Disney

Walt Disney Company's
Euro Disneyland Venture
A study in corporate foreign expansion
by
Lyn Burgoyne

INTRODUCTION
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 moreadvantageous 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 beenanticipated 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 allaspects 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 itsoverambitious 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 whichpreviously 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 researchinvestigation 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, andevaluation, 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.
THE BEGINNING
In order to understand the issues involvedin 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.
Why Paris?
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...