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Euro Disney: The First 100 Days

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Euro disney: the first 100 days description.

The Walt Disney Co. theme parks historically have thrived on the basis of a formula stressing excellent customer service and a magnificent physical environment. The formula has proven successful in Japan, as well as the United States. With the controversial opening of Euro Disney in France, however, there has become reason to doubt the international appeal of the formula. The case documents issues involved with Euro Disney. Examines the transferability of a successful service concept across international boundaries.

Case Description Euro Disney: The First 100 Days

Strategic managment tools used in case study analysis of euro disney: the first 100 days, step 1. problem identification in euro disney: the first 100 days case study, step 2. external environment analysis - pestel / pest / step analysis of euro disney: the first 100 days case study, step 3. industry specific / porter five forces analysis of euro disney: the first 100 days case study, step 4. evaluating alternatives / swot analysis of euro disney: the first 100 days case study, step 5. porter value chain analysis / vrio / vrin analysis euro disney: the first 100 days case study, step 6. recommendations euro disney: the first 100 days case study, step 7. basis of recommendations for euro disney: the first 100 days case study, quality & on time delivery.

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Case Analysis of Euro Disney: The First 100 Days

Euro Disney: The First 100 Days is a Harvard Business (HBR) Case Study on Technology & Operations , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Euro Disney: The First 100 Days is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Euro Disney: The First 100 Days case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Euro Disney: The First 100 Days will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Euro Disney: The First 100 Days case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Technology & Operations, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Euro Disney: The First 100 Days, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Euro Disney: The First 100 Days case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Technology & Operations Solutions

In the Texas Business School, Euro Disney: The First 100 Days case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Euro Disney: The First 100 Days

Step 1 – Problem Identification of Euro Disney: The First 100 Days - Harvard Business School Case Study

The first step to solve HBR Euro Disney: The First 100 Days case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Disney Euro is facing right now. Even though the problem statement is essentially – “Technology & Operations” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Disney Euro, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Euro Disney: The First 100 Days. The external environment analysis of Euro Disney: The First 100 Days will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Euro Disney: The First 100 Days case study. PESTEL analysis of " Euro Disney: The First 100 Days" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Euro Disney: The First 100 Days macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Euro Disney: The First 100 Days

To do comprehensive PESTEL analysis of case study – Euro Disney: The First 100 Days , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Euro Disney: The First 100 Days

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ Euro Disney: The First 100 Days ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Disney Euro is operating, firms are required to store customer data within the premises of the country. Disney Euro needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Euro Disney: The First 100 Days has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Disney Euro in case study Euro Disney: The First 100 Days" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Disney Euro in case study “ Euro Disney: The First 100 Days ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Disney Euro in case study “ Euro Disney: The First 100 Days ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Euro Disney: The First 100 Days ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Disney Euro can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Euro Disney: The First 100 Days case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Disney Euro needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Euro Disney: The First 100 Days

Social factors that impact euro disney: the first 100 days, technological factors that impact euro disney: the first 100 days, environmental factors that impact euro disney: the first 100 days, legal factors that impact euro disney: the first 100 days, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: euro disney: the first 100 days case study solution.

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Euro Disney or Euro Disaster?

By: Goir Sheikholeslami, Leslie Grayson, Kunihiko Amano, Thomas Falk, Virginia Kleinclaus

Concerns the troubles that Euro Disney experienced from the start. Euro Disney claimed that the major cause of its poor financial performance was the European recession and the strong French franc.…

  • Length: 11 page(s)
  • Publication Date: Oct 31, 1994
  • Discipline: General Management
  • Product #: UV0020-PDF-ENG

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Concerns the troubles that Euro Disney experienced from the start. Euro Disney claimed that the major cause of its poor financial performance was the European recession and the strong French franc. The timing of the park's opening could not have been more inopportune. If the recession had been the only cause of Euro Disney's problems, the financial restructuring would only need to carry the park forward to better economic times. Only when Europeans began spending freely again would investors learn the answers to some uncomfortable questions: Was the whole idea of Euro Disney misconceived? Were there other fundamental cultural problems that could inhibit the park's success? Would Euro Disney fail to recover even though other European companies did? And, if so, why was the Disney theme park concept successful in Japan and not in France?

Learning Objectives

To decide what factors played a role in the poor performance of Euro Disney.

Oct 31, 1994 (Revised: Sep 1, 1995)

Discipline:

General Management

Geographies:

Industries:

Amusement and theme parks

Darden School of Business

UV0020-PDF-ENG

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case study euro disney

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Publication date: 20 January 2017

Teaching notes

This case concerns the troubles that Euro Disney experienced from the start. Euro Disney claimed that the major cause of its poor financial performance was the European recession and the strong French franc. The timing of the park's opening could not have been more inopportune. If the recession had been the only cause of Euro Disney's problems, the financial restructuring would only need to carry the park forward to better economic times. Only when Europeans began spending freely again would investors learn the answers to some uncomfortable questions: Was the whole idea of Euro Disney misconceived? Were there other fundamental cultural problems that could inhibit the park's success? Would Euro Disney fail to recover even though other European companies did? And, if so, why was the Disney theme-park concept successful in Japan and not in France?

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Grayson, L.E. and Sheikholeslami, G. (2017), "Euro Disney or Euro Disaster?", . https://doi.org/10.1108/case.darden.2016.000110

University of Virginia Darden School Foundation

Copyright © 1994 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved.

You do not currently have access to these teaching notes. Teaching notes are available for teaching faculty at subscribing institutions. Teaching notes accompany case studies with suggested learning objectives, classroom methods and potential assignment questions. They support dynamic classroom discussion to help develop student's analytical skills.

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Home » Management Case Studies » Case Study of Euro Disney: Managing Marketing Environmental Challenges

Case Study of Euro Disney: Managing Marketing Environmental Challenges

Michael Eisner joined the Walt Disney Company as the chairman of the board in 1984, after his successes at the ABC television network and Paramount. The same year, Tokyo Disney was completing its first year of operations after five years of planning and construction, when the Walt Disney Co. entered into an agreement with Oriental Land Company in Japan. More than 10 million people visited the park that year, spending $355 million. This was $155 million more than had been expected and was partially attributed to the average expenditure per visitor being $35, rather than the estimated $21. The timing of the Tokyo Disneyland opening coincided with a rise in income and leisure time among the Japanese. Tokyo Disneyland thus became quickly profitable. Growth continued, and by 1990 more than 14 million people visited the park, a figure slightly higher than the attendance at Disneyland in California and about half the attendance at Walt Disney World in Florida. Though Disney was not a financial partner in the Tokyo venture, it was reaping the profit from its franchise (10% royalty from admission and 5% from merchandise and food sales).

The Tokyo park was in some ways a paradox. Tokyo Disneyland is nearly a replica of the two parks in the US. Signs are in English, and most food is American style. The management of the Oriental Land Company demanded this because they wanted visitors to feel they were getting the real thing and because they had noted that such franchises as McDonald’s have enormous success in Japan, as Japanese youth embraced American-style culture. Yet, a few changes were necessary, such as the addition of a Japanese restaurant. The product was readily accepted by the Japanese, and acceptance attributed by some to the enthusiastic assimilation of the Japanese to Western ways. The success of the Tokyo Disneyland led the company to consider expansion into Europe.

In 1984, a few months after his arrival at Disney, Eisner decided to create a Disney resort in Europe. In 1985, Disney announced that it had narrowed its locational choice to two countries, Spain and France. The park was scheduled to open in 1992 at either location. Since the park was estimated to provide about 40,000 permanent jobs and would draw large numbers of tourists, the two countries openly courted Disney. If Disney opted for a Spanish location, the park would have to be like the ones in the U.S, where the visitors are outside for almost all amusements. However, Disney had learned from the Tokyo experience that the cold weather does not necessarily impede attendance. But the colder climate in Paris area would require more indoor shows. Furthermore, France would require more focus on technology and historical themes.

After three years of discussions, the search culminated with the selection of a site at the heart of Europe: Marna-la-Vallee, France. Euro Disney was officially born. The total investment by 1992 was estimated at between $2.4 to 3 billion. Disney opted for a 49% stake. France was in full economic crisis and Disney was taking advantage of this crisis. In a real estate coup, the French Government sold Disney some very expensive land at a bargain price and. In spite of the economic benefits the park was expected to bring, many people in France feared that the Park would be one more step toward the replacement of the French culture with that of the US. Critics called EuroDisney “a cultural Chernobyl”.

Disney headed off the criticism by explaining in the French press that Walt Disney was of French Huguenot descent, with an original name of D’Isigny rather than Disney. Disney also agreed to make French the first language in the park, although relying heavily on visual symbols. Disney would build an attraction, Discovery Land, based on the science fiction of France’s Jules Verne; and a movie theatre featuring European history. Many concessions were made to soothe the French resistance. Disney admitted that it may have to alter its no-alcohol policy for this park, but it didn’t. The park also emphasized that Pinocchio was Italian, Cinderalla was French and Peter Pan flew in London.

The marketing campaign began in October 1991. The sales division began ambitious programs to inspire European families to mark the Euro Disney resort on their vacation agendas. The Sales division established a strong presence in all the major markets through special partnerships with leading companies in the travel industry. On April 12, 1992, Euro Disney hosted the biggest event in Disney history, the official opening of the Euro Disney resort. Looking at the future, Euro Disney had two primary objectives: to achieve profitability as quickly as possible and to better integrate Euro Disney into its European environment while reinforcing its greatest asset — Disney heritage. Disney announced plans to add a second theme park, the Disney MGM Studios-Europe, and a water park. Disney was so optimistic that it was negotiating the possibility of creation of creating a third theme park at the beginning of the new millennium.

The Park admission fee costs US $45 for an adult and $30 for a child under 11, a price about 50% higher than the corresponding Disney World price. The US Disney park’s formula in terms of inelasticity of demand did not apply and the demand fell sharply (a 15% decrease in attendance for a 10% increase in price.) Attendance figures were kept secret, but this attitude reinforced the idea that even in terms of attendance, the objectives were not reached. The financial results were not as strong as hoped and the very difficult economic environment contributed to not meeting the ambitious objectives.

As Eisner started an interview with Larry King, he quipped, “Everybody is giving us 42 reasons why we’ve made a mistake, because we have financial problems… We are not either responsible for the real estate crisis or the high French interest rate, which are dreadfully penalizing us. Not a single manager, whoever he be, could manage so many uncontrollable forces.”

Describe the importance of environmental scanning for Disney in its EuroDisney venture. How does the marketing environment affect Disney’s marketing? Single out each of these environmental variables and suggest ways for Disney to manage them.

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Problems And Causes Of Problems At Eurodisney Case Study

Type of paper: Case Study

Topic: United States , Europe , Strategy , Company , European Union , Culture , Disney , Hospitality

Words: 1800

Published: 11/15/2019

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Introduction

Euro Disneyland was opened in 1992 at Paris in a 5 billion project with the main intention of merging Disney and Paris (Matlack & Sager, 2003). In USA and Tokyo Disney was a success and it was the intention of the management then to replicate the same success to Paris. However, the first instance the park opened there was a hurdle in the form of farmers who blocked the entrance with tractors as a protest to the American government who pushed for cutting of French Agricultural subsidies (Matlack & Sager). This was a sign of the future being marred by difficulties despite the positive encouragement that Disney got from the French government. Furthermore, in less than two years in December 1993 the company ran out of operating capital and had to borrow $175 million to continue operations (O’Rourke, 2007). Three months later the company acquired a $1 billion infusion capital that would keep the company afloat and deflate the speculation that the company was to end operations in Europe. However, this did not solve the current problems that persisted in Euro Disneyland that resulted in loses until the implementation of glocalisation strategy. In 2003, before the company changed to Disneyland Paris, it recorded a loss of $ 66 million and attendance fell to 12.4 million that was a decrease of 700,000 from the previous year (Matusitz, 2010). With the introduction of glocalisation—local and global interaction—the company has managed to change its fortunes into a company that generates profits and attracts over 12 million visitors per year.

This paper will highlight the problems that Euro Disney faced describing the source of the problems, the intervention that the company undertook to change the trend of recording loses, and lessons learned from the scenario. Further recommendations would be made, all with the intention of avoiding similar future scenarios.

Euro Disneyland’s ability to create income is pegged on two factors, which are visitors’ length of stay, and the number of visitors. Therefore, the origin of the problems the company faced began in the planning phase where culture was not considered. During this phase, there was no consideration of the differences in culture between the American culture where Disneyland was very successful and the new venture in France.

The operational problems that the company faced were as follows. The company’s policy of serving no alcohol in the park was a disaster since the country’s culture call for wine taking every lunch time (Cornelissen & Elvin, 2003). The company also thought that more visitors frequented the parks on Friday with Monday recording the least numbers; therefore it was a great shock when the trend was the reverse in France. There was also an assumption that Europeans were not serious in taking breakfast and therefore they planned for 350 seat restaurants in the hotel. This plan turned into a major issue where numerous people showed up in the restaurants in the morning. Grant & Neupart, (2003), notes that serving 2500 people in a 350 seat restaurant with lengthy queues was not easy. Furthermore, the visitors wanted Lunch at strictly 12:30 and no matter how much they were advised that lunch could be served at 11:00 AM or 2:00 PM, they maintained their stands.

Staffing was also a problem with few personnel serving numerous clients which resulted in dissatisfied clients. The Japan and American staff model did not work in France where it was seen that in the first two months of operation ten percent of employees left the company (Cornelissen & Elvin, 2003). It was seen that the major reason why many left was that in training the culture of the locals was not considered and instead was not regarded. Conversely, the biggest issue that the company faced was that locals did not stay long at the park. While many visitors came to the park they only stayed for a single day. This was shown when it was recorded that 40% of visitors were French with the rest being American or Japanese tourists living in Europe. This problem further compounded the problem of the company recording losses in France (Grant & Neupart, 2003).

Matusitz, (2010), asserted that shortfalls in visitors and length of stay were because of miscalculations on the part of management that was based on US Disneyland theme park. The five causes he highlighted were inadequate US park standards and quality; Harsh Paris Winters; Strictness of European Parents; European Vacation Habits; and disinterest of the Magic Kingdom Concept.

Interventions Implemented

With the company recording losses, a new strategy was considered in changing the company’s fortunes. The strategy that was suggested and implemented was glocalisation, which is a technique of merging the global and local environment. The changes turned Euro Disneyland into a profit entity and a leading example of the successive implementation of glocalisation. The major changes that underwent glocalisation were four and included. Cutting Prices: The management laid off the existing manager and replaced him with a French executive. The CEO cut the price per head of adults in 1995 and this caused a visitor increase of 23% (O’Rourke, 2007). Accompanying the change of name to Disneyland Paris, the hotel prices in the park were also reduced.

Converting shows into French Style: In order for the locals to feel a part of the company, they converted certain shows and characters to identify with the culture. For instance, the Mickey mouse character was made to be more cunning and using more brains in comparison to the American one (Griffiths, 2009).

Change of eating habits and menu: Alcohol was introduced in the park to ease the tension with the management hiring a French manager who would take care of the menu and ensure that eating was in accordance to the culture. The menu was also blended with international easting standards hence fast food outlets were also introduced having food stuffs like American burgers. Waiters were also trained to advice clients rather than implement the common American slogan “the customer is always right” (Milman, 2010). This change resulted in the company blending an American-French culture.

Change of employee customs and relations: The management allowed for employees to speak French as their first language. There was also hiring of competent interpreters who would help out visitors in understanding the language that would be spoken. Furthermore, certain parts of the park were named in French while others in English. Signs were also put in pairs, that is, one in French and the other in English. Employees were also allowed to groom themselves the way they wanted and not be limited to American looks.

Lessons Learned

From the case study, several lessons can be learned. In the first instance, it is imperative that before embarking on any business project concrete plans must be done. More importantly when trying to start a business venture in a different geographical position practising different cultures. The management must consider the culture of the intended location of the business so as to make sure that there is a smooth transition in operations. The value of proper finance control is also seen where Euro Disneyland could not properly budget and use money within their means. The company broke its budget when it was enhancing facilities in 1992 when instead of using the $2 billion dollars it had budgeted it used $3.8 billion dollars. This marked the beginning of financial problems which could have been prevented by proper financial controls.

It is also learned that the culture of people plays critical roles in business procedures and relations. Therefore if companies are to instil their identity and culture in a certain region, then the best way is through glocalisation where a global perspective and a local perspective are merged together. The success of this strategy was witnessed in Euro Disneyland and has seen a radical change from a loss making entity to a profitable organisation.

Recommendation

Even though Euro Disneyland came up with strategies that combated problems associated with culture. Problems still persisted in terms of income returns, employee satisfaction, identification, and attendance. Therefore to remove such problems it is recommended that:

The company reduces adult per head charges to be less than 100 dollars and pegged to amount of time to be spent in the park.

The company comes up with themes and concepts that would make adults identify with the park not just kids.

Introduce family weekend packages that are discounted to encourage more visits.

Introduce programs that are aimed at ironing out conflicts between American and French cultures hence proper relationships.

Changing the financial and business plan to coincide with the current business culture of Europe.

Alter marketing strategies such as usage of media, and internet in alerting services available to the locals.

The case study has been successful in showing numerous problems that Euro Disneyland encountered all because of not considering the local culture in planning operations. However, they noticed their problems and implemented a strategy called glocalisation that included blending local and global relations in the company. Currently, they are operating at a profit with attendances on the increase although they could still do better.

Cornelissen, J. P., & Elving, W. J. L. (2003). Managing corporate identity: An integrative framework of dimensions and determinants. Corporate Communications, 8(2), 114-114-120. Retrieved fromhttp://search.proquest.com/docview/214190381?accountid=45049 Grant, M.R., & Neupert, K.E. (2003). Cases in Contemporary Strategy Analysis (3rd ed.). Massachusetts: Blackwell Publishing Pp. 267-271 Griffiths, J. (2009). Disneyland Paris: The Family Guide. Paris: Dingojunction Press. Pp. 10-52 Matlack, C., & Sager, I. (2003). EURO DISNEY: LOOKING EURO DISMAL. BusinessWeek, (3861), 14. Retrieved from EBSCOhost. Matusitz, J. (2010). Disneyland Paris: a case analysis demonstrating how glocalization works. Journal of Strategic Marketing, 18(3), 223-237. doi:10.1080/09652540903537014 Milman, A. (2010). The global theme park industry. Worldwide Hospitality and Tourism Themes, 2(3), 220-220-237. doi:10.1108/17554211011052177 PR Newswire, (2011). Euro Disney S.C.A. - Annual General Meeting of the Shareholders, 4 March 2011. Regional Business News, 201102090402PR.NEWS.TODWIRE.LE-20110209-0012 O’Rourke, J. S. (2007). The Business Communication Casebook: A Notre Dame Collection (2nd ed.). Ohio: Thomson Higher Education. Pp. 263-270

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Case Study on Euro Disney

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