Euro Disney: From Dream to

Nightmare
Matt Castings
Melissa Harward
Margo Possehl
Eric Romano
Brian Starks
Taylor Wallace
Euro Disneyland
On April 12, 1992, Disney officially opened Euro Disney,
a $4 billion USD, 4,300 acre resort located just east of
Paris, France.

Despite over seven years of

planning and countless hours
of research, Euro Disney
quickly developed into one of
the most costly mistakes in
the company’s history.
After their great success in Tokyo,
Disney was very optimistic about its
next park, Euro Disney.
Disney believed they could establish
a competitive advantage in the
European theme park industry using
their vast resources and capabilities
to create an economy of scale.
To achieve this competitive
advantage Disney made a large
initial investment and essentially
overbuilt their park to accommodate
the visitors they expected.
 The Walt Disney Company
Mission
“The mission of The Walt Disney
Company is to be one of the
World’s leading producers and
providers of entertainment and
information. Using our portfolio
of brands to differentiate our
content, services and consumer
products, we seek to develop the
most creative, innovative and
profitable entertainment
experiences and related products
in the world.”
Dilemma: Lack of Research
Poor info: Researchers depended on unreliable indicators such as
Tokyo Disneyland’s success and an annual European visitor count
for Disneyland and Walt Disney World

Poor assumptions: Disney’s perception of European standards led

them to spend large amounts of money on high quality products
and facilities.
Poor strategy: The park lacked a unified vision. "European
folklore with a Kansas twist"
Poor timing: The park was built during one of Western Europe’s
worst economic downturns since World War II.
Cultural Chernobyl
French felt threatened by the invasion
of American culture and language
Adaptation of Cinderella’s and Snow
White’s attractions
Unique attractions to the park
 Discoveryland
 Visionarium
High-quality food and entertainment
Alcohol policy 
Domestic approach to employee recruitment and training
replicated at Euro Disney
Staffing requirements, hiring policies and "The Euro Disney Look"
challenged by French labor unions as "an attack on individual
freedom"
Park History
“Walt Disney pioneered the theme park concept. His goal was to create a unique
entertainment experience that combined fantasy and history, adventure, and learning in
which the guest would be a participant, as well as a spectator.”
Disneyland
California, 1955
Opened with one park, one hotel.
Expanded in early 1990s
Walt Disney World Resort
Florida, 1971
Opened with one park, 2 golf courses, 3 hotels and a campground.
Expanded over time to encompass 4 theme parks, 2 water parks and 23 hotels
Tokyo Disneyland
Japan, 1983
… approached Disney to open park on their own…
 Legal
PESTEL  Pressured to hire 70% of its
workforce from local French
Environmental population
 Differences in French
 Market potential: 109 million
employee rights and
people in a 480 km radius expectations of performance.
 French location had cloudy
weather much of the year Social
 Combination dubbed a
 Indirect competition in forms “Cultural Chernobyl.”
of traditional festivals or more  Disney adapted many stories for
culturally-rich attractions Europe
 More Western theme attractions
 Few direct competitors posed a  Video screens to entertain
threat to Euro Disney. guests waiting in line.
 Increased quality of food and
 5 other theme parks in France restaurants attempting to appeal
sprang up to compete but all 5 to European tastes
quickly failed.
Porter’s 5 Forces
Threats of Substitutes
• Considerably high. The company
recognized that a wide range of family
vacation and entertainment experiences
compete for household disposable income.
• Being in Europe, they are competing with cities that
offer a richness and variety of cultural and historical experiences far different than Euro
Disney for family vacations.

Threat of New Entrants

• New entrants seem to be having as hard a time getting started as Disney.
• Within two years of Disney’s announcement to build Euro Disney, three French there
parks opened in an attempt to preempt Disney’s entry into the market. By the summer of
1989, two more theme parks opened their gates.
SWOT Analysis
Strengths Opportunities
 Brand recognition of “Disney.” • Room for expansion and
 Greater financial ability then development in untapped countries.
• Opportunity to integrate other
many companies in foreign
cultures into the atmosphere of the
territories.
park.
• Customizing employee standards to
Weaknesses reflect those of the different cultures.
 The Disney “culture” does not
fit with the culture of all foreign Threats
• Other historical locations and
countries.
vacation destinations
 High risk, high investment
• High Costs
involvement • Bad Weather
Key Success Factors
Disney Brand
 Famous characters, stories, settings, etc would immediately attract
attention without as much advertising
 Known for customer and employee focus and outstanding service
Capital
 Vast financial resources allowed rapid development on a large scale.
Experience
 4th theme park in Disney’s history after Disney Land,
Disney World, and Tokyo Disney.
 Top management had previous
knowledge of things to expect
 Disney had improved its
technologies used in theme
parks to further improve the
quality of the customer’s visit
Industry Critical Factors-Branding
Disney theme parks benefit from the talent and expertise of the Walt Disney
“family” of businesses.
Disney has the advantage of having a good reputation and consumer
recognition all around the world.
The themes for attractions and the characters that are featured in them often
have their origins in cartoons and movies produced by Disney’s studios.
The huge parks allow Disney to broaden the scope of its theme park activities
to create themed hotels, offer golf courses and other sports, convention
facilities, night clubs, a range of retail stores, and even residential housing.
Europe had always been a strong market for Disney movies, and there was a
high demand for toys, books, and comics that featured Disney characters.
European consumers generated about one-quarter of revenues from Disney
licensed Disney characters.
 How’s it doing?
Euro Disney opened in 1992 with 7 hotels, changed its name to
Disneyland Paris in 1994, turned its first profit July 1995.
2 theme parks (second park opened in 2002), 7 resort hotels, 6
associated hotels, golf course, railway station
Wrote off French company’s
debt in 2005
As of 2007, Disneyland Paris
is $2 billion in debt.
Tokyo Disney is working
around power restrictions to
reopen in April. Only a parking
lot was affected by the quake.
Group Discussion
Less important
Bargaining Power of Suppliers
Realistically there is little bargaining power of suppliers because of the
entire Disney conglomerate of companies. Disney theme parks benefit
from the talent and expertise of the Walt Disney “family” of
businesses. Parks are designed by the engineers and architects of a
wholly owned subsidiary – WED Enterprises.

Bargaining Power of Customers

Again, there really is not much bargaining power from the customers
side. They don’t have many alternatives to the “giant” theme park of
Euro Disney. Luckily Euro Disney will have a wide array of customers
that will be able to attend the park from anywhere in Europe.
 PESTEL Cont’d
•Political
• Lightning rod for political protests against U.S.
• French labor unions called Disney’s hiring process “an attack on
individual freedom.”
•Economic
• Europe was experiencing one of its worst economic downturns
• Actual attendance, average spending per customer and hotel occupancy was well
below projections for the first year.
• According to GAAP, pre-tax loss totaled over $0.5 billion
•Technological
• Disney’s experience with engineering rides and attractions made
construction and planning easier.
• Revamping aspects for more European appeal increased development
costs considerably.