Euro Disney’s journey started just over 30 years ago back in 1987 when an agreement was signed between Disney themselves and the French authorities, however the real story begins when Euro Disney opened its doors for the first time in 1992. Euro Disney, now known more commonly as Disneyland Paris is located only 20 miles from Paris, next to the river Marne. It is comprised of three different parks, Disney Village, Disney Studio Park and Disneyland Paris, all offering various elements of entertainment.
Operations management is a complex and imperative area of business “the systematic design, direction, and control of processes that transform inputs into services and products for internal, as well as external customers” (Krajewski, et al, 2013, p. 22). Operations management focuses on and is responsible for components such as, supply chain management, production processes, manufacturing and business operations in order to increase efficiency and thus maximize profitability.
Disneyland Paris have faced several issues and setbacks that have prevented the park from becoming as successful as its equivalent Disney parks located around the world. “Despite being one of the top tourist destinations in Europe attracting 15.6 million last year, Disney land Paris continues to struggle financially” (Gumbel, 2012). Many of these failures and issues stem from four specific areas of operations, directing, product and service design, managing and improving.
Directing, according to Slack et al. (2013) refers to, the overall operational strategy, incorporating the fundamental function of the operation and both the strategic purpose and the performance. The operational strategy should fit with the overarching vision of the business.
Slack describes a strategy as being vital and usually involves decisions and goals that direct a business and allow a company to maintain successful operations. “Operations strategy concerns the pattern of strategic decisions and actions which set the role, objectives and activities of operations” (Slack, et al, 2013, p. 70).
Disney, in 1983, opened its first resort outside of the United States in Tokyo, this park was and still is very successful. When the park first opened visitors were enthralled by the park, characters and entertainment, the customers were enchanted by the American style of the park and embraced the American culture.
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However, Disneyland Paris did not receive the same positive response and isn’t as nearly as successful as Disneyland Tokyo. Euro Disney was not built on the same assumption as the Tokyo Park, the model was adapted to suit a more conservative audience as Disney feared the same overlay would be too ‘American’ and would be unwelcomed by the Europeans. Disney’s theme parks and the company’s overall concept of entertainment is deeply engrained in American pop culture, something the French disliked, however, altering and modifying the product posed a greater risk, as the overall appeal of the theme park is tarnished. Additionally, any modifications made to the product the more difficult it becomes to achieve best practice to replicate in other locations around the world. The park seems to be a mixture of the true American Disney and what Euro Disney thought Europeans wanted.
Euro Disney and the parent company did not foresee the implications caused by the disapproval and initial rejection of the park. However, it would have been foreseeable if the company had thoroughly conducted credible market research.
Disneyland Paris should have implemented Hayes and Wheelwright’s four stage model of operations contribution (Hayes & Wheelwright, 1984). This model demonstrates how operations can overcome obstacles to strategic competition and success, it is also underpinned by the ideology that operation functions, managed effectively, can provide the foundations for a company to achieve a competitive advantage. The model is divided into four stages:
- Internal neutrality – very basic level of contribution, just trying to not make any mistakes and prevents the company from competing effectively and therefore inhibits a company from achieving competitive success.
- External neutrality – intermediate level of contribution, operations function set in motion the process of observing competitors and notice what they are doing, then attempts to match them and adopt what they deem to be best practice.
- Internally supportive – advanced level of contribution, further the previous stage the operations function commences to become amongst some of the best within the market, achieving this requires the company to have a strong and clear vision of the overall strategy and goals.
- Externally supportive - expert level of contribution, operations function begins to be the best and begins to redefine the benchmark of competition. For a company to achieve this, operations must be more inspired, proactive, ground-breaking and they must always be in the long term and forecasting to beat the competition.
Euro Disney’s initial strategy was more of an internal resource-based view (Barney, 1991), which focuses on the capability of the company in order to achieve a competitive advantage, as opposed to an external market-based view (Porter, 1980), which focuses on understanding all of the elements in the market environment in order to achieve a competitive advantage. Euro Disney failed to investigate thoroughly the overall external market environment, including the political, economic, socio-economic, technological, legal and environmental aspects.
Stemming from this another issue that Euro Disney faced, was bring an all-American approach to Europe. Euro Disney brought Europe an American style theme park, but not only that but an American way of thinking, an American management style and an overall American strategy that just didn’t seem to work in the European market. They were thinking like American’s instead of like Europeans, for example, Europeans are less likely to take their children out of school for a holiday, unlike Americans, European’s also spend less money and stay in the hotels for a shorter period. This eventually cost the company more both financially and in terms of the park’s reputation “After the wild success of the Disney theme park in Japan, Euro Disney got over ambitious, taking on more debt than the French resort could handle and over estimating the size and spending habits of its new audience” (Gumbel, 2012).
The European recession, devaluation of currency and the increased interest rates were foreseeable by Euro Disney, however they were not controllable. Euro Disney was not paying enough attention to the economy to see a recession coming, which ultimately caught them off guard.
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