The Success and Downfall of Disneyland Paris and Fordlandia
Many companies throughout the United States are resorting to developing their business abroad. This is because of factors such as the ability to cut costs through cheaper building material and labor, an increase in their revenues, working with less taxes and easier labor laws, and by expanding their general market. The Walt Disney Company and Henry Ford, are two examples of ones who tried to expand overseas. These foreign expansions didn’t prove to be successful in their ventures of expanding.
Because the Walt Disney Company executives were determined to use only an American way of life, they did not thoroughly investigate all aspects of the European environment. The failure to do research on the area caused the Walt Disney Company to build their American dream theme park on foreign soil with no regard for the physical, financial, and cultural environment. The Company's "biggest mistakes were its overambitious plans to develop the site, plus Euro Disneyland's financial structure itself, which depended on a highly optimistic financial scenario with little room for glitches" (Burgoyne, Lyn.) These oversights were contributing factors to the problems that Disneyland Paris faced.
Henry Ford had the idea to set up model factories and villages to go with them. He decided to locate in Brazil after having success in Michigan. In 1927, Ford wanted his own supply of rubber and decided to open a plantation in the Amazon Jungle called Fordlandia. He came across the same problems as Disney land Paris and unfortunately failed in his dream(Bellows) As a company planning to expand overseas, it is helpful to study the history of companies which previously have developed in other countries. For example, studying the Walt Disney Company's venture into France will allow other companies to learn from the Walt Disney’s problems. Understanding and avoiding their mistakes will allow a company entering a new country increased opportunity to succeed. The Walt Disney chose Paris, as the site of Euro Disneyland for many reasons. On April 15, 1983, the Walt Disney Company opened in Tokyo, their first theme park outside the United States. This theme park was an instant hit. Since the company believed they learned so much about operating a theme park in another country, and since Tokyo Disneyland was an instant success, they began immediately to search for a new site, Paris. Also, In the year 1929, Ford went to the Amazon to start up his new company. Brazil seemed to be a good choice considering that the trees in question were native to the region, and the rubber harvest could be shipped to the tire factories in the US by land rather than by sea(Bellows.) Ford purchased a 25,000 square kilometer tract of land along the Amazon river, and immediately began to develop the area. Equipment was brought in such as earth-moving equipment, a pile driver, tractors, stump pullers, a locomotive, ice-making machines, and prefabricated buildings. Workers began building a rubber processing plant as the surrounding area was used for vegetation(Bellows.) The Walt Disney Company has been known for their strict construction and risk management requirements which they wished to impose upon the French workers. Also, the Walt Disney Company had to deal with language barriers and an unfamiliar French legal work. This joint project caused many conference sessions to determine how to best integrate American and French risk management practices covering a large amount of diverse risks. It was important to each side for them to join their philosophies and requirements into a way that would work for Disneyland Paris. The company wanted to purchase a three year contract in which would be allowed by American standards, but Walt Disney had to abide by the laws of France. One example of issues that arose concerning risk management was the installation of sprinklers in the hotels. The French didn’t want this...
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