By: Edward • 1,967 Words • February 6, 2010 • 495 Views
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Many companies throughout the United States and beyond are resorting to developing their business abroad. This is due to numerous factors such as the ability to cut costs through cheaper building material or labor, which leads to increg their revenues, functioning with more advantageous tax and labor laws, and expanding their market, just to name a few. The Walt Disney Company was one of those many American organizations to expand on foreign soil. Its first foreign venture proved to be so successful that the decision was made to further expand abroad. This next foreign expansion experience, named Euro Disneyland did not prove to be the successful venture that had been anticipated by its creators.
Euro Disneyland a theme park comprised of an updated, state of the art Disney's Magic Kingdom, is a subsidiary of the Walt Disney Company located outside Paris, France, and has experienced numerous complications from its inception. Because the Walt Disney Company executives were determined to adhere to American philosophies, they did not thoroughly investigate all aspects of the European environment. This failure to do adequate research caused the Walt Disney Company executives and visionaries to construct their American dream theme park on foreign soil with little if any regard for the practical reality of the physical, financial, and/or cultural environment of their chosen site. More specifically, the Walt Disney Company's "...biggest mistakes were its overambitious plans to develop the site, plus Euro Disneyland's financial structure itself, which depended on a highly optimistic financial scenario with little room for glitches" (Gumbel & Turner, 1994, p. A 12). These massive oversights were contributing factors to the problems faced at Euro Disneyland.
As a company planning on expanding abroad, it is helpful to study the history of companies which previously have developed in other countries. For example, studying the Walt Disney Company's venture into France will allow other companies to learn from the Walt Disney Company's experiences. Recognizing, understanding and avoiding their mistakes will allow a company entering a new country increased opportunity to succeed. Reviewing the Euro Disneyland venture from the site research investigation to the present day operation will be beneficial to a company considering expansion abroad.
THE HUMAN RESOURCE CONNECTION
The human resource professional often is involved in determining the optimum site for a business and is responsible for many other aspects of an international expansion, such as cultural evaluation of the site, employee selection, training, development, compensation, and evaluation, just to name a few. Thus, as a human resource professional it is pertinent to research companies which have succeeded and those which have not, in order to better prepare. Furthermore, human resource professionals must comprehend the laws, traditions, culture, and people of a country in order to minimize problems which can occur.
In order to understand the issues involved in the Walt Disney Company's international expansion in Europe it is pertinent to review the background of Euro Disneyland. This can be done by looking at how the site, Paris, France, was chosen, at the signed agreement, at the risk management issues, and at the opening.
The Walt Disney Company choose Paris, France, as the site of Euro Disneyland for many reasons. On April 15, 1983, the Walt Disney Company opened in Tokyo, Japan, their first theme park outside the United States. This theme park, Tokyo Disneyland became an instant hit. In fact, since the Walt Disney Company executives believed they learned so much about operating a theme park in another country, and since Tokyo Disneyland was an instant success, they began immediately to search for a site for a fourth park (Scimone, 1989).
To find a site for their fourth theme park, the Walt Disney Company looked to Europe where Disney films historically have done better than in the United States. Because of this film success, the Western European audience already was familiar with Disney entertainment and merchandise (Scimone, 1991). From 1983 through 1987 the company searched for sites in the United Kingdom, France, Germany, Spain, and Italy. Finally the possibilities were narrowed down to Costa del Sol in Spain and Paris in France. Although Spain had the edge due to its climate, France had a larger population and a spectacular transportation network (Scimone, 1989). The Walt Disney Company executives believed since Tokyo Disneyland located in a cold-weather climate and virtually the same latitude as Paris,