troductionMany of Businesses inAmerica make detailed assumptions about the potential of expand their businessto other countries.One of the examples of the outcome to intercultural businessis Disney Corporation’s European attempt. Euro Disney has a very difficult beginning experience inFrance. Due its lack onaccurate information about the French and European preference and culture,further on their inability on forecasting external problems and inability oncontrolling both controllable and uncontrollable forces, Disney acquired a hugedebt. Instead of analyzing and learning from its potential customers Disneychose to make assumptions, turned out that most of those assumptions were wrong. Euro DisneylandFirst park of Disneyland opened in Anaheim, California, in 1955. Until1992, the Walt Disney Company had experienced nothing but success in the themepark business.
Following on from the success of the Disneyland themepark in Anaheim, Florida & Tokyo, Disney plans to build a European versionfirst started around 1975, nine years after Walt Disney died. InitiallyBritain, Italy, Spain and France were all considered as possible locations.France was the best choice for Euro Disney, because it presented the bestgeographic location and also had many incentives from the French Government,cheap land, easy bank loans, and more than $1billion in incentives. Eventuallythe French location won, and a site was duly investigated at Marne-la-Vallee,partly because of its close proximity to Paris, and also its centralpositioning within Western Europe. A factor that was thought to be crucial tothe park’s future success if it was to attract sufficient visitors. Theproposed location put the park within 4-hours drive for around 68 million people,and 2 hours flight for a further 300 million or so. On March 24, 1987 Disneysigns an agreement with the French authorities to create Euro Disney in Francefor the building of Disneyland theme park at marne-la_vallee. The park was built 4460 acres of farmland.
Planned to open early 1992.1There are many reasonsfor disneyland’s failure;-Environmental andLocation Factors-Labor Laws-Competition-Financing-Cultural DifferencesCULTURALDIFFERENCESHofstede’sCultural Dimensions TheoryIt is the name of theframe used to measure the level of intercultural communication of an entity, aninstitution, or an entity that constitutes an asset in a social structure, andis referred to by Geert Hosted for the first time. It can be said that thetheory has been used by different disciplines for many different purposes. Forexample, intercultural social behaviors are used in different areas such associology, international management and marketing, communication. In additionto all these, it is also used to measure the extent to which people from manydifferent cultures have come together to work on social networks, how tonavigate on the internet, or how open a community is to different cultures.2PowerDistance IndexIt questions the ideas ofmembers of an organization or social structure about power distribution andseeks to find which of the two extremes is closer in the form of equal orunbalanced distribution of power.
The fact is that the ones who are close to thegentle are defending the power equally, and the defenders of those who are notevenly distributed the power are talking about the gentleness in theorganizations. From this point of view, it can be argued that the organizingculture is developed in organizations with a close sense and that thedemocratic atmosphere is more open. When examined at the cultural level, it isseen that the close organizations are more open to different cultures..Individualism VsCollectivism Aggregation is used to measure how involvedindividuals are. In societies where the concept of individuality is high, itcan be said that individual interests and goals are ahead of social interestsand targets. The fact that people feel themselves as a member of a group as anindividual forms the basic two extremes of the index. In terms of interculturalflexibility, it can be said that the social organizations in which individualsare regarded as individuals and whose concept of belonging is low is more opento foreign cultures.
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US scores higher on Individualism. They just think oftheir own family. France is shown to be an individualist society. Parents maketheir children emotionally independent with regard to groups in which theybelong. This means that one is only supposed to take care of oneself and one’sfamily.Uncertainty avoidanceIndicator showing how pleasant a socialorganization is towards uncertainty or ambiguity.
The capacity to acceptuncertainty is anxious for any ambiguity in low societies, and it is expectedthat the rules or solutions will be created that make every situation morespecific. However, it can be said that the cultural relations of the societiesthat accept the high uncertainties are higher. These cultures are more open tochange and have higher levels of respect for new culture and new ideas.The US scores well below average on theUncertainty Avoidance dimension. . As a consequence, the perceived context inwhich Americans find themselves will impact their behavior more than if theculture would have either scored higher or lower. France French culture scoreshigh on Uncertainty Avoidance. The French don’t like surprises.
Structure andplanning are required.Masculinity VsFeminine The index that determines how the roles betweenthe sexes are emotionally distributed. In masculine societies, values are morebased on competition, power, and concrete objects. On the other hand, values infeminine communities are based on relationships, quality of life and feelings.In feminine societies, the gender of the woman or the man has no precaution andis treated equally to the individual. In literature, the concepts of”numerical life” (masculine) and “quality life (feminine)”are used instead of “masculine” or “feminine” to disturbreaders from some communities or cultural backgrounds.US on Masculinity are high. This can be seen inthe typical American behavioral patterns.
This can be explained by thecombination of a high Masculinity drive together with the most individualisticdrive in the world. In other words, Americans, so to speak, all show theirmasculine drive individually. France has a somewhat feminine culture. At facevalue this may be indicated by its famous welfare system (securité sociale),the 35-hour working week, five weeks of holidays per year and its focus on thequality of life. French culture in terms of the model has, however, anotherunique characteristic. The upper class scores feminine while the working classscores masculine.
Uncertainty avoidance Indicator showing how pleasant a socialorganization is towards uncertainty or ambiguity. The capacity to acceptuncertainty is anxious for any ambiguity in low societies, and it is expectedthat the rules or solutions will be created that make every situation morespecific. However, it can be said that the cultural relations of the societiesthat accept the high uncertainties are higher. These cultures are more open tochange and have higher levels of respect for new culture and new ideas.
The US scores well below average on theUncertainty Avoidance dimension. As a consequence, the perceived context inwhich Americans find themselves will impact their behavior more than if theculture would have either scored higher or lower.French culture scores high on UncertaintyAvoidance.
The French don’t like surprises. Structure and planning arerequired. Pragmatism (long termorientation) Confucian dynamism also means that the timehorizons of social organizations are questioned and measured according towhether social organizations have long or short term expectations, goals orplans.
Long-term focused community units are more interested in making plansfor the future and their values are shaped according to these interests. For example,to save money, to be permanent or to adapt for the sake of their interests. Onthe other hand, it is possible to talk about short-term focused communities.The values in those days are very much past and focused now.
For example,respect for the traditions from the past or the extent to which socialresponsibilities are fulfilled are important.US Americans are prone to analyze newinformation to check whether it is true. Thus, the culture doesn’t make mostAmericans pragmatic, but this should not be confused with the fact thatAmericans are very practical, being reflected by the “can do” mentalitymentioned above. France in this dimension, making it pragmatic.
In societies with a pragmatic orientation, people believe that truth dependsvery much on situation, context and time. They show an ability to adapttraditions easily to changed conditions, a strong propensity to save and investthriftiness, and perseverance in achieving results. Source: (COUNTRY COMPARISON, n.d.) Trompenaars’ Research3 Universalism versusParticularismIt talks about three major differences:Universalistic cultures are focusing on the rules, but Particularism culturesare focusing on relationships. Universalistic is only one truth or reality,while Particularism is a number of perspectives on reality.
Universalisticpeople “treat all cases in the same way”, whereas in Particularism people”treat cases on their special merits and create private understandings”.Based on above rules, it was believed that therules, regulations and policies are universal and can be applied anywherewithout modification. On the other hand French perceives distinct rules andregulations as part of their culture.
Motivated by the success of its threetheme parks, Disney did not realize that French were a part of a distinctculture and its methods may not work there. Individualism versusCommunitarianism: There are three different points betweenIndividualism and Communitarianism in business decisions: People are living in “a communitariansociety” in France while Americans are staying in the individual society. LitheFrench prefer to work together and take part in social relations mutually,whereas people from the USA adore the individualism..It is normal phenomenonfor Americans to make ranks between bosses and employees; however, the Frenchpeople refuse it. In brief, the two prime dimensions could explain hardly theethics in different cultures. Specific versusDiffuse: This dimension mentions two differences betweenthe USA and France1. The USA’s culture is belonging to Explicitnational cultures, which make a decision with “a low context manner”; whileFrance is focusing on Implicit national cultures, which take a command with “ahigh context manner”.
2. The USA pays attention to a negotiationclearly, logically and persuasively, whereas France stresses on a discussioninaccurately and indirectly. Achievement versusAscription: This dimension mentions two differences betweenthe USA and France: “achievement versus ascription” and “doing versus being”.
Americans focus on “achievement” and “doing” in the culture of their country,such as dividing their individualities from their jobs. In contrast, the Frenchpeople prefer to stress “ascription and being”. Moreover, they are not onlyattending on “the highest esteem”, but also distinguishing features orascribing to the single. So, there is no doubt that the USA stress thebloodline of the family and which school you graduated but the French emphasisthe factors of their history.
This dimension measures the method through whichsocial status is accorded to a person. U.S. is certainly an achievement culturewhere a person is regarded based on his achievement. Example: Walt Disney. Euro Disneyland created an environment that wasnot acceptable by the European culture itself.Cultural differences between theUS and France has been ignored by Disney. One of the themes of Euro-Disneylandwas American.
Like other Disneyland in other places, Disney followed one of itstwo major traditions of not serving wine, despite the attitude among the Frenchthat alcohol was a fundamental right. And also restaurants were all Americanfoods. The only exception is Fantasyland which re-created European fables. Therecipes in American restaurants were also indistinctly adapted for Europeantastes. As a consequence, different regional American food was introduced toAmericanize the Disneyland in Europe. Cultural Operational Errors were a major problemfor Euro Disney; it affected Disney’s performance and attendance.Another errorwas the breakfast in Euro Disney’s hotels, based on assumptions Disneydownsized the restaurants, because they assume that Europeans didn’t eatbreakfast, when the truth was that they ate. If Disney instead of decide tomake assumption to base their operations had research and tried to understandthe Europeans preferences (instead of trying to make them change their habits),Disney would fix those problems even before the theme park was launched, itwould increase customer satisfaction.
Environmentaland Location FactorsAs the park wasconstructed, Disney is concerned that the original plans, based on the MagicKingdom of California, were too spurious for this land of real castles, kings,and queens. As a result, enhancements were ordered, and the park was originallybudgeted at $ 2.0 billion.
. This sharply raised the Euro Disney’sdeterioration parameters beyond its ability to deliver.The bad cold and rain between November and Marchfollowed a lot below expectations. Disney seemed to take a great deal ofattention to the importance of hot weather in winter. Florida and Californiaexperiences were not particularly discounted in the winter.Europeans take school much more seriously. Theyare far less likely than Americans to pull their kids out of school forfrivolous reasons, like visiting a theme park. This further erodes Euro Disneyattendance, especially during the long 10-month period when schools are insession.
4 MARKETINGThere are some steps that any company shouldcontemplate before entering a new market in order to flourish. Unfortunatelyfor Euro Disney, those footsteps were not followed, instead Disney tried to”force” the entry of its product (the theme park), and anticipated it to beeasy money. Market Analysis and Market Research are the first and most vitalsteps that a company must take before entering a new market. Every country, everycity in the world, has its own individuality and own culture, and it is vitalthat the culture of the businesses and the people who will address them areappreciated..
Disney does not have the right knowledge of French culture and thepreferences of the French customer, but rather learns from potential customers,rather than doing a Market Survey. If Disney had done a proper Market Analysisand Market Survey, they could predict many of the cultural differences theyhad.The market was viewed as a country with a widerrange of languages and cultures than Europe, the USA or Japan. The ad campaign wastypically American as the campaign was attempting to bring European flavor. While most advertisements target children,adults make the final decision to go or go. This may work in Americabecause Disney theme parks have been established for a long time and adultsassociate all experience with childhood memories. In Europe however theme parksare un-established so more marketing effort is required to convince people thatEuro Disney will surpass everyones expectations.
5MANAGEMENTThe management seemed to be superior to theEuropean market without any skepticism about its success.. The opposition toEuro Disney was disregarded despite the fact that mainstream newspapers seemedsupport the protest. Disney has been described as a disguisedcultural discipline, which can be used for cultural integration. The attitudeof Disney management is confidently dismissive making them appear out of touchwith the cultural differences.There was a reason for the failure of themarketing and administration decisions made before and after the launch of thepark. The whole concept of trying to sell an American product to Europe, whilesome features of the park trying to adapt to suit a wide variety of cultural tastes,doomed the project.
.Overconfidence in the formerly foolproof Disney formulameant that in planning the park not much attention was paid to many importantdetails. In this sense, the main reasons for failure were administrative errorsin project planning. The improper marketing of Euro Disney has greatly affectedparticipation in the poor, but as a result the park itself would not have madethe breakthrough impression needed to create a new market.6Develop Alternatives Disney is so blind that with success in Japan,they have not thought about how they should adjust to their previousexperiences and to better participate in French and European customers.
. Decisionfor a Plan By developing and analyzing several business scenarios, Disney canchoose one of these, or combine it with the best of all. Disney should havethought of all the uncontrollable forces around him; for example French (andother European culture), Frangi, which is overvalued for stagnation.
If abusiness plan is made considering all these factors, Disney will probably havemore realistic numbers (participation, income) and be able to deal with thecultural differences between American and Europe, especially in France. Instead,Disney chose a business plan that would cater to cultural differences, and sawDisney’s theme park as a monopoly because of its quality and uniqueness. Theyonly paid enough attention to the opponents and the opponents who offered adifferent type of entertainment. All these assumptions made Disney’s highexpectation rate extremely high priced entry fees, food and drinks, goods andattendance too high..7Operational Plan After gathering information about French andEuropean customers, their preferences, their culture, their age, their income,their expectations, and to develop a business plan on how to run the businessand which scenario they think was the most accurate one, Disney should havedeveloped an effective operational plan. The Operational Plan should havefocused on, who will run the park? Who will be responsible for the staff? Whowill make the decisions? As Disney was entering in France and most of theemployees would be French or Europeans, the ideal was to put key Frenchmanagers, to deal with the staff, and probably a French chairman, as well ashuman resources managers.
Those managers would have more experience andknow-how, how to deal with the staff, with investors and executives, and withthe media, that could be a Disney’s marketing tool instead of an “attack base”.Decision Making is something that most of the times should be taken quickly andefficient, so those decisions should be taken in France, not on US as Disneydid. If Disney had these aspects they would probably have foreseen most of thecultural and operational, problems that occurred and could have easily avoidedit. The business performance of Euro Disneyland wasnot that great and stable.
It couldn’t have right assumptions on the Europeanmarket and there has been cruel European recession such as increase in interestrates and French currency value. The preliminary plan was not ample andaccurate in providing resolutions to Disney problems and concerns that arisen.A major criticism on Euro Disneyland was that itis neither international nor French in nature, and it failed to satisfyEuropeans at all.
Many of the visitors could not figure it out the theme ofEuro Disneyland that whether it is going to be a European park, an Americanpark, or a French park. In the meantime, the cost for Euro Disneyland was alsoan issue for some visitors. Many of the French visitors had been discouragedfrom coming because of the cost such as housing cost, souvenirs, admission costand so forth. Attendance was kept on decreasing and the company of course, hadgreat financial loss. 8EXTERNAL ANALYSIS9 MACRO ENVIRONMENT (P.E.S.T)The components of the macro environment are thepolitical-legal environment, the economic environment, the socio-cultural environment,and the technological environment in which Disneyland operates.
Political-legalenvironment:The French labour law dictates that a person should workfor 35 hours a week but may not exceed 48 hours a week. Overtime has to be paidfor the first-eight hours and is worth 25% of their base hourly wage and afterthat its worth 50%. Concluding that in theory Disneyland Paris would have toemploy two employees for one position to be efficient and not to break anylabour laws.Socio-culturalenvironment:.Euro Disney mistake has been the failure to recognize thecultural differences between Americans and French people.
People are going totheme parks during the weekends for adults as well as children entertainment. Locating the Theme Park near Paris andacquiring agricultural land as well as imposing the U.S spirit undeniablynegatively affects French citizens. The French people’s lifestyle deeplydepends on the gratitude to their traditional agriculture. Thus, the landtakeover by an American Company mainly does not provide pleasure to them. EconomicEnvironment:Europe Disney did not recognize the period of stagnationmainly in Europe.
Stagnation usually means a higher level of unemployment.Unemployment changes the way people spend their money even more because oftheir disposable income; especially unemployed people do not spend luxury moneyespecially on the entertainment front. Indeed,this should be considered as a factor to reduce the number of customers and thepower of spending.. Technologicalenvironment:The major technological problem has been the particularlocation where the Theme Park has been built. The climate has brought to astandstill the operation of the business.
Although the idea to build a ThemePark has been in correspondence with the existing need on the market theweather should have been considered. In practical terms, the transfer of theidea to fit the market needs indeed could not been suitable since the weatherconditions have not been considered. Probably, a closed type of Theme Parkcould have been suitable for the weather changes.
