Explain why Disney chose to enter Europe through a combination of joint-venture, a licensing contract, a management contract, and various other agreements with the French government and with lenders.

Disney forget the path of the theme parks in the world, and created a business around the idea of integral entertainment.
For its first park, the one in Los Angeles, Disney partnered with ABC, giving them 34.48% of the shares. For the next Disney World Park, in Orlando, Disney decided they want to have absolute control over the business. For the next park, Tokyo Disneyland, Disney went to a partnership with OLCL, who would be owning and operating the park, while Disney would be making money out of the royalties for concept of admissions, trademarks, etc.

When Disney noticed the big success the 3 parks had, it seemed natural to open another park, more precisely in Europe, to satisfy the European demand. When the decision of making the park in Paris, France was made, the government supported the idea, especially because of the employment boost it will bring to the city.
For Euro Disney, the approach was different than with the previous parts. In this case, they decided to keep the control of the management and operations, giving to the investors, majority of the ownership and to the banks the financing responsibilities. The first different thing they did was the creation of Euro Disneyland S.C.A. to build and own Euro Disneyland, with Disney owning 49% of it. This company was managed by Euro Disneyland S.A., a subsidiary totally owned by Disney.
Additionally, EDL Holding Co., owned totally by Disney, was the shareholding company of Euro Disneyland SCA, and it owned EDL Participations SA, acting as Disney's partner. Also, Euro Disneyland SNC, owned by Disney and French corporations, was formed to buy the park facilities.

This approach allowed Disney to minimize the risks that could arise from this new endeavor, while at the same time gave them control of...

Similar Essays