Marketing of Walt Disney Company - Case Study Example

Cultural analysis is a very important variable to consider before embarking in any type of international business venture. Companies have to study and understand the different cultural variables that could affect the entrance into a particular market in order to establish a sound marketing and implementation strategy in the target market. Culture is the beliefs and values that affect the behavior of a group of people (Shermerhorn & Hunt & Osborn, 2003). The culture of any region a company wishes to operate on has to be studied to learn how to effectively utilize marketing techniques to introduce company product and also to learn what adjustment need to be made in the corporate culture to align it with the culture of the residents of the region. The scholar with the greatest knowledge in cultural analysis who invented the most renounce method to perform this type analysis is called Geert Hofstede. His method is called Hofstede cultural dimension which has five dimensions which are: power distance, individualism vs. collectivism, uncertainty avoidance, masculinity vs. femininity and confusion dynamism. This paper studies and analyses the global enterprise Walt Disney and its venture into Paris to expand its operations. It utilizes Hofstede framework to study the effects culture has on products and marketing strategies oversea. Walt Disney Company is a multinational enterprise in the entertainment business that was founded in the 1920’s by Walt Disney who created animation characters that capture the hearts and imagination of the American people. The company is dedicated to movie productions, network television, amusement parks, consumer products, internet interactivity product among other businesses. In 2006 the company had total revenues of $34,285 million (Disney, 2007). The company’s amusement which were originally founded in California, Disneyland, and gained greater popularity in Florida, Disney World, with incredible attractions that bring millions of visitors every year to its premises. The success of the amusement parks in the United States inspired the management of the company to open a European version of a Disney amusement park in Paris, France in 1992. The company selected Paris because it had the best and most affordable available large flat lands to build a park in the area and the location seemed like a perfect strategic point since it placed the park within a four hour drive of 68 million Europeans and within a 2 hour flight of 300 million people (Solarius, 2006). Since the opening day the Park failed to meet the attendance expectation of the company. Disney created a full fledge Park which included hotel facilities similar to the ones in its Florida parks. The attendance number ended up being less than what the company forecasted for the theme park. A lot of factors led to the early struggles of Euro Disney. The company marketing strategy did not consider the cultural factors of the residents of the area. Disney utilized an American cultural ethnocentric strategy thinking that the American appeal and way of doing business would entice customers. The company was absolutely off in its environmental scan. The French people felt that the Park’s attitude was arrogant and was all a big hype of the American culture instead of the magical enchanting experience the people expected. Disney focused too much in bringing in outsider from other countries in Europe instead of targeting the internal market which would logically keep the business going during off seasons such the autumn season. The company did not access cultural factors such as the French tradition of drinking wine with the meals. The prohibition of alcohol in the Park was not accepted by the French or by the European crowd. The company also made other strategic blunders such as creating huge hotel facilities with gulf courses to target week or multiple weeks of vacationing time from the residents. The park was a bit small for this type of strategy and the Europeans culture is different than the American as far as vacation tendencies in that the people like taking short weekend or one or two day vacations instead of prolonged stays in a particular place. Hofstede cultural dimension analysis is a very valuable tool to evaluate the effects of difference strategies in a foreign market. Power distance is the influence people within a culture have of authority figures. It refers to the extent to which the less powerful members of institutions and organizations within a country accept power inequality in a country (Lu, 2006). In the Euro Disney case power distance played a big role in the early failures of the venture. The French people were insulted at the lack of respect for the French culture and the perception the Disney organization illustrated of marketing its American culture as a superior culture to theirs. The company was able to break the power distance dimension by attending the needs of the host country. The most important move was to change the Disney name from Euro Disney to Disneyland Paris to show respect to the local community. Uncertainty avoidance is a particular society’s tolerance for uncertainty and ambiguity (ClearyCultural, 2007). The rating the French society has for this dimensions and all other dimensions as well the ratings of the American and Japanese cultures are illustrated in Appendix A. The French culture rates very high in the scale implying that the French have low tolerance for uncertainly. The Disney case validated the French low tolerance for change. The culture expected a certain type of atmosphere in this theme which had to be aligned with their specific culture. The French could not accept an atmosphere that was different than what they expected. In order to deal with the uncertainty avoidance dimension Disney’s global operation and the products they market worldwide are massively marketed by the company through its film creation activities which introduce the characters to the people prior to introducing the physical products into the market. The international crowd gets to know the characters so there is not cultural shock once the products enter the market. Individualism vs. collectivism refers to a culture’s inclination of measuring its accomplishments based on individual success or group progress. A good strategy for Disney is targeting individualistic nations to sell their products since nations with this type of cultural profile are democratic nations with consumerism behaviors. France met the individualism criteria and eventually the company was able to turn things around. The Company was able to adapt to the other side of the spectrum and establish a theme park in a collective minded nation, Japan. In order to gain the trust of the collective unit in Japan the company invested heavily in this economy and established a film studio operation which created jobs for the residents in the area. The cultural pride factor help in the assimilation process since the Japanese people knew many of the new movie releases were created from the collective efforts of professionals from its nation. Confusion dynamism refers to the perspective of the society of prioritizing either long term or short term goals. In the Disneyland Paris case the American company, Disney, did not accessed well the confusion dynamism of the French and European people which ended costing them a lot of money in the construction of a hotel which did not have be so big nor luxurious. The residents in of the area live life by the minute and do not like to take long vacations since they rather leave their options open for the next day. In Japan the community has a long term perspective, thus the calculated investment the company made was a long-term commitment. Walt Disney knew the strategy would pay off because once they had the loyalty of this culture the customer base would engage in long term business arrangement with Disney. Disney has utilized strategies to engage customers in long term commitments by creating products with recurrent chapters such as the Pirates of the Caribbean series. Masculinity vs. femininity is the last dimension of Hofstede five cultural dimensions. The dimension evaluates a culture to determine if women within the culture have equal rights and opportunities. This dimension has a great impact in the way Disney operates within a certain region. Despite the fact the company does not want to disrespect women, if in a certain region masculinity is the culturally accepted then the products the company offers in such a region would be targeted at the male gender since they would be the ones making all the monetary decisions in a household. The company has lots of products for children and in these types of products this dimension does not matter for the end user since children are innocent creatures. The parents make the purchasing decision, but typically both persons in a relationship make the decision for the children together. Walt Disney Corporation has been around for long time and with its venture in Paris the company learned valuable lessons about the importance of cultural scanning. The company now knows that using analytical tools such as Hofstede cultural dimension minimizes international risks. Disneyland Paris is having much better success now because the company adjusted its operation strategy to serve the cultural needs of its customer base. References Clearlycultural (2007). Making Sense of Cross Cultural Communication. [online]. Avaliable at < http://www.clearlycultural.com> [Accessed 10 September 2007]. CultureGrams (2007). Country Profile: France [online]. Available at CultureGrams database. [Accessed 9 September 2007]. CultureGrams (2007). Country Profile: Japan [online]. Available at CultureGrams database. [Accessed 9 September 2007]. CultureGrams (2007). Country Profile: United States [online]. Available CultureGrams database. [Accessed 9 September 2007]. Disney (2007). Corporate Website [online]. Available from [Accessed 9 September 2007]. Lu, L.T. (2006). The Relationship Between Cultural Distance and Performance in International Joint Ventures: A Critique and Ideas for Future Research. International Journal of Management, 23(3), 436. Schermerhorn, J.R. and James H. and Richard O. (8th ed.)(2003). Organizational Behavior. John Wiley & Sons, Inc. Solarious (2006). The History of DisneyLand Paris [online]. Available from [Accessed 10 September 2007]. Appendix A: Hofstede Cultural Dimension Matrix Power Distance Individualism vs. Collectivism Uncertainty Avoidance Masculinity vs. Femininity Confucian Dynamism Japan 5 1 5 5 4 France 3 4 4.25 1.5 1 United States 1 5 2.5 2 1.5 (CultureGrams, 2007). Legend: A rating scale of 1-5 Power Distance: 5 = value power and authority 1 = value equality Individual vs. Collectivism: 5 - entrepreneurship 1 - group success Uncertainty Avoidance: 5 - job security 1 -self employment Masculinity vs. Femininity: 5 - division between sexes 1 - equal job opportunities Confucian Dynamism: 5 - long term goals 1 - short term goals Read More