They were always sure it would work because they were Disney
The Not-So-Wonderful World of Euro Disney –
Things are Better Now at Paris Disneyland
The problem Disneyland Paris is facing is the issue of expanding its parks into other countries and making sure it does not repeat the same mistakes it encountered in Paris when it first opened there as Euro Disney.
More difficult than it might seem at first glance, there are several issues facing Disney.
cEuro Disney, as it was originally named, opened to the European public in 1992. After many trials and tribulations it seems to have overcome them to come out on top, in typical Disney style, with some important changes.
c Disneys projections for its parks success, whether through hotels, merchandise, and number of visitors were all miscalculated.
cDisney emphasized the parks size instead of the entertainment value of the park.
cThe park admission prices were more expensive than in the United States.
cDisney failed to see the signs of the coming European recession.
cManagers at Disney and Euro Disney upset many organizations.
cThe kick-the-door-down (International Marketing, page 623) attitude of the US managers did not work well with the already hostile French.
So at a certain point, it was questionable whether Euro Disney would even continue to exist or close its doors.
Some changes that transformed Euro Disneys failure into a success were:
cDisney agreed to fund Euro Disney.
cFrom the beginning Euro Disneys convention business exceeded expectations.
cBanks agreed to defer payments for a period of three years.
cIn June of 1994 a Saudi prince invested up to $500 million for a 24% stake in the park.
cIn 1993 a French man by the name Philippe Bourguignon took over Euro Disney as its CEO. He brought back the park to profitability.
cThe biggest success was the changes in marketing that Mr. Bourguignon brought about.
cNational markets were targeted separately, taking into account the different habits of tourists. Marketing offices were opened in several cities, such as Amsterdam, Brussels, Frankfurt, London and Madrid. Each of these offices was in charge of market-specific advertising.
cPrices for park admission were cut by 20%, and some hotel room rates were cut by 30%.
cThe parks name was also transformed. It changed from Euro Disney to Disneyland Paris. Now the marketing theme was about an authentic Disney experience.
cIn 1996 Disneyland Paris became the most visited tourist attraction in France. It even surpassed the number of visitors to the Eiffel Tower and the Louvre Art Museum.
Disney is considering a number of issues:
cThe man who brought this success to Disneyland Paris has left the firm to pursue other directions.
cBig challenges are facing Disneyland Paris. For example, financial issues will be coming up again as some of the concessions given to Disney were about to expire.
cWith the recovery of Disneyland Paris the firm decided to do some major expansions, such as the addition of the California adventure park to the Anaheim Disneyland. Also planned was the opening of a Disney Tokyo and more expansions in Paris, and Hong Kong.
cThere are hopes that the company will not have to spend a lot its own money on these expansions, as well as getting a return on the investments of about 30%, coming from entrance fees and licensing fees.
Disney is considering a number of options in regards to where to expand to next, and wishes to have a strategy suggested to them.
Possible Solutions and Recommendations
Of all issues raised I consider several main issues facing Disney.
cOn the issue of finances, I believe Disney has learned its lesson and would make better decisions now when it comes to real estate, world economy, investments and park and hotel room rates.
cOn the issue of its next destination, I think Disney should consider other countries, besides ones within Asia where it already had success, and beyond Europe. It should consider maybe another country within Europe, but also, check into other countries, such as Australia, or Canada.
cIf considering other countries within Europe I would suggest looking into Spain, which originally wanted to have Euro Disney located there. Also, I would suggest researching the potential in the Czech Republic and Belgium.
cWhatever country Disney expands to, it has to remember the following:
cNot all countries and cultures are the same, meaning, Canada is not the 51st state of America, and Europe is not America either. The managers at Disney would be wise to learn from their ethnocentric mistakes and take it down a few notches when it comes to their attitudes and enforcing their opinions.
cThe marketing lessons from Disneyland Paris should be repeated with the expansion plans. Every location should have its own marketing centers and its own advertising, all suitable for the local tastes and styles.
cAs for the name, I would have kept the name Euro Disney. I think by keeping the original name Disney would have been a taste of America in Europe. It could have kept its Americanism and combine it with the European style and flair, and make it a truly international experience. And I would suggest the same in other countries. Keeping the local style and culture and combining it with the great style of Disney could be a magical experience. Just as when entering Disneyland or Disney World one can forget the hassles of everyday life and enter this magical dream world created by Disney, one can have the same experience in other countries, along with the local flavor.
So a combination approach is recommended, and can appeal to all international tourists.
I think utilizing all these suggestions and learning from its first mistakes, and realizing that combining the good local values of each country along with the good American values can be successful for all concerned.
By being a more international company, one that is not trying to rule the park scene but enhance it and share its magic, one that is easy to work with, one that understands the value of a customers money, one that respects the local culture, and appeals to several target markets, Disney can be successful wherever it expands to.