EuroDisney's poor initial performance Essay
EuroDisney's poor initial performance, 496 words essay example
1. One of the major factors contributing to EuroDisney's poor initial performance was the failure in implementation of cross-border management and strategic approaches. As a multinational corporation, Disney had possessed poor cross-cultural skills where they were insensitive and not responsive to French and Europeans' cultural norms, practices, preferences and values. Disney had failed to understand the importance of cultural adaptation in EuroDisney and misinterpreted the local culture and behaviour of their consumers. Due to lack of knowledge of their target market, EuroDisney relied mostly on American cultures and past experiences when managing Disneyland in other countries during their first year of operation. By not recognizing the cultural differences between the United States and France, Disney had built and promoted Euro Disney as a piece of America that was not acceptable to the French's culture. For instance, Disney has a policy of selling no alcohol beverages in all of their parks which then extended this tradition to EuroDisney. This policy has aroused the anger of the French as alcoholic drinks are considered as a regular beverage in their daily lives. Thus, it is proven that Disney is insensitive to the local culture as they had failed to recognize that the drinking habits of the French. Besides, Disney's dress code that defined the nail polish colours and prohibits of facial hair has failed to meet the French standards in the workplace. The park staffs simply did not follow the dress code required by Disney as they thought it was against their principle of individualism. Consequently, the imposition of this dress code has negatively affected their staffs' satisfaction and performance.
Next, EuroDisney's poor initial performance was due to wrong assumptions by the top management team which caused them to make wrong management decisions. Europeans' eating habits were not taken into consideration as Disney had misunderstood their breakfast norms. An example of this would be downsizing of restaurants breakfast service because they assumed that Europeans did not generally eat breakfast. Moreover, the pricing strategy was wrongly implemented by Disney as it significantly impacts on the health of the business. The European recession has led Disney to make a mistake by overpricing their room rates. For instance, the hotel rooms at EuroDisney were highly priced from $110 to $380 compared to other top hotels in Paris. Hence, Disney failed to attract customers as French perceived EuroDisney as being overpriced. Furthermore, vacation customs of the Europeans were not taken into consideration. Europeans prefer month long vacations and tend to spend at most two days to visit the park, causing EuroDisney to gain lesser profits from hotels and restaurants. In addition, the numbers of visitors were poorly estimated by Disney as they expected that Monday would be a light day and Friday would be crowded. Thus, the staff and resources were wrongly allocated as the peak days were different with other Disneyland, resulting in a lack of staffs in crowded days and a surplus of staffs in light days influencing efficiency and profitability of EuroDisney negatively.