Problem Analysis of Euro Disney's Start up Problems

Summary

Disneyland Paris is facing problems since they first started up. They expected amount of visitors wasnÒ't reached and they expected a lot more French visitors in comparison with visitors from other countries

After thorough inspection by Disney, culture, community relations, sourcing methods and organisational structure were producing problems, which caused for the park not to meet all the expectations.

EuroDisneyland uses a differentiation strategy.

All employees together cost EuroDisneyland a lot of money, these are one of the highest costs Euro Disney is facing.

EuroDisneyland does not adapt its park to the country in which it is located.

EuroDisneyland hires employees from all over Europe, which is good to find the best people to work in their park, these different cultures can also clash with eachother.

The working method in EuroDisneyland is Top-down.

EuroDisney uses the Accumulator HRM Strategy.

The company will come up with a corporate culture that fits the culture of the European employees. Also the company should look into possible cultural clashes within the employees from the various European countries.

In the future, the employees' ideas should be communicated properly and be taken into consideration by the management. New management strategy movement should be towards "Bottom-up".

Euro Disney should make much more use of flexible working to reduce costs, and thus in relationship with increasing profits

Another item in the desired situation to avoid high personnel

costs is that Euro Disney should hire more local people in order to save costs and more of one culture within the company.

Full-time employees get direct compensation as well as indirect compensation for the job they have done. Main compensation for part-timers is direct compensation.

It is important that the culture of (American) Disney fits with the (mostly) French culture of its employees and its (potential) customers.

Euro Disney should change its strategy from accumulator to facilitator.

Preface

The aim of this report will be to cover all the problems that Euro Disney faced in their first years, and what we think the best solutions for these problems are.

In the first chapter we will give an overview of the current situation with the mission, goals, strategies etc. In the second chapter the gap between the current situation and the desired situation will be specified, and then in the third chapter where we describe the desired situation, we will go into the dependent variables and the human resource management (HRM) strategy. In the fourth chapter the implementation of all the changes, necessary for Euro Disney will be explained, with all the cultural, planning, organizing, leading and controlling aspects. Finally, in the conclusion an answer will be given to how the executive board of Euro Disney can reach their desired goals and what the organizational, including all of its internal and external relations, structure, and other aspects will look like

1. Present situation

Introduction

On the 24th of March 1987, after a long period of negotiations and brainstorming, the French government , The Ile-de-France regional council, the Seine-at-Marne Departmental Council, the Suburban Paris Transportation Authority (RATP) and the Public Planning Board for the Development of the new town Marne-la-Vallйe (EPA Marne) sign an agreement for building a Disney theme park at Marne-la-Vallйe, 20 miles from Paris.

Expectations for the park were high, and a half a million people were expected to come to the grand opening. However after the opening had ended, it had turned out that not even half of the expected attendance level was met.

Before the building of the park, it was predicted that the market for Euro Disney would be around 50% French and 50% foreigners, but after the first year the amount of French visitors was only 29% of the total visitors.

After thorough inspection by Disney, it turned out that in the process of producing and designing not the park's looks, details at grandness, but other aspect of the park, like culture, community relations, sourcing methods and organisational structure were producing problems, which caused for the park not the meet all the expectations. Disney knew something had to be done to improve the situation.

Business strategy

EuroDisneyland uses a differentiation strategy, they are different then all the other theme parks in France, but also in the rest of the world. The park spends a lot of money on the costumes of the Disney figures, the hotels, the shops and even to small details like trash cans. They try to create the perfect theme park, with attention to all the details, and this is how they differentiate themselves from the other themeparks. The admission costs of he Disney park is a lot higher then the other parks in France, but the visitors are willing to pay this amount of money to visit one of the biggest theme parks, which is different then the other parks.

Use of flexible working concept in relation to the increase of profits

At EuroDisneyland they employ about 28,000 people (including everyone from manager to construction worker), of which many have permanent open ended contracts. During the summer and during holidays they hire extra employees to be able to handle the extra visitors. A full time employee at EuroDisney works 35 hours per week, and a part time employee works during weekends or just on a call off, so they don't work a fixed amount of hours.

All employees together cost EuroDisneyland a lot of money, these are one of the highest costs Euro Disney is facing. Because they have so many permanent open ended contracts, they also have many fixes charges per month, which they wouldn't have if they had more people working only when the park is busy.

HRM dependent variables

1. Culture

EuroDisneyland does not adapt its park to the country in which it is located. They think that they can just built the park as they did it in the U.S.A. and that it can be operated in the same way, but this is not the case. The french have a different