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Bad decisions at Euro Disney Two years after Walt Disney Co. opened its new part in France, Euro Disney was losing $1 million per day, despite over a million visitors
a 49% share and received seventy to eighty percent of the capital created by Euro Disney, they made the decisions they thought were necessary from afar. While doing
and first test the waters. Here it is important to remember what happened in the case of Disney opening Euro-Disney. Ford should not start building plants throughout
are hotspots, or "high burden" locations, for the contraction of Tuberculosis with 246 and 290 cases per 100,000 of the population in 2003, respectively (World Economic
of the creators, other animation tends to place little stock in these or will sometimes leave such devices out entirely. This has caused critics of the style to refer
Submitted by dhuynh on March 17, 2008
Category: Business
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Two years after Walt Disney Co. opened its new part in France, Euro Disney was losing $1 million per day, despite over a million visitors per month. What had gone wrong?
Disney was overly ambitious, and had made serious strategic and financial miscalculations. It relied too heavily on debt, just as interest rates started to rise. It assumed a real estate boom would continue, allowing it to see some properties to pay off its debts. It made mistakes in the park itself, including cost overruns, a no-alcohol policy (in a country where a glass of wine for lunch is standard), too few bathrooms, and a mistaken assumption that the French would not want breakfast at the hotel restaurants.
The company blamed its problems on a severe European recession, high interest rates, and the devaluation of several currencies against the French franc. But is had alienated the people with whom it needed to work. Disney thought it knew best, and persistently imposed its will on others. "They were always sure it would work because they were Disney," said one French construction-industry official. Disney's European executives felt they were always playing second fiddle to corporate executives.
Disney showed its overconfidence in many ways. Executives boasted they could predict future living patterns in Paris; they predicted people would move to the east near Euro Disney. They believed they could change European habits. For instance, Europeans are more reluctant than Americans to let their kids skip school, and prefer longer vacations to short breaks. Disney believed it could change this.
"There was a tendency to believe that everything they touched would be perfect>" said a former Disney executive. Disney believed that what it could do in Florida, it could do in France. The perceived arrogance, and a critical press, demoralized the workforce, and initially kept visitors away.
The risky financing of Euro Disney was based on a highly...
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