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SWOT analysis of Euro Disney

Describe about the Marketing Theory of Euro Disney?

Walt Disney is basically the parent company of Euro Disney and some other companies. The organization is set in many countries for making it a channel of global family entertainment and creating a chain network in all family circles all over the world, with business diversification of four types which are resorts and parks, media networks, consumer products and studio entertainment. Places like Disney world and Disneyland have been known as one of the amusement places for people to spent their time with family especially children (Ferrell and Hartline, 2010). Disney came into existence with the aim of making Disney a place for families. The theme park was first opened to public in 1952, although the company was founded in 1932. By establishing the Disney amusement park in the middle of southern California, the lifestyles of American families were changed. The meaning of entertainment was well conveyed through the establishment of Walt Disney amusement park (Simeon, 2013).

Around 1992 April, the affiliation of various companies were conducted with Walt Disney and they released a new park for their European visitors. This was considered as one of the most lavish and biggest theme park by the Walt Disney Company. Soon after that, the expansion of Paris big theme park was established and it was also bigger in comparison with others. This made a startup issues because of some mistakes committed by the management without enough consideration about the market of Europe (Thewaltdisneycompany.com, 2015). Here the analysis is done on the basis of Organizational culture in Euro Disney. In order to expand the business Euro Disney required setting an Organizational culture that would be very much acceptable for the external public of the organizational. This included certain changes in the Organizational behavior. Based on the theories the possible evaluation is done.

At the beginning of the Euro Disney operation it confronted several factors that determined their growth in financial terms and success at the very first stage (Hill and Jones, n.d.). According to the situation mentioned in the case study, the subsequent is an analysis of weakness and strength of Euro Disney before 1993.

External

Opportunities

Threats

ü  Engaging French Staff for a new organizational culture adaptation.

ü  To change from Ethnocentric to polycentric staffing.

v  It was against the sentiment of the Americans.

v  Had a burly local culture to which the organization needed to change its cultural view.

v  The employees had to know more languages and adapt the American culture of hospitality.

v  Communication between the customers and the employees.

v  The American system of organizational Structure.

Internal

Strength’s

Weaknesses

ü  Popularity in the name of the Organization.

ü  The success in Japan and internal growth.

ü  Geographical location and proximity

ü  Strong business convention.

ü  Many years of experience and success.

ü   

v  Low knowledge on French culture.

v  The costly price

v  The orientation being Ethnocentric.

v  The prices were high for the French people to afford.

v  Focused highly on American fairy tales rather than local market.

After implementing strategies for making its activities and services on local based market, Euro Disney was opened in major cities of Europe. The strategy that was implemented turned out to be fruitful for the organization in Europe (Griffin and Moorhead, 2011). It became profitable after attracting a good number of customers by implementing the strategy. In order to attract the European customers, Euro Disney changed their organizational structure. They changed their ethnocentric concept into Polycentric by engaging more number of French employees especially in managerial posts. However in the year it came under the threat of bankruptcy. In order to depict the internal strength and weakness of Euro Disney the following situational analysis is done on the basis of threats and opportunities.

Internal

Strength’s

Weaknesses

      Management acquiring knowledge about the local market.

      The success and growth internally in Hong Kong and Japan. Where Japan adapted the American culture.

      were made on local basis.

      Efforts implemented for enhanced and cheaper service.

      Strong business convention.

      Localized market for marketing subsidiaries.

o   Perception of low customer value.

External

Opportunities

Threats

      A good financial support from the Government of France.

      Other resources of financial support were available.

o   The existence of anti American attitude.

o   The 9/11 slump aftermath, in tourism.

o   Competition in the market.

o   Powerful local culture.

The organizational culture was the prime issue in case of Euro Disney. In pre-1993, Euro Disney failed to understand the adoption of the European culture. The management imposed the American culture and most of the employees were American who could not communicate in French. Here the biggest issue was communication with the customer. So in order to improve the condition, Euro Disney hired Philippe Bourguignon, as the senior vice President. This was done so that the Frenchman could come up with a strategic plan and change their employee structure so as to meet the Goal.

Post 1993 the environment and evaluation

What Euro-Disney could have done is to concentrate differences of the two cultures. This required:

The development and management of people in the organization.

Understanding the opportunities from the existing environment for future sustenance.

Philippe Bourguignon price strategy was successful but for a short time. What he needed to focus is on the cultural difference.

2

Substitute Strategy: during 2005, Euro Disney Company was on the edge of bankruptcy because of combined external and internal factors (Samson, Daft and Ananthram, 2011). Nevertheless, Euro Disney became a leading employer in France; this provided a scope for the company being financed by the Government of France in addition to supplementary incentives and opening up Charles Deguele port for low cost flights and that would result in reduction in fare and increase in good number of customers (Reviews, 2013).

The other strategies that were applicable were the differentiation in the existing market about the cost leadership strategy. The diversification strategy had certain risks which could have been avoided. Those are,

A novice experience for Euro Disney

A powerful repugnance of risk.

The demerits of this strategy are:

Time consuming and challenging

Loss of focus in the core business.

For using differentiation strategy for increasing the perception of customer value would have been a measure for controlling the Euro Disney bankruptcy.  In order to maintain the customer value the use of this strategy was very important (Baker and Saren, 2010). This strategy had its own merits and demerits. They are as follows:

Merits:

Increase in the customer base of Euro Disney.

Cover the completion

Demerits:

Required business process re-engineering and approaches which are innovative so as to reduce cost providing the differentiated services. This was a challenging issue.

If the existing market were saturated then there was least possibility for this strategy to become effective.

A scope of growing business for Euro Disney in Eastern Europe was untapped while it can. At the same time they could integrate the service providers of transportation in order to reduce their market and cost insistently for promoting the Euro Disney service value for changing the perception.

Advantages:

This strategy will increase and create a high customer value by training and developing the employees.

This will not only reduce cost but also attract a good number of customers by reaching to the unused eastern zone of European market.

Disadvantages:

This strategy is dependent on the economical, political and social factors as well as the purchasing power of the customers.

This strategy needs a good amount of effort by the organization so as to consider the transportation problems for their customers.

Localizing the marketing operations and services, in order to attract the customers the Euro Disney can follow the price strategy that provides best cost for both the companies and the consumers (Daft, 2012). For this the company needed to change the culture of the organization. This is a part of globalization strategy that considers the value of customer more than their profits.

This strategy also had its advantages and disadvantages, and they are:

Advantages:

The number of visitor will increase due to the cost.

Will assist the Euro Disney to beat its competitors.

Disadvantages:

A perception of bad service might exist due to low price charge.

With saturated existing market this strategy has chances to be ineffective.

It may require the overhauling of the whole company because the cost reduction is a big challenge.

Justification of the alternatives:

In order to aggressively promote the Euro Disney services for increasing the customer value, it was important to change organizational culture. This will help in leveraging the power of Euro Disney to identify the weakness and threats with the available opportunities in France and contribute in further success of the company (Starbuck et al., 2008). A good and well planned preparation is required to fully provide and integrate efficient service to the customers with airlines of affordable cost along with other transport providers like railway.

Cultural differences play a big role because different country has different cultures and people will prefer culture of their own. The managerial consideration of Euro Disney was Ethnocentric which needed a sheer change. Polycentric world view would have concluded in the required services for the local market.

References

Baker, M. and Saren, M. (2010). Marketing theory. London: SAGE.

Daft, R. (2012). Studyguide for organization theory and design by daft, richard l., isbn. [S.l.]: Academic Internet Publish.

Daniel, F. (2012). Business Process Management Workshops. Berlin: Springer.

Ferrell, O. and Hartline, M. (2010). Marketing Strategy. 5th ed. South-Western, p.768.

Griffin, R. and Moorhead, G. (2011). 10th ed. Cengage Learning, p.608.

Hill, C. and Jones, G. (n.d.). Strategic management theory.

Miles, J. (2012). Management and organization theory. San Francisco, Calif.: Jossey-Bass.

Reviews, C. (2013). Studyguide for fundamentals of management by griffin, ricky w., isbn. [S.l.]: Cram101 Incorporated.

Samson, D., Daft, R. and Ananthram, S. (2011). Management 100. South Melbourne: Cengage Learning.

Simeon, R. (2013). Working in the global economy. New York: Routledge.

Starbuck, W., Holloway, S., Whalen, P. and Tilleman, S. (2008). Organizational learning and knowledge management. Cheltenham, Glos, UK: Edward Elgar Pub.

com, (2015). Disney History | The Walt Disney Company. [online] Available at: https://thewaltdisneycompany.com/about-disney/disney-history [Accessed 23 Mar. 2015].

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[Accessed 16 June 2024].

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