09/11/15 ESANInterna1onalMBA

MICKEYGOESTOFRANCE

MinZhuClarisseLevi

NadiyaJihaanGowerdeChabertAlvaroMatus

AntoineMortellier

09/11/15 ESANInterna1onalMBA

INTRODUCTION

The Walt Disney Company (“Disney”) •  AnAmericandiversifiedmul1na1onalmassmediaandentertainment

conglomerate•  FoundedinLosAngeles,California,UnitedStates,in1923

•  FounderWaltDisneyandRoyO.Disney•  FourMajorBusinessSegments

ConsumerProductsandInterac0ve

Mediatoys,clothing,andothermerchandises,Internet,mobile,socialmedia,

virtualworlds,computergamesopera1ons

StudioEntertainmentfilm,music

recordinglabel,theatricaldivisions

ParksandResorts

themeparks,vaca1onresorts

MediaNetworkstelevisionproper1es

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Expectedtoopenin2016inShanghai,China.AgroundbreakingceremonytookplaceonApril7,2011.

1955,California,USATheresortfocusesonMickeyMouseandotherDisneycharacters

1971,Florida,USAParks:MagicKingdom,Epcot,Disney'sHollywoodStudios,Disney'sAnimalKingdom,waterparks

1983,Chiba,Japan

1992,Paris,France 2005,HongKong

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EuroDisneyland

CaseyStudy:EuroDisneylandNego0a0on

•  Disneydecidedin1984tolaunchEuroDisneyland(“EuroDisneyland”or“EDL”)inMarne-la-Vallee,FrancefollowingthesuccessofTokyoDisney.

•  Thereali1esofopeningandopera1ngEDLinFrancewerefardifferentthanDisney’sexpecta1onswhenitbegannego1a1ons—somuchsothattheResortnarrowlyescapedbankruptcy.

•  ThefailureandmistakesofDisney’sinterculturalnego1a1onwiththeFrenchgovernmentandci1zensthroughEuroDisneyland.

Disneycase

TheDeal

WaltDisneygotinspiredfromFrenchpatrimoine(castles&gardens)èCrea1onofthewell-knownDisneycastle

WaltDisneyrememberedMemoriesofWWI(ambulancedriverinFrance)

1stbestop0onavailabletosetupthenewresortèSPAIN• ADractsonlysummertourists• Lackofreliablephoneservice• VerydistantfromcentralEurope

2ndbestop0onavailabletosetupthenewresortèFRANCE• ParisaDracts12to16millionsvisitorsannually• CEO’smemoriesofFrance(MichaelEisner,aOerWaltDisney’sdeathin1966)• Ile-de-FranceareacontrolledbyFrenchGovernmentdirectly• Weathernotanimportantfacttopointout(donotaffecttourism)

DisneylandParis’Process

Actors:French&SpanishGovernments&

EuroDisneylandcorpora1on

Goal:Thousandofjobsforthehostcountry+billionsof

revenueduetohighfrequencyofannualtouristvisits

Meansemployed:Financialdeals($400millionforaTGVstop,extensionoffreeway,$700millionlow-interestloan,Disneypaysonly26%totalcost)Taxbreaks,freelandto

Disneycorpora1on

1985èDecisionmadetobuilduptheresortinFrance

(unbeatableoffer)

Howdoestheresortlooklike?29aprac1ons,6hotels,190000sqm

enterntainmentcenter,golf,Restaurants,campground

TightNego1a1on

Challenges

Disney:Keepmanagement

controloftheresort(even49%of

shares)

Proteststoovercome

Verylowflowoftouristscomparedtoexpecta1ons(30000adayandfewFrenchpeople)

Nosufficientcashby1993(emergency

fundsneeded,savedfrombankrupcythankstoSaudi

ArabiaPrincebuying24.5%shares)

TheGovernment

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RoleofPrivateInvestment

Unemployment

Tourism

Bureaucra1cStructure

Na1onalGovernments-

Mayor

LandAcquisi1on

TheGovernment:SuccessesandFailures

Hiringamediator&theacknowledgingtheimportanceofarbitra1on

Buildingrela1onshipsin

theprenego1a1on

stage–helpedwith

Governmentchange

Culturalandethnocentrictensions

betweentheGovernmentandEDL

TensionsgrewbetweentheNa1onaland

LocalGovernment–

AndalsobetweenLocal

andEDL

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ThirdPar1es

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Construc1on

InsistedonbuildingatAmericans’standards

Insteadofmendingrela1onships,they

broughtinanAmericanEngineer

Training

Differenceinlabour

percep1ons/laws

Manifesta1oninactsofrebellion

Unilateralculturalindoctrina1on

Guests

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Guests

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Dress&Indoctrina1onatDisney

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Controversy

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Renego1a1on:MickeyTakesFrenchLessons

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A"eroneyearoftroubledinterac2onswiththeFrenchpeople,Disney“reopened”nego2a2onstocorrectitsmistakes

Nomina0onofaFrenchChairman•  1993:PhilippeBourguignon,a

Frenchman,succeededFitzpatrick,asthenewchairman

•  Hewasinchargedwithovercomingtheculturalgap

PhilippeBourguignon

Renego1a1onwithCastMembers

•  Adapta0onofworkprac0cestobecomemoreFrench

èItimprovedintraorganiza1onalrela1ons

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Recogni1onofstandardFrench

employeeclassifica1ons

Annualizedhourlyworkschedules

Setngamaximumworkweek

Solici1ngthecastmember’s

opinions

Renego1a1onwiththeguests

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CutngPrices

•  Park1cketsforadultsinhighseasonreducedby20%

•  Offeredspecialpromo1onsinwinter

•  Reducedthecostoftheleastcostlyhotelroomsbyathird

•  Paris-arearesidents,special30%admissiondiscount

Adver1sing

•  Changeditsfocustotarget•  AdultsvsChildren

LaunchofficesinEurope

•  Between1994-1996:officesopenedinLondon,Frankfurt,Milan,Madrid,Amsterdam…

•  Packagescustomizedforregionalaudience

•  Crea1ngfes1vi1esforEuropeanholidays:Oktoberfest,Bas1lleDay

Individualna0onalmarketsFrenchGuests

Bydemonstra1ngawarenessoftheirinterestsandpriori1es

CorrecttheAmericancompany’smispercep1onsofFrenchconsump1onhabits

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• SellingthesamecartoonishproductsthatDisneysellsintheUnitedStates(hats,Tshirts)

• Revampinappropriatemenus:“peopledonotcometotheparkforagastronomicexperience”

RedefineEuroDisneyoffer

• AllowedalcoholintoDisneylandpark

PolicyChanges

“EuropeanguestcametoexperienceDisney,notDisney’sversionofEurope”

•  EuroDisneylandwasrenamed“DisneylandParis”Toiden1fyitwith-  Walt’soriginalcrea1on-  ThecityofParis(roman1candexci1ng)

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Renamethepark

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Conclusion

AdviceonExpandingtheEmpire• ForDisneytosucceedinglobalopera1ons,itmustavoidculturalstereotypes.Itmustbasedecisionsonwhatitlearnsaboutothercultures,notwhatitassumesaboutthem.• Disneymustalsostrikeabalancebetweenadap0ngtothehostenvironmentandsacrificingitscorporateiden0ty.Whenfacedwithculturalgaps,Disneyshouldreevaluateitspoliciesanddeterminewhethertheyareactuallyfundamentaltoitscorporateimage,ormerelyfundamentaltoitscorporateimageintheUnitedStates.

• Finally,Disneyshouldnego1atewithawarenessthatevenit,averitableempire,isfallible.Disneyshouldfocusonofferingthehighqualityproductsandexperiencestheworldhascometolove,butshouldalsorecognizethatsuchlove—andtheprofitsthataccompanyit—mustbeearnedanddeserved.