Disneyland Paris

Topics: The Walt Disney Company, Walt Disney Parks and Resorts, Walt Disney Pages: 5 (1402 words) Published: November 21, 2011
“In a Magical Kingdom not so far away - somewhere between a place where you wish upon a star and dreams come true - Disney heroes and heroines live in fairytales that are, happily, never ending...” (disneylandparis.co.uk 2011)

Source: http://disneylandparisdeals.net/cheap-disneyland-paris-deals/


Walt Disney opened his first Disney Park in California in 1955 with a pride of the US President Ronald Reagan being one of his guests (disneydreamer.com 2011). The success was followed by opening Walt Disney World in Florida in 1971 and in Tokyo in 1983 (Owen 2011). The performance and popularity of the Japanese subsidiary resulted in making the company’s CEOs search within the Old Continent- considering the UK, France, Spain, Italy and Germany (Capps 2011). Being sure about new capabilities and competences built in Japan together with strong sales of Disney films, 23 March 1987 by signing the contract with Jacque Chirac, the company decided to give up warm climate in Spanish Costa del Sol and start developing a new park in Marrnela- VallZe,20m km from Paris ( Burgoyne 1995).


Paris, is located in a country with well-developed infrastructure, famous for superior transport network in particular. The capital has been one of the most visited destinations in the world and can be easily reached by 17 million Europeans within 2h driving, 320 million can fly there in less than 3 hours( approximately the same market as in the U.S.). However, some argue that the place was chosen mainly due to the generosity of French government, which expected new jobs and revenue to be generated. In spite of sugar-beet farmers protesting, the 4, 400acres were sold at very low market value of $ 7, 500 per acre. Among others, it also guaranteed to extend rail network, to decrease VAT on tickets sales and to finance utility services( Burgoyne, 1995). ANY PROBLEMS?

In spite of the initial wows and high future expectations , the first CEO of Disneyland Paris Robert Fitzpatrick- knowing the local people and culture as his wife is French; warning several times that the park should not be operated as in the U.S. None paid attention( Burgoyne, 1995). However, the first obstacles had occurred already during the negotiations. Language barriers and different law systems caused misunderstandings about construction and risk management obligations (Burgoyne, 1995). In spite of these initial misinterpretations the theme park was finally opened on 12 April 1992, with Walt Disney Company being extremely optimistic (Recklies 2001). Although the park was visited by 11 million people as it was estimated, it did not generate the expected revenue, losing $1.03 billion at the end of 1993. The total cost of development reached $5billion. However, it some argue the number was higher due to the so called budget breakers (NOTE), high interest rates(NOTE)and labour cost(NOTE) ( Burgoyne, 1995).

Secondly, the Disneyland’s management and financial experts were unable to see upcoming European downturn which later resulted in property market to tumble and the household disposable income to drop significantly.

Thirdly, the park also experienced several operational problems such adjusting the capacity of workers in peak times. The Walt Disney Company did not clearly understand European eating norms and times, banning the alcohol in the park, serving traditional French breakfasts and lunches in non-seating restaurants which resulted in endless queues at 9.a.m. and 12.30 p.m. for typical American fast food( Burgoyne, 1995). The most serious obstacles, however, occurred when searching, recruiting, training and housing 12,000 employees in less than a year. The time pressure, high language requirements and 13 page manual called ‘’The Disney Look’’ clearly describing the ‘’American Disney Smile’’ by dictating the shape of the earrings, nails or haircut lead to the increased labour turnover and poor services for customers. The...
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