Eurodisney Failure During the Initial Term Paper

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According to Kepler Equities, there will be a 5% average growth in sales over the next five years for EuroDisney as a result, and breakeven is considered to be achievable in the 2012 timeframe. While EuroDisney can't compete with a strong British Pound and Euro relative to the weak American dollar, they can do what Disney does best, and that is bring in the flashy, new rides and entertainment. In 2005 for example Space Mountain 2 opened and Buzz Lightyear's Laser Blast opened in 2006, with Toon Studios planned in 2007 and Tower of Terror for 2008. All these new attractions are meant for generating interest from young families and stop them from going over to Orlando when they can get the same experiences at EuroDisney.

What will be remembered as Eisner's folly or grand mistake, EuroDisney was built under the direction of Disney's previous CEO, down to the specifics of how Disney's most expensive castle of all was created, the centerpiece of the park which cost Disney 2.4 billion Euros.

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The soaring production costs put break-even well into the 21st century for Disney, as did the 6% royalties on all revenues Walt Disney Company imposed on EuroDisney for use of characters, branding, and intellectual property. These two financial decisions nearly led to the bankruptcy of the corporation formed to run the park. Given the continued weak dollar, the costs of production for Disney soared, as did the hotel and golf course introduction and ongoing maintenance costs.

Disney didn't take into account the currency fluctuations and the exacerbating effects this would have on attendance, in addition to the.....

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