EURO DISNEY

BACKGROUND

• Company Name: Walt Disney• Business Line: Amusement/Theme Parks• Opening: In 1955, 80-acre theme park in

California, US• Theme Parks: US (California & Florida),

Tokyo and France.• Famous Cartoon Figures: Mickey Mouse,

goofy etc.• Focus : Euro Disney (Disney’s Largest

project in 90’s)• Problem Area: Euro Disney “Service

Delivery Ability”!!

Tangible Dominant

Intangible Dominant

SaltSoft Drinks

Detergents

Automobile

Cosmetics

Fast Food

Advertising

AirlinesManagement

ConsultingInsurance

Tangibility SpectrumTangibility Spectrum

Entertainment – Theme Park

Theme Parks in Europe

Euro Disney Project

• Investments: 21 billion Francs.• Site Size: 1/5th of the city of Paris.• Projected : 12000 Employees.• Forecast: 11 million visitors in first year.• Hotels: Complete ownership of total of 6

hotels.• Occupancy: 70% annually for hotels.• Other Features: 18 hole championship

Golf Course.• Design: Same as other Disney parks but

made adapted for Northern European Weather

conditions

Financial Arrangement

Real Risks Taken…...

• Real Estate Development: Own and Operate hotels and resorts nearby

• Phase II Development: shopping malls , apartments etc nearby

• Sell Phase II: When real Estate prices high

• Expectation: Soaring Profits!!!!• Negligence: Investment made when

European economy was in recession

Criticism of Euro Disney

Catering Multinational Audience

Operations: Reality Vs Forecast

Management & Training

Continued…………….

• Disney Trademark: Smile a lot

• Interpretation of Smile in French Culture

• Total customer satisfaction: Disney Vs Employees thinking

Marketing Concerns

Marketing Counter measures

Euro Disney’s Problems

Euro Disney’s Problems Cont’d

Services Marketing TriangleServices Marketing Triangle

18

The Services Marketing TriangleThe Services Marketing Triangle

Internal Marketing

Interactive Marketing

External Marketing

Company(Management)

CustomersEmployees

“enabling thepromise”

“delivering the promise”

“setting thepromise”

Internal MarketingCompany

(Management)

Employees

External Marketing

Company(Management)

Customers

Interactive Marketing

Employees Customers

GAP MODEL

PROVIDER GAP 1: Not knowing what customers expect

• Lack of market segmentation: All Europeans• Focus on transactions than relationships: Volumes

PROVIDER GAP 2: Not selecting the right service designs &

standards

PROVIDER GAP 3: Not delivering the Service

Standards

Customer not fulfilling roles

•All language to be spoken: Expected by customers.•Barcelona resident Expectations

PROVIDER GAP 4: Not matching performance to

promises

Ineffective mgmt. of customer expectations

• Lack of Adequate Education to customers• E.g. : Toilet signboards were low

11/15/08

SWOT Analysis

Euro Disney

11/15/08

Strengths & Weaknesses

• Strengths– Strong reputation

and brand name– Ability to realize

mistakes and to change

– Financially sound – Phillippe

Bourguignon

• Weaknesses– Cultural imperialism

11/15/08

Opportunities & Threats

• Opportunities– Learn more about

local culture & customs

– Integrate local culture into theme park

– Customize employee standards to the reflect local culture

• Threats– High prices– Increasing value of

the Franc– Employee

dissatisfaction

11/15/08

Euro Disney Update( 1993-97)

11/15/08

Outlook

11/15/08

• New Entertainment programs and special festivals.

• Opening of the Newport Bay Club.• Commercial real estate development of

land around Euro-Disney.• A new suburban rail station.

What’s New At Euro Disney

11/15/08

1997 1996 1995 1994 1993

Sales (in millions) $838 $772 $735 $709 $954

Net Income (loss) 38 40 40 (292) (869) (in millions)

Avg # of employees 10,229 10,307 9,356 10,941 12,177

Five Year Financial Review

11/15/08

Euro Disney Financial Update

11/15/08

Financial Update Continued

11/15/08

Thank You