Upload
vaibhav-gupta
View
1.786
Download
0
Embed Size (px)
Citation preview
Walt Disney Company : The Entertainment King
Strategy Formulation
GROUP- 5 Rahul Bafna – 04 MBA- DIV:A Vaibhav Gupta – 27 Akshay Johur – 33 Krishnan PS – 43 Akshaya – 50 Amogh Yadav – 63
The Disney Journey1927 – 1966:
◦The Walt Disney Era1967 – 1984:
◦Roy O. Disney & Roy E. Disney 1984 – 1993:
◦Michael Eisner1994 – 2000:
◦Michael Eisner: Rectification Measures
Situation Analysis – 1927 - 1966 The Entertainment Industry- Development phase
Disney- Initial phase- facing short-term cash crunches
Flat and nonhierarchical organization
Creativity and Quality- Driving forces for the success of the company
Company was scaling up and went public in 1940
World War II affected the production
Walt Disney’s Strategy (1927–1966)
Licensed Mickey Mouse to overcome cash crunches
Started developing full-length films to tap the future market
2 films per year + large number of shorts Special cartoons for government during World War A blend of Live Action with Animation Launch of Walt Disney Music Company Buena Vista Distribution comes into play Disneyland- The Entertainment Park Targeted not just the kids but also the adults
Situation Analysis – 1967 - 1984New Chairman- Roy .O Disney
Walt Disney World with 2 on-site resort hotels
Tokyo Disneyland was announced
Film output on declining
Financial performance was deteriorating
Sid Bas to the rescue
Roy Disney’s Strategy (1966–1984)Opened in-house travel company
Live shows to major cities
The Tokyo Disneyland to look just like its U.S. counterpart
Introduced a new label Touchstone, to target teen/adult market
New cable venture, The Disney Channel
Internal Situation Analysis 1984 - 1994
•On the helm of Takeover
•New management Team
•Declining Profits
•Emphasis on creativity
External Situation Analysis 1984 - 1994
Theme Parks •Maturity in US markets•Europe / Asia markets were booming
Sitcoms• Move from Family – oriented Sitcoms &
centered less on social issues• Focus on ‘acerbic takes on middle class’ &
on single adults ( e.g.. Sienfeld)
Animation •Beginning of Modern era of US animation referred to as the American Animation renaissance•Beginning of Outsourcing – lesser cost of Production
Competitors • Pixar• Dreamworks
Eisen’s Strategy (1984–1994)Separated Creative and Financial forces to
foster innovation.Instilled Disney’s culture in the EmployeesNetwork SyndicationFostering creative talentHigh risk taking – Venture capitalist approach
FinancialCorporate SponsorshipsCo-ordinated negotiated inter-divisional
transfer prices
Eisen’s Strategy (1984–1994) Established Different functional verticals
◦ Corporate Marketing Function
◦ Marketing calendar
◦ Disney film library
◦ In-house media buying group
Expanding into new businesses◦ ‘retail as entertainment’ concept
◦ Entered into the Book, Magazines and record publishing segment
◦ New channels of Distribution
Theme Park Strategies◦ Euro Disney – Very low cost of capital & higher profit margins
◦ Compromised with the French Govt. & its employees.
◦ Added attractions – Night life complex & Water based attractions.
Eisen’s Strategy (1984–1994)Risky Films – ventured into new segments of films
Cross Promotional Marketing strategies through ◦ Corporate Tie ups ◦ Retail◦ Expansion into other businesses◦ National Hockey League – Mighty Ducks◦ Broadway-bound Theatre production
Commitment to live Entertainment
Situation Analysis – Post 1994
•Lion King’s “roaring” success
•Euro Disney –back on track
•Demise of the President,Wells
•Katzenberg leaves Disney
•Merger with ABC
Impact of merger with ABCDebt ratio of 34% from earlier 20%
Culture clash
Change of ABC’s congenial
atmosphere
Growth declines and then stabilises
Eisen’s Strategy (Post 1994)Entry into movies having big name stars and
expensive special effectsExcellent prediction of market for DVD’sConverting Theme parks into destination
resortsForay into Internet and TVCost cutting planMaximizing corporate synergyCross promotionEntry into Restaurants, Cruise Ships,
Educational RetreatsMerging of touchstone with ABC
Impact of External factors on Strategy (Post 1994)Movie tie-ins revenues decreasingCulture clashMore focus on selling merchandise
of core charactersGong showEncouraging conflict between top
managementHigh attrition rateOne man show
Impact of Structure on Strategy
Signing of Hollywood’s best actors and directors Pursuing High quality Scripts from lesser known writers Reduction of time between releases Use of technology Increase in number of licenses to help recover costs Need for innovative attractions at the theme parks Special marketing function to handle company wide
marketing activities. Exploration of untapped businesses, regions and
audience. At Euro-Disneyland, making cultural allowances Purchase of NHL team Foray into DVD to have the first movers advantage and
compensate the high costs
Impact of Strategy on Company StructureRetails-as-entertainment concept at the Disney
storesVenture into books, magazine, recording labelsTapping of the Home Video market by
launching the video cassettes at affordable price.
Broadway versions of their critically acclaimed movies
Creation of synergy group to handle communication after the ABC merger
Shared office space in international marketStrategic Planning Unit – Gong Show to keep
the innovations going
Overall Strength And WeaknessStrengths
Eisner’s leadership Values of the company Disney’s Brand value—Mickey
mouse legacy Ability to venture into different
areas and make profits successfully-diversification
Global Standardization Target Audience- Everyone Constant Innovation Popular characters
Weaknesses Autocratic leadership Frequent change in top
management High sunk cost Excessive Research &
Development High Investment High Risk Factor Unprofitable or hasty acquisition Cultural Imperialism Media Network Competition Too Large Organization
Overall Opportunities And ThreatsOpportunities
Merchandise GLOCAL-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 Move into different segments Market development in
untapped countries. Online Websites Develop more attractions for
theme park
Threats More money focused thus
losing image a s a fun company Facing fierce competition from
Paramount Parks, Universal Studios and Six Flags Theme Parks.
Maintain product differentiation.
Searching, paying and retaining innovative people.
More of a one man show Competitors: National, Regional
& Global Highly Demanding in terms of
Sales, Creativity and Innovation Too Large Organization
Questions?