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Disney Case study

By: Enriquez Jeremy; Jacildone, Jenny; Lim, Hazel; Lim, Marvin

Jeremy Enriquez

on 25 October 2012

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Transcript of Disney Case study

Jeremy Enriquez
Jenny Jacildone
Hazel Lim
Marvin Lim A Case Study on
On June 12, 2006 Disney Mobile phone service is launched
On January 23, Disney announces a deal to purchase Pixar Animation Studios in an all-stock transaction worth $7.4bn
In July 2006, the Disney film Pirates of the Caribbean 2 is the highest grossing movie in opening weekend history at $135,000,000 USD
Employees: 133,000 (2006) Divisions of Disney Media and Entertainment
American Broadcasting Company
Buena Vista Distribution
Buena Vista Motion Pictures Group
Walt Disney Studio Entertainment
Walt Disney Parks and Resorts
Disney Consumer Products Divisions of Disney For more than eight decades, the name Walt Disney has been preeminent in the field of family entertainment. From humble beginnings as a cartoon studio in the 1920s to today's global corporation, The Walt Disney Company continues to proudly provide quality entertainment for every member of the family, across America and around the world
Disney Legends
- The Disney Legends program was established in 1987 to acknowledge and honor the many individuals whose imagination, talents, and dreams have created the Disney magic. Since its inception, the program has honored many gifted animators, Imagineers, song writers, actors and business leaders as having made a significant impact on the Disney legacy

The Walt Disney Family Museum
- The Disney Family Museum Web site is produced and maintained by the Walt Disney Family Foundation, a nonprofit organization. Founded in 1995, the Foundation strives to promote education, writing, and scholarship about Walt Disney History
The Walt Disney Company

Is heralded as the world’s largest entertainment company
Earned the reputation by tight control
Although control pervades the company, it is not too strong a grip Employees are aware of their prime objectives
Have freedom to think beyond limit and come up with new innovative ideas
Company have adopted the phrase “Dream as a team”
The concept of independency tempered the control over each department
Managers here do the great job of encouraging the imagineers and employees
Imagineers have a brainstorming session called “Blue sky”
Disney president Frank Wells believes that “If a good idea is there. You know it, you feel it, you do it, no matter where it comes from” Strict control but independent SWOT Analysis STRENGHTS
Global Standardization Increasing Trends in Revenue
Target Customer: Children and Profit.
Creative Process
Popular Brand Name

High sunk cost
Excessive Research & Development
Constant Up gradation
High Investment
High Risk Factor SWOT Analysis… OPPORTUNITIES
Global Localization: Think global, Act Local
Characters of national or regional appeal
Cheaper alternatives to soft toys
Disney Music Channel
Disney School of Management/Training Institute

A slower economic recovery
Competitors: National, Regional & Global
Employee Retention
Highly Demanding in terms of Sales,
Creativity and Innovation
Unprofitable or hasty acquisition
Brand Consistency
Product Differentiation SWOT Analysis… Internal
Creativity Management
Resource Management
Task specific work culture
Target oriented approach

Buying Behavior
Marketing Pattern
Sales Turnover
Customer Satisfaction Factors Robert A. Iger
- President and Chief Executive Officer, The Walt Disney Company Its Current Executive Management By function: arranging the business according to what each section or department does
By product or activity: organising according to the different products made
By area: geographical or regional structure
By customer: where different customer groups have different needs
By process: where products have to go through stages as they are made Ways to Structure a Business Disadvantages
Closed communication could lead to lack of focus
Departments can become resistant to change
Coordination may take too long
Gap between top and bottom Advantages
Specialisation – each department focuses on its own work
Accountability – someone is responsible for the section
Clarity – know your and others’ roles Functional Structure Disadvantages
Duplication of functions (e.g. different sales force for each division)
Negative effects of competition
Lack of central control over each separate division Advantages
Clear focus on market segment helps meet customers’ needs
Positive competition between divisions
Better control as each division can act as separate profit centre Organization by Product/Activity Disadvantages

Conflict between local and central management
Duplication of resources and functions Advantages

Serve local needs better
Positive competition
More effective communication between firm and local customers Organization by Area Market Share of Disney Revenues Would Disney Be a good Investment? =>Depends on what kind of results are expected
=> Long Term investment Future Market Opportunities Acquiring Playdom =>Playdom is the No. 4 social gaming company in Facebook, and No.1 in my space.
=> Playdom is where Disney could easily extend its characters and brands to social games.
=> draws about 42 million players a month Disney Netbook (NetPal) Target market is for 6-12 years old => Would have heavy parental controls
=> Would contain a cute user interface Joining the Cruise Market Expansion takes many forms with additional ships: Disney Dream and Disney Fantasy. Disney's Target Market =>Average age is 44.5 years old.
=> Children are the base but the
Parents are the deciding factor. Strategies Product Differentiation Key Success Factors Headquarters and primary production facilities 

The Walt Disney Studios in Burbank, California

has been a component of the Dow Jones Industrial Average since May 6, 1991

Mickey Mouse serves as the official
mascot of The Walt Disney
Company Walt Disney: The Background Founded on October 16, 1923 by brothers Walt and Roy Disney as an animation studio
One of the biggest Hollywood Studios
Licensor of:
- 11 theme parks
- Several television networks, including ABC
and ESPN Mickey Mouse was created in
1928 by Walt Disney and Ub
Iwerks and voiced by Walt Disney
Birthday: November 18, 1928
Comic animal cartoon character
Icon for The Walt Disney Company
Mickey Mouse one of the most recognizable symbols in the world Mickey Mouse Target Market Strategies Demonstrating its leadership in marketing to reach kids and families, The Walt Disney Company unveiled the first national wireless phone service in 2006, known as "Disney MobileSM." The phone used GPS capabilities to allow parents to control who their child is communicating with and to monitor where she is. This is part of Disney's strategy to be relevant to contemporary family lifestyles. Disney also continues to appeal to teens and their parents by staying current with digital gaming and social media opportunities. International Outreach Strategies According to "DEMC," a small-business strategist, Disney recognizes that many people do not have the opportunity to travel to the U.S. to visit Walt Disney World or Disneyland. As a result, Disney developed theme parks around the globe to capture the market, adapting them to local cultures. They include Disneyland Paris, Tokyo Disney, and Hong Kong Disneyland. With worldwide expansion, Disney aims to increase its marketplace and expand its brand.
Disney's ownership of media networks such as "ABC," "Disney Channel," and "ESPN" is a strategy the company is using to market its brand to Americans. This includes a systematic approach to television advertising, as well as radio commercials, print, outdoor advertising, and mobile initiatives, promoting discounts on resorts, and family packages. To reach teenagers, Disney launched "advergaming," which puts ad messages in online and video games. The goal is to reach kids directly and encourage them to urge their parents to visit a Disney park for a family experience. Advertising and Promotional Strategies Innovation as a Marketing Strategy As part of its marketing strategy, Disney believes in innovation to stay ahead of the competition and build business. With rapid advances in technology, the traditional passive television audience is in transition, no longer captive to prime-time scheduling on major networks. According to "eMarketer," by 2011, 86 percent of Internet users in the U.S. will be downloading video content. Disney's strategy is to connect with kids directly via storytelling utilizing multiple technologies. Walt Disney diversify its operations to decreasing sales in product lines into home video, film, merchandise, radio broadcasting, net-work television and theme parks.

Disney dominates family entertainment market and focused market diversification to cover a wide array of products and services. Walt Disney Internal Environment Disney interactive media group intro a media kit web site for their customer to source for information about advertising on Disney’s family of sites.

The movie business and the network – television departments faced competition by new cartoon figures appears everyday in tv shows or movie theaters overseas. Walt Disney External Environment The following table summarizes the fourth quarter and full year results for fiscal 2010 and 2009 (in millions, except per share amounts): Walt Disney: Financial Performance Walt Disney offers a wide variety of heterogeneous products; its movies, shows, themes parks, music radio, and merchandize offer a range for all tastes, cultures and ages. Making its product really differentiated within its company and from products from other companies. Internal
Creativity Management
Resource Management
Task specific
work culture
Target oriented approach

Buying Behavior
Marketing Pattern
Sales Turnover
Customer Satisfaction Vulnerability =>High (and Increasing) Cost of Production
=>Lack of Development
=>Misunderstandings between partner companies Discuss the steps Disney should take to ensure success in the future. For future success in the digital age, international markets, and new leadership role, Disney must:
*Develop new business models to levitate the risks associated with them;
*Overcome the two main challenges the entertainment industry is facing which were:
file sharing and copyright infringement.

*Adapt and change their management system in order to integrate into the digital age;

*Follow its brand philosophy wich is to make people happy. In addition to that, Disney should analyze how the entertainment industry could indirectly impact their brand.

*Recognize new technology trends and develop plans to minimize the risks associated with technology. Disney now has five lines of business. How succesful do you think Disney will be in the future with its endeavors to integrate entertainment inside and outside the home? Will its theme parks, restaurants, and movies complemet its plans to expand into the markets of the intenet and broadcasting Every single action in a company has its impact on the future success of that company. In fact, on its way to expand its business worldwide, Disney has multilplied its innovations and movies productions to better serve internaltionally. It has now 7 theme parks, 27 hotels with 36,888 rooms, 2 cruise ships, 728 Disney Stores, 1 broadcast network, 10 television stations, 9 international Disney Channels, 42 radio stations, an Internet portal, 5 major Internet Web sites etc. Its 5 lines of businesses with its endeavours to integrate entertainment inside and outside the home is a good opportunity for Disney to gain a competitive advantage within the market place and more importantly within movie production industry.

In fact, its technological innovations with its media networks will comfort its leading position within the sector.

Nowadays, technology has become a very increasingly tool to compete with rival companies and industries.

Internet and Broadcasting will have a positive impact in developing marketing plans and strategies for theme parks, restaurant, and movies.

We suggest that Disney first focus on integrating entertainment inside the home and in a second time outside the home. How should Disney maintain its corporate culture as it continues to expand into global markets? Disney is “rich in heritage, traditions, quality standards, and values that it believes are critical factors to it success”.

Cast members share the values of honestly, integrity, respect, courage, openness, diversity, and balance.

These values are demonstrated through such traits and behaviours like making guests happy, caring about fellow cast members, working as a team, delivering quality, fostering creativity, paying attention to every detail, and having an emotional commitment to Disney. Disney Corporate Culture
As diversity in the workplace continues to become a focus for nearly in The Walt Disney Company, and have to works to make this vision a reality.

“By providing the cast members with the opportunity to express their own creative thoughts and direction, Disney has fostered a greater ‘buy-in’ to the company vision”. Diversity In The Workplace Disney’s orientation process is ongoing for all Disney cast members, beginning with the recruitment stage.

It continuously reinforces the values, philosophies, and guest service standards on which Disney has prided itself for so many years.

Employees at Disney called “cast members”. They do not work at a job; instead, they are “cast in the role for the show”.

Disney uses this terminology to immerse its employee in an environment that constantly reinforces the image Disney wants to project to the public. Orientation
Managing Diversity
Make Effective Work Teams
Effective Motivation Through the Goals (Theories of Motivation) What Should Disney Maintain? Managing diversity is creating organizational changes that enable all people to perform up to their maximum potential. (Kreiner & Kinicki, 2008).

Disney have to focusing on manage the diversity of the cast, because the cast (employees) is an assets of Disney business to reach a goals and expand the business into global market.

There is some action option for Disney :
a. Include/exclude e. Isolate
b. Deny f. Tolerate
c. Asssimilate g. Build relationship
d. Suppress h. Foster mutual adaptation Managing Diversity To make employees satisfaction and continued willingnesss to contribute will be better for make effectibe team works in Disney. (Team Viability).

Need a support system such as tecnology & IT.

They must have a much greater chance of success.

From team-friendly organization, there are comes work team, each individual with team work competencies and effective team work and becomes completing team effectiveness criteria : performance & viability. Make Effective Team Works From Abraham Maslow (1943), need hierarchy theory can be apply on Disney Cast.
To expand their business, Disney Cast have to be motivated, also their need are fulfill. Effective Motivation Through The Goals With the current labor market and competitive conditions dictating wage rates, should Disney and other large companies in the tourist industry be required to pay higher wages?
Based on United States Department of Labor (Bureau of Labor Statistics ), it exhibits that the employment number is decreasing and it has the contrary as the wage rate, in average weekly rate, it is increasing.
Our group has several points of view to elaborate the answer. Those are:
a. Financial Point of View
b. Organization Behavior Point of View Revenues and operating income by segment, it presents that although the revenue was increasing but the income was decreasing

Most of its expenditure is spent in capital expenditure, especially in Theme Parks and Resorts.

In covering the wage rate issue, there is a possibility for the company to provide the bonus for the employee who be able to achieve a great performance instead of increasing the wage. Thus, it will create the variable cost instead of fixed cost.

The company has to make a budgeting on its fixed cost in his financial statement, and it became the responsibility for the company to fulfill to its employee, which is it can be replaced to something better such as make it as variable cost as mentioned before. Financial Point of View Motivating and Rewarding can be implemented to reduce the effects. As mentioned before, instead of increasing the wage rate, it is better for the company to award bonus for the employee achievements.

The Maslow’s Need Hierarchy can be a consideration. If the company implemented the bonus program instead of increasing wage rate, at once, the company will fulfill a few level in Maslow’s hierarchy, such as Physiological, Esteem and Self actualization.

Providing the bonus in such company culture as Disney has, could be more effective than increasing the wage. Providing the bonus is implementing the Extrinsic Reward which providing the financial and social reward. Organizational Point of View
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