The Disney case demonstrates how culture is critical for any organization looking to expand globally. Culture will determine the positive or negative reception of the business in the international market. As evident in the Disney case, the company was not cognizant of the cultural requirements of the French market and instead presented a business that adhered to American requirements. All aspects of the park in France were connected to the American culture, including the Disney characters and how they were presented. It is why the French did not develop as much interest in the park as was projected by Disney. It is an indication that culture will determine whether a business is accepted or rejected by the locals (Kilsgård, Nero & Sundin, 2008). One may conclude that culture will determine the success or failure of global expansion for any business, as was the case for Disney in France. Since the business was not culturally accepted, it became almost impossible for Disney to make its projected profits. By the end of the first year, the company was experiencing the lowest visits of all its parks and was running into losses.
Many of the failures the company was experiencing were due to the lack of cultural integration. Companies who adopt a similar expansion strategy like Disney will likely fail in their expansion efforts. The locals need to feel that the new business fits well with their culture for them to connect with its products and services easily. If the company maintains its home country culture, which may be new and not easily recognizable in the new global market, the business may not lay strong foundations as expected; without a strong foundation, the business is bound to fail.
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Cultural Factors to Consider
Disney failed to carry out an initial analysis of the cultural demands in its new global market, and this contributed significantly to the company’s failure in France. When considering expansion into a global market, companies need to consider cultural factors such as language, religion, demographics and social standards (Kilsgård, Nero & Sundin, 2008). This was not the case for Disney. The company paid little to no attention in these cultural factors. The assumption was that since other Disney parks across the world were doing extremely well, the success of the France part was guaranteed even without consideration and integration of the identified cultural factors. Disney failed to recognize and work along with Europe’s culture of long family holidays of up to one month. Instead, the company projected success for the park in France on the American culture of short and frequent family trips. It is why visits by French locals to the park were lower than predicted. Therefore, businesses looking to expand globally need to consider cultural factors like the way of life adopted by the locals and their food choices and preferences. If Disney had considered these and more cultural factors, the company’s entry into the European market would have been smoother and more profitable.
Foreseeability of Cultural Factors and Environment
Any organization looking to expand globally needs to conduct immense research on the new market and understand the best strategies for entry. Culture stands as one of the crucial aspects of the new environment a company needs to research. Culture acts as the backbone of any society or organization, and this would be no different for a company’s global market (Novais & do Nascimiento João, 2016). When enough research on cultural factors and the environment is conducted, the company would oversee these aspects of the new global market and identify how to integrate them into the company’s entry strategy successfully.
Such insight may not have been possible for Disney during its plan for expansion into France. The company believed that its success in other parts of the world would make it easy to experience more success in Europe. Disney parks were doing well in the US and Japan, and the company assumed this success would trickle down to its France branch. Disney was not keen enough on the significantly different culture that was present in Europe. If Disney had considered culture a crucial determinant in its success, it would have collected as much information on this culture as possible to integrate this into its amusement park. It should be similar for other organizations that want to expand globally. When sufficient research is conducted, the company will foresee cultural factors and environment that would play a role in its expansion.
The role of ethnocentricity in Foreign Market Entry
Ethnocentrism is a concept used in different subjects to fulfil varied ends. What the term means for sociologists may not necessarily be what it means for anthologists or psychologists. Research indicates that the concept is clustered with other ideas like discrimination, racism, xenophobia or nationalism. It defines a group, cultural or ethnic egocentrism that views one’s group or culture to be superior to the rest. It will involve the expression of hatred, hostility or contempt for the outside groups (Bizumic, 2014). Ethnocentrism in the global market expansion will determine whether the business will incorporate the culture of its new market into its overall operations. When the organization is egocentric, it will force its organizational and home country culture on the communities it encounters in its global markets. This was the case for Disney. The organization viewed its culture and that of the American society as more important, likeable and easily accepted than it viewed the French or European culture.
It is why the picture presented by Disney’s park was one that was promoting the American culture more than it was promoting the French culture. One the other hand, the locals also held ethnocentric attitudes towards their culture. They viewed it as superior to that which Disney was bringing to them. It would be hard for Disney and the local community to integrate new cultures into their own. It would remain the same for organizations engaging in global market entry. Ethnocentricity would force organizations to be well-informed on the cultures they are getting into to prevent the development of the conflict between the organization’s culture and that of the local community.
Frameworks for Cultural Analysis
There are numerous frameworks for cultural analysis that organizations can use to determine their readiness for cultural integration in the new global market. One framework is the HOFSTEDES dimension of culture, which helps distinguish cultures using their beliefs on individualism and collectivism, masculinity and femininity and much more (Maznevski et al., 2002). The LEWIS model enables intercultural analysis to promote the positive interaction of different cultures. Organizations can adopt these frameworks and many others that exist for this purpose (Maznevski et al., 2002). Disney would have implemented one of these frameworks to help learn more about French culture and make entry into this new market easy. The framework would have identified French beliefs in gender, the ease for interaction, individualism, collectivism and much more. Disney may have opted to use one or more of these frameworks to ensure that it gathered holistic data on the local culture. Organizations expanding globally need to be aware of these frameworks to help conduct cultural analyses. These analyses can then enable them to understand how to interact with these new cultures to ensure that none appears as inferior to the other and that all business operations take into account the cultural needs of the organization and the local community.
Developing Cross-Cultural Marketing Skills
Global expansion means an organization will be dealing with different cultures in its new market. The organization must identify how to adopt cross-cultural marketing skills to promotes its success in the global market (Burton, 2008). These skills must be developed in the organization for easy implementation when necessary. Disneyland Paris was not doing well financially; then the organization decided to have a French national as its CEO. The new CEO managed to get the organization gradually back on its feet. The CEO changed the park’s name from EuroDisney to Disneyland Paris. It was one of the decisions that helped improve the park’s financial health. The new CEO was well trained in appropriate marketing skills, especially in an environment where the organization was failing due to cultural issues. Such a decision would have required immense knowledge in cross-cultural marketing skills which was demonstrated by the new CEO. It would be important that organizations identify talent that is well-informed on cross-cultural marketing skills. The organization can also include training on these skills to ensure that its personnel are well informed in what this marketing requires. Therefore, training and the hiring process can help organizations recruit talent with expertise in cross-cultural marketing and further develops these experts from within the organization.
References
Bizumic, B. (2014). Who coined the concept of ethnocentrism? A brief report.
Burton, D. (2008). Cross-cultural marketing: theory, practice and relevance . Routledge.
Kilsgård, D., Nero, M., & Sundin, E. (2008). Cultural differences when entering a new market-A study of Swedish companies entering the Eastern European markets.
Maznevski, M. L., Gomez, C. B., DiStefano, J. J., Noorderhaven, N. G., & Wu, P. C. (2002). Cultural dimensions at the individual level of analysis: The cultural orientations framework. International journal of cross cultural management , 2 (3), 275-295.
Novais, A. L. M., & do Nascimiento João, B. (2016). Cultural influences on entry mode choice in international business: An assessment and review. Gestão e Projetos: GeP , 7 (1), 1-14.
