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Euro-Disney:
The First 100 Days
McGraw-Hill
© 2000 The McGraw-Hill Companies
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The Walt Disney Traditional
Formula
• Theme parks--core of attractions organized to an
identical set of themes
• Offerings for adults
• Offerings for children
• Offerings for different psychographic targets
• Stable of characters
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The Walt Disney
Traditional Formula (cont’d)
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• Commitment to always having something new and
different at parks
• Service delivery
• Concept of guest experience
• Attention to detail
• Disney University
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Qualifying potential hires
Transmitting Disney values
Training employees to be effective in jobs
Grooming standards
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Tokyo Disneyland--A Successful
Transfer
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Euro Disney--A Success?
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Services Marketing Problems
• Heterogeneous target market--multi-national,
local/traveling--makes strategy more difficult
• Pricing too high
• Poor market research
• Cold weather location
• Lack of consideration for local culture
• Service standards hard to implement
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Criteria to Assess
First 100 Days
ATTENDANCE
• 2/3 into initial 5 1/2 month operating
period, have 2/3 of projected revenues
• figure of 3.6 million visitors slightly
behind pace to achieve 7 million
projected, although summer months
remain
COSTS
PROFITS
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• Substantial cost problem
• Extra 5,000 workers needed
• Pre-opening and other costs
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Criteria to Assess
First 100 Days
EMPLOYEE
TURNOVER
• Very high in beginning period
• No employee housing
• More because difficult role to perform
than in any other park due to language
OVERALL
PERFORMANCE
VS OTHER
PARKS
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• Appears to be ahead of other parks at
same point in time
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What Aspects Transferable/
Not Transferable?
TRANSFERABLE
• Theme park formula:
Values/quality/imaginati
on
• Guest service
• Structure of parks
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NOT TRANSFERABLE
• Service standards conflicted
with French labor unions
• Policy toward wine
• Waiting lines
• Management of local employees
by expatriates
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Considerations Before
Extending Service Concept
Across Borders
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Adapting service itself
Adapting promotion and distribution
Adapting entry modes
Adapting communication
Adapting market research international
Adapting work force management
– culture’s effect on employee behavior
– adapting service employee incentives
– adapting service standards for
international delivery
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What Can Disney Do Now?
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Lower prices
Build additional ride capacity
Improve cast friendliness
Coordinate marketing of parks with
release of films
• Change to local management team
• Aggressive cross-promotion
• Attract and retain high quality
employees
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Update: March ‘93
• Loss of $40 million before deferral of $20 million
debt payment
• Underutilization of hotel rooms
• Bombarded with negative publicity
• Fitzpatrick stepped down as president
• Lowered admission prices by 25% for adults and
33% for kids
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Changes and Update 1998:
An Impressive Turnaround
• More than 11 million visitors per year--bigger than
Eiffel Tower or Louvre
• #1 short-stay tourist destination in Europe
• Higher hotel occupancy rate (64%) than Paris
hotels
• Profits 1997 rose 77%
• Renamed Disneyland Paris
• Added new Space Mountain Ride
• “Kids Go Free” promotions
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Current Situation
Profitable for last 3 years
– 1997 income up 21.5% yr to yr; Costs up
8.3%
– 1998 1st quarter income up 16.6% over
1997
– 12.6 million in attendance in 1997
– 78% hotel occupancy in 1997
– Recovery due in part to “American” cost
controls
– Slight increase in average guest spending
– Emergence of major conference center
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Labor Unrest
• 80-160 employees went on strike in July 1998
– Wanted classification as “artists” not “extras”
– Resentful that multiple skills were not rewarded
– Costumed strikers smiling, not confrontational
• Average striking worker making more than minimum
wage; artist classification would net $330 more per month
• Disgruntled employees returned to
work without government support
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Future Plans
• Control 3,200 acres around current location
• Creating Val d’Europe - a “town” outside
Euro Disney
– 90,000 sq. meter shopping mall
– 1,610 housing units
– Office space
– International business park
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"Rejected New Names for
EuroDisney"
10.
9.
8.
7.
6.
5.
4.
3.
2.
Euro Disaster
El Biggo Mistake-o
Never-Never-Profit Land
La Veal de Guys in Big Smelly Costumes
Gumpworld
Beaucoup de Crap Americain
Johnny Depp's Hotel of Destruction
Boutros Boutros-Goofy
Have-You-Forgotten-We-Saved-Your-Assin-the-World-War-Two-Land
1. Ooh-La-Lame
As presented on the 9/15/94 broadcast of LATE SHOW with DAVID LETTERMAN
McGraw-Hill
© 2000 The McGraw-Hill Companies
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Euro-Disney: The First 100 Days