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Disney France Company’s Strategic Audit Project Report

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Updated: Aug 10th, 2020

Executive Summary

Disneyland Paris is, by far, one of the best-known entertainment areas in Europe. With the name Walt Disney attached to it, the theme park is understandably the most visited tourist destination in Europe. Seeing that the company has gained cult status, its French subdivision, as understandably enough, gained an impressive competitive advantage in the European entertainment industry market comparatively fast.

Nevertheless, Disneyland Paris has developed a range of issues over the past few years due to the rigid policies and the uncompromising compliance with the policy that was set by the company.

It is assumed that the adoption of a sustainable strategy that will allow for a more flexible allocation of the corporate resources and assets, as well as the implementation of a better-balanced leadership approach, will help improve the quality of the services provided by Disneyland Paris to a considerable extent.

Current Situation

Current Performance

The French Disneyland is currently at the top of the state’s entertainment-related attractions. Despite being outstandingly popular, the company has been suffering significant expenses over the past few years, as the 2015 report indicates. Indeed, according to the latest information on Disney’s financial indicators, the firm’s revenues grew by 10.9% compared to 2014 (from €533,300,000 to €591,700,000), whereas the expenses skyrocketed from €644,100,000 to €709,600,000 (10.16%). Depreciation and amortization have also taken their toll on the company’s financial performance, leaving the French Disney in a tight economy (“Euro Disney S.C.A.” 1).

One must admit that the identified changes have not had a drastic impact on the organization’s performance – quite on the contrary, Disneyland, France (DF) experienced an 11% increase in revenues in 2015, which could be attributed to the successful promotion campaign and the phenomenal popularity of the brand image and products of the organization. Nevertheless, the lack of innovation and the sloppy progress suggest that the company’s current approach toward marketing could use redesigning.

Strategic Posture

Mission

The current mission and vision of DF concern creating an entertainment area that will incorporate the latest technological advances and provide its visitors with comfort and the opportunity to have an unforgettable fun. According to the official statement of the organization, DF personnel strives “To act, support and inspire to protect the environment where the magic happens and to build a leading innovating and sustainable destination in Europe” (“Our commitment to the environment” par. 1). Therefore, it can be assumed that the organization has managed to adjust the corporate philosophy of Disney to the environment of the European market and determine the objectives that will allow it to advance in the identified economic environment.

Objectives

The objectives of the organization revolve primarily around gaining more influence in the European market and retaining its top position in the entertainment industry. While aligning with the corporate tradition, the specified objectives could use the introduction of sustainability principles and the focus on diversity issues. Thus, the needs of a wider range of tourists could be satisfied.

Strategies

The current strategies of DF include the principles of Corporate Social Responsibility (CSR). In other words, DF has been putting a heavy emphasis on the reinforcement of the green economy. The tendency of the firm to pay close attention to the responsibility-related concerns can be used as the foundation for building a more reasonable strategy for using corporate resources.

Policies

Since 2016, DF has been deploying innovative Human Resource Management (HRM) policies (“Disneyland Paris: Innovating Human Resources Policies Since 1992” 1). The specified step is rather sensible, given the fact that the firm has been suffering an extensive drop in its revenues. By focusing on improving service quality, DF will be able to gain the trust of a wider audience.

Relevance to International Operations

Seeing that the company aims at further expansion, diversification of its services and the promotion of multiculturalism must continue. Moreover, the exploration of other markets, as well as possibilities for mergers and acquisitions, should become one of DF’s strategies.

Corporate Governance

Board of Directors

Axel Duroux is the Chairman of the Supervisory Board, Gerard Bouche owns the E. Leclerc Shopping Center of Coulommiers, and Michel Corbiereis the leader of the Forest Hill Group (“Corporate Governance” par. 1-4).

Top Management

Catherine Powell is the President of Euro Disney S.A.S., Daniel Delcourt performs the role of the Senior Vice President and Chief Operating Officer, Darlene Papalini is the Senior Vice President, and she heads Sales and Marketing Europe (“Management Team” par. 1-6).

External Environment: Opportunities and Threats

Societal Environment

Seeing that DF applies a rather flexible approach when addressing the needs of the local population, it can be assumed that DF feels rather comfortable in the societal environment. Catering to the needs of all local po[pulsation, the organization provides its visitors with a plethora of opportunities for having fun for both children and adults.

Task Environment

The threat of new entrants

Given the immense popularity of the organization, claiming that it may be affected by new entrants would be quite a stretch. Nevertheless, offering customers discount-related opportunities may help reduce the threats of competition to an even greater degree.

Bargaining power of buyers

Since Disney is a one-of-a-king company that has overshadowed most of its competitors in the target market, it can be assumed that the bargaining power of buyers is considerably low.

The threat of substitutes’ products and services

As long as DF continues using the brand image and products that the Walt Disney Company owns, it will remain quite competitive. Therefore, the threat of substitutes is currently low.

Bargaining power of suppliers

The bargaining power of suppliers, in its turn, is rather low. The buyer price sensitivity barely exists since the product is unique and, therefore, people are willing to pay a significant amount of money to receive the corresponding services. Furthermore, because of a well-developed, elaborate branding strategy, customers view the product as important – the Disney legacy has become part and parcel of many people’s childhood /

Rivalry among competing firms

As stressed above, the incredibly rich history, the unforgettable brand images, and a huge customer base make DF a part of the Walt Disney Corporation, an unbeatable rival. Therefore, the level of competition among similar organizations operating in the French economic environment is minuscule. Put differently, DF can be deemed as by far the most successful family entertainment business in entire France.

The relative power of different groups

Similarly, the groups currently existing in France do not have any tangible effect on DF because of the experience and the weight gained over the past few decades. Because of its rich history and the reputation that it has gained over the years of its operations, DF can be viewed as the corporate monster of the French entertainment industry. Nevertheless, with the recent drop in customer safety levels, Df may face the threat of a new competitor that will offer similar services with higher safety rates.

PEST Analysis

Political factors

The current political situation in France does not affect DF negatively. However, the lack of governmental support may reduce its chances of successfully expanding into the target market. Therefore, investors will be sought as the primary source of extra financial resources.

Economic factors

The fact that France has been witnessing economic issues over the past few years indicates that DF may suffer serious consequences. Particularly, with the rise in the unemployment levels among the members of the French population, as well as the reduction in the number of government finances, the opportunities enjoying the support of the government will be missed. Similarly, given the high prices set by the organization, as well as the rise of the unemployment levels in the state, fewer people will be able to enjoy rather expensive services offered by DF.

Sociocultural factors

Seeing that DF as a part of the Walt Disney Corporation is viewed as entertainment for the whole family, it is not affected by sociocultural factors. Offering solely safe content, the firm has been wisely staying away from the contemporary political agenda.

Technological factors

The company is currently experiencing issues with the maintenance of its services and the provision of customer safety. Therefore, the technological aspect of the firm’s performance will have to be addressed immediately. Particularly, the reallocation of DF’s financial resources for the further support of the R&D team, as well as the acquisition of better equipment and the focus on quality management, will have to be considered an option.

Summary of External Factors

The current external factors can be deemed as rather favorable for the company’s further foray into the French market and the development of business ties with other organizations. However, the lack of emphasis on the significance of technological progress, particularly the enhancement of customer security and equipment maintenance, may jeopardize the company’s chances to advance in the French market.

Internal Environment: Strengths and Weaknesses

Corporate Structure

The corporate structure is rather rigid, which does not allow for uninhibited information flow. However, the framework helps keep essential operations in order.

Corporate Culture

The corporate culture of DF is linked directly to the one that is actively promoted as the foundation for interactions between the staff members in Walt Disney. As a result, the quality of relationships between the members of the company is surprisingly good.

Corporate Resources

Marketing

Disney has been known for its rather aggressive marketing for quite a while (Kohler 17). PDF follows the same set of principles that the Walt Disney Corporation does. As a result, the brand image and associated concepts are used to create a wide range of products.

The images form beloved animated films are used actively so that the target audiences could be attracted successfully. Furthermore, the company has been deploying the system of a rather elaborate segmentation. On the one hand, the identified approach helps learn more about the target audiences. On the other hand, however, the said framework makes the corporate product less universal; as a result, the firm has been omitting the opportunity to market its goods to male customers.

Finance

The current finances management framework lacks sustainability.

Research and Development

The R&D department could use a better safety-related framework.

Operations and logistics

Supply chain management helps deliver relevant tools and data fast and successfully.

Information Systems

With the latest IT tools deployed, the information management system at DF works impeccably.

SWOT Analysis

Strengths

The large customer base and the popularity that the firm enjoys can be viewed as the essential strengths that need to be used actively.

Weaknesses

The lack of a sustainable approach toward the allocation of the financial resources coupled with the recent maintenance issues is a weakness. Therefore, the current focus must be on improving services’ quality and the provision of customer safety.

Opportunities

Success in the French market and the title of the leading organization in the entertainment industry are the opportunities that DF should currently pursue. Furthermore, DF is facing the chance to attract a wider range of customers by reconsidering its marketing approach. By focusing on other types of customer demographics, such as teenage boys, the organization will be able to gain even greater influence.

Threats

At present, the failure to address the safety issue is the greatest threat to DF. As soon as the company becomes notorious for its safety problems, it will face an imminent downfall.

Summary of Internal Factors

While the values and principles that make the foundation of DF are relatively sensible, the present-day safety issues and the marketing approach, seem to require closer attention. Therefore, DF must redesign its current approach toward the management of its finances.

Analysis of Strategic Factors

Review of Mission and Objectives

The current missions and objectives of the organization are aimed at following the Walt Disney standards and values to the T, which is an admittedly good start. However, to expand into the target market successfully, DF will have to push the envelope by exploring new opportunities and challenging its current philosophy. Particularly, the reconsideration of the current approach toward resources management and the importance of quality services and the provision of customer safety will have to be taken into account.

Strategic Alternatives and Recommended Strategy

Strategic Alternatives

As stressed above, it is strongly recommended that the company should consider using the principles of economic sustainability to redesign the allocation of resources. However, the company could also consider attracting more investments. By organizing an event that could draw the attention of potential benefactors, DF could create the foundation for its further quality improvement. As a result, Total Quality Management principles could be implemented to focus on the provision of safety and instructing the staff members.

Recommended Strategy

It is strongly suggested that the company consider the principles of diversity as the essential corporate philosophy that will define future decision-making processes. Additionally, a different approach toward the leadership process will have to be suggested.

Also, the principles of a sustainable allocation of resources and a cost-efficient framework for addressing the expenses-associated issues are strongly advised. Even though the organization’s recent financial statement shows that DF’s debts have not reached a drastic stage of maturity, the financial accounts point to a possible problem in DF’s financial approach. To increase the revenue level, DF will have to consider a more aggressive branding strategy and a promotion campaign that will attract a wider audience. Finally, DF should consider the idea of a merger or acquisition as the means of expanding its influence and gaining the trust of the residents of the French community.

Works Cited

“Corporate Governance.” Disneyland Paris, 2016, Web.

“Disneyland Paris: Innovating Human Resources Policies Since 1992.” Disneyland Paris, 2016, Web.

“Euro Disney S.C.A.” Disneyland Paris, 2015, Web.

Kohler, Isabelle. Strategic Marketing Analysis of Walt Disney’s Parks and Resorts. GRIN Verlag, 2014.

“Management Team.” Disneyland Paris, n.d., Web.

“Our commitment to the environment.” Disneyland Paris, n.d., Web.

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