HEALTHY

Topics: The Walt Disney Company, Disneyland Paris, Walt Disney Parks and Resorts Pages: 22 (5409 words) Published: October 18, 2014


The analysis of governance failure:
Disneyland Pairs

Xiao Zhu 104018813
Shuo Yang 104014910
Weiqiang He 104013223
Chengyu Yang 103944753
University of Windsor

Content

Introduction………………………………………………………… 3 The reason Euro-Disney encounter in crisis………………………… 4 Factors contribute to the crisis …………………… ……………… 6 1. Management styl…………………………………………… 6 2. Cultural difference ………………………………………… 6 3. Environment and local factor……………………………… 8 4. Financial structure and initial plan ……………………….. 8 5. Regulation related issues and government support ……… 9 The implication for this failure …………………………………… 11

Conclusion………………………………………………………… 18

Appendix…………………………………………………………….. 20 Reference……………………………………………………………..21

Introduction
Now, five Disneyland Parks open around the world. In 1955, the first Disneyland was established in Anaheim, California. Walt Disney designed and built this theme park and supervised it directly. Since then, with the booming of mass tourism around the world, Walt Disney Company gradually transferred their target to the overseas and started to develop new projects. In 1971, they spent ten years to build the second Disneyland Park, which located in Orlando, Florida; in 1983, Tokyo Disneyland was completed and had achieved a huge success until now; in 1992, $2.8 billion cost in Paris Disneyland was put into operation; in 2005, Hong Kong Disneyland also came into service. Based on the success and experiences of two Disney projects in America and one project in Japan, Disney was full of optimism for its development prospects of the Euro Disney project. Even Robert Fitzpatrick, the general manager of this project, had some worries before the opening that the excessive amount of tourists might have to be refused to enter the park during the peak season. Incredibly, after European Disneyland opened, the Walt Disney Company found that it could not achieve its expected revenue target. Euro Disney also encountered with the beginning of a severe economic recession in Europe. Because of this, European tourists would like to save much more money than American tourists. Many people bring their own food and avoid living in Disney hotels. The expectation of investors is profitable, but the harsh condition led to a failure of Disney. In the following part, we will analyze the reasons why Disney came into crisis and the main factors that contribute to this failure. Also, we will give some solutions regarding to this case and provide several recommendations if similar situations happen in other companies.

The reasons of Euro-Disney encounter in crisis
The reasons why Disney comes into crisis are the result of unsuitable sources, dynamics and circumstances. First of all, the source of information regarding at the market Disney collected is not accurate and the bias information from management team led to the wrong decision. This is also the most important factor in this case. An effective management structure should have the ability to identify the right information and pick off the deviations. Apparently, the management team of Disneyland does not do it well. For example, the market research is insufficient and mislead the management decisions, which incurs a butterfly effect to the whole business. In other words, the management team did not make sure the reliability of the sources market researchers collected, so they failed to foresee their potential mistakes. As a MNCs like Disney, they must have an excellent management team, which can be successful in the previous project like Tokyo Disneyland. However, the failure in Europe reveals the risk that information managers may ignore in the planning procedure. Even though they make a so-called comprehensive market research at the very beginning, most of the information they received deviated from the real circumstances. During the process of information...


References: 1. Andrews A. (2010), Euro Disney chief Philippe Gas defends debt, Disneyland Paris working conditions. The Daily Telegraph
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3. Earl P. Spencer. Euro Disney: What Happened? What Next? Journal of International Marketing, Vol.3, No.3 (1995), pp. 103-114
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7. Latham & Walkins Tax Department, (12 January 2012), Client Alert. Focus on the new French restrictions applicable to the tax deduction of interest incurred on debt financings contracted in connection with certain leveraged acquisitions
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9. M. Douglas, "Cultural Bias," In the Active Voice (London: Routledge, 1982), pp. 183-254.
10. M. Thompson, R. Ellis, and A. Wildavsky, Cultural Theory (Boulder, CO: Westview Press, 1990).
11. Packman. H. M& Casmir. F. (1999), Learnimg from the Euro Disney Experience: A case study in international/ intercultural communication. International Communication Gazette, 61(6),473-489. Doi: 10.1177/0016549299061006002
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13. Robert R. Cangemi and Raymond H. Lopez. Euro Disney. Journal of Financial Education, Vol. 21,(Fall 1995), pp. 64-88
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