euro disney failure case study

Mickey Goes to France: A Case Study of the Euro Disneyland Negotiations

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Mickey Goes to France: A Case Study of the Euro Disneyland Negotiations

Cardozo Journal of Conflict Resolution, Vol. 15, 2013

28 Pages Posted: 16 Apr 2013 Last revised: 7 Nov 2013

Lauren A. Newell

Campbell University School of Law

Date Written: March 19, 2013

Euro Disneyland (since renamed Disneyland Resort Paris) in Marne-la-Vallée, France was declared a success even before it was built, and yet it narrowly escaped a humiliating bankruptcy after opening. This article applies intercultural negotiation theory to examine how The Walt Disney Company proved fallible in its negotiations with the French government and citizens in the course of constructing and operating Euro Disneyland. Through a case study of the negotiations, this article reveals why the reality proved so different from the expectations. It concludes with advice for how The Walt Disney Company — and, by implication, any multinational firm — should approach international deal-making in the future to avoid repeating past mistakes.

Keywords: Disney, negotiation, international negotiation

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Lauren A. Newell (Contact Author)

Campbell university school of law ( email ).

225 Hillsborough Street Raleigh, NC 27603 United States

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Mickey goes to france: a case study of the euro disneyland negotiations.

Lauren A. Newell , Ohio Northern University Follow

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Lauren A. Newell, Mickey Goes to France: A Case Study of the Euro Disneyland Negotiations, 15 Cardozo J. Conflict Resol. 193 (2013).

Euro Disneyland (since renamed Disneyland Resort Paris) in Marne-la-Vallée, France was declared a success even before it was built, and yet it narrowly escaped a humiliating bankruptcy after opening. This article applies intercultural negotiation theory to examine how The Walt Disney Company proved fallible in its negotiations with the French government and citizens in the course of constructing and operating Euro Disneyland.

Through a case study of the negotiations, this article reveals why the reality proved so different from the expectations. It concludes with advice for how The Walt Disney Company — and, by implication, any multinational firm — should approach international deal-making in the future to avoid repeating past mistakes.

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The Not-So-Wonderful World of Eurodisney

By: Tasha Kolesnikova

From its first year of operation, EuroDisney overlooked several key elements that consequently hampered its financial growth and performance. This research study tackles the issue of the "Not So Wonderful World" of Euro Disney, and other Disney are subsidiaries within the Walt Disney Company. By the end of this analysis, we should have a clear knowledge of what business decisions led to EuroDisney's less-than-ideal reality, as well as a better grasp of the parent or guardian company's mistakes.

📜 A Brief Look at History

Excessive legal representation, bombardment of american-style advertising.

• Ethnocentrism Leading to Ineffective Management 

Unforeseen Circumstances

Consider ethnic communication, market analysis, 💯 disney management's cross-cultural marketing abilities, ✈️ spain as disney park consideration, 💎 the next disneyland.

• 📚 Conclusion

But before we get started with the case analysis, it is important to note that this is just a synopsis of the topic to help guide your homework with your research and conclusion. If in case the topic may be too complex, you can contact our essay writers .

The Walt Disney Company is the parent company of Euro Disney and other Disney companies around the world, making it a global family entertainment network with four business divisions: media systems, parks and resorts, studio room entertainment, and consumer products.

In 1955, Walt Disney established an amusement park in the middle of Southern California's orange orchards in Orlando, Florida. This forever changed how Americans and the rest of the world, be it China, France, Japan, or the United States, perceive entertainment. No longer was it the realm of carnival hucksters but a place of wonder and joy.

Come April 1992, The Walt Disney Company and Affiliated Companies unveiled a new European tourism attraction along the river Marne in the east of Paris: the largest and most lavish Disney theme park - Euro Disney, currently known as Disneyland Paris.

Nonetheless, creating a large theme park in Paris resulted in Euro Disney's set-up for disaster due to management errors of being unable to contemplate certain consequences and put together an effective marketing strategy. Furthermore, they did not have the same in-depth understanding of the European market, demographics, and local culture compared to their American counterparts.

🚩 Factors That Contributed to Poor Performance

Many causes led to Euro Disney's poor performance during the first year of operation, and many of them might have been avoided if the right elements had been considered earlier. Factors that led to Euro Disney's poor performance include:

Demographics and subsidies were the first issues they encountered. The French government provided an irresistible offer of 1 billion US dollars in different incentives, all in the hopes of creating 30,000 jobs in France. Therefore, the people of France also donated a broadband TGV and suburban railway connection at low credit alternatives. They also deemed choosing a location 20 miles outside of Paris to be ideal. Contrarily, it had no significant influence on Disney's success.

Furthermore, despite the overvalued franc, terrible weather, the fact that the French are not famed for their hospitality, occasional anti-American demonstrations by disgruntled farmers because French agriculture subsidies were lower, and that possibly people would prefer a wanderlust glimpse of Paris over an American theme park, Paris was the chosen home base of Euro Disney.

Another unfavorable event that took place was that the opening of the theme park in Paris coincided, or much rather, competed, with other historical events within Europe, a notable one being the 1992 Olympics in Seville, Spain.

Overall, Euro Disney's chances for success in 1992 did not look promising.

Legal counsel was employed far too frequently in negotiations with France. The rigorous legal technique applied by Disney management offended France, a cultural difference wherein, just like the majority of Europeans, viewed relying on attorneys to obtain a result as the last resort.

While this might have all been enough to hurt its launch, Euro Disney pulled through in the summertime of 1992. Yet, their troubles were not over as various marketing and operational blunders would still contribute to the park's failure.

Another controllable aspect were the Euro Disney advertisements posted, further highlighting the poor performance of Euro Disney in Paris. Instead of attempting to explain to clients what they can actually do for the leisure area, Euro Disney advertisements focused on glamor with facts such as the theme park being built on 4,800 acres of land, had five separate recreation zones, six hotels with a total capacity of 5,200 people, an entertainment center, a 27-hole golf course, a woodland campsite, and that all this cost 4 billion US dollars. These were things that would most likely entice a North American, not a French person. The French were more concerned about how this experience could be to the European consumer park. Aside from producing irrelevant and unrelatable ads to the French, they were flooded with them on every inch of France, which was highly unappreciated by the French.

Ethnocentrism Leading to Ineffective Management

Disney and Euro Disney executives utilized their American corporate practices, marketing strategies, ethnic beliefs and expected this to be adopted and accepted by a foreign country. The French saw this as ethnocentrism and American imperialism as they had complete disregard of French culture.

This caused Euro Disney's administration to face challenges due to ethnic differences and a lack of grasp of French culture. Issues brought up in its initial stages were alcohol, admission and lodging costs, breakfast in the hotel, employees, policies regarding house animals, and staffing issues.

The Walt Disney Company had focused their business model the way they did in America and Japan, but this sort of international marketing was highly unacceptable in France. The culture of the Japanese would have been completely different altogether.

Therefore, approximately 1,000 people, or 10% of the workforce, quit Euro Disney during the first nine weeks of the new theme park as the French considered this all unjust treatment.

The approaching European recession, the Gulf War in 1991, and rising interest rates were all factors that even experts were unable to properly discern during their time.

The summer of 1992 marked a recession of the European nations causing revenue from food, commerce, souvenirs, and hotels to fall well short of expectations.

High interest rates also caused various currencies a devaluation against the franc, causing Euro Disney to face even greater financial jeopardy. It also caused competitors to attract tourists toward different destinations, such as the Seville Expo of 1992 and the 1992 Olympics being held in Barcelona.

💡 Recommendations

Several factors that led to the poor performance of the new theme park were extremely controllable. Suggestions that could have prevented the Disneyland disaster and future marketing plans would be the following:

When in Rome, act like the Romans. In this case, the French. The delivery of advertising should be based on the resources and services that consumers may expect from visiting the Disneyland resort, not on its physical components such as the location.

Advertising should also be carefully regulated and not bombarded. Ensure consideration toward culture and make sure people are not misled by deceptive commercial campaigns. All advertising must adhere to a set of principles.

In international corporations like Disney, cross-ethnic communication, cooperative decision-making, and collaborative problem solving are critical. As a general rule, it is vital for management to have a basic understanding of domestic operations and rules, as well as the diverse cultures and duties of the sales force outside of the United States.

EuroDisney would have been able to introduce policies that would be suitable and acceptable by French customers if they had just studied French culture. The French value their culture; thus, it was critical for EuroDisney to be adjusted to it and overcome cultural differences.

Marketing plans such as looking at market trends and posting surveys amongst their French employees would have easily addressed Euro Disney's poor performance. Major factors were staffing issues, societal difficulties, and the creation and delivery of their advertising.

The issue was that proper cross-ethnic marketing talents were not utilized and implemented early on.

Cross-cultural marketing would have informed experts that Europeans were more active and would cover more of the Euro Disney theme park and rides more than their American counterparts. As a result, instead of the usual three-day, two-night stay at the Disney North American theme park, the stay was reduced to two days and nights.

European vacation customs were also not investigated; thus, the theme park did not see the earnings and success it had hoped for. People in the United States take short breaks, but they do it more frequently. Europeans, on the other hand, take a month off. The American professionals expected the Europeans to abandon their one-month vacation custom and give Americans shorter, more frequent vacations, but this did not happen.

Moreover, they built an American amusement park in the center of Europe, complete with a North American mindset and food, oblivious to the cultural value of Europeans. However, the park's problem was recognized by the new CEO in 1993, and modifications were made, thus beginning new marketing strategies, which included cross-cultural pricing and comprehension capabilities.

They began to incorporate films like Zoro and Mary Poppins, both French and Western favorites. The new Disneyland also embodied famous European figures as part of their commercial campaign along with regular Disney characters, resulting in higher profits being yielded within a year.

In comparison to France, Spain is a country that warmly accepts and receives different cultures, as opposed to the central and east Europeans. Additionally, if Euro Disney had started in Spain, Disney would have received less criticism. However, we must keep in mind that Euro Disney was designed to serve the entire European Union, not just Spain. As a result, even if Spain acquired the American customs, criticism will almost certainly emerge from other European nations.

On the other hand, Disney would have still had to adapt to the culture of its consumers, as well as the culture of Spain in general, and include it into the conception, implementation, and operation of the new theme park. Also, the Americans' workaholic tendencies are in direct opposition to not only Spain's work-life balance wherein there is a prioritization of life and family, but also to Europe as a whole.

Implementation of international marketing should be considered more of a cultural function, however. It is about considering ethnic factors apart from the American mindset. External factors like political risks and economic and financial disruptions are not necessarily avoidable and something the Walt Disney Company would have faced in any other part of Europe.

The next priority for the Disneyworld site should be Dubai, UAE. Dubai (UAE) is the Arab world's most important commercial business center and is located at the center of the map, therefore making it the world's busiest airport in terms of international traffic, and thus a very diverse city with a mix of nationalities, cultures, and backgrounds. Business prospects are broadened from east to west, with a lot of American and European have established a presence here as a gateway to Northern Africa, the Middle East, and Asia.

Overall, Dubai possesses the traits and the appropriate environment for promoting the new "Disney Arabia" to a broader range of individuals, both traditional and liberal, international and local, and therefore appears to be an excellent strategic position for the establishment of another Disney world.

But the mix of people can make things tricky in terms of incorporating Dubai culture and analyzing traveler activities, approaches, and fads. Either way, it is critical to learn from the mistakes made when EuroDisney first started.

📚 Conclusion

Disneyland Paris began to experience market changes in 2005 due to the fact that the new management came and analyzed earlier managerial approaches and operations. This assisted them in identifying where the difficulties were formed and what resulted in their poor performance in their first year of operation.

When it comes to international marketing, multinationals with prestige and scale such as Disney make it impossible to make errors as hundreds of millions of dollars are on the line. Therefore, it would be a waste to see it all go down the drain for something as controllable and unavoidable as cultural marketing.

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Publication date: 20 January 2017

Teaching notes

This case concerns the troubles that Euro Disney experienced from the start. Euro Disney claimed that the major cause of its poor financial performance was the European recession and the strong French franc. The timing of the park's opening could not have been more inopportune. If the recession had been the only cause of Euro Disney's problems, the financial restructuring would only need to carry the park forward to better economic times. Only when Europeans began spending freely again would investors learn the answers to some uncomfortable questions: Was the whole idea of Euro Disney misconceived? Were there other fundamental cultural problems that could inhibit the park's success? Would Euro Disney fail to recover even though other European companies did? And, if so, why was the Disney theme-park concept successful in Japan and not in France?

• Capital structure
• International case
• Diversity case
• International
• Cross-cultural behavior

Grayson, L.E. and Sheikholeslami, G. (2017), "Euro Disney or Euro Disaster?", . https://doi.org/10.1108/case.darden.2016.000110

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Copyright © 1994 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

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Failed Americanism? A Case Study for Eurodisney Failure

• October 22, 2018 January 17, 2019
• by Nageshwar Das
• Case Studies
• 12 min read

The article uses some aspects of the Hofstede’s cultural dimensions and Trompenaars’ research on organizational culture to compare the cultural difference between America and France , then find out three mistakes that the company made in managing its Euro Disney operation through the case study. Many of Businesses in America make detailed assumptions about the potential to expand their business to other countries and structural models of organizing which can be easily failed to consider the cultural differences.  So, what are you going to discuss? – Failed Americanism? A Case Study for Eurodisney Failure.

Does the content explain how Failed Americanism? and analyze the Euro Disney failure case study.

One of the examples of the outcome to intercultural business is Disney Corporation’s European venture. Due to the lack of cultural information of France as well as Europe, further, on their inability to forecast problems, Disney acquired a huge debt. False assumptions led to a great loss of time, money and even reputation for the corporation itself.

Instead of analyzing and learning from its potential visitors, Disney chose to make assumptions about the preference of Europeans, which turned out that most of those assumptions were wrong. Also, study the  Case Study on the Merger Between US Airways and American Airlines . Disney Company is one of the most successful operators of theme parks in the world, and their theme park in America and Japan achieved great success but the situation in Europe is not so good.

In the following sectors, the three lessons the company should have learned about how to deal with diversity based on its experience will be described. More rapid development in the trend of multinational companies, cross-cultural management has become a major part of the business. The purpose of this paper is to obtain some favorable factors for the future development of Euro Disney by the above analysis.

Three Mistakes by Euro Disney:

The following mistakes are below:

First Mistake:

In determining the target market did not take into account cultural differences Euro Disney’s choice of location focus on the aspects of financial and population, then the Eurodisney theme park located in populous central Europe. Disney executives did not see that Mickey Mouse and intellectuals in the region of the left bank of the Seine in Paris cannot live in harmony and France is serious about their intelligence.

In retrospect, Paris is not the best place to establish such a theme park, so the establishment of the Disney parks is a declaration of war to intellectuals of French. Disney’s manager stated publicly some of the criticism is “the nonsense of small number of Business” would not help them a favor. This may be well operated according to American culture, while the French pay more attention to their own cultural elite and regard this refute as an attack of national quality.

Second Mistake:

Having not adequately taken into account the habits of the French when arranging the service kinds Disney does not provide breakfast because they think that the Europeans do not eat breakfast. In addition, the Disney company does not provide alcoholic beverages within the park, but the French habits are different, they are used to drinking a cup while taking lunch, which aroused the anger of the French.

Disney executives did not estimate that the European are not interested in vacation in theme park so much, in the attitude of Disney Company the European will be happy about spending a few days in a theme park like the American and Japanese, but middle-class in Europe just want to “get away from everything around” and go to the coast or the mountains, and Euro Disney is the lack of such appeal.

Last Mistake:

No combination of French culture to the local staff management Disney has taken the global standard model as same as the Japanese business, they transplanted the American culture to France directly than doing this result with a serious clash of cultures.

The Disney Company use many measures that departed with the local culture, for example, in the Euro Disney, the France worker is requested to comply with the strict appearance code as the other theme parks in the United States and Japan do, the workers are asked to break their ancient cultural aversions to smiling and being consistently polite to the park guest even must mirror the multi-country makeup of its guest.

In addition, the Disney Company brought their U.S. Pop culture to France and fought hard for a greater “local cultural context”. The French people think that this is an attack on their native culture, so they adopted an unfriendly attitude toward to the arrival of the Disney, including the protest come from the intellectual and the local residents and farmers.

Three Lessons by Eurodisney:

The following lessons are below:

First Lessons:

Multinational companies should target market accurately even in the same country or regional market, the traditional culture makes different control power to different people. Multinational companies should be fully based on detailed market research to find the weak links in the market and make a breakthrough, use the “point to an area” model to expand.

For example , McDonald’s opened in the Chinese market, its target is no longer work for the busy working-class, but the children. The golden arches mark, the joyful atmosphere of the shop, the furnished toys, full of playful ads, as well as various promotional activities specifically carry out for children, these have a tremendous appeal to the target customers.

McDonald thinks that adult eating habits difficult to change, only those children whose taste not yet formed are the potential customers of Western fast-food culture, the McDonald received Broad market recognition and have huge market potential.

Second Lessons:

Multinational enterprises should pay full attention to the importance of the influence of cultural differences on marketing face to the new multiple culture environment, the multinational enterprise should take an objective to acknowledge about the cultural differences of the consumer demand and behavior and respect it, abandoning the prejudice and discrimination of culture completely.

Moreover, multinational enterprises should be good at finding out and using the base point of communication and collaboration of different cultures and regard this base point as the important consideration factor when the plan to enter the target country market.

After all, the fundamental criterion for a successful business enterprise is whether it can integrate into the local social and cultural environment. The multinational enterprises should improve the sensitivity and adaptability to the different cultural environment.

Last Lessons:

Multinational enterprises should make full use of the competitive advantages of cultural differences and promote international marketing. The objective of international cultural differences can also be the basic demand points of different competitive strategy.

In the international market, launching culture marketing activities and highlighting the exotic culture and cultural differences in the target market can open the market quickly. Companies should strive to build cross-cultural “two-way” communication channels, it is necessary to adapt to the host’s cultural environment and values and carry out the business strategy of localization to make it can be widely accepted by the host country local government, local partners, consumers, and other relevant stakeholders.

Effective cross-cultural communication, on the one hand, contributes to cultural integration but also can create a harmonious internal and external human environment for corporate management.

Euro Disney Calamity:

The following Calamity is below:

Until 1992,

The Walt Disney Company had experienced nothing but success in the theme park business. Its first park, Disneyland, opened in Anaheim, California, in 1955. Its theme song, “It’s a Small World After All,” promoted an idealized vision of America spiced with reassuring glimpses of exotic cultures all calculated to promote heartwarming feelings about living together as one happy family.

There were dark tunnels and bumpy rides to scare the children a little but none of the terrors of the real world . . . The Disney characters that everyone knew from the cartoons and comic books were on hand to shepherd the guests and to direct them to the Mickey Mouse watches and Little Mermaid records. The Anaheim park was an instant success.

In the 1970s,

The triumph was repeated in Florida, and in 1983, Disney proved the Japanese also have an affinity for Mickey Mouse with the successful opening of Tokyo Disneyland. Having wooed the Japanese, Disney executives in 1986 turned their attention to France and, more specifically, to Paris, the self-proclaimed capital of European high culture and style. “Why did they pick France?” many asked.

When word first got out that Disney wanted to build another international theme park, officials from more than 200 locations all over the world descended on Disney with pleas and cash inducements to work the Disney magic in their hometowns. But Paris was chosen because of demographics and subsidies. About 17 million Europeans live less than a two-hour drive from Paris. Another 310 million can fly there at the same time or less.

Also, the French government was so eager to attract Disney that it offered the company more than $1 billion in various incentives, all in the expectation that the project would create 30,000 French jobs. From the beginning, cultural gaffes by Disney set the tone for the project. By late 1986, Disney was deep in negotiations with the French government.

Disney team:

To the exasperation of the Disney team, headed by Joe Shapiro, the talks were taking far longer than expected. Jean-Rene Bernard, the chief French negotiator, said he was astonished when Mr. Shapiro, his patience depleted, ran to the door of the room and, in a very un-Gallic gesture, began kicking it repeatedly, shouting, “Get me something to break!”

There was also snipping from Parisian intellectuals who attacked the transplantation of Disney’s dream world as an assault on French culture; “a cultural Chernobyl,” one prominent intellectual called it. The minister of culture announced he would boycott the opening, proclaiming it to be an unwelcome symbol of American clichés and a consumer society.

Unperturbed,

Disney pushed ahead with the planned summer 1992 opening of the $5 billion parks. Shortly after Euro-Disneyland opened, French farmers drove their tractors to the entrance and blocked it. This globally televised act of protest was aimed not at Disney but at the US government, which had been demanding that French agricultural subsidies be cut. Still, it focused world attention on the loveless marriage of Disney and Paris.

Then there were the operational errors. Disney’s policy of serving no alcohol in the park, since reversed caused astonishment in a country where a glass of wine for lunch is a given. Disney thought that Monday would be a light day for visitors and Friday a heavy one and allocated staff accordingly, but the reality was the reverse.

Another unpleasant surprise was the hotel breakfast debacle. “We were told that Europeans ‘don’t take breakfast,’ so we downsized the restaurants,” recalled one Disney executive. “And guess what? Everybody showed up for breakfast. We were trying to serve 2,500 breakfasts in a 350-seat restaurant at some of the hotels. The lines were horrendous.

They didn’t want the typical French breakfast of croissants and coffee, which was our assumption. They wanted bacon and eggs.” Lunch turned out to be another problem. “Everybody wanted lunch at 12:30. The crowds were huge. Our smiling cast members had to calm down surly patrons and engage in some ‘behavior modification’ to teach them that they could eat lunch at 11:00 AM or 2:00 PM.”

There were major staffing problems too. Disney tried to use the same teamwork model with its staff that had worked so well in America and Japan, but it ran into trouble in France. In the first nine weeks of Euro-Disneyland’s operation, roughly 1,000 employees, 10 percent of the total, left.

One former employee was a 22-year old medical student from a nearby town who signed up for a weekend job. After two days of “brainwashing,” as he called Disney’s training, he left following a dispute with his supervisor over the timing of his lunch hour. Another former employee noted, “I don’t think that they realize what Europeans are like . . . that we ask questions and don’t think all the same way.”

One of the biggest problems,

However, was that Europeans didn’t stay at the park as long as Disney expected. While Disney succeeded in getting close to 9 million visitors a year through the park gates, in line with its plans, most stayed only a day or two. Few stayed the four to five days that Disney had hoped for. It seems that most Europeans regard theme parks as places for day excursions.

A theme park is just not seen as a destination for an extended vacation. This was a big shock for Disney. Also, study the Case Study of the Starbucks Mobile Payment Application . The company had invested billions in building luxury hotels next to the park-hotels that the day-trippers didn’t need and that stood half empty most of the time.

To make matters worse, the French didn’t show up in the expected numbers. In 1994, only 40 percent of the park’s visitors were French. One puzzled executive noted that many visitors were Americans living in Europe or, stranger still, Japanese on a European vacation! As a result, by the end of 1994 Euro-Disneyland had cumulative losses of $2 billion.

At this Point,

Euro-Disney changed its strategy. First , the company changed the name to Disneyland Paris in an attempt to strengthen the park’s identity. Second , food and fashion offerings changed. To quote one manager, “We opened with restaurants providing French-style food service, but we found that customers wanted self-service like in the US parks. Similarly, products in the boutiques were initially toned down for the French market, but since then the range has changed to give it a more definite Disney image.” Third , the prices for day tickets and hotel rooms were cut by one-third. The result was an attendance of 11.7 million in 1996, up from a low of 8.8 million in 1994.

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