Presentation on theme: "10/28/02Case: Euro Disney Euro Disney The first 100 days."— Presentation transcript:
10/28/02Case: Euro Disney Euro Disney The first 100 days
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Structure of Walt Disney Revenue in 1991 Responsible for Theme park$2,865Theme park71 % Hotels21 % Other8 % Filmed entertainment $ 2,593 Consumer products $ 724
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Visitors 50 million 90 % repeat customers, 5 % from Europe Adults in late twenties with young children
10/28/02Case: Euro Disney Success factors Creative imagination: Park set-up Cartoons come alive Participation of visitors Parks are continually updated
10/28/02Case: Euro Disney To exceed its customers expectation every day. Disneys stated goal is
10/28/02Case: Euro Disney 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.
10/28/02Case: Euro Disney Service delivery has been under constant refinement. Disney University.
10/28/02Case: Euro Disney Hiring process: a peer interview process to select cast members a 45-minute interview session with a Disney personnel manager extensive orientation program in Disneys service standards
10/28/02Case: Euro Disney Service standards: safety courtesy show efficiency
10/28/02Case: Euro Disney Certain messages reinforced throughout the training: happiness measured differently by every guest and challenge to create customers perceptions are extremely fragile employees are on stage at every moment and should look to provide service fixing costumers problems is very important
10/28/02Case: Euro Disney Employees were evaluated based upon: energy enthusiasm commitment pride
10/28/02Case: Euro Disney 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 Disneys brand of entertainment
10/28/02Case: Euro Disney 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.
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Contractual concessions with the French government The French government agreed to extend highways and the railway The French government agreed to 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
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Financial Goals Attracting 11 million visitors in the first year of operation Achieving operating income of $373 million at April 12,1992
10/28/02Case: Euro Disney Phase II Disney MGM studios Park and additional hotel rooms Attracting 8 million visitors Disney budgeted $3 billion to complete Phase II
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney French Intellectuals proposed ideas about: Cultural requirements Park design Grooming standards Eating habits
10/28/02Case: Euro Disney Research concluded that Europeans were interested in: New York Disney land The Western United States
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Start Up Process Employment Marketing Disney Service and operations Problems
10/28/02Case: Euro Disney Employment Hire and train employees people to fill jobs Another 5000 people for peak season
10/28/02Case: Euro Disney Marketing Give the park a European flavor Advertised in magazines throughout Europe Sleeping beauty Castle Nestle
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Problems Dress code Housing shortage Employees are leaving or being laid off Examples of employees
10/28/02Case: Euro Disney Visitors 40% 3.5% 18% 8% 18% 3.5% 9% Other
10/28/02Case: Euro Disney Decisions Big issues prioritizing objectives: Revenue outlook Cost problems Service delivery system
10/28/02Case: Euro Disney Decision sets 1st 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
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney Disneys 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
10/28/02Case: Euro Disney Questions
10/28/02Case: Euro Disney Assess Disneys 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?
10/28/02Case: Euro Disney What is Euro Disneys target Market? What are the implications for the development and organization of the park?
10/28/02Case: Euro Disney Technology Consumers Needs 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
10/28/02Case: Euro Disney 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
10/28/02Case: Euro Disney 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 Disneys entertainment
10/28/02Case: Euro Disney 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? Have they done the proper research to make these conclusions?
10/28/02Case: Euro Disney Service delivery: Disney standard Disney University Treatment of employee's Integrate the cultures
10/28/02Case: Euro Disney 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
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
10/28/02Case: Euro Disney What lessons has Euro Disney learned which could be applied to the development of the second park?
10/28/02Case: Euro Disney Expected Service Perceived Service Service delivery Customer-driven Service designs and standards Company perception of consumer expectations Customer Gap Company Customer Gap 3 Gap 2 External communications to customers Gap 4
10/28/02Case: Euro Disney Evaluation Inadequate marketing research orientation Lack of upward communication Insufficient relationship focus Inadequate service recovery
10/28/02Case: Euro Disney Adapt for the local market from the US model and if so, how?
10/28/02Case: Euro Disney 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.
10/28/02Case: Euro Disney Questions
10/28/02Case: Euro Disney Thank you for your attention