CASE STUDY: EURO DISNEYLAND

Case Study: EURO DISNEYLAND



Case Study: EURO DISNEYLAND

Introduction: Euro Disneyland Case

Identify the major problem facing the company

Euro Disneyland has been a fascinating project of collaboration, which took many years to be realized. After 2 successes, one in California and the other in Japan, the company didn't want to stop the assumption and dreamed to open another theme park in Europe. This project became reality in 1992. The problem that they had to face was to adapt an American organization in a suburb of Paris, Marne La Vallee. Disney theme parks, long considered to be a recipe for guaranteed financial success, soon ran into trouble and meet financial deficiency. They thought that the project could be a success as it was the case for the park in Japan but they had to cope with many new challenges, forcing them to reconsider their cookie-cutter standard model for success.

Robert Fitzpatrick left his post of chairperson to let Philippe Bourguignon resolve the problem of a net loss of FFr 188 million for Euro Disneyland's fiscal year which ended September 1992. Between April and September 1992, only 29 percent of the park's total visitors were French while 50 percent were waited.

The company didn't realize that some adaptations were needed in order to be a success and to attract European visitors. In Europe you have to answer to many different tastes because the visitors come from all over the world even if most come from Europe.

In fact the objectives fixed by the direction of Disney had not been reached the first year and then also. So we will see in this report that few minor problems have to be faced and represent the major problem which is the poor profit of Euro Disneyland. Many things have been done to increase the benefits; management even slashed prices at the park for local residents to FFr 150 from FFr 225 for adults. The company has to make enough money to finance its FFr 8-10 billion cost. They tried to explore potential sources of financing for the park but they had to face unpredictable minor problems.

Identify the minor problems facing the company

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, ...