troduction further on their inability on forecasting external

troduction

Many of Businesses in
America make detailed assumptions about the potential of expand their business
to other countries.One of the examples of the outcome to intercultural business
is Disney Corporation’s European attempt. Euro Disney has a very difficult beginning experience in
France. Due its lack on
accurate information about the French and European preference and culture,
further on their inability on forecasting external problems and inability on
controlling both controllable and uncontrollable forces, Disney acquired a huge
debt. Instead of analyzing and learning from its potential customers Disney
chose to make assumptions, turned out that most of those assumptions were wrong.

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Euro Disneyland

First park of Disneyland opened in Anaheim, California, in 1955. Until
1992, the Walt Disney Company had experienced nothing but success in the theme
park business. Following on from the success of the Disneyland theme
park in Anaheim, Florida & Tokyo, Disney plans to build a European version
first started around 1975, nine years after Walt Disney died. Initially
Britain, Italy, Spain and France were all considered as possible locations.
France was the best choice for Euro Disney, because it presented the best
geographic location and also had many incentives from the French Government,
cheap land, easy bank loans, and more than $1billion in incentives. Eventually
the French location won, and a site was duly investigated at Marne-la-Vallee,
partly because of its close proximity to Paris, and also its central
positioning within Western Europe. A factor that was thought to be crucial to
the park’s future success if it was to attract sufficient visitors. The
proposed 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 Disney
signs an agreement with the French authorities to create Euro Disney in France
for the building of Disneyland theme park at marne-la_vallee.  The park was built 4460 acres of farmland.
Planned to open early 1992.1

There are many reasons
for disneyland’s failure;

-Environmental and
Location Factors

-Labor Laws

-Competition

-Financing

-Cultural Differences

CULTURAL
DIFFERENCES

Hofstede’s
Cultural Dimensions Theory

It is the name of the
frame used to measure the level of intercultural communication of an entity, an
institution, or an entity that constitutes an asset in a social structure, and
is referred to by Geert Hosted for the first time. It can be said that the
theory has been used by different disciplines for many different purposes. For
example, intercultural social behaviors are used in different areas such as
sociology, international management and marketing, communication. In addition
to all these, it is also used to measure the extent to which people from many
different cultures have come together to work on social networks, how to
navigate on the internet, or how open a community is to different cultures.2

Power
Distance Index

It questions the ideas of
members of an organization or social structure about power distribution and
seeks to find which of the two extremes is closer in the form of equal or
unbalanced distribution of power. The fact is that the ones who are close to the
gentle are defending the power equally, and the defenders of those who are not
evenly distributed the power are talking about the gentleness in the
organizations. From this point of view, it can be argued that the organizing
culture is developed in organizations with a close sense and that the
democratic atmosphere is more open. When examined at the cultural level, it is
seen that the close organizations are more open to different cultures..

Individualism Vs
Collectivism

Aggregation is used to measure how involved
individuals are. In societies where the concept of individuality is high, it
can be said that individual interests and goals are ahead of social interests
and targets. The fact that people feel themselves as a member of a group as an
individual forms the basic two extremes of the index. In terms of intercultural
flexibility, it can be said that the social organizations in which individuals
are regarded as individuals and whose concept of belonging is low is more open
to foreign cultures. US scores higher on Individualism. They just think of
their own family. France is shown to be an individualist society. Parents make
their children emotionally independent with regard to groups in which they
belong. This means that one is only supposed to take care of oneself and one’s
family.

Uncertainty avoidance

Indicator showing how pleasant a social
organization is towards uncertainty or ambiguity. The capacity to accept
uncertainty is anxious for any ambiguity in low societies, and it is expected
that the rules or solutions will be created that make every situation more
specific. However, it can be said that the cultural relations of the societies
that accept the high uncertainties are higher. These cultures are more open to
change and have higher levels of respect for new culture and new ideas.

The US scores well below average on the
Uncertainty Avoidance dimension. . As a consequence, the perceived context in
which Americans find themselves will impact their behavior more than if the
culture would have either scored higher or lower. France French culture scores
high on Uncertainty Avoidance. The French don’t like surprises. Structure and
planning are required.

Masculinity Vs
Feminine 

The index that determines how the roles between
the sexes are emotionally distributed. In masculine societies, values are more
based on competition, power, and concrete objects. On the other hand, values in
feminine communities are based on relationships, quality of life and feelings.
In feminine societies, the gender of the woman or the man has no precaution and
is 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 disturb
readers from some communities or cultural backgrounds.

US on Masculinity are high. This can be seen in
the typical American behavioral patterns. This can be explained by the
combination of a high Masculinity drive together with the most individualistic
drive in the world. In other words, Americans, so to speak, all show their
masculine drive individually.

France has a somewhat feminine culture. At face
value 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 the
quality of life. French culture in terms of the model has, however, another
unique characteristic. The upper class scores feminine while the working class
scores masculine.

Uncertainty avoidance

Indicator showing how pleasant a social
organization is towards uncertainty or ambiguity. The capacity to accept
uncertainty is anxious for any ambiguity in low societies, and it is expected
that the rules or solutions will be created that make every situation more
specific. However, it can be said that the cultural relations of the societies
that accept the high uncertainties are higher. These cultures are more open to
change and have higher levels of respect for new culture and new ideas.

The US scores well below average on the
Uncertainty Avoidance dimension. As a consequence, the perceived context in
which Americans find themselves will impact their behavior more than if the
culture would have either scored higher or lower.

French culture scores high on Uncertainty
Avoidance. The French don’t like surprises. Structure and planning are
required.

Pragmatism (long term
orientation)

Confucian dynamism also means that the time
horizons of social organizations are questioned and measured according to
whether social organizations have long or short term expectations, goals or
plans. Long-term focused community units are more interested in making plans
for 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. On
the 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 social
responsibilities are fulfilled are important.

US Americans are prone to analyze new
information to check whether it is true. Thus, the culture doesn’t make most
Americans pragmatic, but this should not be confused with the fact that
Americans are very practical, being reflected by the “can do” mentality
mentioned above.

France in this dimension, making it pragmatic.
In societies with a pragmatic orientation, people believe that truth depends
very much on situation, context and time. They show an ability to adapt
traditions easily to changed conditions, a strong propensity to save and invest
thriftiness, and perseverance in achieving results.

Source: (COUNTRY COMPARISON, n.d.)

 

Trompenaars’ Research3              

Universalism versus
Particularism

It talks about three major differences:
Universalistic cultures are focusing on the rules, but Particularism cultures
are focusing on relationships. Universalistic is only one truth or reality,
while Particularism is a number of perspectives on reality. Universalistic
people “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 the
rules, regulations and policies are universal and can be applied anywhere
without modification. On the other hand French perceives distinct rules and
regulations as part of their culture. Motivated by the success of its three
theme parks, Disney did not realize that French were a part of a distinct
culture and its methods may not work there.

 

Individualism versus
Communitarianism:

There are three different points between
Individualism and Communitarianism in business decisions:  People are living in “a communitarian
society” in France while Americans are staying in the individual society. Lithe
French prefer to work together and take part in social relations mutually,
whereas people from the USA adore the individualism..It is normal phenomenon
for Americans to make ranks between bosses and employees; however, the French
people refuse it. In brief, the two prime dimensions could explain hardly the
ethics in different cultures.

Specific versus
Diffuse: 

This dimension mentions two differences between
the USA and France

1. The USA’s culture is belonging to Explicit
national cultures, which make a decision with “a low context manner”; while
France is focusing on Implicit national cultures, which take a command with “a
high context manner”.

2. The USA pays attention to a negotiation
clearly, logically and persuasively, whereas France stresses on a discussion
inaccurately and indirectly.

Achievement versus
Ascription:

This dimension mentions two differences between
the 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 French
people prefer to stress “ascription and being”. Moreover, they are not only
attending on “the highest esteem”, but also distinguishing features or
ascribing to the single. So, there is no doubt that the USA stress the
bloodline of the family and which school you graduated but the French emphasis
the factors of their history. This dimension measures the method through which
social status is accorded to a person. U.S. is certainly an achievement culture
where a person is regarded based on his achievement. Example: Walt Disney.

Euro Disneyland created an environment that was
not acceptable by the European culture itself.Cultural differences between the
US and France has been ignored by Disney. One of the themes of Euro-Disneyland
was American. Like other Disneyland in other places, Disney followed one of its
two major traditions of not serving wine, despite the attitude among the French
that alcohol was a fundamental right. And also restaurants were all American
foods. The only exception is Fantasyland which re-created European fables. The
recipes in American restaurants were also indistinctly adapted for European
tastes. As a consequence, different regional American food was introduced to
Americanize the Disneyland in Europe.

Cultural Operational Errors were a major problem
for Euro Disney; it affected Disney’s performance and attendance.Another error
was the breakfast in Euro Disney’s hotels, based on assumptions Disney
downsized the restaurants, because they assume that Europeans didn’t eat
breakfast, when the truth was that they ate. If Disney instead of decide to
make assumption to base their operations had research and tried to understand
the Europeans preferences (instead of trying to make them change their habits),
Disney would fix those problems even before the theme park was launched, it
would increase customer satisfaction.

Environmental
and Location Factors

As the park was
constructed, Disney is concerned that the original plans, based on the Magic
Kingdom of California, were too spurious for this land of real castles, kings,
and queens. As a result, enhancements were ordered, and the park was originally
budgeted at $ 2.0 billion.. This sharply raised the Euro Disney’s
deterioration parameters beyond its ability to deliver.

The bad cold and rain between November and March
followed a lot below expectations. Disney seemed to take a great deal of
attention to the importance of hot weather in winter. Florida and California
experiences were not particularly discounted in the winter.

Europeans take school much more seriously. They
are far less likely than Americans to pull their kids out of school for
frivolous reasons, like visiting a theme park. This further erodes Euro Disney
attendance, especially during the long 10-month period when schools are in
session.4

 

 

MARKETING

There are some steps that any company should
contemplate before entering a new market in order to flourish. Unfortunately
for Euro Disney, those footsteps were not followed, instead Disney tried to
“force” the entry of its product (the theme park), and anticipated it to be
easy money. Market Analysis and Market Research are the first and most vital
steps that a company must take before entering a new market. Every country, every
city in the world, has its own individuality and own culture, and it is vital
that the culture of the businesses and the people who will address them are
appreciated.. Disney does not have the right knowledge of French culture and the
preferences of the French customer, but rather learns from potential customers,
rather than doing a Market Survey. If Disney had done a proper Market Analysis
and Market Survey, they could predict many of the cultural differences they
had.

The market was viewed as a country with a wider
range of languages and cultures than Europe, the USA or Japan. The ad campaign was
typically 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 America
because Disney theme parks have been established for a long time and adults
associate all experience with childhood memories. In Europe however theme parks
are un-established so more marketing effort is required to convince people that
Euro Disney will surpass everyones expectations.5

MANAGEMENT

The management seemed to be superior to the
European market without any skepticism about its success.. The opposition to
Euro Disney was disregarded despite the fact that mainstream newspapers seemed
support the protest. Disney has been described as a disguised
cultural discipline, which can be used for cultural integration. The attitude
of Disney management is confidently dismissive making them appear out of touch
with the cultural differences.

There was a reason for the failure of the
marketing and administration decisions made before and after the launch of the
park. The whole concept of trying to sell an American product to Europe, while
some features of the park trying to adapt to suit a wide variety of cultural tastes,
doomed the project..Overconfidence in the formerly foolproof Disney formula
meant that in planning the park not much attention was paid to many important
details. In this sense, the main reasons for failure were administrative errors
in project planning. The improper marketing of Euro Disney has greatly affected
participation in the poor, but as a result the park itself would not have made
the breakthrough impression needed to create a new market.6

Develop Alternatives

Disney is so blind that with success in Japan,
they have not thought about how they should adjust to their previous
experiences and to better participate in French and European customers.. Decision
for a Plan By developing and analyzing several business scenarios, Disney can
choose one of these, or combine it with the best of all. Disney should have
thought of all the uncontrollable forces around him; for example French (and
other European culture), Frangi, which is overvalued for stagnation. If a
business plan is made considering all these factors, Disney will probably have
more realistic numbers (participation, income) and be able to deal with the
cultural differences between American and Europe, especially in France. Instead,
Disney chose a business plan that would cater to cultural differences, and saw
Disney’s theme park as a monopoly because of its quality and uniqueness. They
only paid enough attention to the opponents and the opponents who offered a
different type of entertainment. All these assumptions made Disney’s high
expectation rate extremely high priced entry fees, food and drinks, goods and
attendance too high..7

Operational Plan

After gathering information about French and
European customers, their preferences, their culture, their age, their income,
their expectations, and to develop a business plan on how to run the business
and which scenario they think was the most accurate one, Disney should have
developed an effective operational plan. The Operational Plan should have
focused on, who will run the park? Who will be responsible for the staff? Who
will make the decisions? As Disney was entering in France and most of the
employees would be French or Europeans, the ideal was to put key French
managers, to deal with the staff, and probably a French chairman, as well as
human resources managers. Those managers would have more experience and
know-how, how to deal with the staff, with investors and executives, and with
the 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 and
efficient, so those decisions should be taken in France, not on US as Disney
did. If Disney had these aspects they would probably have foreseen most of the
cultural and operational, problems that occurred and could have easily avoided
it.

The business performance of Euro Disneyland was
not that great and stable. It couldn’t have right assumptions on the European
market and there has been cruel European recession such as increase in interest
rates and French currency value. The preliminary plan was not ample and
accurate in providing resolutions to Disney problems and concerns that arisen.

A major criticism on Euro Disneyland was that it
is neither international nor French in nature, and it failed to satisfy
Europeans at all. Many of the visitors could not figure it out the theme of
Euro Disneyland that whether it is going to be a European park, an American
park, or a French park. In the meantime, the cost for Euro Disneyland was also
an issue for some visitors. Many of the French visitors had been discouraged
from coming because of the cost such as housing cost, souvenirs, admission cost
and so forth. Attendance was kept on decreasing and the company of course, had
great financial loss. 8

EXTERNAL ANALYSIS
9

 

 MACRO ENVIRONMENT (P.E.S.T)

The components of the macro environment are the
political-legal environment, the economic environment, the socio-cultural environment,
and the technological environment in which Disneyland operates.

 

Political-legal
environment:

The French labour law dictates that a person should work
for 35 hours a week but may not exceed 48 hours a week. Overtime has to be paid
for the first-eight hours and is worth 25% of their base hourly wage and after
that its worth 50%. Concluding that in theory Disneyland Paris would have to
employ two employees for one position to be efficient and not to break any
labour laws.

Socio-cultural
environment:

.Euro Disney mistake has been the failure to recognize the
cultural differences between Americans and French people. People are going to
theme parks during the weekends for adults as well as children entertainment.  Locating the Theme Park near Paris and
acquiring agricultural land as well as imposing the U.S spirit undeniably
negatively affects French citizens. The French people’s lifestyle deeply
depends on the gratitude to their traditional agriculture. Thus, the land
takeover by an American Company mainly does not provide pleasure to them.

 

Economic
Environment:

Europe Disney did not recognize the period of stagnation
mainly in Europe. Stagnation usually means a higher level of unemployment.
Unemployment changes the way people spend their money even more because of
their disposable income; especially unemployed people do not spend luxury money
especially on the entertainment front. Indeed,
this should be considered as a factor to reduce the number of customers and the
power of spending..

 

Technological
environment:

The major technological problem has been the particular
location where the Theme Park has been built. The climate has brought to a
standstill the operation of the business. Although the idea to build a Theme
Park has been in correspondence with the existing need on the market the
weather should have been considered. In practical terms, the transfer of the
idea to fit the market needs indeed could not been suitable since the weather
conditions have not been considered. Probably, a closed type of Theme Park
could have been suitable for the weather changes.