Disneyland Resort Paris Case Study

Part 1

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Instruction: Answer the questions below.

  1. Why should an organization take a total supply network perspective?
  2. What is involved in configuring a supply network?
  3. Where should an operation be located?
  4. How should operations plan their capacity?

Part 2

Instruction: Read the case carefully. Answer the questions that follow.

Case Study: Disneyland Resort Paris

In August 2006, the company behind Disneyland Resort Paris reported a 13 per cent rise in revenues, saying that it was making encouraging progress with new rides aimed at getting more visitors. ‘I am pleased with year-to-date revenues and especially with third quarter’s, as well as with the success of the opening  of  Buzz  Lightyear  Laser  Blast,  the  first  step  of  our  multi-year  investment  program.  These results reflect the group’s strategy of increasing growth through innovative marketing and sales efforts as  well  as  a  multi-year  investment  program.  This  performance  is  encouraging  as  we  enter  into  the important summer months’, said Chairman and Chief Executive Karl L. Holz. Yet it hadn’t always been like  that.  The  14-year  history  of  Disneyland  Paris  had  more  ups  and  downs  than  any  of  its rollercoasters. From 12 April 1992 when EuroDisney opened, through to this more optimistic report, the resort had been subject simultaneously to both wildly optimistic forecasts and widespread criticism and ridicule. An essay on one critical Internet site (called ‘An Ugly American in Paris’) summarized the whole  venture  in  this  way.  ‘When  Disney  decided  to  expand  its  hugely  successful  theme  park operations  to  Europe,  it  brought  American  management  styles,  American  cultural  tastes,  American labor  practices,  and American  marketing  pizzazz  to  Europe.  Then,  when  the  French  stayed  away  in droves, it accused them of cultural snobbery.’

Disneyland Resort Paris Case Study

The ‘magic’ of Disney

Since its founding in 1923, The Walt Disney Company had striven to remain faithful in its commitment to  ‘Producing  unparalleled  entertainment  experiences  based  on  its  rich  legacy  of  quality  creative content and exceptional story-telling’. In the Parks and Resorts division, according to the company’s description, customers could experience the ‘Magic of Disney’s beloved characters’. It was founded in

1952,  when  Walt  Disney  formed  what  is  now  known  as  ‘Walt  Disney  Imagineering’  to  build Disneyland in Anaheim, California. By 2006, Walt Disney Parks and Resorts operated or licensed 11 theme parks at five Disney destinations around the world. They were: Disneyland Resort, California, Walt  Disney  World  Resort,  Florida,  Tokyo  Disney  Resort,  Disneyland  Resort  Paris,  and  their  latest park,  Hong  Kong  Disneyland.  In  addition,  the  division  operated  35  resort  hotels,  two  luxury  cruise ships and a wide variety of other entertainment offerings. But perhaps none of its ventures had proved to be as challenging as its Paris Resort.

Service delivery at Disney resorts and parks

The  core  values  of  the  Disney  company  and,  arguably,  the  reason  for  its  success,  originated  in  the views and personality of Walt Disney, the company’s founder. He had what some called an obsessive focus on creating images, products and experiences for customers that epitomized fun, imagination and service. Through the ‘magic’ of legendary fairytale and story characters, customers could escape the cares of the real world. Different areas of each Disney Park are themed, often around various ‘lands’ such  as  Frontierland,  and  Fantasyland.  Each  land  contains  attractions  and  rides,  most  of  which  are designed to be acceptable to a wide range of ages. Very few rides are ‘scary’ when compared to many other entertainment parks. The architectural styles, décor, food, souvenirs and cast costumes were all designed to reflect the theme of the ‘land’, as were the films and shows. And although there were some regional differences, all the theme parks followed the same basic set-up. The terminology used by the company  reinforced  its  philosophy  of  consistent  entertainment.  Employees,  even  those  working

‘backstage’, were called ‘cast members’. They did not wear uniforms but ‘costumes’, and rather than being given a job they were ‘cast in a role’. All park visitors were called ‘guests’.

Disney  employees  were  generally  relatively  young,  often  of  school  or  college  age.  Most  were  paid hourly  on  tasks  that  could  be  repetitive  even  though  they  usually  involved  constant  contact  with customers.  Yet,  employees  were  still  expected  to  maintain  a  high  level  of  courtesy  and  work performance.  All  cast  members  were  expected  to  conform  to  strict  dress  and  grooming  standards. Applicants to become cast members were screened for qualities such as how well they responded to questions, how well they listened to their peers, how they smiled and used body language, and whether they  had  an  ‘appropriate  attitude’.  Disney  parks  had  gained  a  reputation  for  their  obsession  with delivering  a  high  level  of  service  and  experience  through  attention  to  operations  detail.  All  parks employed queue management techniques such as providing information and entertainment for visitors, who were also seen as having a role within the park. They were not merely spectators or passengers on the rides, they were considered to be participants in a play. Their needs and desires were analysed and met through frequent interactions with staff (cast members). In this way they could be drawn into the illusion that they were actually part of the fantasy.

Disneyland Resort Paris Case Study

Disney’s  stated  goal  was  to  exceed  their  customers’  expectations  every  day.  Service  delivery  was mapped and continuously refined in the light of customer feedback and the staff induction programme emphasized  the  company’s  quality  assurance  procedures  and  service  standards  based  on  the  four principles of safety, courtesy, show and efficiency. Parks were kept fanatically clean. The same Disney character never appears twice within sight – how could there be two Mickeys? Staff were taught that customer  perceptions  are  both  the  key  to  customer  delight,  but  also  are  extremely  fragile.  Negative perceptions  can  be  established  after  only  one  negative  experience.  Disney  university-trained  their employees in their strict service standards as well as providing the skills to operate new rides as they were  developed.  Staff  recognition  programmes  attempted  to  identify  outstanding  service  delivery performance  as  well  as  ‘energy,  enthusiasm,  commitment,  and  pride’.  All  parks  contained  phones connected  to  a  central  question  hotline  for  employees  to  find  the  answer  to  any  question  posed  by customers.

Tokyo Disneyland

Tokyo Disneyland, opened in 1982, was owned and operated by the Oriental Land Company. Disney had  designed  the  park  and  advised  on  how  it  should  be  run  and  it  was  considered  a  great  success. Japanese  customers  revealed  a  significant  appetite  for American  themes  and American  brands,  and already  had  a  good  knowledge  of  Disney  characters.  Feedback  was  extremely  positive  with  visitors commenting  on  the  cleanliness  of  the  park  and  the  courtesy  and  the  efficiency  of  staff  members.

Visitors also appreciated the Disney souvenirs because giving gifts is deeply embedded in the Japanese culture.  The  success  of  the  Tokyo  Park  was  explained  by  one  American  living  in  Japan.  ‘Young Japanese are very clean-cut. They respond well to Disney’s clean-cut image, and I am sure they had no trouble  filling  positions. Also,  young Japanese  are  generally  comfortable  wearing  uniforms, obeying their  bosses,  and  being  part  of  a  team.  These  are  part  of  the  Disney  formula. Also,  Tokyo  is  very crowded and Japanese here are used to crowds and waiting in line. They are very patient. And above all, Japanese are always very polite to strangers.’

Disneyland Paris

By 2006 Disneyland Paris consisted of three parks: the Disney Village, Disneyland Paris itself and the Disney Studio Park. The Village was composed of stores and restaurants; the Disneyland Paris was the main theme park; and Disney Studio Park has a more general movie-making theme. At the time of the European  park’s  opening  more  than  two  million  Europeans  visited  the  US  Disney  parks.  The company’s brand was strong and it had over half a century of translating the Disney brand into reality. The  name  ‘Disney’ had  become  synonymous  with  wholesome  family  entertainment  that  combined childhood innocence with high-tech ‘Imagineering’.

Initially, as well as France, Germany, Britain, Italy and Spain were all considered as possible locations, though Germany, Britain and Italy were soon discarded from the list of potential sites. The decision soon  came  to  a  straight  contest  between  the Alicante  area  of  Spain,  which  had  a  similar  climate  to Florida for a large part of the year and the Marne-la-Vallée area just outside Paris. Certainly, winning the  contest  to  host  the  new  park  was  important  for  all  the  potential  host  countries.  The  new  park promised to generate more than 30,000 jobs. The major advantage of locating in Spain was the weather. However, the eventual decision to locate near Paris was thought to have been driven by a number of factors that weighed more heavily with Disney executives. These included the following:

  • There was a suitable site available just outside Paris.
  • The proposed location put the park within a 2-hour drive for 17 million people, a 4-hour drive for 68 million people, a 6-hour drive for 110 million people and a 2-hour flight for a further 310 million or so.
  • The site also had potentially good transport links. The Channel Tunnel that was to connect England with France was due to open in 1994. In addition, the French autoroutes network and the high-speed TGV network could both be extended to connect the site with the rest of Europe.
  • Paris was already a highly attractive vacation destination.
  • Europeans generally take significantly more holidays

each year than Americans (five weeks of vacation as opposed to two or three weeks).

  • Research indicated that 85% of French people would welcome a Disney park.
  • Both national and local government in France were prepared to give significant financial incentives (as were the Spanish authorities), including an offer to invest in local infrastructure, reduce the rate of value added tax on goods sold in the park, provide subsidized loans,

and value the land artificially low to help reduce taxes. Moreover, the French government was prepared to expropriate land from local farmers to smooth the planning and construction process.

Early concerns that the park would not have the same sunny, happy feel in a cooler climate than Florida were allayed by the spectacular success  of Disneyland Tokyo in a location with a similar climate to Paris, and construction started in August 1988. But from the announcement that the park would be built in  France,  it  was  subject  to  a wave  of criticism.  One  critic  called  the  project  a  ‘cultural  Chernobyl’ because  of  how  it  might  affect  French  cultural  values.  Another  described  it  as  ‘a  horror  made  of cardboard, plastic, and appalling colours; a construction of hardened chewing-gum and idiot folklore taken  straight  out  of  comic  books  written  for  obese  Americans’.  However,  as  some  commentators


noted,  the  cultural  arguments  and  anti-Americanism  of  the  French  intellectual  elite  did  not  seem  to reflect the behaviour of most French people, who ‘eat at McDonald’s, wear Gap clothing, and flock to American movies’.

Designing Disneyland Resort Paris

Phase 1 of the Euro Disney Park was designed to have 29 rides and attractions and a championship golf course together with many restaurants, shops, live shows and parades as well as six hotels. Although the park was designed to fit in with Disney’s traditional appearance and values, a number of changes were made to accommodate what was thought to be the preferences of European visitors. For example, market research indicated that Europeans would respond to a ‘wild west’ image of America. Therefore, both  rides  and  hotel  designs  were  made  to  emphasize  this  theme.  Disney  was  also  keen  to  diffuse criticism,  especially  from  French  left-wing  intellectuals  and  politicians,  that  the  design  of  the  park would  be  too  ‘Americanized’ and  would  become  a  vehicle  for American  ‘cultural  imperialism’.  To counter charges of American imperialism, Disney gave the park a flavour that stressed the European heritage of many of the Disney characters, and increased the sense of beauty and fantasy. They were, after  all,  competing  against  Paris’s  exuberant  architecture  and  sights.  For  example,  Discoveryland featured storylines from Jules Verne, the French author. Snow White (and her dwarfs) was located in a Bavarian village.  Cinderella  was located  in a French inn.  Even Peter  Pan was  made to  appear more

‘English Edwardian’ than in the original US designs.

Because  of  concerns  about  the  popularity  of  American  ‘fast  food’,  Euro  Disney  introduced  more variety into its restaurants and snack bars, featuring foods from around the world. In a bold publicity move, Disney invited a number of top Paris chefs to visit and taste the food. Some anxiety was also expressed  concerning  the  different  ‘eating  behaviour’ between  Americans  and  Europeans.  Whereas Americans preferred to ‘graze’, eating snacks and fast meals through-out the day, Europeans generally preferred to sit down and eat at traditional meal times. This would have a very significant impact on peak  demand  levels  on  dining  facilities.  A  further  concern  was  that  in  Europe  (especially  French) visitors  would  be  intolerant  of  long  queues.  To  overcome  this,  extra  diversions  such  as  films  and entertainments were planned for visitors as they waited in line for a ride.

Before  the  opening  of  the  park,  Euro  Disney  had  to  recruit  and  train  between  12,000  and  14,000 permanent and around 5,000 temporary employees. All these new employees were required to undergo extensive training in order to prepare them to achieve Disney’s high standard of customer service as well as understand operational routines and safety procedures. Originally, the company’s objective was to hire 45 per cent of its employees from France, 30 per cent from other European countries, and 15 per cent from outside of Europe. However, this proved difficult and when the park opened around 70 per cent of employees were French. Most cast members were paid around 15 per cent above the French minimum wage.

An   information   centre   was   opened   in   December   1990   to   show   the   public   what   Disney   was constructing.  The  ‘casting  centre’ was  opened  on  1  September  1991  to  recruit  the  ‘cast  members’ needed to staff the park’s attractions. But the hiring process did not go smoothly. In particular, Disney’s grooming requirements that insisted on a ‘neat’ dress code, a ban on facial hair, set standards for hair and  finger  nails,  and  an  insistence  on  ‘appropriate  undergarments’  proved  controversial.  Both  the French  press  and  trade  unions  strongly  objected  to  the  grooming  requirements,  claiming  they  were excessive  and  much  stricter  than  was  generally  held  to  be  reasonable  in  France.  Nevertheless,  the company refused to modify its grooming standards. Accommodating staff also proved to be a problem, when the large influx of employees swamped the available housing in the area. Disney had to build its own   apartments   as   well   as   rent   rooms   in   local   homes   just   to   accommodate   its   employees.

Notwithstanding all the difficulties, Disney did succeed in recruiting and training all its cast members before the opening.

The park opens

The  park  opened  to  employees,  for  testing  during  late  March  1992,  during  which  time  the  main sponsors and their families were invited to visit the new park, but the opening was not helped by strikes on the commuter trains leading to the park, staff unrest, threatened security problems (a terrorist bomb had  exploded  the  night  before  the  opening)  and  protests  in  surrounding  villages  that  demonstrated against the noise and disruption from the park. The opening day crowds, expected to be 500,000, failed to materialize, however, and at close of the first day only 50,000 people had passed through the gates. Disney had expected the French to make up a larger proportion of visiting guests than they did in the early  days.  This  may  have  been  partly  due  to  protests  from  French  locals  who  feared  their  culture would be damaged by Euro Disney. Also, all Disney parks had traditionally been alcohol-free. To begin with, Euro Disney was no different. However, this was extremely unpopular, particularly with French visitors who like to have a glass of wine or beer with their food. But whatever the cause the low initial attendance was very disappointing for the Disney Company.

It was reported that, in the first 9 weeks of operation, approximately 1,000 employees left Euro Disney, about one half of whom ‘left voluntarily’. The reasons cited for leaving varied. Some blamed the hectic pace of work and the long hours that Disney expected. Others mentioned the ‘chaotic’ conditions in the first  few  weeks.  Even  Disney  conceded  that  conditions  had  been  tough  immediately  after  the  park opened.  Some  leavers  blamed  Disney’s  apparent  difficulty  in  understanding  ‘how  Europeans  work’.

‘We can’t just be told what to do, we ask questions and don’t all think the same.’ Some visitors who had experience of the American parks commented that the standards of service were noticeably below what would be acceptable in America. There were reports that some cast members were failing to meet Disney’s normal service standard: ‘even on the opening weekend some clearly couldn’t care less . . .My overwhelming impression . . . was that they were out of their depth. There is much more to being a cast member than endlessly  saying  “Bonjour”. Apart from  having a detailed knowledge  of the site,  Euro Disney  staff  have  the  anxiety  of  not  knowing  in  what  language  they  are  going  to  be  addressed  .  .  . Many were struggling.’

It was also noticeable that different nationalities exhibited different types of behaviour when visiting the park. Some nationalities always used the waste bins while others were more likely to drop litter on the  floor.  Most  noticeable  were  differences  in  queuing  behaviour.  Northern  Europeans  tend  to  be disciplined and content to wait for rides in an orderly manner. By contrast some Southern European visitors ‘seem to have made an Olympic event out of getting to the ticket taker first’. Nevertheless, not all reactions were negative. European newspapers also quoted plenty of positive reaction from visitors, especially  children.  Euro  Disney  was  so  different  from  the  existing  European  theme  parks,  with immediately recognizable characters and a wide variety of attractions. Families who could not afford to travel to the United States could now interact with Disney characters and ‘sample the experience at far less cost’.

Disneyland Resort Paris Case Study

The next 15 years

By August 1992 estimates of annual attendance figures were being drastically cut from 11 million to just over 9 million. EuroDisney’s misfortunes were further compounded in late 1992 when a European recession caused property prices to drop sharply, and interest payments on the large start-up loans taken out  by  EuroDisney  forced  the  company  to  admit  serious  financial  difficulties. Also  the  cheap  dollar resulted in more people taking their holidays in Florida at Walt Disney World. At the first anniversary of the park’s opening, in April 1993, Sleeping Beauty’s Castle was decorated as a giant birthday cake to

celebrate  the  occasion;  however,  further  problems  were  approaching.  Criticized  for  having  too  few rides, the roller coaster ‘Indiana Jones and the Temple of Peril’ was opened in July. This was the first Disney roller coaster that included a 360-degree loop, but just a few weeks after opening emergency brakes locked on during a ride, causing some guest injuries. The ride was temporarily shut down for investigations. Also in 1993 the proposed Euro Disney phase 2 was shelved due to financial problems. This meant Disney MGM Studios Europe and 13,000 hotel rooms would not be built to the original

1995 deadline  originally agreed upon by the Walt Disney Company.  However,  Discovery  Mountain, one of the planned phase 2 attractions, did get approval.

By the start of 1994 rumours were circulating that the park was on the verge of bankruptcy. Emergency crisis talks were held between the banks and backers with things coming to a head during March when Disney offered the banks an ultimatum. It would provide sufficient capital for the park to continue to operate until the end of the month, but unless the banks agreed to restructure the park’s $1bn debt, the Walt Disney Company would close the park, and walk away from the whole European venture, leaving the banks with a bankrupt theme park and a massive expanse of virtually worthless real estate. Michael Eisner, Disney’s CEO, announced that Disney was planning to pull the plug on the venture at the end of March  1994  unless  the  banks  were  prepared  to  restructure  the  loans.  The  banks  agreed  to  Disney’s demands.

In May 1994 the connection between London and Marne La Vallée was completed, along with a TGV link, providing a connection between several major European cities. By August the park was starting to find its feet at last, and all of the park’s hotels were fully booked during the peak holiday season. Also, in October, the park’s name was officially changed from EuroDisney to ‘Disneyland Paris’ in order to

‘show that the resort now was named much more like its counterparts in California and Tokyo’. The end-of-year figures for 1994 showed encouraging signs despite a 10% fall in attendance caused by the bad  publicity  over  the  earlier  financial  problems.  For  the  next  few  years  new  rides  continued  to  be introduced. 1995 saw the opening of the new roller coaster, ‘Space Mountain de la Terre à la Lune’, and Euro Disney did announce its first annual operating profit in November 1995. New attractions were added  steadily,  but  in  1999  the  planned  Christmas  and  New Year  celebrations  are  disrupted  when  a freak storm caused havoc, destroying the Mickey Mouse glass statue that had just been installed for the Lighting Ceremony and many other attractions.

Disney’s ‘Fastpass’ system was introduced in 2000: a new service that allowed guests to use their entry passes to gain a ticket at certain attractions and return at the time stated and gain direct entry to the attraction without queuing. Two new attractions were also opened, ‘Indiana Jones et la Temple du Peril’ and ‘Tarzan le Recontre’starring a cast of acrobats along with Tarzan, Jane and all their jungle friends with  music  from  the  movie  in  different  European  languages.  In  2001  the  ‘ImagiNations  Parade’ is replaced by the ‘Wonderful World of Disney Parade’ which receives some criticism for being ‘less than spectacular’ with only 8 parade floats. Also Disney’s ‘California Adventure’ was opened in California. The Paris resort’s 10th anniversary saw the opening of the new Walt Disney Studios Park attraction, based on a similar attraction in Florida that had already proved to be a success.

André Lacroix from Burger King was appointed as CEO of Disneyland Resort Paris in 2003, to ‘take on  the  challenge  of  a  failing  Disney  park  in  Europe  and  turn  it  around’.  Increasing  investment,  he refurbished whole sections of the park and introduced the Jungle Book Carnival in February to increase attendance during the slow months. By 2004 attendance had increased but the company announced that it was still losing money. And even the positive news of 2006, although generally well received still left questions unanswered. As one commentator put it, ‘Would Disney, the stockholders, the banks, or even

the French government make the same decision to go ahead if they could wind the clock back to 1987? Is this a story of a fundamentally flawed concept, or was it just mishandled?’


1 What markets are the Disney resorts and parks aiming for?

2 Was Disney’s choice of the Paris site a mistake?

3 What aspects of their parks’ design did Disney change when it constructed Euro Disney?

4 What did Disney not change when it constructed

Euro Disney?

5 What were Disney’s main mistakes from the conception of the Paris resort through to 2006?

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