IntroductionMany of Businesses inAmerica make detailed assumptions about the potential of expand their businessto other countries.One of the examples of the outcome to intercultural businessis Disney Corporation’s European attempt. Euro Disney hasa very difficult beginning experience in France. Due itslack on accurate information about the French and European preference andculture, further on their inability on forecasting external problems andinability on controlling both controllable and uncontrollable forces, Disneyacquired a huge debt. Instead of analyzing and learning from its potentialcustomers Disney chose to make assumptions, turned out that most of thoseassumptions were wrong.
Euro DisneylandFirstpark of Disneyland opened in Anaheim, California, in 1955. Until 1992, theWalt Disney Company had experienced nothing but success in the theme parkbusiness. Followingon from the success of the Disneyland theme park in Anaheim, Florida , Disney plans to build a European version first started around 1975, nineyears after Walt Disney died. Initially Britain, Italy, Spain and France wereall considered as possible locations.
France was the best choice for EuroDisney, because it presented the best geographic location and also had manyincentives from the French Government, cheap land, easy bank loans, and morethan $1billion in incentives. Eventually the French location won, and a sitewas duly investigated at Marne-la-Vallee, partly because of its close proximityto Paris, and also its central positioning within Western Europe. A factor thatwas thought to be crucial to the park’s future success if it was to attractsufficient visitors.
The proposed location put the park within 4-hours drivefor around 68 million people, and 2 hours flight for a further 300 million orso. On March 24, 1987 Disney signs an agreement with the French authorities tocreate Euro Disney in France for the building of Disneyland theme park atmarne-la_vallee. The park was built 4460acres of farmland. Planned to open early 1992.There are many reasons for disneyland’sfailure;-Environmental and Location Factors-Labor Laws-Competition-Financing-Cultural DifferencesCULTURALDIFFERENCESHofstede’sCultural Dimensions TheoryIt is the name of the frame used to measure thelevel of intercultural communication of an entity, an institution, or an entitythat constitutes an asset in a social structure, and is referred to by GeertHosted for the first time. It can be said that the theory has been used bydifferent disciplines for many different purposes.
For example, interculturalsocial behaviors are used in different areas such as sociology, internationalmanagement and marketing, communication. In addition to all these, it is alsoused to measure the extent to which people from many different cultures havecome together to work on social networks, how to navigate on the internet, orhow open a community is to different cultures.PowerDistance IndexIt questions the ideas of members of anorganization or social structure about power distribution and seeks to findwhich of the two extremes is closer in the form of equal or unbalanceddistribution of power. The fact is that the ones who are close to the gentleare defending the power equally, and the defenders of those who are not evenlydistributed the power are talking about the gentleness in the organizations.From this point of view, it can be argued that the organizing culture isdeveloped in organizations with a close sense and that the democraticatmosphere is more open. When examined at the cultural level, it is seen thatthe close organizations are more open to different cultures.Thereare some of the main cultural differences between the United States and France. United States the fairly low score on PowerDistance in combination with the most individualistic culture in the world.
TheAmerican premise of “liberty and justice for all.”. France scores fairly highon Power Distance. Children are raised to be emotionally dependent, to a degree,on their parents. This dependency will be transferred to teachers and later onto superiors. It is, therefore, a society in which a fair degree of inequalityis accepted. Power is not onlycentralized in companies and government, but also geographically.
Individualism Vs Collectivism Aggregation is used to measure how involved individualsare. In societies where the concept of individuality is high, it can be saidthat individual interests and goals are ahead of social interests and targets.The fact that people feel themselves as a member of a group as an individualforms the basic two extremes of the index. In terms of interculturalflexibility, it can be said that the social organizations in which individualsare regarded as individuals and whose concept of belonging is low is more opento foreign cultures. US scores higher on Individualism. They just think oftheir own family.
France is shown to be an individualist society. Parents maketheir children emotionally independent with regard to groups in which theybelong. This means that one is only supposed to take care of oneself and one’sfamily.Uncertainty avoidanceIndicator showing how pleasant a social organization istowards uncertainty or ambiguity.
The capacity to accept uncertainty is anxiousfor any ambiguity in low societies, and it is expected that the rules orsolutions will be created that make every situation more specific. However, itcan be said that the cultural relations of the societies that accept the highuncertainties are higher. These cultures are more open to change and havehigher levels of respect for new culture and new ideas.The US scores well below average on the UncertaintyAvoidance dimension. . As a consequence, the perceived context in whichAmericans find themselves will impact their behavior more than if the culturewould have either scored higher or lower. France French culture scores high onUncertainty Avoidance.
The French don’t like surprises. Structure andplanning are required.Masculinity Vs Feminine The index that determines how the roles between thesexes are emotionally distributed. In masculine societies, values are morebased on competition, power, and concrete objects. On the other hand, values infeminine communities are based on relationships, quality of life and feelings.In feminine societies, the gender of the woman or the man has no precaution andis treated equally to the individual. In literature, the concepts of”numerical life” (masculine) and “quality life (feminine)” areused instead of “masculine” or “feminine” to disturbreaders from some communities or cultural backgrounds.
US on Masculinity are high. This can be seen in thetypical American behavioral patterns. This can be explained by the combinationof a high Masculinity drive together with the most individualistic drive in theworld. In other words, Americans, so to speak, all show their masculine driveindividually. France has a somewhat feminine culture. At face valuethis may be indicated by its famous welfare system (securité sociale), the35-hour working week, five weeks of holidays per year and its focus on thequality of life.
French culture in terms of the model has, however, anotherunique characteristic. The upper class scores feminine while the working classscores masculine. Uncertainty avoidance Indicator showing how pleasant a social organization istowards uncertainty or ambiguity. The capacity to accept uncertainty is anxiousfor any ambiguity in low societies, and it is expected that the rules orsolutions will be created that make every situation more specific. However, itcan be said that the cultural relations of the societies that accept the highuncertainties are higher. These cultures are more open to change and havehigher levels of respect for new culture and new ideas.
The US scores well below average on the UncertaintyAvoidance dimension. As a consequence, the perceived context in which Americansfind themselves will impact their behavior more than if the culture would haveeither scored higher or lower.French culture scores high on Uncertainty Avoidance.
The French don’t like surprises. Structure and planning are required. Pragmatism (long term orientation) Confucian dynamism also means that the time horizons ofsocial organizations are questioned and measured according to whether socialorganizations have long or short term expectations, goals or plans.
Long-termfocused community units are more interested in making plans for the future andtheir values are shaped according to these interests. For example, to savemoney, to be permanent or to adapt for the sake of their interests. On theother hand, it is possible to talk about short-term focused communities. Thevalues in those days are very much past and focused now.
For example, respectfor the traditions from the past or the extent to which social responsibilitiesare fulfilled are important.US Americans are prone to analyze new information tocheck whether it is true. Thus, the culture doesn’t make most Americanspragmatic, but this should not be confused with the fact that Americans arevery practical, being reflected by the “can do” mentality mentioned above. France in this dimension, making it pragmatic. Insocieties with a pragmatic orientation, people believe that truth depends verymuch on situation, context and time. They show an ability to adapt traditionseasily to changed conditions, a strong propensity to save and investthriftiness, and perseverance in achieving results.
Source: (COUNTRY COMPARISON, n.d.)Trompenaars’ Research Universalism versus Particularism- It talks about three majordifferences: Universalistic cultures are focusing on the rules, butParticularism cultures are focusing on relationships. Universalistic is onlyone truth or reality, while Particularism is a number of perspectives onreality. Universalistic people “treat all cases in the same way”, whereas inParticularism people “treat cases on their special merits and create privateunderstandings”.
Based on above rules, it was believed that the rules,regulations and policies are universal and can be applied anywhere withoutmodification. On the other hand French perceives distinct rules and regulationsas part of their culture. Motivated by the success of its three theme parks,Disney did not realize that French were a part of a distinct culture and itsmethods may not work there. Individualism versusCommunitarianism: There are three different points between Individualismand Communitarianism in business decisions: People are living in “a communitarian society”in France while Americans are staying in the individual society. Lithe Frenchprefer to work together and take part in social relations mutually, whereaspeople from the USA adore the individualism..It is normal phenomenon forAmericans to make ranks between bosses and employees; however, the Frenchpeople refuse it. In brief, the two prime dimensions could explain hardly theethics in different cultures.
Specific versus Diffuse: This dimension mentions two differences between the USAand France1. The USA’s culture is belonging to Explicit nationalcultures, which make a decision with “a low context manner”; while France isfocusing on Implicit national cultures, which take a command with “a highcontext manner”. 2. The USA pays attention to a negotiation clearly,logically and persuasively, whereas France stresses on a discussioninaccurately and indirectly.
Achievement versus Ascription: This dimension mentions two differences between the USAand France: “achievement versus ascription” and “doing versus being”. Americansfocus on “achievement” and “doing” in the culture of their country, such asdividing their individualities from their jobs. In contrast, the French peopleprefer to stress “ascription and being”. Moreover, they are not only attendingon “the highest esteem”, but also distinguishing features or ascribing tothe single. So, there is no doubt that the USA stress the bloodline of thefamily and which school you graduated but the French emphasis the factors oftheir history. This dimension measures the method through which social statusis accorded to a person.
U.S. is certainly an achievement culture where aperson is regarded based on his achievement. Example: Walt Disney. Euro Disneyland created an environment that was notacceptable by the European culture itself.Cultural differences between the USand France has been ignored by Disney.
One of the themes of Euro-Disneyland wasAmerican. Like other Disneyland in other places, Disney followed one of its twomajor traditions of not serving wine, despite the attitude among the Frenchthat alcohol was a fundamental right. And also restaurants were all Americanfoods. The only exception is Fantasyland which re-created European fables.
Therecipes in American restaurants were also indistinctly adapted for Europeantastes. As a consequence, different regional American food was introduced toAmericanize the Disneyland in Europe. Cultural Operational Errors were a major problem for EuroDisney; it affected Disney’s performance and attendance.Another error was thebreakfast in Euro Disney’s hotels, based on assumptions Disney downsized therestaurants, because they assume that Europeans didn’t eat breakfast, when thetruth was that they ate. If Disney instead of decide to make assumption to basetheir operations had research and tried to understand the Europeans preferences(instead of trying to make them change their habits), Disney would fix thoseproblems even before the theme park was launched, it would increase customersatisfaction.Environmentaland Location FactorsAs the park was being constructed,Disney became concerned that the original plans, based on the Magic Kingdom inCalifornia, were too spurious for this land of real castles, kings, and queens.As a result, enhancements were ordered, and the park, originally budgeted at$2.0 billion ended up costing $3.
8 billion.This pushed Euro Disney’s break-evenparameters sharply higher, perhaps beyond its ability to deliver.The nasty cold and rain between November and Marchdepressed attendance far below expectations. Disney seemed to have greatlyunderestimated the importance of warm weather on winter attendance. Its Floridaand California experiences were not discounted enough, especially in winter.
Europeans take school much more seriously. They are farless likely than Americans to pull their kids out of school for frivolousreasons, like visiting a theme park. This further erodes Euro Disneyattendance, especially during the long 10-month period when schools are insession. MARKETINGThere are some steps that any company shouldcontemplate before entering a new market in order to flourish.
Unfortunatelyfor Euro Disney, those footsteps were not followed, instead Disney tried to”force” the entry of its product (the theme park), and anticipated it to beeasy money. Market Analysis and Market Research are the first and most vitalsteps that a company must take before entering a new market. Each country, eachcity in the world has its own individualism, its own culture, and it is vitalto companies to appreciate the culture and the people they will deal with.Disney lacked of accurate information about French culture and Frenchcustomer’s preferences, instead of doing a Market Research and learns from itspotential customers. If Disney would have done a proper Market Analysis andMarket Research they would have been able to anticipate many culturaldivergences they had.In marketing the park Europe was treated as one countrywhen it has a larger range of language and culture than the US or Japan. Whilethe attempt was to give the park a European flavour, the advertising campaignwas typically American.
Most advertisingwas aimed at children while the adults make the final decision on whether to goor not. In America this may work because Disney theme parks are longestablished and adults associate the whole experience with childhood memories.In Europe however theme parks are un-established so more marketing effort isrequired to convince people that Euro Disney will surpass everyonesexpectations.MANAGEMENTThe Management seem to be overpowered by theirreputation for success with no scepticism about the European market. Theopposition to Euro Disney was disregarded despite the fact that mainstreamnewspapers seemed support the protest. Disney ignored the description of EuroDisney as a cultural abomination, which could have highlighted the need forfurther cultural integration. The attitude of Disney management is confidently dismissivemaking them appear out of touch with the cultural differences.There were reasons for failure due to marketing andadministration decisions made before and after the launch of the park.
Thewhole concept of trying to sell an American product to Europe, while trying toadapt some features of the park to suit a wide variety of cultural tastes,doomed the project. Overconfidence in the formerly foolproof Disney formulameant that in planning the park not much attention was paid to many importantdetails. In this sense the administrative errors in the project planning werethe main reasons for failure. The inappropriate marketing of Euro Disneycontributed greatly to the poor attendance but ultimately the park itself wasnot going to make the groundbreaking impression needed to create a new market.Develop Alternatives Disney was so blind by their success in Japan that theydidn’t stop to consider their previous experiences and how they need to adjustthem in order to better attend its French and European customers. Decision forone Plan After developing several business scenarios and analyzing them Disneyshould be able to select one, or make a combination with the best aspects ofall of them.
Disney should have considered all uncontrollable forces that wasaround them; for example French (as well as other European culture),over-valued Franc due to recession. If a business plan was made considering allof those factors, Disney would probably had more realistic numbers (attendance,revenues) and should be able to deal with the cultural differences betweenAmerican and Europe, especially in France. Instead Disney chose a business planthat underestimated the influence of cultural differences, and saw Disney’stheme park as a monopoly due its quality and uniqueness. They just ignored anddidn’t give enough attention to the competitors offering different type ofentertainment. All those assumptions made Disney’s expectation way too high,with overpriced admission fees, food and beverages, merchandise and with anattendance too high. Operational Plan After gathering information about French and Europeancustomers, their preferences, their culture, their age, their income, theirexpectations, and to develop a business plan on how to run the business andwhich scenario they think was the most accurate one, Disney should havedeveloped an effective operational plan.
The Operational Plan should havefocused on, who will run the park? Who will be responsible for the staff? Whowill make the decisions? As Disney was entering in France and most of theemployees would be French or Europeans, the ideal was to put key Frenchmanagers, to deal with the staff, and probably a French chairman, as well ashuman resources managers. Those managers would have more experience andknow-how, how to deal with the staff, with investors and executives, and withthe media, that could be a Disney’s marketing tool instead of an “attack base”.Decision Making is something that most of the times should be taken quickly andefficient, so those decisions should be taken in France, not on US as Disneydid. If Disney had these aspects they would probably have foreseen most of thecultural and operational, problems that occurred and could have easily avoidedit.
CONCLUSIONSThe business performance of Euro Disneyland was notthat great and stable. It couldn’t have right assumptions on the Europeanmarket and there has been cruel European recession such as increase in interestrates and French currency value. The preliminary plan was not ample andaccurate in providing resolutions to Disney problems and concerns that arisen. A major criticism on Euro Disneyland was that it isneither international nor French in nature, and it failed to satisfy Europeansat all. Many of the visitors could not figure it out the theme of EuroDisneyland that whether it is going to be a European park, an American park, ora French park.
In the meantime, the cost for Euro Disneyland was also an issuefor some visitors. Many of the French visitors had been discouraged from comingbecause of the cost such as housing cost, souvenirs, admission cost and soforth. Attendance was kept on decreasing and the company of course, had greatfinancial loss. Euro Disney gave people who couldn’t afford to go to America anidentical experience as same as in America. However, the Euro Disney was failedto please French visitors, even European visitors but made them to complainabout the long lines, and poor service.