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Rik Spitters International Master in Media Innovation BM-01 Hans de Nie, John van den Elst
Introduction
This
essay
is
based
upon
the
article
Why
Business
Models
Matter
written
by
Magretta
(2002).
In
this
article
Magretta
explains
why
business
models
still
matter.
She
does
this
by
first
give
the
reader
a
closer
look
of
how
the
origins
of
business
models.
She
gives
examples
of
businesses
that
applied
business
models
in
a
good
way
and
examples
of
bad
implementations.
One
of
these
examples
of
bad
implementations
Magretta
gave
was
EuroDisney,
or
as
it
is
called
nowadays:
Disneyland
Paris.
With
this
essay
I
want
to
go
deeper
into
the
business
model
of
Disneyland
Paris
and
why
it
has
failed
in
so
many
ways
back
in
1992
when
the
park
opened.
I
will
follow
the
same
structure
as
Magretta
did
in
her
article,
therefore
this
article
will
mainly
refer
to
her
article.
However
to
understand
why
Disneyland
Paris
business
model
failed
in
so
many
ways
we
will
explain
the
origins
of
the
park,
origins
that
lay
in
America,
with
the
first
two
parks
in
Anaheim
and
Florida.
To
all
who
come
to
this
happy
place:
Welcome.
Disneyland
is
your
land.
Here
age
relives
fond
memories
of
the
past,
and
here
youth
may
savor
the
challenge
and
promise
of
the
future.
Disneyland
is
dedicated
to
the
ideals,
the
dreams,
and
the
hard
facts
that
have
created
America,
with
the
hope
that
it
will
be
a
source
of
joy
and
inspiration
to
all
the
world.
Walter
E.
Disney,
17
July
1955
day.
When
the
park
opened
for
the
public.
Approximately
50.000
people
attended
the
opening,
and
from
that
point
on
the
park
kept
growing
and
growing.
Within
a
few
years
a
second
park
opened
in
Florida.
Both
areas
in
Florida
and
California
transformed
in
resorts
so
that
guest
could
stay
longer.
Both
resorts
were
quite
similar.
In
their
business
model
nothing
changed.
And
why
should
they,
the
model
worked,
because
as
with
the
first
park
Disneyland
Florida
was
a
great
success
as
well.
So
when
the
idea
came
to
mind
to
go
abroad
with
Disneyland
the
executives
were
confident
that
nothing
had
to
change.
Their
first
continent
to
they
set
their
eyes
on
was
Europe.
However
it
was
Asia
that
was
the
second
continent
with
its
own
Disneyland.
Tokyo
Disneyland
proved
to
be
a
success,
without
changing
the
business
model.
Therefore
the
Disney
executives
were
even
more
confident
that
a
European
park
would
be
successful.
During
the
eighties
they
looked
for
a
central
area
in
Europe.
After
a
few
years
it
was
decided,
next
to
Paris
a
land
was
bought
up,
Marne-La-Valle.
Confident
that
this
park
would
be
a
gigantic
success,
Euro
Disney
SCA,
the
company
that
owns
the
park,
started
building
Euro
Disneyland
based
on
the
three
other
successful
parks.
To
all
who
come
to
this
happy
place,
welcome.
Once
upon
a
time...
A
master
storyteller,
Walt
Disney,
inspired
by
Europes
best
loved
tales,
used
his
own
special
gifts
to
share
them
with
the
world.
He
envisioned
a
Magic
Kingdom
where
these
stories
would
come
to
life,
and
called
it
Disneyland.
Now
his
dream
returns
to
the
lands
that
inspired
it.
Euro
Disneyland
is
dedicated
to
the
young,
and
the
young
at
heart...
with
a
hope
that
it
will
be
a
source
of
joy
and
inspiration
for
all
the
world.
Michael
D.
Eisner,
12
April
1992
Euro
Disaster
Openings
day
arrived
for
Euro
Disneyland
on
March
12th
in
1992.
Great
traffic
jams
were
foreseen
and
everyone
was
warned
that
it
could
be
overcrowded.
Around
90.000
cars
were
expected.
A
government
survey
indicated
that
a
half
million
people
would
visit
the
park.
However,
on
openings
day,
by
midday
half
of
the
parking
lot
was
full.
Only
25.000
cars
arrived,
it
was
nearly
as
crowed
as
expected.
Was
it
because
people
were
advised
not
to
come
to
the
park
by
car,
was
it
because
of
the
strike
that
the
RER
Railway
was
dealing
with
or
was
there
another
reason
people
didnt
visit
the
parks
openings
day?
There
is
much
speculation
about
why
the
openings
day
of
Euro
Disneyland
failed.
Some
say
it
was
because
of
the
broadcasts
for
people
not
to
come
and
some
say
it
was
because
people werent eager to visit the park. The latter reason seems a reasonable one since the days that followed the park didnt meet the expectations. Visitors stayed away from the park, and the ones that came to the park were spending less little then expected. This didnt changed for the next coming years, and Euro Disneyland was upon the brink to go bankrupt. Because of financial investors the park the park could go on. And finally in 1995 the park got its first quarterly profit. The attendance grew from over 8 million to over 10 million in one year and in the next coming years the park got a bit healthier. It even grew to become the fourth best-visited park in the world, and the firs tin Europe. However all of this this came with the cost that the actually planned second park was delayed from 1996 until 2002 and that the park is still in great depth. But what was the reason Europeans did not visit the park and meet up to the expectations of Disney?
widespread rule that people till this day still believe is active. This rule changed after 1995, own brought food is allowed in the parks now. Also food prices were too high and no alcohol was served inside the park, something Europeans werent used to. These American rules partly led to an average attendance of 25.000 instead of the predicted 60.000. Another reason was the name of Euro Disneyland. Michael Eisner, former CEO of The Disney Company stated, In America the word Euro is believed to mean glamorous or exciting. For Europeans it turned out to be a term they associated with business, currency, and commerce. Therefore in 1995 Disney decided to change the name of Euro Disneyland into Disneyland Paris. In 2002 the name changed again into Disneyland Park, this because of the opening of the second park Walt Disney Studios Park. The overall resort is now called Disneyland Paris. So the biggest flaw of Disney was that they didnt understood their target audience. They just copied their business model from America and placed it in Europe. But little did they know that European people are used and lived to different standards. And because of that the park failed in the beginning years.
Conclusion
It
was
only
after
the
executives
of
Disney
realized
that
they
had
to
change
their
business
model
in
order
to
turn
the
park
profitable.
And
therefore
Disneyland
Paris
is
a
very
good
example
of
why
business
models
matter
and
why
they
always
have
to
be
looked
over
and
over
again.
It
is
very
clear
from
this
story
that
you
cannot
simply
copy
another
business
model
and
place
it
in
another
company,
even
if
it
is
in
the
same
company.
Business
models
makes
people
aware
of
what
things
are
important,
not
only
for
the
company
and
how
to
set
it
up,
but
more
importantly
of
your
customer.
Disney
learned
this
the
very
hard
way.
And
you
bet
that
they
wont
let
that
happen
again,
they
think
twice
before
opening
a
new
park,
and
will
forever
take
a
very
close
look
on
their
business
model
and
what
customers
are
that
they
are
dealing
with.
References
Corliss,
R.
(1992,
April).
Voila!
Disney
Invades
Europe.
Will
the
French
Resist?
Time
Magazine.
Retrieved
from
http://www.time.com/time/magazine/article/0,9171,975357-3,00.html
Euro
Disney
Adding
Alcohol.
(1993).New
York
Times.
Retrieved
from
http://www.nytimes.com/1993/06/12/business/euro-disney-adding-alcohol.html
Finch,
C.
(2011).
The
Art
of
Walt
Disney
(third.,
p.
504).
Magretta,
J.
(2002).
Why
Business
Models
Matter.
Harvard
business
review.
Retrieved
from
http://info.psu.edu.sa/psu/fnm/asalleh/MargarettaWhyBusModelMatter.pdf