Euro Disney Case Study Essay Sample

Essay on Euro Disneyland Case Study

2226 WordsJun 14th, 20129 Pages

Euro Disneyland Case Study

1. INTRODUCTION: The primary objective of this case analysis is to evaluate the proposed Euro Disneyland (EDL) project by applying Capital Budgeting techniques such as Net Present Value, analyze financial and economic risks, measure exposures of Euro Disneyland (EDL) such as economic exposure, transaction exposure and translation exposure, and develop strategies to mitigate these exposures. The case findings reveal that Disney should invest in Euro Disneyland taking into account the benefits arising out of French government subsidies and …
2. BACKGROUND: In 1984, Disney management decided to develop a European theme park On March 24, 1987, the Walt Disney Company entered into the “Master Agreement” with the…show more content…

The operating income at all levels of attendance lies in the range of FF 1.4-FF2.1 billion; the incentives to Disney are 30% of total operating income. The resulting Net Income for lowest attendance lies in the range of FF 116.77 million to FF 241.82 million. The resulting Net Income for highest attendance lies in the range of FF 333.06 million to FF 460.49 million.The resulting Net Income for lowest attendance lies in the range of FF 249.92 million to FF 351.16 million.
3.1.3 NPV calculation for Euro Disneyland as a standalone project:
FCFE or Free Cash Flow to equity was calculated to Net Income using cost of capital as 15%. Since the majority of the cost of capital is contributed by $1500 million equity, free cash flow to equity was calculated to calculate NPV. The initial cash outlay is $1500 million. The range of NPV of Euro Disney land as a standalone project varies from $(932.42), ($760.18) and ($587.95) for the lowest, average and highest number of visitors visiting Euro Disney land. The negative NPV’s are due to low operating margins. The low operating margins are a result of higher cost associated with infrastructure and high operating cost. (See Exhibit…)

3.1.4 NPV calculation for Disney:
3.2 Should Disney go for this project based on NPV
Although the NPV are negative, the negative NPV’s are due to low operating margins. The low operating margins

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Case Study: Disney Global Essay examples

2214 Words9 Pages

International marketing
International marketing is an important factor in helping organizations to become globally competitive. According to Cateora, Gilly, and Graham (2013), “international marketing is the performance of business activities designed to plan, price, promote, and direct flow of the companies goods and services to consumers of users in more than one nation for profit” (p. 10). International marketing strategies and its efficiency assists in the expansion of an organization. Moreover, the major goals of a marketing manager are to reduce risk and capitalize on returns in profit. Global expansion has developed a tactical imperative for nearly all large organizations and marketing managers have a great deal on their hands…show more content…

The not-so-wonderful world of EuroDisney”, 2013).
Furthermore, like EuroDisney’s poor performance, the Hong Kong Disney’s opening grieved poor performance. However, Disney did make use of the EuroDisney cultural mistakes they had made to their advantage but some aspects of the culture were overlooked. They essentially took measures to make sure the theme park culture matched the host country. As indicated by one of Hang Kong Disneyland’s landscape architects, “We’ve come at it with an American sensibility, but we still appeal to local tastes” (“Case 2-1. The not-so-wonderful world of EuroDisney”, 2013, p. 4). Even with this action, the populous was unhappy with the size of the amusement park and the lack of fluency of the Disney’s characters.
Foreseeable and controllable factors
Some of the foreseeable and controllable factors should have been noticed by studying the market of the host country. Cultures are different throughput the world and organizations becoming global need to take this into contemplation. Ethnocentrism played a big role in the troublesome start and will be discussed in more detail. As far as the market was concerned, studies should have went into more depth on the European economics (Curwen, 1995). Management should have noticed the loom of the European economic recession. Also, the World Fair was also taking place the same year EuroDisney opened in Seville and the Olympics in Barcelona and if management

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