Current economic circumstances will be addressed. Strategic analysis PESTLE Analysts Political and Legal Economic Social. The age of the population is increasing. (Office for national statistics). This is bad news for Euro Disney as it will mean a smaller target market. Technological New technology is very important to theme parks as it enables them to provide the attractions necessary for attracting customers. It can also be used to improve efficiency and queue waiting times. It is also important tin terms of competition, to be a world leading theme park- state of the art technology needs to be implemented.
Transactions for holidays are often made online. There are a number of computer viruses that enable criminals to steal the details of customers online. If this was to become e a major problem, customers would be discouraged from purchasing holidays to Euro Disney online and methods of increasing security would need to be implemented Environmental In order to remain a reputable company Euro Disney must ensure it does not operate in a way that result s in damaging the environment. This would tarnish their image and create a bad image for the company.
Despite green methods of business often Ewing more costly, companies cannot afford in terms of legislation as well as public opinion to operate in environmentally unfriendly ways. In terms of competition Euro Disney is faring well and competing effectively. Situation audit Most visited tourist destination in Europe. Attendance is currently at record levels Euro Disney comprises two Theme Parks offering 54 attractions It is located 35 minutes east of Paris and therefore in a prime location with good accessibility. 44% of customers are French By creating 49,000 Jobs, Euro Disney has a positive effect on the French economy.
It is he 5th largest convention facility in France with vast meeting and seminar facilities. (Disneyland Paris) Currently Euro Disney has a remaining debt of 1. 9 million (case study) SOOT Analysis Strengths Euro Disney is already a well established and reputable company. According to Disneyland (2008), Euro Disney is the most visited tourist destination in Europe and the top tour operator in France in terms of number of clients, with 15. 3 million visits in 2008. This is strength for the company as is seen favorably by the public and does not have to struggle to overcome any image issues.
Euro Disney only has to maintain and re-enforce its reputation to be successful in terms of public image. According to the case study, despite the economic downturn Euro Disney has made record profits. This is strength for the company as it suggests they are already on the right track to success and objectives are being achieved. A wide variety of attractions are offered, giving diversity to what Euro Disney offers customers. The resort is very well located and easily accessible to customers. Weaknesses The company is in massive debt of 1. 9 million Euros.
Despite their success a net loss f 42 million Euros was made due to interest charges on the remaining debt. Euro Disney plans to fund all attractions in the future with self-generated cash; this does not seem an attainable objective at the moment as their largest profit ever made was 44 million Euros. The company’s debt impacts on their ability to generate capital for further growth. (case study) Opportunities The credit crunch. According to Buddhists (2008, The Credit Crunch Explained), the credit crunch can be described as a crisis caused by banks being overly nervous in lending money to people, businesses or each other.
When they do lend, they charge higher rates of interest to cover their risk. In real terms this means more expensive mortgages, credit cards, trouble for pension savers and other investors due to stock markets fluctuating wildly, and in the worst cases repossession and bankruptcy. Customers will have less disposable income and therefore less money to spend on holidays which are considered a luxury. One would assume this would mean bad news for a theme park, however there is evidence that the credit crunch can pose as an opportunity. According to Griffin (2008), the credit crunch was a key factor in
Dragoon Manors great success in the summer of 2008, with cash-conscious customers abandoning the sun for the British theme park. This could mainly be due to rising fuel prices. Considering that 44 per cent of Euro Disney’s customers are French and the theme park is already popular with its own people, this could heavily apply to Euro Disney as more French families may choose to pay a visit to France’s largest theme park, rather than go abroad. This could lead to increased visitor numbers but not necessarily greater customer expenditure, as spending is likely to be minimized as much as possible.
Threats The credit crunch also poses as a threat for Euro Disney. Interest rates are likely to rise due to the credit crunch; this could mean that their debt could increase greater than it would without the credit crunch in effect. This is a threat for the company as it could mean a further reduction in capital. Drawing on this information, recommendations for two different five year (2009-2014) strategies will be made. Strategic scenario 1: The credit crunch will be short-lived and European growth will begin at the start of the New Year.
Strategic scenario 2: In this case the effects of the reedit crunch will worsen until the end of the five year plan. Strategy 1 As the credit crunch will be short lived and the economy will continue to grow again in 2010- 2011 customers should have an increased disposable income. The implications of this in terms of Euro Disney will be that customers have more money to spend on goods and services, providing an opportunity for the company to generate higher revenues and profits Aim and objectives: Year 2009- 2014 Growth and development of the business is a major priority for the company.
Exceeding customer’s expectations in order to remain Rupee’s most visited tourist attraction by continuing to welcome more families and provide unique quality and creativity is a corporate objective. (Disneyland) archiving a profit of 7 million Euros during the period of 2009-2014 could be an objective. Achieving Objectives They should aim to attract families willing to pay more and renew hotel rooms; this should be achievable as demand is high. If they were to continue offering ‘a third night free’ the supply of rooms may not be sufficient for demand at peak times.
According to the case study, stays of between two and three days are the ‘sweet spot’. In order to encourage longer stays Euro Disney could provide an attractive itinerary for three days. It should emphasis that at least a three day stay is needed to receive the full Disney experience. Continue offering hotel accommodation and park passes free to children under seven as according to the case study families felt that children under five were not ready to attend the theme park. The free passes act as an incentive.
New technology could be invested in, this is very important especially due to the nature of Euro Disney; better technology often means better attractions and services for customers. It should improve visitor numbers and the reputation of the resort as a world leading theme park. Capital for investment should be available if their success and growth continues. More hotel rooms should be made available either by extending existing hotels or building new ones. This is very necessary as the case study already states that hotel occupancy is already high and demand outstripping supply.
It is important that supply meets demand or customer service will not be maintained and revenue will be lost. The company’s marketing department could create a global advertisement campaign with a budget of 30 lion Euros to launch the new product and services that the company will invest in offering. This should reach a wide audience and attract more visitors. By the end of 2014 should be a more advanced and developed theme park offering an even wider variety of attractions and services. It should have increased visitor numbers along with this capacity.
Money will have been invested in new technology and hotels. Strategy 2 Aim and objectives: Year 2009 – 2014 The aim here is to ensure survival during the credit crunch while taking full advantage of the opportunities it may present. Archiving a profit of 4 million Euros In this case the credit crunch will be in effect throughout the five year plan. The implications of this will be that customers will have less disposable income. This could suggest that more French and close European families visit the resort due to higher fuel prices, discouraging them from visiting further a field destinations.
Therefore visitor numbers may even increase despite the financial downturn, however it is expected that customers will spend as little as possible during their visits and emphasis needs to be put on value for money. In order to reduce the impact of low sales of goods in resort Euro Disney could create an appropriate competition. In order to increase sales of merchandise, visitors who spend over 50 Euros on merchandise will automatically be entered into a prize draw for two tickets to Disneyland Paris for three days, all expenses paid.
The competition can be advertised in around the resort and in hotel rooms as well as on company brochures and purchased package information. The price of hotel accommodation may need to be reduced as much as possible in order to ensure visitors continue to make use them. More customers may visit the park but they will want to reduce the cost of their stay as much as possible, possibly by using near cheap, budget accommodation. If the cost of accommodation is too high, local French visitors may try and reduce their stay to only a day and travel home.
If visitor numbers do seem to increase as much as anticipated the allocation of staff may need to be adjusted. Instead of employing staff to sell extra services and products they should be employed in areas were a high number of customers will be active such as at the main entrance, car parks and attractions. If this is not done customer service may no longer be satisfactory and the parks reputation will be severely damaged. The effects of the credit crunch are very uncertain and may impact very quickly. Therefore risks should be reduced as much as possible and no major investments should be made unless totally necessary.