Euro Disney - Case Study

Essay by royalinxUniversity, Bachelor'sA-, March 2006

download word file, 7 pages 0.0

Problems & Sub-Problems

Euro Disney opened its park in April 12, 1992. The company had many problems when it entered European market. In the opening day of Euro Disney attendance at the event was less than expected, commuter trains leading to the park were on strike, protesting staffing and security problems were evident, residents of the nearby villages demonstrated against the noise, and a terrorist bomb just missed disabling nearby electrical facilities the night before. Additionally, the research showed that the attendance of nearby French residents, who were projected to account for half of the park's attendance, was running below expected rate. In New York, the shares of The Walt Disney Company dropped 5% following the June attendance announcement. In July, Euro Disney announced that revenues for its first quarter were $489 million; however, it would incur a loss for the fiscal year. The company blamed the loss on the fact that it had geared up for a higher level of operations than had actually been attained.

As well, shares of Euro Disney, which traded on the French Bourse, dropped 2.75% following the announcement, capping a 31% drop since the opening of the park. Moreover, the capacity of the park was 50 000 visitors and admission gates were closed after this figure was reached. For instance, on one occasion in the three months opening, the gates of the park were closed from 11 a.m. to 3 p.m. because the park reached its capacity. Consequently, the capacity issue was unsatisfactory to the people who came to the park, because they were not able to enter the park. In addition, Disney imbued the park with a European flavour. The design of the complex departed in some ways from the traditional formula, and Disney characters had their roots in European mythology due...