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McGraw-Hill © 2000 The McGraw-Hill Companies
2
S M The Walt Disney Traditional
Formula
• Theme parks--core of attractions organized to an
identical set of themes
• Offerings for adults
• Offerings for children
• Offerings for different psychographic targets
• Stable of characters
McGraw-Hill © 2000 The McGraw-Hill Companies
3
S M The Walt Disney
Traditional Formula (cont’d)
• Commitment to always having something new and
different at parks
• Service delivery
• Concept of guest experience
• Attention to detail
• Disney University
– Qualifying potential hires
– Transmitting Disney values
– Training employees to be effective in jobs
– Grooming standards
McGraw-Hill © 2000 The McGraw-Hill Companies
6
S M Services Marketing Problems
• Heterogeneous target market--multi-national,
local/traveling--makes strategy more difficult
• Pricing too high
• Poor market research
• Cold weather location
• Lack of consideration for local culture
• Service standards hard to implement
McGraw-Hill © 2000 The McGraw-Hill Companies
7
S M Criteria to Assess
First 100 Days
• 2/3 into initial 5 1/2 month operating
period, have 2/3 of projected revenues
• figure of 3.6 million visitors slightly
behind pace to achieve 7 million
projected, although summer months
remain
• Substantial cost problem
• Extra 5,000 workers needed
• Pre-opening and other costs
ATTENDANCE
COSTS
PROFITS
McGraw-Hill © 2000 The McGraw-Hill Companies
8
S M Criteria to Assess
First 100 Days
• Very high in beginning period
• No employee housing
• More because difficult role to perform
than in any other park due to language
• Appears to be ahead of other parks at
same point in time
EMPLOYEE
TURNOVER
OVERALL
PERFORMANCE
VS OTHER
PARKS
McGraw-Hill © 2000 The McGraw-Hill Companies
9
S M What Aspects Transferable/
Not Transferable?
TRANSFERABLE
• Theme park formula:
Values/quality/imaginat
ion
• Guest service
• Structure of parks
NOT TRANSFERABLE
• Service standards conflicted
with French labor unions
• Policy toward wine
• Waiting lines
• Management of local employees
by expatriates
McGraw-Hill © 2000 The McGraw-Hill Companies
10
S M
Considerations Before Extending Service Concept
Across Borders
• Adapting service itself
• Adapting promotion and distribution
• Adapting entry modes
• Adapting communication
• Adapting market research international
• Adapting work force management
– culture’s effect on employee behavior
– adapting service employee incentives
– adapting service standards for
international delivery
McGraw-Hill © 2000 The McGraw-Hill Companies
11
S M What Can Disney Do Now?
• Lower prices
• Build additional ride capacity
• Improve cast friendliness
• Coordinate marketing of parks with
release of films
• Change to local management team
• Aggressive cross-promotion
• Attract and retain high quality
employees
McGraw-Hill © 2000 The McGraw-Hill Companies
12
S M Update: March ‘93
• Loss of $40 million before deferral of $20 million
debt payment
• Underutilization of hotel rooms
• Bombarded with negative publicity
• Fitzpatrick stepped down as president
• Lowered admission prices by 25% for adults and
33% for kids
McGraw-Hill © 2000 The McGraw-Hill Companies
13
S M
Changes and Update 1998:
An Impressive Turnaround
• More than 11 million visitors per year--bigger than
Eiffel Tower or Louvre
• #1 short-stay tourist destination in Europe
• Higher hotel occupancy rate (64%) than Paris
hotels
• Profits 1997 rose 77%
• Renamed Disneyland Paris
• Added new Space Mountain Ride
• “Kids Go Free” promotions
McGraw-Hill © 2000 The McGraw-Hill Companies
14
S M Current Situation
Profitable for last 3 years
– 1997 income up 21.5% yr to yr; Costs up
8.3%
– 1998 1st quarter income up 16.6% over
1997
– 12.6 million in attendance in 1997
– 78% hotel occupancy in 1997
– Recovery due in part to “American” cost
controls
– Slight increase in average guest spending
– Emergence of major conference center
McGraw-Hill © 2000 The McGraw-Hill Companies
15
S M Labor Unrest
• 80-160 employees went on strike in July 1998
– Wanted classification as “artists” not “extras”
– Resentful that multiple skills were not rewarded
– Costumed strikers smiling, not confrontational
• Average striking worker making more than minimum
wage; artist classification would net $330 more per month
• Disgruntled employees returned to
work without government support
McGraw-Hill © 2000 The McGraw-Hill Companies
16
S M Future Plans
• Control 3,200 acres around current location
• Creating Val d’Europe - a “town” outside
Euro Disney
– 90,000 sq. meter shopping mall
– 1,610 housing units
– Office space
– International business park
McGraw-Hill © 2000 The McGraw-Hill Companies
17
S M "Rejected New Names for
EuroDisney"
10. Euro Disaster
9. El Biggo Mistake-o
8. Never-Never-Profit Land
7. La Veal de Guys in Big Smelly Costumes
6. Gumpworld
5. Beaucoup de Crap Americain
4. Johnny Depp's Hotel of Destruction
3. Boutros Boutros-Goofy
2. Have-You-Forgotten-We-Saved-Your-Ass-
in-the-World-War-Two-Land
1. Ooh-La-Lame As presented on the 9/15/94 broadcast of LATE SHOW with DAVID LETTERMAN