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Euro Disney's Analysis of the External and Internal Environment

Essay by   •  September 18, 2010  •  Case Study  •  1,400 Words (6 Pages)  •  4,091 Views

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Euro Disney' marketer's before entering a market as in this case has been the European market should have scanned the environment. By scanning the environment they should analyze the mega-environment as well as the task environment for possible opportunities and threats . Yet, a close attention could have been paid to their strength and weaknesses inside the company. Indeed, the consideration about any trends should have been incorporated in their environment analysis.

In this case there has been a recognition of a trend, which is the trend of people going to theme parks during the weekends for entertainment of them as well as their children. Also here is an existing need for entertainment of this kind. Therefore, an opportunity exists in the European market that Euro Disney could have taken advantage of. However, their failure to pick up signals from the macro environment and microenvironment as well as to position their product accordingly, had negative effects on their operations. A further analysis of their macro and micro environment highlights their malfunction.

MACRO ENVIRONMENT (P.E.S.T)

The components of the macro environment are the political-legal environment, the economic environment, the socio-cultural environment, and the technological environment in which Euro Disney operates.

Political-legal environment:

Euro Disney's decision to open its Theme Park near Paris has caused a negative publicity in the sight of many French politicians. In fact, they have objected the existence of Theme Parks in the center of their French culture since the park has been viewed as a visible symbol of the U.S. culture. Although Euro Disney marketers probably choose this location, in particularly France, due to the fact that is the center of Europe and could most probably be the most convenient place for people to arrive and settle in their hotel to be entertained. For instance, people from all over Europe could travel quickly to Paris due to short distance and travel convenience like people from Germany or Spain could quickly and conveniently arrive in Paris.

However, the ignorance of the politicians' unfriendliness and deterrence caused the dire publicity to be spread all over France and probably wider. Politicians are usually the most publicly articulated figures. Thus, their opposition view would probably be spread to many potential visitors or customers that are most likely to decide not to buy or visit Euro Disney Theme Park or products. The negative publicity should have been important factor that Euro Disney marketer did not considered when placing the Theme Park and sustaining the U.S. spirit.

Socio-cultural environment:

Euro Disney marketers have recognized a trend. People are going to theme parks during the weekends for adults as well as children entertainment. Indeed, there is an existing need for entertainment of this kind. Therefore, an opportunity exists in the European market that Euro Disney could have taken advantage of.

However, the opportunity should have not been 'taken for granted'. Other cultural factors should have been analyzed to decide the positioning of Theme Park. Their prevalent mistake has been the failure to recognize the cultural differences between Americans and French people. Locating the Theme Park near Paris and acquiring agricultural land as well as imposing the U.S spirit undeniably negatively affects french citizens. The French peoples' lifestyle deeply depends on the gratitude to their traditional agriculture. Thus, the land takeover by an American Company mainly does not provide pleasure to them.

In addition, the politicians' negative publicity and the cultural leaders' unfriendliness toward the Euro Disney theme park caused the company to close down one resort hotel and laid off 5000 employees. Taking this into account the Euro Disney marketers should have anticipated peoples' resistance toward the Theme Park and should have changed their positioning in accordance to the cultural as well as lifestyle changes. Probably they could have changed their positioning toward more French like spirit such as French names for their labeled products or shows. Probably their decision not to have French names has been due to the targeting market, which is whole Europe containing many cultures and languages. Indeed, they have overlooked the market since it is too broad target market to fit the different cultural needs.

Economic Environment:

Euro Disney mainly failed to recognize the recession period in Europe. Recession usually means higher level of unemployment. The unemployment further changes the way people spend their money since they have less disposable income, particularly when people are unemployed they do not spend money on luxury especially on entertainment. Indeed, this should have been considered as a factor that could lower the number and spending power of customers.

Further, the implementation of the exchange rate mechanism has had negative impact on French and British GDP level. Thus, by decreased GDP the standard of living decreases driving consumers away from spending money on Theme Parks. Indeed, the climate in Europe together with the lower GDP has led the operations to depend only on summer month's period. In fact, the income generated only from this period has not been enough even to sustain the business.

I addition, ignoring the lower GDP and the Europe's recession Euro Disney's marketers have

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