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Euro Disney The first 100 days 10/28/02 Case: Euro Disney.

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Presentation on theme: "Euro Disney The first 100 days 10/28/02 Case: Euro Disney."— Presentation transcript:

1 Euro Disney The first 100 days 10/28/02 Case: Euro Disney

2 Startup Opened in 1992 within budget Beginning (additional) influences
Drop of shares due to first year loss After 5 years still problems with visitors “Cultural Chernobyl” 10/28/02 Case: Euro Disney

3 Structure of Walt Disney
Revenue in 1991 Responsible for Theme park $2,865 71 % Hotels 21 % Other 8 % Filmed entertainment $ 2,593 Consumer products $ 724 10/28/02 Case: Euro Disney

4 WDC resorts: Walt Disney World Resort (Orlando, 1971)
Magic Kingdom Disney MGM Studios Theme Park Epcot Center Disneyland (Los Angeles, 1955) Others Tokyo Disneyland: designed by WDC but owned and run by Oriental Land Company 10/28/02 Case: Euro Disney

5 Visitors 50 million 90 % repeat customers, 5 % from Europe
Adults in late twenties with young children 10/28/02 Case: Euro Disney

6 Success factors Creative imagination: Park set-up Cartoons come alive
Participation of visitors Parks are continually updated 10/28/02 Case: Euro Disney

7 Disney’s stated goal is
To exceed its customers’ expectation every day. 10/28/02 Case: Euro Disney

8 This goal is supported by:
standard of service, park design operating details human resource policies and practices Disney “play” would be flawlessly performed day in and day out at each location. 10/28/02 Case: Euro Disney

9 Service delivery has been under constant refinement.
“Disney University.” 10/28/02 Case: Euro Disney

10 Hiring process: a peer interview process to select cast members
a 45-minute interview session with a Disney personnel manager extensive orientation program in Disney’s service standards 10/28/02 Case: Euro Disney

11 Service standards: safety courtesy show efficiency 10/28/02
Case: Euro Disney

12 Certain messages reinforced throughout the training:
happiness measured differently by every guest and challenge to create customer’s perceptions are extremely fragile employees are on stage at every moment and should look to provide service fixing costumers problems is very important 10/28/02 Case: Euro Disney

13 Employees were evaluated based upon:
energy enthusiasm commitment pride 10/28/02 Case: Euro Disney

14 Success of Disney in Tokyo:
strong Japanese appetite for American-styled popular entertainment increasing trend in Japan toward leisure country which actively resisted many U.S. products appeal for Disney’s brand of entertainment 10/28/02 Case: Euro Disney

15 The reasons why Tokyo Disneyland worked:
Young Japanese are very clean cut. Japanese are generally comfortable wearing uniforms Obeying their bosses Like to be part of a team. They are very patient. Japanese are always very polite to strangers. 10/28/02 Case: Euro Disney

16 Location of the Euro Disney site
1981: Bidding process involving Germany, Spain and France 1987: Agreement with the French government Central location Highly popular vacation destination The only disadvantage seem to be the inclement weather 10/28/02 Case: Euro Disney

17 Contractual concessions with the French government
The French government agreed to extend highways and the railway build a high-speed TGV train extension The French government would reduce the value-added tax The French government provided over $700 millions in loans 10/28/02 Case: Euro Disney

18 Financial Facts Euro Disney was 49 % owned by The Walt Disney Company and 51 % owned by Euro Disney S.C.A Admission to the park cost $41 for adults and $27 for children The capacity of the park was 50,000 visitors Cost estimates were determined by the consulting firm ADL 10/28/02 Case: Euro Disney

19 Financial Goals Attracting 11 million visitors in the
first year of operation Achieving operating income of $373 million at April 12,1992 10/28/02 Case: Euro Disney

20 Phase II Disney MGM studios Park and additional hotel rooms
Attracting 8 million visitors Disney budgeted $3 billion to complete Phase II 10/28/02 Case: Euro Disney

21 Theme Park Design Phase 1 Theme Park 29 Rides and Attractions
6 Themed Hotels Davey Crockett Campground 414 Cabins 27 hole Championship Golf Course Restaraunts, shops, and entertainment options 10/28/02 Case: Euro Disney

22 French Intellectuals proposed ideas about:
Cultural requirements Park design Grooming standards Eating habits 10/28/02 Case: Euro Disney

23 Research concluded that Europeans were interested in:
New York Disney land The Western United States 10/28/02 Case: Euro Disney

24 Actions taken: Add 3 western theme hotels French was first language
Signs & employees were bilingual Characters altered to meet French ideas Disney did not offer wine within the park Disney had many entertainment shops and foods Disney was thought of as an “Imaginary Place, a culture without sin” 10/28/02 Case: Euro Disney

25 Start Up Process Employment Marketing Disney Service and operations
Problems 10/28/02 Case: Euro Disney

26 Employment Hire and train employees 14000 people to fill 12000 jobs
Another 5000 people for peak season 10/28/02 Case: Euro Disney

27 Marketing Give the park a European flavor
Advertised in magazines throughout Europe Sleeping beauty Castle Nestle 10/28/02 Case: Euro Disney

28 Service and Operations
Euro Disney University Disney Standards Diversity of Nationalities 270 managers and supervisors were cross trained 200 managers were imported employees paid $6.50/hour generally worked 169 hours a month 10/28/02 Case: Euro Disney

29 Problems Dress code Housing shortage
Employees are leaving or being laid off Examples of employees 10/28/02 Case: Euro Disney

30 Visitors 9% Other 18% 8% 18% 40% 3.5% 3.5% 10/28/02 Case: Euro Disney

31 Decisions Big issues prioritizing objectives: Revenue outlook
Cost problems Service delivery system 10/28/02 Case: Euro Disney

32 Decision sets 1st set of decisions: 2nd set of decisions:
Service system up to the standards and cost levels of the other Disney Parks 2nd set of decisions: How to market for achieving winter attendance targets 3rd set of decisions: Phase II The level of investments Timing of investments Nature of investments 10/28/02 Case: Euro Disney

33 A day at Eurodisney ‘Trains on Strike; Tourists Unable to Reach Park’
‘Euro Disney Visitors Complain of Long Lines and High Prices’ ‘Guests find Euro Disney Employees Rude’ ‘Visitors Claim Euro Disney is a Fairy Tale come True’ ‘Europeans not Impressed with American Fast-Food’ ‘Disney Shows Lack of Appreciation for French Culture- Wine not Served in Park’ ‘Euro Disney not up to Standards of American Theme Parks’ ‘Europeans Discover the Old West at Frontierland’ 10/28/02 Case: Euro Disney

34 Disney’s concerns Disney does not fit traditional French entertainment
Competition from Paris entertainment industry Linguistic barriers – Europe is multilingual Cultural barriers – food habits, alcohol a part of diet, long lines Europe is multicultural with differences in perceptions for entertainment Lack of housing accommodations for staff Acceptance of Disney as part of American culture by the French? Cold weather could be a deterrent Expensive by European standards 10/28/02 Case: Euro Disney

35 Questions 10/28/02 Case: Euro Disney

36 To answer question divide it into parts:
Assess Disney’s decision to build a theme park in Europe. How can such a decision be evaluated and was it a wise one? To answer question divide it into parts: Is Europe a good (new) market? What possibilities were there? How was it executed? 10/28/02 Case: Euro Disney

37 What is Euro Disney’s target Market
What is Euro Disney’s target Market? What are the implications for the development and organization of the park? 10/28/02 Case: Euro Disney

38 10/28/02 Case: Euro Disney Needs Consumers Technology Entertainment
High Services Level Other facilities around and in the park, such as hotels, restaurants The park Walt Disney figures Fantasy world Vacation Being together with family Have fun Young families. families Young couples Middle/Upper class Grandparents Other Disney fans 10/28/02 Case: Euro Disney

39 Customers Children Young families families
Grandparents with grandchildren Disney fans People that can afford spending money on the park (middle class and upper class) People who just want to go so badly that they put other things aside to be able to go to Euro Disney European people 10/28/02 Case: Euro Disney

40 Target Market The majority of Disney visitors are
adults many of them are in the late twenties and have young children. The rest are people from four to sixty years who have enough money to spend, to have a good time with Walt Disney’s entertainment 10/28/02 Case: Euro Disney

41 What issues must a company think through before extending a successful service overseas?
What is the expected service for Europeans? What is expected out of design and service standards? Are employees sufficiently screened and have the issues of supply and demand been worked out to suit European demands? Does the level of service delivery and/or exceed the expectations of Europeans? Does the company have the correct expectations about European consumers? Does the company know what the expected standards are? Does the company deliver these services properly and efficiently? Does the company live up to its promises and communicate in a satisfactory way to Europeans? Have they done the proper research to make these conclusions? Have they done the proper research? 10/28/02 Case: Euro Disney

42 Service delivery: Disney standard Disney University
Treatment of employee's Integrate the cultures 10/28/02 Case: Euro Disney

43 Should Euro Disney proceed with the next step of development?
Euro Disney should first solve their problems before they expand Euro Disney could apply the lessons they have learned from the Phase I experience to Phase II 10/28/02 Case: Euro Disney

44 Service recovery strategies
Fail-safe the service Welcome and encourage complaints Act Quickly Treat customers fairly Learn from recovery experiences Learn from lost customers learn from Phase I experience Satisfaction surveys and employees as listening posts Empower employees to act quickly Fair interpersonal treatment Project teams can be assigned to a problematic area to develop a solution Difficult for Euro Disney to identify lost customers

45 What lessons has Euro Disney learned which could be applied to the development of the second park?
10/28/02 Case: Euro Disney

46 Expected Service Perceived Service Customer Gap Customer
External communications to customers Service delivery Company Gap 4 Gap 3 Customer-driven Service designs and standards Gap 2 Company perception of consumer expectations 10/28/02 Case: Euro Disney

47 Evaluation Inadequate marketing research orientation
Lack of upward communication Insufficient relationship focus Inadequate service recovery 10/28/02 Case: Euro Disney

48 Adapt for the local market from the US model and if so, how?
10/28/02 Case: Euro Disney

49 Recommendations Adapt to French standards & expectations
Employee involvement in Euro Disney planning & operations Single theme for Euro Disney; focus on French culture Promote winter attendance through reduced costs and package plans Identify additional target markets (i.e., student groups) Before expanding, understand Disney fit with European cultures Package Euro-Disney with other Paris destinations Prepare to contract buses if public transport is disrupted. Leave some memorial for any villages/ people displaced by park. Give displaced people lifetime pass. 10/28/02 Case: Euro Disney

50 Questions 10/28/02 Case: Euro Disney

51 Thank you for your attention
10/28/02 Case: Euro Disney

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