This is a Thunderbird Case Study.Only one year after the grand opening of EuroDisneyland, Robert Fitzpatrick left his position as EuroDisney's chairperson. In April 1993, Philippe Bourguignon took over the helm of EuroDisney, thought by some to be a sinking ship. EuroDisney publicly reported a net loss of FFr188 million for the fiscal year ending September 1992, through cumulative losses through April 1993 approached half a billion dollars. The European park fell one million visitors short of its goal for the first year of operations. In addition to the financial woes weighing on Bourguignon, he was also expected to stem the flow of bad publicity, which EuroDisney had experienced from its inception. Phase Two development at EuroDisneyland was slated to start in September 1993, but in light of their drained cash reserves (FFr1.1bn in May 1993) and monstrous debts (estimated at FF42bn), it was unclear as to how the estimated FFr8-10billion Phase Two project would be financed. Despite this bleak picture, Michael Eisner, CEO of Walt Disney Co., remained optimistic about the venture: "Instant his are things that go away quickly, and things that grow slowly and are part of the culture are what we look for. What we created in France is the biggest private investment in a foreign country by an American company ever. And it's gonna pay off."
Swot Analysis of "EuroDisneyland" written by J. Stewart Black, Tanya Spyridakis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eurodisneyland Eurodisney facing as an external strategic factors. Some of the topics covered in EuroDisneyland case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the EuroDisneyland casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EuroDisneyland case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eurodisneyland Eurodisney, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eurodisneyland Eurodisney operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of EuroDisneyland can be done for the following purposes –
1. Strategic planning using facts provided in EuroDisneyland case study
2. Improving business portfolio management of Eurodisneyland Eurodisney
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eurodisneyland Eurodisney
Strengths EuroDisneyland | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eurodisneyland Eurodisney in EuroDisneyland Harvard Business Review case study are -
Ability to lead change in Global Business field
– Eurodisneyland Eurodisney is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Eurodisneyland Eurodisney in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– EuroDisneyland firm has clearly differentiated products in the market place. This has enabled Eurodisneyland Eurodisney to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Eurodisneyland Eurodisney to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Eurodisneyland Eurodisney has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eurodisneyland Eurodisney has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Eurodisneyland Eurodisney has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Eurodisneyland Eurodisney are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Eurodisneyland Eurodisney has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study EuroDisneyland - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the EuroDisneyland Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Eurodisneyland Eurodisney digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eurodisneyland Eurodisney has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Eurodisneyland Eurodisney in the sector have low bargaining power. EuroDisneyland has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eurodisneyland Eurodisney to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Eurodisneyland Eurodisney
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eurodisneyland Eurodisney does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Eurodisneyland Eurodisney has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in EuroDisneyland Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Eurodisneyland Eurodisney has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eurodisneyland Eurodisney to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses EuroDisneyland | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EuroDisneyland are -
Skills based hiring
– The stress on hiring functional specialists at Eurodisneyland Eurodisney has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Eurodisneyland Eurodisney has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - EuroDisneyland should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study EuroDisneyland, is just above the industry average. Eurodisneyland Eurodisney needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Eurodisneyland Eurodisney supply chain. Even after few cautionary changes mentioned in the HBR case study - EuroDisneyland, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eurodisneyland Eurodisney vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study EuroDisneyland, in the dynamic environment Eurodisneyland Eurodisney has struggled to respond to the nimble upstart competition. Eurodisneyland Eurodisney has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Eurodisneyland Eurodisney products
– To increase the profitability and margins on the products, Eurodisneyland Eurodisney needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study EuroDisneyland has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Eurodisneyland Eurodisney 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Eurodisneyland Eurodisney, firm in the HBR case study EuroDisneyland needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study EuroDisneyland, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, J. Stewart Black, Tanya Spyridakis suggests that, Eurodisneyland Eurodisney is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the EuroDisneyland HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Eurodisneyland Eurodisney has relatively successful track record of launching new products.
Opportunities EuroDisneyland | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study EuroDisneyland are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eurodisneyland Eurodisney can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Eurodisneyland Eurodisney has opened avenues for new revenue streams for the organization in the industry. This can help Eurodisneyland Eurodisney to build a more holistic ecosystem as suggested in the EuroDisneyland case study. Eurodisneyland Eurodisney can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Eurodisneyland Eurodisney to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eurodisneyland Eurodisney to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Eurodisneyland Eurodisney to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Eurodisneyland Eurodisney can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Eurodisneyland Eurodisney can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eurodisneyland Eurodisney can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Eurodisneyland Eurodisney has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Eurodisneyland Eurodisney in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eurodisneyland Eurodisney is facing challenges because of the dominance of functional experts in the organization. EuroDisneyland case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eurodisneyland Eurodisney can use these opportunities to build new business models that can help the communities that Eurodisneyland Eurodisney operates in. Secondly it can use opportunities from government spending in Global Business sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Eurodisneyland Eurodisney can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Eurodisneyland Eurodisney can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Eurodisneyland Eurodisney can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Threats EuroDisneyland External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EuroDisneyland are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eurodisneyland Eurodisney in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Eurodisneyland Eurodisney
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Eurodisneyland Eurodisney.
Stagnating economy with rate increase
– Eurodisneyland Eurodisney can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Environmental challenges
– Eurodisneyland Eurodisney needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Eurodisneyland Eurodisney can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Eurodisneyland Eurodisney business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eurodisneyland Eurodisney with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Eurodisneyland Eurodisney is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eurodisneyland Eurodisney can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study EuroDisneyland .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Eurodisneyland Eurodisney will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EuroDisneyland, Eurodisneyland Eurodisney may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Eurodisneyland Eurodisney can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Eurodisneyland Eurodisney has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Eurodisneyland Eurodisney needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of EuroDisneyland Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study EuroDisneyland needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study EuroDisneyland is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study EuroDisneyland is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of EuroDisneyland is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Eurodisneyland Eurodisney needs to make to build a sustainable competitive advantage.
