for guaranteed financial success, soon ran into trouble. Tackling the many problems faced by Euro Disney operations has posed many new challenges to Disney, forcing them to reconsider their cookie-cutter standard model for success. For the Euro Disney theme park to survive, Disney must find ways to adapt their theme park model in a manner which preserves the best of Disney while more closely fitting the needs of the European market.

A HISTORY OF SUCCESS

Disney�s theme parks in the United States and Japan were models of success whose strong customer base made a significant contribution to the overall bottom line of the Walt Disney Company. After opening the first theme park in California in 1955, the Walt Disney Company opened two more parks in Florida and in Tokyo, Japan, based upon a successful formula in which Disney characters used to create a family-friendly atmosphere in which theme park visitors were treated to excellent customer service in a very clean environment.

Dependent upon its employees to provide the high level of customer service that is at the heart of the Disney experience, the company had created a careful screening process for applicants, an intensive employee training program to insure they would meet the strict standards of service, and a comprehensive communication program to keep employees fully informed. Constantly under refinement, this process helped insure Disney employees were able to conform to Disney�s standards and deliver the high level of customer service their millions of annual guests have come to expect.

On the heels of the strong success of Tokyo Disneyland, which opened in 1983, and encouraged by strong sales of Disney licensed products in the European market, Disney began work on opening a European-based Disney theme park. After ten years of planning and development, Euro Disney opened in Paris, France, in 1992, with high hopes that the Disney magic, which had worked so well in the United States and Japan, was sure to repeat itself in France.

THE PROBLEMS FACING EURO-DISNEY

Early hopes for a similar success soured soon after Euro Disney opened, and the experience of opening Euro Disney delivered unexpected surprises to Disney management. The park soon encountered several major problems:

Attendance: Disney�s consulting firm, Arthur D. Little, has projected first year park attendance to range between 11.7 and 17.8 million attendees. To be cautious, Disney used the low range of Little�s figures and predicted eleven million attendees, with seven million of those visitors attending in the six month period between the opening of the park and September 30. While initial hotel bookings at the theme park during the summer looked promising, in the summer months, as the theme park entered its first winter, bookings dropped to twenty percent or less of monthly projects. With the park located near Paris, it was expected that French residents would comprise half of the visitors to the park, helping to act as a �safety net� to poor response from other European nations. However, far fewer French visitors were coming than projected, and it soon became clear this �safety net� was not going to bolster Euro Disney�s sagging customer volume.

Staffing: In a service-oriented business such as Disney with very exacting customer service standards, proper staffing is crucial to an organization�s success. In spite of the importance of having a top-notch workforce, many considerations crucial to developing that effective workforce were overlooked at Euro Disney. Staffing shortages created a negative cycle in which extra