Euro Disney

EuroDisney - Situational Analysis

April 12 1992, was the day Disney sought to capture the European market by opening its doors to a major theme park called EuroDisney. This sounds enticing as the name "Disney" is known worldwide, however the following situational analysis will thoroughly examine the factors which saw EuroDisney not live up to its expectations in the years after its initial opening and list strategies which could have helped avoid such disappointing results.

The situational analysis will include a market analysis, product analysis, competitive analysis and finally a SWOT analysis.

Analysis of the firm's external environment (market analysis)

The market in which EuroDisney wanted to establish itself in was quite a difficult one. Various external market factors have been identified as being critical to the overall success of EuroDisney in Paris. Such factors included:

1. European Real disposable income per capita - government taxes of approximately 50% of gross wages, are always on the rise as debt as a percentage of GDP for come European countries is in the range of 50- 115% this leaving the government with no choice but to raise taxes, thus having a negative impact on disposable income. High levels of unemployment also play an important role.

2. Vacation habits and customs - Europeans generally like to spend their holidays at sunny locations at other European countries and also the south of France. Families do however visit EuroDisney but their stay is relatively short, usually a stop over on their way to their final destinations.

3. Since vacations are long, their leisure budget is usually low. For example a two day visit to the park would cost an estimated $200 per person, which represents 30% of the leisure budget for the Belgians and 25% for the French. This is too expensive and does hinder attendance.

4. High oil prices causes petrol prices to increase thus affecting families when they travel to and from EuroDisney, thus again reducing disposable income.

5. Cultural hostility - EuroDisney's attractions did reflect European origins. However management failed to get the point across to it staff about harmonizing with the hosts. Insensitive to French social standards.

In terms of the above factors, some suggested strategies are recommended which may have assisted in counteracting these threats. There are two main factors which needed to be addressed in terms of the above five factors - money and cultural differences. Seeing that taxes were high, oil prices and unemployment were on the way up and leisure budgets are low, EuroDisney could have lowered its prices or even promote special offers to entice Europeans, both adults and children to stay longer. Cultural differences were evident as Europeans did resent the fact that staff did not harmonise with the French. This is another example of poor planning by the Disney management team. Cultural understanding when expanding overseas is important to any organisation, as traditions and customs need to be thoroughly understood in order to gain acceptance by the people and as well as gaining market share.

Analysis of the specific market (product analysis)

Prior to the opening of EuroDisney in Paris in 1992, Disney prided itself in terms of its portrayed image it had globally. They (Disney Corporation) believed that the name "Disney" itself would bring in the customers. However shortly after opening its doors to the public, EuroDisney learnt that it needed more than just its image to entice customers. Various