Euro Disney - Case Study
1 Introduction Euro Disney 's Plans and Reality
When the International Offer of Shares for the Euro Disneyland S.C.A. (in the following called Euro Disney) was published in October 1989 the plans for this new enterprise of the Walt Disney group were ambiguous. The financial plans for the first year of operation projected total revenues of FF 5,482 million and a net profit after taxation of FF 204 million. For the following years the development should be even more impressive. At that time the plans were seen as a consequent application of the concepts of the existing Disney-designed theme parks.[1]
Just a short time after Euro Disney was opened in time on April 1992 it was obvious that reality would not meet the plans. In November 1992 the financial reports for the year ended 30 September 1992 were published which included the first 172 opening days of Disneyland Paris. There the management had to announce a loss of FF 188 million. The second year was even worse. Although Euro Disney nearly met plans for guest attendance, they faced a loss of FF 5,337 million whereas total turnover was FF 5,725 million. Plans for the second year of operation (1 April 1993 to 31 March 1994) forecasted a turnover of FF 6,801 Mio and a profit of FF 359 Mio.
The scope of this assignment is to find out if these financial results were an indication that principal factors in the planning process were wrong. For this the author will compare the plans and actual results for Euro Disney 's first two years, analyse major premises Disney set when planning for Euro Disney and analyse the steps of the planning process. The base for this analysis will be mainly the profit and loss accounts.
2 Theory of the Planning Process
Normally there are several ways to reach an organisations goal. To determine the way to this goal which is for most organisations except non-profit ones the maximisation of profit, a plan is needed. Planning means to decide for one of the possible
When the International Offer of Shares for the Euro Disneyland S.C.A. (in the following called Euro Disney) was published in October 1989 the plans for this new enterprise of the Walt Disney group were ambiguous. The financial plans for the first year of operation projected total revenues of FF 5,482 million and a net profit after taxation of FF 204 million. For the following years the development should be even more impressive. At that time the plans were seen as a consequent application of the concepts of the existing Disney-designed theme parks.[1]
Just a short time after Euro Disney was opened in time on April 1992 it was obvious that reality would not meet the plans. In November 1992 the financial reports for the year ended 30 September 1992 were published which included the first 172 opening days of Disneyland Paris. There the management had to announce a loss of FF 188 million. The second year was even worse. Although Euro Disney nearly met plans for guest attendance, they faced a loss of FF 5,337 million whereas total turnover was FF 5,725 million. Plans for the second year of operation (1 April 1993 to 31 March 1994) forecasted a turnover of FF 6,801 Mio and a profit of FF 359 Mio.
The scope of this assignment is to find out if these financial results were an indication that principal factors in the planning process were wrong. For this the author will compare the plans and actual results for Euro Disney 's first two years, analyse major premises Disney set when planning for Euro Disney and analyse the steps of the planning process. The base for this analysis will be mainly the profit and loss accounts.
2 Theory of the Planning Process
Normally there are several ways to reach an organisations goal. To determine the way to this goal which is for most organisations except non-profit ones the maximisation of profit, a plan is needed. Planning means to decide for one of the possible