The Euro Disneyland Case Essay
999 WordsNov 24th, 20124 Pages
After the massive success that the Walt Disney Company has achieved in Tokyo, the company suffered a big failure in the next overseas expansion venture which was named Euro Disneyland. The failure’s main reason was the lack of the emotional intelligence that should be present in effective leaders. In particular, the emotional intelligence components are: self-awareness, self-regulation, motivation, empathy, and social skill. The most important element that was missing in this case is empathy which represents the capability to comprehend the emotional temperament of other people and treat them accordingly. The empathy characteristics include the cross-cultural understanding, customer service, and capability in building and holding…show more content…
Therefore, they started looking for a new country to operate a new park with omitting the cultural differences between the two countries. And because Paris is located in the same latitude as Tokyo and they have the same weather climate, the Walt Disney Company executives assumed that it is applicable to operate in Paris.
Not only that, the company continued in the organizational mistakes due to the lack of cross-culture understanding. For example, the Walt Disney Company wrongly allocated staff according to the assumption that says Friday would be the heavy day for visitors and Monday a light-footed one. However, the case was the reverse. Also, in contrast of the Orlando Cast Members, French Cast Members are not adaptable to the inflexible schedule. However, the Walt Disney Company was inattentive of the variance in employee acceptance of the inflexible scheduling. Another instance, The Walt Disney Company had mistakenly assumed that visitors of Euro Disneyland would spend a lot of money as in the United States and Japan. However, this did not happen because of Europeans’ per-capita low income.
Moreover of these substantial mistakes, there is a contributing factor to the problem of Euro Disneyland which is poor customer’s service. As is stated in class’s slides, 70% of the reasons for losing customers are emotional intelligence related such as poor services and no follow up. For the Walt Disney Company was the case. To illustrate
EURO DISNEYLAND CASE ANALYSIS
Euro Disney, nowadays Disneyland Paris, is a holiday and recreation resort located in Mane-la-Valle, a new town close to Paris (Euro Disney, 2009). When the International offer of shares for the Euro Disneyland was issued in October 1989 the strategies for this new enterprise of the Walt Disney group were very optimistic. The financial plans for the first year of operation estimated total revenues of FF 5,482 million and a net profit after tax of FF 204 million. For the subsequent years the development was projected to be even more impressive. Just within a short time after Euro Disney was unwrapped in April 1992, it was noticeable that reality would not encounter the plans. In November 1992, the financial reports for the year ended in 30 September 1992 were published which included the first 172 opening days of Disneyland Paris. There the management had to announce a loss of FF 188 million. The second year was even worse. Although Euro Disney nearly met plans for guest attendance, they confronted a loss of FF 5,337 million whereas total turnover was FF 5,725 million. Plans for the second year of operation (1 April 1993 to 31 March 1994) predicted a turnover of FF 6,801 million and a profit of FF 359 million. (Recklies, n.d.)
Euro Disney started to have problems early, on 1980’s problems with negotiation and construction, on the 1990’s with French figures started to voice
against the park, with phrases
like “Cultural Chernobyl”
(Euro Disney, 2009) .Euro Disney also had problems in the beginning of its operations, since the first day, problems related to cultural issues and operational issues oc
curred massively, affecting directly Euro Disney’s performance and attendance.
The main objective of this report is to understand how Euro Disney had this initial failure. How it could had a better initial experience, and to provide recommendations to students and
business men don’t committee the same errors.
Hofstede's cultural dimensions theory
Hofstede's cultural dimensions theory is a framework for cross-cultural communication, developed by Geert Hofstede. It describes the effects of a society's culture on the values of its members, and how these values relate to behavior, using a structure derived from factor analysis. The theory has been widely used in several fields as a paradigm for research, particularly in cross-cultural psychology, international management, and cross-cultural communication. (Hofstede's cultural dimensions theory, n.d.)
Dimensions of national cultures
Power distance index
Individualism vs. collectivism
Uncertainty avoidance index
Masculinity vs. femininity
Long-term orientation vs. short term orientation