Euro-Disney
International Entrance Strategy
The way in which any large multi-national enterprise enters a foreign market can be what makes or breaks the foreign direct investment. Walt Disney’s international strategy with Euro Disney is no different. In hindsight vision is 20/20 but it is now clear that using a combination equity ownership, a licensing contract, and a management contract was not the key to success for this investment. The organization had too many interests involved and therefore the proper due diligence was not completed. For example, Euro Disney experienced inflated construction costs as a result of using high-end materials. This in turn has caused there to be higher costs for consumer’s admission, food, rides and souvenirs, resulting in low attendance. This is similar to the mistake that was about to be made in Tokyo when the US counterparts wanted to localize many of the parks. As a result of the licensing arrangement the owners in Tokyo made the decision not too. Having the local owners know what the customers want and making the decisions lead to the right choice being made.
The park made several attempts to adapt to a French and European context. As mentioned previously there was a notion that the customers would want high-end materials and would be willing to pay for it. This was clearly not the case as customers would have preferred less sophistication for better prices. Additionally they tried to incorporate French and European storylines and adaptations such as having Cinderella and Snow White’s home was a Bavarian village. Also, research showed the Europeans visiting the US based parks really enjoyed the Wild West themes so that was incorporated as well. It was clear that the park tried to incorporate many different themes and this did not work well for the customers. They felt it was a random mixture of different cultures and were not clear on what the experience was supposed to be. Disney would have been better suited to
The way in which any large multi-national enterprise enters a foreign market can be what makes or breaks the foreign direct investment. Walt Disney’s international strategy with Euro Disney is no different. In hindsight vision is 20/20 but it is now clear that using a combination equity ownership, a licensing contract, and a management contract was not the key to success for this investment. The organization had too many interests involved and therefore the proper due diligence was not completed. For example, Euro Disney experienced inflated construction costs as a result of using high-end materials. This in turn has caused there to be higher costs for consumer’s admission, food, rides and souvenirs, resulting in low attendance. This is similar to the mistake that was about to be made in Tokyo when the US counterparts wanted to localize many of the parks. As a result of the licensing arrangement the owners in Tokyo made the decision not too. Having the local owners know what the customers want and making the decisions lead to the right choice being made.
The park made several attempts to adapt to a French and European context. As mentioned previously there was a notion that the customers would want high-end materials and would be willing to pay for it. This was clearly not the case as customers would have preferred less sophistication for better prices. Additionally they tried to incorporate French and European storylines and adaptations such as having Cinderella and Snow White’s home was a Bavarian village. Also, research showed the Europeans visiting the US based parks really enjoyed the Wild West themes so that was incorporated as well. It was clear that the park tried to incorporate many different themes and this did not work well for the customers. They felt it was a random mixture of different cultures and were not clear on what the experience was supposed to be. Disney would have been better suited to