Euro Disney

ÐŽ§They were always sure it would work because they were DisneyЎЁ

The Not-So-Wonderful World of Euro Disney -

Things are Better Now at Paris Disneyland

The Problem

The problem Disneyland Paris is facing is the issue of expanding its parks into other countries and making sure it does not repeat the same mistakes it encountered in Paris when it first opened there as Euro Disney.

More difficult than it might seem at first glance, there are several issues facing Disney.

Background

Ñ"Ð* Euro Disney, as it was originally named, opened to the European public in 1992. After many trials and tribulations it seems to have overcome them to come out on top, in typical Disney style, with some important changes.

Ñ"Ð* DisneyÐŽ¦s projections for its parkÐŽ¦s success, whether through hotels, merchandise, and number of visitors were all miscalculated.

Ñ"Ð* Disney emphasized the parkÐŽ¦s size instead of the entertainment value of the park.

Ñ"Ð* The park admission prices were more expensive than in the United States.

Ñ"Ð* Disney failed to see the signs of the coming European recession.

Ñ"Ð* Managers at Disney and Euro Disney upset many organizations.

Ñ"Ð* The ÐŽ§kick-the-door-downЎЁ (International Marketing, page 623) attitude of the US managers did not work well with the already hostile French.

So at a certain point, it was questionable whether Euro Disney would even continue to exist or close its doors.

Some changes that transformed Euro DisneyÐŽ¦s failure into a success were:

Ñ"Ð* Disney agreed to fund Euro Disney.

Ñ"Ð* From the beginning Euro DisneyÐŽ¦s convention business exceeded expectations.

Ñ"Ð* Banks agreed to defer payments for a period of three years.

Ñ"Ð* In June of 1994 a Saudi prince invested up to $500 million for a 24% stake in the park.

Ñ"Ð* In 1993 a French man by the name Philippe Bourguignon took over Euro Disney as its CEO. He brought back the park to profitability.

Ñ"Ð* The biggest success was the changes in marketing that Mr. Bourguignon brought about.

Ñ"Ð* National markets were targeted separately, taking into account the different habits of tourists. Marketing offices were opened in several cities, such as Amsterdam, Brussels, Frankfurt, London and Madrid. Each of these offices was in charge of market-specific advertising.

Ñ"Ð* Prices for park admission were cut by 20%, and some hotel room rates were cut by 30%.

Ñ"Ð* The parkÐŽ¦s name was also transformed. It changed from Euro Disney to Disneyland Paris. Now the marketing theme was about an authentic Disney experience.

Ñ"Ð* In 1996 Disneyland Paris became the most visited tourist attraction in France. It even surpassed the number of visitors to the Eiffel Tower and the Louvre Art Museum.

Disney is considering a number of issues:

Ñ"Ð* The man who brought this success to Disneyland Paris has left the firm to pursue other directions.

Ñ"Ð* Big challenges are facing Disneyland Paris. For example, financial issues will be coming up again as some of the concessions given to Disney were about to expire.

Ñ"Ð* With the recovery of Disneyland Paris the firm decided to do some major expansions, such as the addition of the California adventure park to the Anaheim Disneyland. Also planned was the opening of a Disney Tokyo and more expansions in Paris, and Hong Kong.

Ñ"Ð* There are hopes that the company will not have to spend a lot its own money on these expansions, as well as getting a return on the investments of about 30%, coming from entrance fees and licensing fees.

Disney