“Once, Disney’s CEO Michael Eisner commented the entertainment business with these words: „Fantasy is very hard work. To make something fun, is hard. It’s gratifying. It’s satisfying. But fun? No.” …[…]”
This thesis occupies on location decisions for Foreign Direct Investment and its particular impact on regional structures. Against the background of the entertainment industry and regarding the specific case of Euro Disney, expectations and reasons for locating an economic activity as well as the examination of the effect for the region are pointed out. In particular, the focus goes to the analysis of the location decision made by The Walt Disney Company and its impact on regional infrastructures.
Aim is to show how an individual incentive package and especially the provision of key infrastructure can influence the location decision of potential investors particular in business with high infrastructural awareness. Further, the case of Marne-la-Vallée is an excellent example for an observation how Foreign Direct Investment can help to advance regional development. Especially caused by the specific characteristics of the theme parks and resort business, the focus to the location decision in particular view to the infrastructural development seems to be interesting. Nevertheless, the successful operation of a theme park highly depends on the location and infrastructural network connecting the site in all directions.
This thesis may be interesting for regions willing to attract investors and for potential investors as well. Certain businesses such as the theme park and resort one are highly dependent on excellent infrastructural connection, besides all fiscal and financial incentives, infrastructure often is presumed as self-evident. But in reality, the availability of an infrastructural network stays one of the deciding elements for the location decision in favor for one specific region. Even rural regions like Marne-la-Vallée can be attractive for potential investors if the host country provides incentive packages tailored to the investor’s needs and expectations.
Table of Contents
Preposition
A Introduction
1. Entertainment
1.1 Entertainment Industry
1.1.1 Definition
1.1.2 Supply and Demand
1.1.2.1 Prerequisites on the demand side
1.1.2.1.1 Motivation
1.1.2.1.2 Time
1.1.2.1.3 Income
1.2 Location-based Entertainment
1.2.1 Definition and History
1.2.2 Financial operating characteristics
1.2.2.1 General issues
1.2.2.2 Key variables and interdependences
2. The Walt Disney Company and the Euro Disney S.C.A
2.1 The Walt Disney Company
2.1.1 The business
2.1.2 Economies of scale and competition
EXCURSUS: Character licensing
2.2 Relations between TWDC and Euro Disney S.C.A.
2.3 The Euro Disney S.C.A.
3. The region
3.1 Introduction
3.2 Seine-et-Marne
3.3 Marne-la-Vallée
4. A summarizing prospect
B Main Part
1. Euro Disney in France: The location decision
1.1 Background
1.2 Introduction
1.3 Foreign Direct Investment and Multinational Enterprises
1.3.1 Reasons for Foreign Direct Investment
1.3.2 Expansion alternatives
1.4 Expectations and incentives on two perspectives
1.4.1 The perspective of the MNE
1.4.2 The perspective of the host country
1.4.2.1 Incentives
1.4.2.2 Reasons and expectations
1.5 European market and subsidy game
1.6 Final decision
1.7 Agreement on the Creation and Operation
2. Impact and infrastructural development
2.1 Projections
2.2 The Vision
2.3 Strategic planning
2.4 Development
2.4.1 Fundamentals
2.4.2 Opening and struggling
2.4.3 Signs of recreation
2.4.4 Entourage extension
2.4.4.1 The Resort
2.4.4.2 The real estate strategy
2.4.5 Opening and struggling, the second
2.4.5.1 The Second Theme Park and financial crisis
2.4.5.2 Val d’Europe extension
2.4.5.3 Expansion of train network
2.4.5.4 External linkages
2.4.5.5 Financial restruction
C Conclusion
1. Infrastructure today
2. Résumé and perspectives
Objective and Research Focus
This thesis examines the strategic location decisions of the Walt Disney Company (TWDC) regarding its Foreign Direct Investment (FDI) in France, specifically analyzing the impact of this investment on the development of regional infrastructures in Marne-la-Vallée. The central research aim is to understand how incentive packages—particularly the provision of critical infrastructure—influenced Disney's choice of location and how this subsequent investment served as a catalyst for regional infrastructural and urban development.
- The economic foundations and market dynamics of the entertainment and amusement industry.
- Theoretical frameworks of Foreign Direct Investment (FDI) and location strategies of multinational enterprises.
- The specific case of the Walt Disney Company’s expansion into Europe and the selection process of the Marne-la-Vallée site.
- The role of complex incentive packages, including financial support and infrastructure provision, in attracting large-scale investments.
- The direct and indirect long-term impacts of the Disney project on regional infrastructural networks, economic growth, and urbanization in the Seine-et-Marne region.
Excerpt from the Book
1. Entertainment
Once, Disney’s CEO Michael Eisner commented the entertainment business with these words: „Fantasy is very hard work. To make something fun, is hard. It’s gratifying. It’s satisfying. But fun? No.”
The fun industry, the amusement business or the entertainment industry, however one calls this business segment, the terms fantasy, fun, or amusement may remind one of Disney and its famous entertainment parks, Disneyland in California, Disney World in Florida and Tokyo Disney. Then, perhaps one also reminds the European version, firstly known as Euro Disney and yet, after a change of name, Disneyland Resort Paris. The single major Disney facility in Europe has been constructed near to the French capital Paris. Within a relatively rural region, one can find a large entertainment complex and might have asked why Disney opted for this location amidst sugar beet fields and small villages. Further, no matter from where to get there, if one has already visited the site, he might have remarked that the accessibility to the location is splendid. Regardless from which direction one comes, the infrastructural connection should not be the problem. Exactly these observations lead to the subject of this thesis.
Beneath several other reasons, the location decision of The Walt Disney Company for the rural area Marne-la-Vallée was mainly influenced by infrastructural incentives provided by the host country. Consequently, the option for that specific region could be seen as the initial force for the regional development and thereby especially the construction of an infrastructural network.
The process from first negotiations to the initial decision and the infrastructural development until nowadays always is covered with expectations of the investor and the region. There are reasons for which TWDC decided to build up a large entertainment complex some kilometers in the East of Paris. Thereby, the aspect of Foreign Direct Investment incentives plays a key role in regard that a multinational company must have had some specific expectations from the location for that large investment.
Summary of Chapters
1. Entertainment: This chapter provides an introduction to the entertainment industry, covering economic basics such as supply and demand, motivation theories, and the history and financial characteristics of location-based entertainment.
2. The Walt Disney Company and the Euro Disney S.C.A: This chapter introduces TWDC as a multinational media conglomerate and describes the establishment and structure of its French subsidiary, Euro Disney S.C.A., designed to operate the European theme park.
3. The region: This section presents the geographical, administrative, and economic background of the Seine-et-Marne region and Marne-la-Vallée, providing context for why this area was chosen for the project.
4. A summarizing prospect: This chapter synthesizes the key theoretical and structural points from the introduction to facilitate a better understanding of the subsequent analysis in the main part.
1. Euro Disney in France: The location decision: This chapter explores the rationale behind TWDC's choice of France, focusing on the strategic aspects of Foreign Direct Investment, the intense "subsidy game" between potential host countries, and the final agreement between the company and French authorities.
2. Impact and infrastructural development: This chapter details the chronological development of the Euro Disney project, analyzing how infrastructural investments and the vision of a "resort" environment contributed to regional growth, urban expansion, and the ongoing integration of new partners and linkages.
1. Infrastructure today: This concluding chapter summarizes the current state of regional infrastructure and the economic landscape in Marne-la-Vallée following the Disney investment.
2. Résumé and perspectives: This section evaluates the long-term effects of the project, highlighting how the original FDI acted as a catalyst for regional development and future urban and economic expansion.
Keywords
Foreign Direct Investment, FDI, The Walt Disney Company, TWDC, Euro Disney, Marne-la-Vallée, Location-based Entertainment, LBE, infrastructural development, regional development, incentive packages, Disney Resort Paris, urbanisation, theme park economies, economic growth
Frequently Asked Questions
What is the primary subject of this thesis?
The thesis focuses on the location decision of the Walt Disney Company to invest in France, specifically analyzing how infrastructural incentives provided by the host country impacted this decision and the subsequent regional development.
What are the core thematic fields covered in the work?
The work explores the intersection of international business strategy, the economics of the entertainment industry, Foreign Direct Investment theory, and the impact of large-scale commercial developments on regional infrastructure and urban planning.
What is the central research question?
The research explores how individual incentive packages and the provision of key infrastructure influence the location decisions of multinational investors and how such investments can catalyze regional development in practice.
Which scientific methods are employed?
The study utilizes a descriptive and analytical approach, combining economic theory—specifically regarding FDI, agglomeration, and theme park economies—with a chronological analysis of the project's development and the specific incentive measures implemented by the French government.
What topics are discussed in the main part?
The main part covers the background of the location decision, the motives for Foreign Direct Investment, the competitive "subsidy game" between potential host sites, the formal agreements made, and a detailed look at the project's development and its impact on regional infrastructures over time.
Which keywords best describe this research?
Key terms include Foreign Direct Investment, Walt Disney Company, Marne-la-Vallée, Location-based Entertainment, regional development, and infrastructure.
How does the "subsidy game" described in the thesis affect the location decision?
The thesis illustrates how host regions, such as France and Spain, overbid each other by offering complex incentive packages—including tax breaks, favorable loan terms, and significant infrastructure improvements—to attract the Walt Disney Company, thereby playing a decisive role in the final location choice.
What role does the "entourage extension" play in the project?
The entourage extension refers to the strategic expansion beyond the initial theme park, incorporating real estate development, shopping centers, and business parks. This strategy helps create a homogeneous entertainment complex that attracts further partners and maximizes the long-term regional economic impact.
Why is Marne-la-Vallée considered a prime example for this analysis?
Marne-la-Vallée is highlighted as a significant example because it demonstrates how a rural area, through the intentional construction of an infrastructural network and a tailored incentive package, can be transformed into a dynamic economic and tourist hub through the influx of major Foreign Direct Investment.
- Quote paper
- Bachelor of Arts in International Management (B.A.) Stephanie Rohac (Author), 2006, Euro Disney Paris as the largest single foreign direct investment in France: The location decision of the Walt Disney Company and its impact on regional infrastructures, Munich, GRIN Verlag, https://www.grin.com/document/67211
