After the success of Tokyo Disney and Hong Kong Disney, Euro Disneyland chairperson, Robert Fitzpatrick, announced the launch of Disneyland in Europe (Luthans & Doh, 2015). Its destination in Paris, France was estimated to be approximately 11 million people in attendance on its first day. Notably, France was thought of as the ideal location due to its low interest on the French bank’s $800 million loan. However, Disney was met with controversial backlash and criticisms of insulting European culture by implementing American preferences (Luthans & Doh, 2015). In a reflection of France’s poor performance, the Disneyland in Anaheim, California was marked as a commercial success. It’s Asian counterparts also performed well due to careful consideration of implementing Asian culture into its theme parks. Hence, Euro-Disney failed due to its high expense and lack of input of European culture into its new theme park (Luthans & Doh, 2015).
The objective of the following case analysis is to discuss five key issues that led to Euro-Disney’s initial failure. Furthermore, this case study analyzes potential solutions, by comparing various topics on expanding Disney on an international platform, to promote more positive future feedback.
One of the major issues was the high expense that led to France’s initial failure to garner attention at its new Disneyland theme park. In comparison to Disney’s one-day pass in Orlando, which costs $33, Disney Paris charges $40 for its day pass. While Paris’ theme park hotels are only slightly less expensive than its American counterpart, the park itself was too small to justify the use of six hotels (Luthans & Doh, 2015).
Secondly, a major issue that affected the success of Disney Paris was the lack of cultural understanding. Disney placed an alcohol ban to preserve the ‘clean’ image of all its parks. However, implementing this egocentric, American policy caused an outrage in France, where wine is viewed as a part of the daily lives of French people. Furthermore, operational errors were made due to cultural dispute (Luthans & Doh, 2015). Following American habits, Disney planned for its weekends to have heavier traffic while its weekdays would have less. However, statistics show that Disney Paris had a higher traffic load on its weekdays than its weekends. Moreover, its restaurants cater to ‘Americanized’ French cuisine, which was seen as insulting to French culture, which created massive protests (Luthans & Doh, 2015).
Geert Hofstede’s cross-cultural communication tactics also explain some of Disney’s failure in France. For example, the power distance index refers to the degree in which the less powerful societal members are willing to accept the inequality in power distribution (Hofstede, 1984). A society that exhibits a higher degree of PDI shows a higher concern for hierarchical processions (Hofstede, 1984). Societies with a lower PDI show a lower concern for authoritative order, and a higher interest in social justice (Hofstede, 2011). In the dimension of PDI, inequality of power is often seen from the perspective of people will less social power. Americans scored relatively low on the PDI while French people scored high.
Geert Hofstede’s cross-cultural communication tactics also explain some of Disney’s failure in France. For example, from the Hofstede cultural dimension, the long-term orientation paradigm indicates the significance that society places on their past when dealing with current or impending issues (Hofstede, 1984). In essence, societies with different orientation value will prioritize tradition and history differently when regarding their societal goals (Hofstede, 2011). Societies who score lower on this dimension have more care towards long-term orientation, in which there are a more conservative attitude and higher value in traditions and structural norms within society (Hofstede, 2011). In comparison to the United States, France scores only a little higher on the pragmatism scale at a score of 39. Therefore, France has strong consideration for its long-term orientation, in terms of structure, history, and tradition. The problem, however, lies in American’s own priority in maintaining American pragmatism for the structure and traditions of Disney. Hence, both Americans and the French have polarized concepts and policies of what Disney must demonstrate, in which, neither are willing to compromise.
Some minor issues included the location and bad weather. As most Europeans prefer to bicycle or on-foot transportation, Disney’s location out in the farmlands of Eastern Paris indicates that its customers will consist mostly of tourism and less of French citizens (Luthans & Doh, 2015). Secondly, Paris encounters at least six months of frosty seasons that alter between rain and snow. Thus, realistically, Disney Paris only has six months of the year to make enough profit to cover the whole of the year (Luthans & Doh, 2015). Labor law issues also reflect cultural differences, in which Disney Paris struggled with labor dress codes. Disney in the United States is highly restrictive on the appearance of its employees. However, French law prohibits these restrictions on individual and collective liberates (Luthans & Doh, 2015).
According to Trompenaars’ cultural conflicts, Disney Paris suffered from the universalism versus particularism function (Trompenaar, 1996). As such, a major difference between American culture and European culture is American’s focus on universalistic rules (Trompenaar, 1996). Policies and labor regulation, according to Disney, must abide by Disney’s universal code of conduct, which was highly rebelled against by the French culture, which perceives different rules and regulations in comparison to Americans (Trompenaar, 1996).
Conclusion and Recommendation
In analyzing Euro Disney’s poor initial performance, two key factors emerged among the 5 issues that were discussed: 1. Strong cultural division. 2. Financial burden. In order to improve its position, two courses of action are recommended. First is to develop a strong discount strategy to compensate for Paris’ rainy seasons. Secondly, compromising on French view of popular cuisine, alcohol intake, and cigarette smoking when catering to some of Disney’s more upscale restaurants. By acknowledging French cultural norms, Disney would increase its chances to recover from its initial failure.
- Hofstede, G. (1984). Cultural dimensions in management and planning. Asia Pacific Journal of Management,1(2), 81- 99. doi:10.1007/bf01733682
- Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model in Context. Online Readings in Psychology and Culture, 2(1). http://dx.doi.org/10.9707/2307-0919.1014
- Luthans, F., and Doh, J. P. (2015). International management: culture, strategy, and behavior. New York, NY: McGraw-Hill Irwin.
- Trompenaars, F. (1996). Resolving international conflict: Cultural and business strategy. London Business School, 7(3), pp. 51-68. Retrieved from teaching.up.edu