Euro Disney or Euro Disaster? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Euro Disney or Euro Disaster?
This is a Darden case study.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?
Authors :: Goir Sheikholeslami, Leslie Grayson, Kunihiko Amano, Thomas Falk
Swot Analysis of "Euro Disney or Euro Disaster?" written by Goir Sheikholeslami, Leslie Grayson, Kunihiko Amano, Thomas Falk includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Euro Disney facing as an external strategic factors. Some of the topics covered in Euro Disney or Euro Disaster? case study are - Strategic Management Strategies, International business and Global Business.
Some of the macro environment factors that can be used to understand the Euro Disney or Euro Disaster? casestudy better are - – challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, there is backlash against globalization, there is increasing trade war between United States & China, wage bills are increasing, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc
Introduction to SWOT Analysis of Euro Disney or Euro Disaster?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Euro Disney or Euro Disaster? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Euro Disney, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Euro Disney 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 Euro Disney or Euro Disaster? can be done for the following purposes –
1. Strategic planning using facts provided in Euro Disney or Euro Disaster? case study
2. Improving business portfolio management of Euro Disney
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 Euro Disney
Strengths Euro Disney or Euro Disaster? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Euro Disney in Euro Disney or Euro Disaster? Harvard Business Review case study are -
Organizational Resilience of Euro Disney
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Euro Disney does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Euro Disney is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Euro Disney is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Euro Disney or Euro Disaster? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Euro Disney in the sector have low bargaining power. Euro Disney or Euro Disaster? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Euro Disney to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Euro Disney has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Euro Disney to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Euro Disney has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Euro Disney 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.
Ability to recruit top talent
– Euro Disney is one of the leading recruiters in the industry. Managers in the Euro Disney or Euro Disaster? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Euro Disney is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Goir Sheikholeslami, Leslie Grayson, Kunihiko Amano, Thomas Falk can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Euro Disney 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.
Superior customer experience
– The customer experience strategy of Euro Disney in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Euro Disney 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 Euro Disney or Euro Disaster? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Euro Disney has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Euro Disney or Euro Disaster? 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 switching costs
– The high switching costs that Euro Disney 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.
Weaknesses Euro Disney or Euro Disaster? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Euro Disney or Euro Disaster? are -
Aligning sales with marketing
– It come across in the case study Euro Disney or Euro Disaster? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Euro Disney or Euro Disaster? can leverage the sales team experience to cultivate customer relationships as Euro Disney is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Euro Disney is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Euro Disney or Euro Disaster? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Euro Disney 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.
Slow decision making process
– As mentioned earlier in the report, Euro Disney has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Euro Disney even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Euro Disney or Euro Disaster?, is just above the industry average. Euro Disney 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.
Increasing silos among functional specialists
– The organizational structure of Euro Disney is dominated by functional specialists. It is not different from other players in the Global Business segment. Euro Disney needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Euro Disney to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Euro Disney products
– To increase the profitability and margins on the products, Euro Disney needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Euro Disney, firm in the HBR case study Euro Disney or Euro Disaster? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Euro Disney or Euro Disaster?, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Euro Disney or Euro Disaster?, it seems that the employees of Euro Disney don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Euro Disney needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Euro Disney or Euro Disaster? | 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 Euro Disney or Euro Disaster? are -
Better consumer reach
– The expansion of the 5G network will help Euro Disney to increase its market reach. Euro Disney will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Euro Disney can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Euro Disney can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Euro Disney or Euro Disaster?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Euro Disney 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 Euro Disney 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Euro Disney in the consumer business. Now Euro Disney can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Euro Disney can use these opportunities to build new business models that can help the communities that Euro Disney operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Euro Disney can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Euro Disney 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Euro Disney to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Euro Disney is facing challenges because of the dominance of functional experts in the organization. Euro Disney or Euro Disaster? 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.
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. Euro Disney 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. Euro Disney 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.
Learning at scale
– Online learning technologies has now opened space for Euro Disney 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.
Threats Euro Disney or Euro Disaster? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Euro Disney or Euro Disaster? are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Euro Disney 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.
Environmental challenges
– Euro Disney 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. Euro Disney can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Consumer confidence and its impact on Euro Disney demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Euro Disney high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Euro Disney 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Euro Disney needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Euro Disney
– 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 Euro Disney.
Shortening product life cycle
– it is one of the major threat that Euro Disney is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Euro Disney has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Euro Disney 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Euro Disney or Euro Disaster?, Euro Disney 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Euro Disney 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 Euro Disney or Euro Disaster? .
Weighted SWOT Analysis of Euro Disney or Euro Disaster? 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 Euro Disney or Euro Disaster? 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 Euro Disney or Euro Disaster? 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 Euro Disney or Euro Disaster? 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 Euro Disney or Euro Disaster? 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 Euro Disney needs to make to build a sustainable competitive advantage.