Factors contributing to EuroDisney’s poor performance during the first year of operations
Many of us on the western hemisphere knows Disney to be the land of endless magic and a haven for young children and families to engage in fun activities together. This was proven to be contradictory in the case of EuroDisney. EuroDisney was hit unexpectedly by the tremendous success of Tokyo Disneyland which had opened its doors in 1983, 9 years before they commenced business in France. Tokyo Disneyland boasted increasing numbers of returning visitors to the theme park annually although it was said that Disney basically ‘transplanted’ the parent company into Japan. Efforts to do the same in France proved futile. EuroDisney made several mistakes from inception of commencing business in France. Some events were unforeseeable and uncontrollable which drove EuroDisney to an unsuccessful first year in operations.
Ethocentrism
The major factor contributing to EuroDisney’s poor performance in the first year of operations was the unconcerned nature of the French to adapt the American culture. The lack of research into French culture by the American company posed the greatest threat to EuroDisney before it commenced operations in France and even after. The French are not well known for their hospitality. Disney sells the dream of a magical place where characters interact harmoniously with families and young children. This alone was a huge decision the directors overlooked before moving its operations to France. Disney tried to sell an American service and products to Europe and more so France where they were physically located, a country that shared a love hate relationship with America. The French are also not known to adapt to any other culture. The French’s ethnocentrism contributed majorly to the unsuccessful attempt by Disney to dominate Europe’s market during its first year of operations. The Japanese on the other hand adapted to cultural change easily which led to their success in the forthcoming years. The American advertising and marketing strategy caused harm to EuroDisney by boasting its lavish park and all its components rather than its benefit to the French population. The French were not open to the American style of business. This factor of ethnocentrism by the French was foreseeable and could have been controlled by offering products and services more tailored to suit the French and European population rather than imposing the American cultural identity on the French.
Lack of Research
Another factor contributing to the demise of EuroDisney during the first year of operations was the fact that the directors of Disney and those implementing management systems into EuroDisney did not fully research French culture and behaviour patterns in its entirety. Though this point may coincide with ethnocentrism, these points examine in detail where Disney directors went wrong, areas they should have done more research into. The vacation patterns by the French were overlooked, their eating habits were misunderstood and their spending habits were misjudged. French parents usually only took their children out if there was a holiday over the weekend as opposed to our American families who would go out regardless if there was a holiday or not. The banning of red wine in the park totally backfired on the company because having a glass of red wine with a meal in France is almost a staple to the French. The French were also not open to spending money on hamburgers and milkshakes. Disney was misinformed greatly on the breakfast eating patterns of Europeans, forcing 2500 people to eat breakfast catered only to 350 seated persons in some hotel restaurants. Prices to enter the park and souvenirs were also quite expensive. Foreigners found it more affordable to make a trip to Orlando rather than spending in France. The price of hotels in EuroDisney (20 miles away from Paris) were similar to that of a high-end room in downtown Paris. The French were also not keen on spending on souvenirs as opposed to that of the Americans and Japanese. Overspending on lavish infrastructure that were not in the original plans of EuroDisney also caused high expenses for the company and as a result contributed to their major losses when the recession hit. (Solaris, n.d.) These factors could have been foreseen if proper research was conducted and as a result controlled.
Unforeseen circumstances
Paris’ economic circumstances also lead to the poor performance on EuroDisney with Europe entering a recession in 1992 caused revenues to be lower than anticipated. Also high interest rates many currencies around the world to devaluate against the franc thus causing it more expensive to enjoy EuroDisney and as a result Disney in Orlando became more affordable. The World’s Fair in Seville and the 1992 Olympics in Barcelona also caused the low attendance rate of visitors to EuroDisney. These unforeseen circumstances were uncontrollable by EuroDisney. There was little to nothing the directors of Disney could have done in their power to alleviate EuroDisney from these catastrophic events.
Locations considered for ‘Disneyland X’
After major thought three locations I would consider for the expansion of Disneyland X are as follows: Rio de Janerio, Brazil; Dubai, U.A.E.; Delhi, India.
Decisions were made based on political, social and economic standards. Each location was chosen based on their adaptation to foreign cultures, their diversity, weather, GDP, accessibility from other countries and competition in each area.
Best selected location for Disneyland X
Brazil is the largest and wealthiest country in Latin America. Brazil boasts a population of 207.7 million. It is also one of the fastest growing economies in the world. The GDP of the country is 1.796 trillion USD. (World Bank, 2016) It has proved to remain economically stable in tough times. Brazil is home to a vast number of ethnicities and serves directly to the Latin America community, South American community and to a wider extent of the Caribbean. Though the country is easily accessible from these regions, the population alone is able to support this venture. Tourism contributes to a major part of the economic growth of the country. Brazil not only experiences tourists from international countries but also its own citizens travelling to different cities around the country.
The weather is usually hot and facilitates a year round operation of the park, also hurricanes are not common in this area as opposed to Orlando. Brazilians enjoy outdoor activities due to the beautiful weather they experience year round. Brazil also shares a good relationship with U.S.A. giving it more reasons to welcome this American company with open arms. Disneyland in Brazil will not be in direct competition with any of the Disney’s around the world because it will be catering to a different region on the globe. Beto Carrero is the largest theme park in Latin America. (Language, 2008) The park was opened in 1991 in Santa Catarina and also collaborated with Dreamworks Animation and Universal Studios in 2012. This shows the cultural adaption of Brazilians to a different culture. Brazil today has 27 theme parks and attracts approximately 12 million tourists in 2012 and accounted for more BRL 1.5 billion in revenues. (Bruha, 2014) Brazil currently does not have any industry that can supply equipment to the sector as a result majority of this technology is imported. The Brazilian government is open to new foreign investments and gives tax benefits to the sector. They currently sit on the 79th mark on transparency international however their scores continue to rise showing attempts to battling corruption within the country. (T.I., n.d.) With the established 27 theme parks the idea of clustering theme parks gives tourists more value for their money. As opposed to going on vacation where there is one theme park, families would opt to take their children to a destination where there are choices.
References
S., & S. (n.d.). Disneyland Paris Brief History. Retrieved September 29,
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Brazil . (n.d.). Retrieved September 29, 2017, from https://data.worldbank.org/country/brazil
Language , T. (2008, February 24). Beto Carrero World: Brazil's Biggest
Theme Park. Retrieved September 29, 2017, from https://blogs.transparent.com/portuguese/beto-carrero-world-brazils-biggest-theme-park/
Bruha, P. (2014 , September 25). Theme Parks In Brazil.
Retrieved September 29, 2017, from http://thebrazilbusiness.com/article/theme-parks-in-brazil
E.V., T. I. (n.d.). Corruption Perceptions Index 2016. Retrieved September 29, 2017, from
https://www.transparency.org/news/feature/corruption_perceptions_index_2016