Euro Disney - Case Study

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1 Introduction – Euro Disney 's Plans and Reality

When the International Offer of Shares for the Euro Disneyland S.C.A. (in the following called Euro Disney) was published in October 1989 the plans for this new enterprise of the Walt Disney group were ambiguous. The financial plans for the first year of operation projected total revenues of FF 5,482 million and a net profit after taxation of FF 204 million. For the following years the development should be even more impressive. At that time the plans were seen as a consequent application of the concepts of the existing Disney-designed theme parks.[1]

Just a short time after Euro Disney was opened in time on April 1992 it was obvious that reality would not meet the plans. In
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For this reasons all conclusions given below should be evaluated carefully. For a more detailed analysis additional information would be necessary[4].

To be able to make a general statement this report will compare the plans for the first and second year of operation with the financial years ending September 30th 1992 and 1993. At least the last one will provide the opportunity to compare two periods of twelve months of operation. This comparison is provided in appendices 1 to 3. With a stress on the second year – as explained above – the following conclusions can be drawn:

· In the first year Euro Disney nearly met expectations for revenues and operating expenses of the Magic Kingdom. With no operating profit from the resort and property development sector and higher than planned general and administrative costs it failed to meet the profit projection by FF 392 Mio.

· In the second year again revenues from the Magic Kingdom reached the planned level but operating expenses for this exceeded plans so that the operating profit was below expectations.

· Again there was no significant operating profit from the resort and property development operations.

· Lease, general and administrative expenses far exceeded plans.

· As a result the profit before exceptional profit and taxation missed plans by FF 2,332 Mio.

A more detailed analysis is given in appendix 4.


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