Euro Disney - Bungling a Successful Format - Case Study Example

In addition to getting other sources of funds for investment, the company opened another park in 1993 in Tokyo that was very successful with profits of more than $100 per year. However, by the end of the year 1992, Disney Company realized that they were not in business since they were not making profits. This is because the company charged very high park admission fees of more than $40 for adults.

The high fees discouraged many people and the few who came brought their own food and spent very few nights in the hotels. The mistakes that the organization made included setting high prices with the assumption that price does not affect demand and thus anticipating large profit margins (Hartley, 2011). The Company assumed that setting lower prices will limit the profit margins and they assumed that people would still visit the park, which will lead to profits. Apparently, Disney Company also made some cultural blunders. In France, there is an alcohol policy, which prohibits wine consumption except during lunch and supper. This policy discouraged visitors from visiting the hotels leading to reduced profits (Hartley, 2011). The company predicted the peak periods leading to the retrenchment of workers, which is against the labor rules. Lastly, the company neglected the bus drivers and hence the tour companies never recommended the tourists to visit Euro Disney. Read More