Harvard Case - DISNEYLAND RESORT PARIS: MICKEY GOES TO EUROPE
"DISNEYLAND RESORT PARIS: MICKEY GOES TO EUROPE" Harvard business case study is written by Martha Maznevski, Karsten Jonsen. It deals with the challenges in the field of General Management. The case study is 18 page(s) long and it was first published on : Dec 20, 2006
At Fern Fort University, we recommend a multi-pronged approach for Disneyland Resort Paris to address its challenges and capitalize on future growth opportunities. This strategy focuses on enhancing the guest experience, optimizing operational efficiency, and strengthening the brand's position in the European market.
2. Background
The case study focuses on Disneyland Resort Paris (DLRP), a theme park resort facing challenges in its early years. Despite being a popular destination, DLRP struggled with profitability, cultural clashes, and a perception of being inferior to its American counterpart. The case highlights the complex issues surrounding international business expansion, particularly in the context of a highly brand-sensitive industry.
The main protagonists are:
- Michael Eisner: CEO of The Walt Disney Company, facing pressure to improve DLRP's performance.
- Philippe Gaspard: CEO of DLRP, tasked with turning around the resort's fortunes.
- The French workforce: Facing cultural differences and potential job insecurity due to American management practices.
- Disneyland Resort Paris guests: Seeking a unique and magical experience comparable to other Disney destinations.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Strong Brand: Disney holds a globally recognized and beloved brand, offering inherent appeal.
- Unique Destination: DLRP offers a unique experience for European visitors, catering to a specific market.
- Potential for Growth: The European market holds significant potential for tourism and entertainment.
Weaknesses:
- Cultural Differences: Misunderstandings and communication barriers between American and French cultures.
- Operational Inefficiencies: Initial operational issues leading to subpar guest experiences.
- Financial Performance: Struggling profitability due to high operating costs and lower-than-expected visitor numbers.
Opportunities:
- Expand European Market: Capitalize on the growing European tourism market.
- Enhance Guest Experience: Improve guest satisfaction through targeted initiatives and personalized experiences.
- Leverage Technology: Implement digital technologies to enhance operations and guest interactions.
Threats:
- Competition: Other theme parks and entertainment venues in Europe pose a significant threat.
- Economic Fluctuations: Economic downturns can impact tourism and visitor spending.
- Brand Perception: Negative perceptions of DLRP compared to other Disney destinations.
Porter's Five Forces:
- Threat of New Entrants: Moderate, as establishing a theme park requires significant capital investment.
- Bargaining Power of Suppliers: Moderate, as Disney has leverage due to its size, but suppliers can impact costs.
- Bargaining Power of Buyers: High, as tourists have numerous entertainment options and can be price-sensitive.
- Threat of Substitutes: High, as other entertainment forms (movies, concerts, etc.) compete for leisure time.
- Competitive Rivalry: High, as DLRP faces competition from established theme parks and emerging entertainment options.
Key Issues:
- Cultural Sensitivity: Bridging cultural differences in management style and workforce expectations.
- Operational Efficiency: Improving operational processes to ensure smooth guest experiences.
- Marketing and Branding: Repositioning DLRP as a unique and desirable destination for European visitors.
- Financial Sustainability: Achieving profitability through cost optimization and revenue generation.
4. Recommendations
1. Enhance Guest Experience:
- Cultural Adaptation: Develop culturally sensitive offerings and experiences, incorporating local traditions and themes.
- Personalized Experiences: Leverage technology to personalize guest interactions, offering tailored recommendations and services.
- Improved Operations: Streamline operations, reduce wait times, and enhance overall efficiency to improve guest satisfaction.
- Enhanced Entertainment: Introduce new attractions, shows, and experiences that cater to European preferences.
2. Optimize Operational Efficiency:
- Cost Optimization: Implement cost-saving measures across all departments, focusing on operational efficiency and waste reduction.
- Technology Integration: Utilize technology to automate processes, improve data analysis, and enhance guest interactions.
- Supply Chain Management: Optimize supply chain operations to reduce costs, improve inventory management, and ensure timely delivery.
- Employee Training: Invest in employee training and development programs to enhance skills and knowledge, fostering a culture of excellence.
3. Strengthen Brand Positioning:
- Targeted Marketing: Develop targeted marketing campaigns that resonate with European audiences, highlighting DLRP's unique offerings.
- Brand Storytelling: Create compelling narratives that connect with European cultural values and aspirations.
- Strategic Partnerships: Collaborate with European businesses and organizations to enhance brand visibility and reach.
- Public Relations: Build positive media relations and manage public perception through proactive communication and engagement.
4. Foster a Collaborative Culture:
- Cross-Cultural Training: Implement programs to foster cross-cultural understanding and communication between American and French employees.
- Employee Empowerment: Empower employees to contribute ideas and solutions, fostering a sense of ownership and responsibility.
- Open Communication: Encourage open communication and feedback channels to address concerns and build trust.
- Leadership Development: Develop leaders with strong cultural sensitivity, communication skills, and a commitment to inclusivity.
5. Basis of Recommendations
These recommendations are grounded in the following considerations:
- Core Competencies: Leveraging Disney's core competencies in storytelling, entertainment, and guest experience creation.
- External Customers: Catering to the specific needs and preferences of European visitors.
- Internal Clients: Building a collaborative and engaged workforce through cultural sensitivity and employee empowerment.
- Competitors: Differentiating DLRP from competitors by offering unique and culturally relevant experiences.
- Attractiveness: Quantitative measures such as increased guest satisfaction, improved financial performance, and enhanced brand perception.
Assumptions:
- Economic Stability: A stable European economy will support tourism and visitor spending.
- Technological Advancement: Continued advancements in technology will enable further optimization and personalization.
- Brand Loyalty: Disney's strong brand will continue to attract visitors despite initial challenges.
6. Conclusion
By implementing these recommendations, Disneyland Resort Paris can overcome its initial challenges, achieve sustainable profitability, and establish itself as a leading entertainment destination in Europe. A focus on enhancing the guest experience, optimizing operations, and strengthening the brand's position will enable DLRP to capitalize on the potential of the European market and achieve long-term success.
7. Discussion
Alternatives:
- Focusing solely on cost-cutting measures: This approach could lead to a decline in guest experience and damage the brand's reputation.
- Ignoring cultural differences: This could lead to ongoing conflict and resentment among the workforce, hindering operational efficiency.
- Over-relying on technology: While technology is essential, it should not replace human interaction and personalized experiences.
Risks and Key Assumptions:
- Economic downturn: A significant economic downturn could negatively impact tourism and visitor spending.
- Competition: The emergence of new entertainment options could pose a threat to DLRP's market share.
- Cultural adaptation: Successfully adapting to European cultural nuances may require significant effort and time.
8. Next Steps
Timeline:
- Year 1: Implement key operational improvements, enhance guest experience, and launch targeted marketing campaigns.
- Year 2: Focus on cultural integration, employee training, and further technology integration.
- Year 3: Evaluate progress, refine strategies, and expand offerings based on market feedback and performance.
Key Milestones:
- Increase guest satisfaction: Achieve a significant increase in guest satisfaction scores within the first year.
- Improve financial performance: Achieve profitability within two years.
- Enhance brand perception: Increase brand awareness and positive perception among European audiences.
- Develop a collaborative culture: Foster a culture of collaboration and mutual respect between American and French employees.
By taking these steps, Disneyland Resort Paris can transform itself from a struggling venture into a thriving and beloved destination, solidifying its position in the European entertainment landscape.
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Case Description
It draws upon unique insights from some of historic key players as well as the current ones and sets up situations that can be interpreted from different roles in an organization (marketing, operations, senior management, etc.) and some of the issues they faced being the first multi-cultural Disney theme park in the world. Disneyland Resort Paris opened its gates in April 1992 amidst enormous controversy as a bastion of American cultural imperialism in Europe. By 2006 it was the most visited tourist site in Europe with over 12 million annual visitors. In spite of a difficult tourist industry in the early 2000s, Disneyland Resort Paris's attendance remained stable: 60% of its visitors were repeat visitors, and guest satisfaction was extremely high. The operation had created 43,000 jobs, invested more than €5 billion and contributed to the development of a new region. As the leaders developed their execution plans, they wondered what principles should guide them and how to interpret Disney in multicultural Europe. Guests from different parts of Europe wanted different things from a vacation: how could they keep the classic Disney magic yet successfully appeal to European consumers? After 15 years of switching between French and American leadership, the answers were still not obvious. The leaders agreed that the 2007 celebrations of its 15th anniversary should set the scene for Disney's recognition as a well established experience in the heart of Europe, and a long-term financial success. But what would it look like and what path would take them there? Learning objectives: The case was written to support two teaching objectives; the class can focus on one or both depending on time and instructor objectives. It raises issues that can be dealt with through perspectives of organizational behaviour, general management and marketing. 1. Identifying the complex role of national or ethnic cultures in multinational firms.
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