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The Walt Disney Company: CSR Presentation

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Ibrahim Emara

on 18 April 2016

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Transcript of The Walt Disney Company: CSR Presentation

DISNEY
: AN INTRODUCTION

Ibrahim Emara, Bader Tayyar, Alexander Hager, and Ahmed El Shenawy |
CSR PRESENTATION
BUSINESS 201-D |
April 18, 2016
1923:
Founded as 'Disney Brothers Studio' by Walter Elias and Roy Disney

1937:
Renamed Walt Disney Studios and continued to produce short animations

1937:
First full-length animated movie was Snow White and the Seven Dwarves
EARLY YEARS
FINANCIAL SUCCESS OF ITS ANIMATED FILMS
Post-1937:
Expanded the studio's portfolio with films such as Pinocchio, Fantasia, and Cinderella

1955:
First Disneyland opened in California
EXPANSION OF DISNEY'S ACTIVITIES
EXPANSION OF DISNEY'S ACTIVITIES
1966:
Renamed as the enterprise now known as 'The Walt Disney Company'
1966:
Purchased Capital Cities; a network of 10 television channels and 21 radio stations
- Led to the creation of the Disney Channel and acquisition of other networks such as ABC and ESPN in later years
TODAY
Disney is comprised of different sectors in various spheres of operation:
- Interactive products sector
- Theme parks and resorts
- Media chain sector
- Studio entertainment sector
CSR:
BENEFITS

POSITIVE IMPACT ON FINANCIAL STRENGTH
Nearly 80% of young employees prefer to work for a socially responsible company
When a company engages in CSR, a high-motivation ripple effect is triggered among employees
Thus, CSR leads to greater firm efficiency and profitability
IN DISNEY'S CASE...
CSR has visibly improved Disney's financial strength
Greater return on investment capital percentage - 8.9% in 2006 vs approx. 14% in 2015
Tax rate percentage has risen by nearly 2%, indicating higher profits
OPERATING COST REDUCTION AND RISK MANAGEMENT
Implementing CSR involves reducing costs (i.e. having a lower cost of capital and recycling waste)
Hence, a socially responsible company is seen as a low-risk opportunity for investors
CSR indicates that a company is committed to meeting stakeholder demands
IN DISNEY'S CASE...
Disney has decreased the solid waste it produces by 28,645 tons
Electricity consumption and gas emissions have reduced by 6.6% and 4.6%, respectively
- This reduction is enough to power the annual consumption of 3 Disney theme parks
ENHANCED BRAND IMAGE AND REPUTATION
More than half of consumers across 60 countries favor products made by socially responsible companies
Consumers are willing to pay more if prices include a markup to support a company's CSR engagement
IN DISNEY'S CASE...
As of 2015, Disney is the third-most reputable company in the world in terms of CSR
CSR has humanized Disney’s brand and enabled it to build greater customer trust and loyalty
DIFFERENTIATION FROM COMPETITORS
CSR differentiates companies from competitors by:
- Attracting superior workers
- Providing leverage for managing stakeholders
- Creating a significant competitive advantage in markets where product differentiation is difficult
IN DISNEY'S CASE...
Disney has become one of the world's most distinguishable brands by:
- Creating a set of values and a corresponding culture
- Building a reputation for being committed to something more than profits
- Consumer products sector
CSR:
LIMITATIONS

PROFIT MAXIMIZATION AND RESOURCE EFFICIENCY ISSUES
CSR can divert focus from employee satisfaction to solely striving for profit maximization
IN DISNEY'S CASE...
Creating a positive work culture, friendly inter-personal relationships, and employee satisfaction is crucial to corporate success
Disney must try to keep their shareholders happy and their resources working at maximum efficiency despite CSR restrictions
GREENWASHING
Refers to the implementation of a CSR strategy only to appeal to the public eye rather than for the benefit of employees
Since CSR raises shareholders' financial expectations, managers announce superficial CSR plans in order to lower risks of low profit
IN DISNEY'S CASE...
Disney has been accused of greenwashing in the past
Workers have reported discrimination due to racial and religious prejudices and have filed lawsuits
LACK OF SUCCESS OF STRINGENT CSR POLICIES
The strict nature of CSR makes it difficult for companies to reach goals without 'cutting corners'
Third-party manufacturing can lead to a string of logistical and legal issues
IN DISNEY'S CASE...
Until recently, Disney was authorizing an unethical third-party manufacturer in Haiti
Employees created Aladdin t-shirts for a meager 28¢ an hour
CONSUMERS PAYING FOR CSR-INDUCED MARKUPS
CSR can sometimes lead to certain costs being risen
Company would need to increase their prices of their products or services to accommodate these changes
IN DISNEY'S CASE
Ticket prices increased from $82 in 2010 to $110 in 2016; an increase of almost $30 per person
Ticket prices at Disney's theme parks have been on the rise
DISNEY'S CSR ACTIVITIES
LIVE HEALTHIER
Launched in 2006 after consumer research showed parents wanted help with their families' nutrition
Promote healthy lifestyle choices throughout various commercial and media platforms
Involves promoting minimally-processed foods such as:
Based on Disney's Nutrition Guidelines, which organizes the nutritional value of regular foods
- Fruits
- Vegetables
- Low-fat dairy
- Whole grains
- Lean proteins
LIVE HEALTHIER (CONTINUED)
Disney established long-term targets for the program:
By 2015, have all food advertising in compliance with its Nutrition Guidelines
- Already reached 50% as of 2014
By 2020, increase the percentage of globally licensed wholesale food sales from 66% to 85% worldwide
- Reached 71% so far
CONSERVE NATURE
Aimed at protecting wildlife and connecting kids and families to nature
Facilitated by grants from the Disney Worldwide Conservation Fund (DWCF) towards charitable causes
Disney has allocated over $25 million towards scientific studies on ecosystem protection and endangered species
Has also created experiences for kids to connect them with nature at Disney’s numerous theme parks
Conserve Nature (Continure)
CONSERVE NATURE (CONTINUED)
Several long-term targets have been set for this program, most notably:
Connect 35 million kids and families with nature experiences by 2015
- Surpassed with 38.8 million experiences created already
Done by creating immersive experiences at Disney theme parks and resorts to enlighten kids on the wonders of nature
THINK CREATIVELY
Aimed at providing innovative entertainment and promoting creative thinking, among other offerings
Helped about 24,000 kids through creative learning programs
Impacted around 12,000 other kids through Disney Musicals program
Initiated 'Star Wars: Force for Change' program that solves global problems affecting kids (i.e. autism, developing a mobile app to enhance creativity)
Therapeutic food packs sent for infants in impoverished nations such as Haiti and the Dominican Republic
- Provided 1 million food packs globally
STRENGTHEN COMMUNITIES
Aims at providing basic needs for underprivileged kids
Also aimed at empowering communities through volunteer work and donations
'Friends for Change' program - sponsors the Boys and Girls Clubs of America’s National Youth of the Year program
Disney Heroes Work, which aids over 1,000 U.S Armed Forces veterans
Coins for Change program - over $2 million donated
VoluntEARS - Mentoring children and arranging food banks
Disney Movie Moments (entertainment opportunities at over 40 hospitals
Marvel + Child Life Council Comic Books - distributed comics to more than 400 hospitals
STRENGHTEN COMMUNITIES (CONTINUED)
Several targets have been identified for this program, such as:
Take 20 million actions by 2020
- As of 2014, 5 million actions have been taken already
- Done by protecting the planet, volunteering in local charitable events, fundraising for programs, and donating to non-profit organizations
Expand charitable actions globally (i.e. USA, China, Africa, India)
CONCLUSION
Disney has established itself as an an active corporate citizen through 4 main programs:
- Live Healthier
- Conserve Nature
- Think Creatively
- Strengthen Communities
Has followed the example of its late co-founder Walt Disney when he said, “Our greatest natural resource is the minds of our children"
Has managed to reap the financial and reputational benefits of CSR while legitimately impacting the lives of millions
'Inspire Others'
'Following the traces'
Walt Disney: 5 Lessons
Do What You Love
Take What You Do Seriously
Do It For Others
Never Just Settle With Your First Success
Don’t Let Obstacles Stop You
Full transcript