Global_Enterprise

Contents 1- INTRODUCTION: 3 2- CULTURAL DEFINITION: 3 3- ORGANIZATION BACKGROUND: 3 4- THE ORGANIZATION GOALS, HABITS, AND NORMS IN USA: 3 5- THE SRC PROBLEM: 4 6- SOLUTIONS: 6 7- CONCLUSION: 7 8- REFERENCES: 7 1- Introduction: The number of companies operating internationally is growing constantly. The world is opening up for foreign firms and new destinations in the company´ business are increasing. Because of high competition the companies operating abroad are faced with a much larger task than before. When going international the challenges the company must handle are new and unfamiliar. Obstacles the firm never faced before are becoming crucial in the everyday work. Culture is one of these obstacles and can affect the entire co-operation. Culture can influence the business in different ways. Language problems, pricing difficulties and culture are uncommon, especially in the beginning. The company must be able to handle these difficulties in a way that is satisfying also for the other part. Mistakes can be difficult to correct and disrespect for the foreign culture can destroy the entire operation. 2- Cultural definition: Culture is the “set of distinctive spiritual, material, intellectual and emotional features of society or a social group and that it encompasses, in addition to art and literature, lifestyles, ways of living together, value systems, traditions and beliefs (UNESCO,2002) . International marketing consists of finding and satisfying international customer’s needs and wants better than the competition, both domestic and international, and of coordinating marketing activities within the constraints of the global environment (MMC/ international marketing). Culture has a great impact on international marketing. When conducting international business it is of great importance to consider the cultural aspects because it can seriously affect the company’s future, the company must have to study about the local culture in-depth before offering a product to them, and must have to convert its all thinking into the culture of the local people. Sometime the company fails to make this conversion successfully as a result they fail to have local people attention and make huge loss. 3- Organization background: As an example of cross cultural analysis in global marketing, we will talk about The Walt Disney Company and its experience in the French market. The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products (Walt Disney website). 4- The organization goals, habits, and norms in USA: Disneyland Park is one and the first of the Walt Disney Parks and Resorts projects, it is a theme park located in Anaheim, California, and it is Known as Disneyland when it opened on July 18th, 1955, and it is still known by that name, it is the only theme park to be designed and built under the direct supervision of Walt Disney(Walt Disney website). Disney entertainment provides, for adults and children alike, a created experience that represents what many people would like the world to be: happy, innocent, simple, safe, clean, honest, and kind. The factors behind the park success were the innovative park design, the rich heritage of the company’s cartoon characters, the unique nature of the visitor experience, and the high quality of the service delivery system. All those along with the cultural impact of the park on the American people (according to scholars such as Luis Marin (1973), Umberto Eco (1977), Alan Bryman (1995) and Janet Wasko (2001), books. Google , understanding Disney ), it did not just promote a new approach to amusement based on a themed experience. Rather, it promoted a totalizing vision of America based on a specific ideology which materializes in an ideal, and at the same time credible, world composed by themed lands. An all-encompassing ideology, which celebrates America’s past and future and America’s traditional, white middle-class family values Such an ideology is conveyed within a nostalgic representation of America’s collective memory through attractions, costumes, and shows, so that the whole park appears as the most appealing, safest, and happiest of the possible worlds. This same ideology produces illusions and stimulates the desire for them, by presenting the park as the place where dreams, and particularly the American dream, come true, helped in making the success of the park so impressive (www.otto.to.it). Disneyland has a larger cumulative attendance than any other theme park in the world, with close to 600 million guests since it opened. In 2009, 15.9 million people visited the park, making it the second most visited park in the world that calendar year (www.themeit.com). Starting from that hit in the US market and realizing that a large number of the visitors are from Asia and Europe, Walt Disney Company decided to expand internationally. So a park in Tokyo was opened and described as a virtual replica of the U.S. parks. Again the Tokyo Disneyland was very successful mainly because it fits with various aspects of Japanese culture and the Japanese interest in American culture. The that the Tokyo Disneyland is viewed as a model of exceptional service in Japan illustrates the globalization of American service culture ( David E. Raz) 5- The SRC problem: Nine years after the opening of the park in Japan Euro Disney started its operations in France. Once again the project was almost identical to the three previous projects in Florida, California, and Japan. However, Euro Disney was a struggle Disney didn’t take into consideration cultural marketing. Euro Disney should have paid more attention to the definition of marketing. Marketing is based upon satisfying the varied needs or wants of a firm’s customers, and the needs and wants are very much culturally based . If a product is not culturally acceptable, its use does not satisfy the human needs. Thus Disney needed to address the European market from a cultural perspective. Disney may have been more successful if it had looked at culture and cross-cultural differences. These differences included cultural heritages, tastes, buying patterns, working conditions, service mentality language, customs, and manners. Disney could have had better success if it incorporated the local culture into its theme parks whereas the common assumption is that the serious judgment error in cross-cultural communication was the primary reason for Euro Disney‘s failure ( Richard Alan Goodman). Euro Disney did not even take into consideration the cultural norms such as the way people dine and dress. For example, Disney made a culture mistake by anticipating that Europeans were a fan of the sit down breakfasts, so Disney downsized its restaurants before it opened. During the opening days, Disney found the restaurants to be overwhelmed with people more than expected. In addition, Disney had difficulty realizing that Europeans eat at a set time every day. Disney had planned for the American behaviour of wandering around with lunch in hand However, what happened is Europeans all rushed to the restaurants around 12:30. This made the lines long which aggravated people. Then to make matters worse, Disney didn’t serve wine or beer at the restaurants, because Disney believed it was a family park. Disney forgot that they were in the heartland of Europe where people drink alcohol with most meals. Soon after this incidence Disney adapted to the European culture of dining. Yet Disney still did not have a grasp on the European vacation. Euro Disney’s ability to generate revenue would depend upon the number of visitors and the length of their stay. In addition, the length of stay was an average of 2 days when Disney predicted a week or two stay. However, Disney didn’t know that most guests would not stay a week or two at a time, like they had planned. If Disney had concentrated on marketing to the European guest, they might have been more successful. Moreover, expectation of the European vacations was a cultural mistake by Disney. Disney thought that the Europeans would act similarly to Americans and take their children out of school during a vacation, but that was not the case (Recklies). Furthermore, Disney figured that, like Americans, Europeans take several small vacations. Instead Europeans take a long 4 or 5 week vacation in the summer. Most guests on average stayed for a night or two at a Disney resort. Disney thought it could change the European habits, but this adventure proved them wrong. In addition, Disney made the mistake of assuming American risk management policies would work in France. Euro Disney was promoted and defended by senior company managers in the United States, and as the chairman of Euro Disney was an appointed American who was argued to have strong ties with France. Blinded by their ethnocentric approach and beliefs that the success in Japan would be translated into France, Disney’s management did not consider an extensive number of critical factors. In this aspect, they did not put too much of an emphasis to the fact that to be an American with strong ties in France did not mean that one has developed the French thinking, has become part of the French culture, and would incorporate French ideas in the project implementation. The lack of long-term strategic thinking and partnership factors turned out to be detrimental for Euro Disney’s initial success. Miscalculations based on insufficient marketing research were made regarding the per-capita spending of the guests at Euro Disneyland. The Walt Disney Company had assumed that guests visiting Euro Disneyland would spend large amounts of money as they did in the United States and Tokyo. More specifically, the Walt Disney Company calculated that each guest would buy $33 worth of food and souvenirs per day. This did not happen. In fact, spending was about 12% less than predicted. European guests were going to the theme park paying the steep entry fees, but spent less per-capita on food and merchandise than the Americans. This may be due in part to the fact that many guests wanted to spend as much time on the rides as possible because of the high admission price (30% more than Disney World in Florida) and less time shopping for souvenirs. While the American and Japanese consumers did not leave the theme parks empty handed, the Europeans did. This resulted in lower-than-expected revenue by Euro Disneyland (www.oitc.com). Transportation preferences of visitors to the park and around the park were also miscalculated. For example, if speaking for transportation around the park, in the initial design of Euro Disney it was assumed that the Europeans would have the same preferences as the Americans. In the USA a variety of trains, boats, and tramways carried visitors from the hotels to the park. Although it was possible to walk, most Americans chose to ride, while the Europeans on the other hand, chose to walk rather than ride, leaving the vehicles significantly underutilized. As for the transportation preferences to the park, it was assumed that given the automobile ownership statistics in Europe, the majority of visitors would drive their own cars to Euro Disney and that a relatively small number of visitors would arrive by bus. As a result, the parking facilities were built accordingly as were the facilities for bus drivers. It happened, however that the initial planning vastly underestimated the proportion of visitors who would arrive by bus. The facilities for bus drivers to park their buses and rest were inadequate. Euro Disney was forced to reduce the space left for parking lots and to open more space for buses and bicycles that the Europeans were more willing to use (Www.oitc.com). In addition, all the cast members had to follow the dress code manual, which dictates how each and every cast member should be groomed (Recklies). The problem with the manual is that Europeans don’t really adhere to an “American Look”. After all, they are not American. Many of the European cast members believed the Disney Look stripped them of their “individualism”. Furthermore, service was not the French specialty. Cast members lacked the American service mentality, so the service quality was not as good as in the American parks. Moreover, as a result of the strict dress code Disney was taken to court (Recklies). Europeans believed the dress policy violated the French labor laws; soon after, Disney had a new dress policy. The French felt that the workforce was “too American”. 6- Solutions: To incorporate the strategic predisposition and human resource plan into the Euro company goal of catering for multinational needs, Disneyland should firstly switch from the ethnocentric predisposition to region-centric predisposition. The emphasis would be on local responsiveness under this approach. The number of home-country executive would be reduced and more host-country nationals and third country nationals would be able to take part in the decision making process. By using a region-centric predisposition, the culture of the region is considered. Therefore Euro Disneyland is set up to be multinational responsive, which would allow it to meet the different demands and tastes of different European countries. The service can be standardized within the region if regional people are developed for key positions. The key issue of region centricity is to let Euro Disneyland develop its own managerial culture instead of having an emphasis of American management philosophy In addition; a reduction in U.S. executives allows local managers from a particular geographic region to handle operations in and around the area. Both the U.S. expatriate and the European region executives need to be trained. Through training, the ethnocentrism of expatriates can be overcome and thus create a better understanding of the value and customs of the host country and how to cooperate with local personnel. On the other hand, the European regional executives could gain international experience and knowledge from the expatriate as well. 7- Conclusion: Nowadays, any multinational enterprise (MNE) should be aware of the cultural environment of the country where it is operating. Not surprisingly there is a saying that a company should act globally but think locally, and be culturally aware because it is the lack of cultural awareness that causes businesses to fail. The literature nowadays is full of examples of companies which have failed in one way or another to be successful in certain countries as a result of the negligence with which they regard host countries‟ cultures. One vivid example of such a company is Euro Disney as has been demonstrated here. Cultural differences must be considered from different angles and despite the fact they might fall under the same category, like Western culture for example, it is the cultural differences for the specific country that matter. For example, both France and the USA are Western culture countries and at the same time they have major cultural differences. Thus, it was the lack of awareness for these cultural differences that caused the initial project of Euro Disney to fail. The project was executed as an equivalent to the American model of Disney, under the assumption that it will have the same level of success in France as it had in the United States. However, the French culture, despite being Western in nature, is quite distinct and in many aspects radically different from the American mores and norms.