Category: Disney

The internal and external factors matrix that affect Walt Disney’s Theme Parks come from the internal factors evaluation model and external factors evaluation matrix. Walt Disney has good management structures, well thought out plans, and unbeaten brand recognition. The Universal Studios and the Six Flags are doing fairly well but cannot equal the market strength of Walt Disney.

The SWOT analysis is one of the tools the company used for strategy formulation (David, 2015). Some of the strengths, weaknesses, opportunities and threats are in the table below. The main threats were its competitors the Universal Studios and Six Flags (Harvey & Goudvis, 2007). Although they did not pose any danger to the company since their performance indicated that they had so much to do to attain Disney Parks’ success. The business was also new but manageable (Vecchio, 2007).

The Strategic Position and Action Evaluation Matrix measured Disney’s competitive advantages, industry strength, financial strength, and environmental stability as follows:

The SWOT analysis and the SPACE matrices are the best tools for strategy selection due to their simplicity (Harvey & Goudvis, 2007). The two accommodated the most important information for decision making. The company should acquire legal property rights to prevent losses and continue strengthening itself internally. The two matrices provide the management with holistic information that help to prioritize the decision making process.

The QSPM indicate that internal expansion is better than acquiring competitors. The attractiveness figure for domestic development is 6.09 while that of buying competitors has a smaller score of 5.28.

The best decision, according to the matrices, is to concentrate on internal development because the threats are manageable. No competitor can match a strong organization that has invested heavily in itself.

References

David, F. (2015). Strategic management concepts (15th ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Harvey, S., & Goudvis, A. (2007). Strategies that work. Portland, Me.: Stenhouse Publishers.

Vecchio, R. (2007). Leadership. Notre Dame, Ind.: University of Notre Dame Press.

Company Background and History

Walt Disney Company is identified as the world’s largest media conglomerate and it was started on October 16^th 1923 by brothers Walt and Roy Disney. Back then, it was known as the Disney brothers cartoon studio, but later, after establishing itself as one of the major players in the American animation industry, moved on to television, live-action film and travel industries.

In 1986 it took on its current name The Walt Disney Company, and went ahead to focus on radio, theater, online media and publishing. It also took up flagship projects aimed at marketing more adult content other than its original family based content (Sehlinger, Ridge & Testa, 2011).

Company Executives

The company has enjoyed some stable leadership for many decades, though in recent years there were issues of poor management that led to financial woes. Among the presidents that they have had are:

• Walt Disney: 1923–1966
• Roy O. Disney:1966–1971
• Donn Tatum: 1968–1972
• Card Walker: 1971–1977
• Ron W. Miller: 1980–1984
• Frank Wells: 1984–1994
• Michael Ovitz: 1995–1997
• Robert Iger: 2000 – to date.

The Chief Executive Officers at Walt Disney Company over the years are:

• Roy O. Disney: 1929–1971
• Donn Tatum: 1971–1976
• Card Walker: 1976–1983
• Ron W. Miller: 1983–1984
• Michael Eisner: 1984–2005
• Robert Iger: 2005 – to date.

The board was chaired by Walt and Roy Disney who shared the role from 1945 to 1960, but Walt stepped down in 1960 to concentrate on the innovative and creative aspects of the company (Cullen & Parboteeah, 2003).

Company Organizational Structure

It has been identified to have a rigid and conservative structure that leaves very little room for diversification as far as culture is concerned. Their adoption of bureaucracies in their culture has been the subject of great criticism over the last few years especially with the reduced productivity of the studio business that has been depending on few successful projects per year (Gupta, 2010).

International Branches and International Structure

The company has operations in over 40 countries globally that are managed under one global culture with specific customizations to the specific organizational and market needs in the particular country (Cullen & Parboteeah, 2007).

Most of their subsidiaries do not enjoy much autonomy as they have adopted a closed culture where bureaucracies are key and flow from the mother company to the particular departmental managers in the different countries they operate in. This has been the subject of great criticism over the last few years especially with the reduced productivity of the studio business in countries outside America (Miller, 2010).

Multinational Methodology and Practices

The Walt Disney Company has for some time identified high value customers as their main market, where they can charge high prices as they seek to exploit their differentiated experience and high brand value.

They are investing in the capturing of customer’s attention through their huge portfolio of products so as to gain a competitive edge over the other players in the same industry. With the huge size of the company, the management can concentrate on a global strategy which will in turn develop and improve their cost efficiency (Shapiro, 2009).

Their global strategy has been for some time consistent since they have not been facing any major pressure for local preferences. They have to, however, deal with language barriers especially since their main target market is young kids, though they have managed to adapt effectively into local preferences in the particular global markets. They have done this by adopting subtitles or creating specific products for the specific market in the specific language used by that market (Mockler, 2002).

The structure of the company as it is supported by their global strategies, gives a multinational structure that is interlinked especially in regard to the portfolio of their business units. This has enabled them to create synergies that have promoted cost reduction.

This structure is allowed by the industry and actually promoted due to the stiff competition especially by multinational entertainment companies, so that there is more focus in the industry and profit margins are managed easily. This has made them a successful multinational especially with their global strategy that has enabled them to gain a competitive edge over other multinationals in the industry (Forsgren, Holm & Johanson, 2005).

Products and Product Categories

The Walt Disney Company has over the years grown to incorporate other companies which are categorized and operated under four major divisions, which include the Walt Disney Studios or Studio Entertainment, Walt Disney Parks and Resorts, Disney Consumer Products and Media Networks.

The Walt Disney Studios concentrates on the company’s film production, the theatrical divisions of the company, and their recording label. On the other hand, the Walt Disney Parks and Resorts feature the company’s theme parks, cruise line, and other travel-related ventures (McDaniel, 2007).

The Disney Consumer Products concentrates with the production of toys, clothing, and other merchandise that is usually based on Disney-owned properties and characters. The media networks that are run by the company include their television station and their internet entertainment services (Goldsbury, 2008).

The company enjoys a huge range of entertainment features as well as business holdings that have served to increase their range of revenues. These have been the subject of their increased emphasis on innovation and creativity and they include: Walt Disney Motion Pictures Group, Walt Disney Theatrical, Disney Music Group, Disney Interactive Media Group, Disney-ABC Television Group, ESPN Inc., Pixar Studios, Radio Disney, Disney Consumer Products and Marvel Entertainment.

It also has invested in resorts and other diversified holdings that have served to increases the scope of their revenue bases, while at the same time reducing their concentration risks (Tavis & Tavis, 2009). These include the Walt Disney Parks and Resorts, Walt Disney World Resort, Tokyo Disney Resort, Disney Vacation Club, Disneyland Resort, Disneyland Paris, Hong Kong Disneyland Resort, Euro Disney S.C.A. and Disney Cruise Line (Veness, 2009).

Manufacturing and Distribution

The company has invested heavily in the research and development of superior products. They have adopted effective and precise quality standards for their manufacturing and distribution channels that have enabled them to increase customer loyalty over the years. The company, however, doesn’t produce most of its products directly due to the general costs related with production and more so distribution (Young & Glinow, 2005).

This has led them to result to outsourcing of their manufacturing and distribution activities to external contractors with a whole list of guidelines that make sure they conform to the specific requirements of the Walt Disney Company. This has worked to increase their footprint in the market and to grow their brand especially in the global markets where there is a need for heavy investment (Andersson, 2010).

Profitability

The company has enjoyed relatively stable revenue flows over the years that have helped it to grow to its current size in the global market. Its revenues in the last few years have been specifically impressive especially in the year 2011 where their revenues increased to US$ 40.893 billion, their operating income in the same year also increased to US$ 8.043 billion, while their net income increased to US$ 4.807 billion.

They have been identified to currently hold total assets to the tune of US$ 72.124 billion by the end of the year 2011 which was also identified to have increased from the previous financial year. Their total equity was also identified to have increased in the 2011 financial year to US$ 37.385 billion. The company currently employs over 156,000 employees globally, which just goes to show their huge capacity as a global player in the entertainment industry.

SWOT Analysis

The Walt Disney Company has managed to weather through the tribulations in the entertainment industry over the last decades due to its ability to exploit its strengths and opportunities and by carefully managing its weaknesses and threats in the market. The company’s ability to withstand market forces as well as industry forces is based on the following strengths, weaknesses, opportunities and threats:

Strengths

Global standardization has been identified as one of Walt Disney Company’s strengths in the entertainment industry. This is because their adoption of a global strategy has given them the capacity to increase their market penetration in different countries and increase their portfolio of customers.

This translates to increased revenues from their global operations as well as a competitive edge in the market. They have also identified a niche market by targeting a particular segment, that is, the children and maximized their acceptability in that particular market. They also have a superior creative process that has allowed them to come up with innovative products.

They have a popular brand name that has made them famous over the world. This has ensured that any new products that they launch are accepted quickly in the market and they also save marketing costs as the brand practically markets itself. With their diversification, they have acquired the ability to stay relevant in all market segments as well as to secure their income inflows (O’Sullivan, 2007).

Weaknesses

Their excessive research and development programs have proved to be a weakness due to the wastage of resources in terms of both time and money. They have in the past found themselves losing out in the market after their competitors have launched products that are still in the research and development stage in their company.

With the high capacity of their products in terms of investment costs such as the production of films, they have always found themselves staring at high risk projects that have heavy financial consequences especially if they fail. The limited range of their target market is also a weakness since they have over the years concentrated only on children as their primary customers.

They have in previous years suffered under poor management and though they are currently trying to rectify this, they still have a long way to go to eliminate the accumulated weakness. This is further worsened by the inherent cultural imperialism that exists in the company. The competition from media networks has weakened them especially their previous market domination in their target market.

Opportunities

The company enjoys a wide range of opportunities that if they continue to tap into, may increase their profitability and competitive edge in the market. Among these opportunities is the merchandise market. This is primarily boosted by their brands that are mainly promoted through their characters such as Mickey Mouse.

This could be used to increase their profits as these characters are known and accepted globally. Global localization gives them an opportunity to serve particular markets more efficiently while employing their global resources so as to reduce operating costs. Since they have been accepted as characters of national and regional appeal especially in the North American market, they have a competitive edge over their competitors and any product they launch is readily accepted in the market.

The introduction of the Disney music channel gives them an opportunity to exploit one of the biggest income earners in the entertainment industry, which is music. Their introduction of the Disney School of Management gives them an opportunity to nature great talent that will be of great use not only to the company, but to the industry in general.

Threats

While the company may seem to be thriving, it is faced by many threats that may weaken it in future if they are not addressed accordingly. One of the threats is the rampant piracy in the movie industry that has served to greatly reduce the revenues of the industry in general they also face a huge threat from the increasing competitors who are joining the industry as it seems lucrative.

They currently have a problem with employee retention as some of their best talent seems to be poached by their competitors in the industry. There is the eminent threat posed by the nature of the industry whose demands in terms of creativity, innovation and sales seem to be increasing. Product differentiation is also one of the threats facing the company as they are currently facing competition from other companies with products that are similar to theirs (Cullen & Parboteeah, 2006).

Conclusion

The Walt Disney Company is identified as a world leader in the media and entertainment industry and it is a model multinational in the industry. It has been identified to have exploited superior multinational strategies that helped it to attain a global image, but this has not been without challenges. Their increased multinational activities have ensured the strengthening of their brand to give them a competitive edge in the market.

References

Andersson, U. (2010). Managing the Contemporary Multinational: The Role of Headquarters. Boston: Edward Elgar Publishing.

Cullen, J., & Parboteeah, P. (2003). Multinational management: a strategic approach. New York: Thomson/South-Western Pub.

Cullen, J., & Parboteeah, P. (2006). Multinational Management: A Strategic Approach. New York: Academic Internet Publ.

Cullen, J., & Parboteeah, P. (2007). Multinational Management: A Strategic Approach. New York: Thomson/South-Western Pub.

Forsgren, M., Holm, U, & Johanson, J. (2005). Managing the embedded multinational: a business network view. Boston: Edward Elgar Publishing.

Goldsbury, C. (2008). Luxury Guide to Walt Disney World Resort. New York: Globe Pequot.

Gupta, S., C. (2010). International Business Management : Multinational Management. Mumbai: Ane Books India.

McDaniel, B. (2007). Walt Disney World: The Full Report. New York: WDW

Miller, L., L. (2010). Frommer’s Walt Disney World and Orlando with Kids. New York: John Wiley & Sons.

Mockler, R., J. (2002). Multinational strategic management: an integrative entrepreneurial context-specific process. London: Routledge.

O’Sullivan, K. (2007). Strategic Knowledge Management in Multinational Organizations. New York: Idea Group.

Sehlinger, B, Ridge, B, & Testa, L. (2011). The Unofficial Guide Walt Disney World 2012. New York: John Wiley & Sons.

Shapiro, A., C. (2009). Multinational Financial Management. New York: John Wiley and Sons.

Tavis, L. & Tavis, T. (2009). Values-based multinational management: achieving enterprise sustainability through a human rights strategy. New York: John Wiley & Sons.

Veness, S. (2009). The Hidden Magic of Walt Disney World: Over 600 Secrets of the Magic Kingdom, Epcot, Disney’s Hollywood Studios, and Animal Kingdom. New York. Adams Media.

Young, M. & Glinow, V. (2005). Managing multinational teams: global perspectives. New York: Emerald Group Publishing.

Organization Climate towards the End of Michael Eisner’s Tenure at Disney

The beginning of Eisner’s tenure and management at Disney are marked by successful results, leading to profitability and prosperity of the company. Most of the purchases and mergers also contributed to the growth of Disney’s influence. Apparently, the success of Eisner’s venture and activities was explained by good relationships with other executives leading the company. Fruitful cooperation with supervisors was evident, but the rest of the personnel did not feel sufficient support on the part of the CEO. However, in the second half of their tenure, Michael Eisner experienced a significant decline in relation to his record and profile.

Most of his relationships broke up due to his egoism and reluctance to compromise. Failure to communicate and cooperate with other important people in the cinematographic industry, including Jeffrey Katzenberg, Steve Jobs, and Michael Ovitz. Further, excess focus on potential rivals and negligence of organizational culture and climate. In particular, the CEO did not provide space and freedom for developing creativity among the employees, which is especially important in this kind of industry. Although Eisner was willing to be part of the company’s personnel and, therefore, he strived to be active while generating ideas and contributing to the companies’ success.

Recommendation to Improve the Organizational Climate Based on Leadership Skills, Principles, and Vision

Although at the end of Eisner’s tenure was not quite successful, the overall policy, philosophy, and vision of the company were congruent with its goals. Specifically, the executive encouraged people working in teams and generating ideas; he also believed that the role of a leader should not be confined to controlling processes and leading people only. Rather, Eisner’s leadership strategies should have been more expansive and visionary because some of the activities did not bring in significant shifts in employee culture and organizational climates. Additionally, low morale and inappropriate ethics are also among the reasons for Eisner’s resignation.

However, excessive focus on this approach prevented other members of the organization to practice creativity and put forward ideas as too many restrictions were imposed on them. Being a cheerleader at the very beginning, Disney managed to achieve tremendous success in the field. Extreme authority and excess use of power should be eliminated to give more freedom to employees and complement the creative policy. The atmosphere should be much more creative to provide writers, animators, and composers with sufficient space and freedom for work.

Strategic Implication of Michael Eisner’s Leadership and His Efficiency at the Strategic Level

At the strategic level, Michael Eisner’s leadership was not oriented on employees, but on the way, they perform objectives and tasks. Negligence of organizational culture led to disorganization and pressure imposed on creative workers. In the context of globalization and diverse culture, it is highly important for Disney’s manager to be more sensitive to the atmosphere in the workplace. The creative process cannot stand frictions and conflict because it does not provide greater results and increased productivity. Cinematography and the animated industry should be more concerned with establishing fruitful and trustworthy relationships to ensure long-term cooperation.

More freedom given to employees does not mean failure to comply with the company’s objectives and missions. In fact, the task of the leader is to gain trust and respect on the part of the employees. The focus on transformational leadership and a person-oriented approach is largely encouraged and, therefore, new executives working at Disney should pay closer attention to employees’ concerns.

Introduction

Walt Disney is one of the largest media and entertainment companies in the world. The company was established over nine decades ago in the US. Currently, the company is listed at the New York Stock Exchange. It also operates in all continents in the world. Walt Disney is organized into five major business segments namely, “media networks, parks/ resorts, studio entertainment, consumer products, and interactive media” (Walt Disney). Given its financial success, the company’s stock has been one of the most attractive to investors in the last decade. This paper will provide a detailed analysis of the financial performance of the company in the last five years. This will involve using descriptive statistics, as well as, regression analysis to describe the performance of the company. The analysis will focus on three measures namely, stock price, revenue, and earnings-per-share. Based on the outcome of the analysis, recommendations will be made to investors concerning the suitability of investing in the company’s stock.

Trend Analysis

Revenue

Walt Disney realized an upward trend in quarterly revenues in the last five years. The company’s revenue increased from USD 9,867 million in the last quarter of 2009 to USD 11,568 million in the last quarter of 2013. This represents a 17.24% increase in revenue. In the second quarter of 2014, the company’s revenue declined by 5.4% compared to the first quarter. Overall, the upward trend is statistically valid. This conclusion is supported by the p-value of 0.000 in table 1, which presents the results of the test for the significance of the upward trend in the company’s revenue.

The upward trend is illustrated in figure 1, which shows that the company’s revenue has increased significantly in the last five years. However, the figure shows that the quarterly revenues have been fluctuating. One of the factors that explain the fluctuation is the seasonality of the entertainment industry (Walt Disney). For instance, visits to parks and resorts are often high during summer seasons and low during winter. In this respect, seasonal variations in expenditure among customers affect the company’s quarterly revenues.

Earnings-per-share

The company’s quarterly earnings-per-share (EPS) exhibits an upward trend. The EPS increased from USD 0.33 per share in the second quarter of 2009 to USD 1.08 per share in the second quarter of 2014. This change represents nearly 300% increase in the amount of the company’s income allocated to each share in the last five years. Indeed, the p-value of 0.0000 in table 2 confirms that the upward trend is statistically significant. The increase in the EPS means that the company’s profitability has consistently improved. It also suggests that Walt Disney has a strong financial position. The EPS normally determines the payment of dividends and changes in future stock prices. In this respect, the steady increase in EPS implies that Walt Disney is a reliable company where investors can expect high returns in future (Jones 128-148). Although the year-on-year EPS has been increasing, figure 2 shows that the quarterly EPS has been fluctuating. The fluctuation can be attributed to the seasonal changes in the company’s revenues, which are likely to affect its quarterly profits.

Stock Price

Figure 3 shows that Walt Disney’s stock price has maintained an upward trend. In addition, the upward trend is statistically valid as indicated by the p-value of 0.0000 in table 3. The price of the company’s stock increased from USD 21.9 per share in the second quarter of 2009 to USD 79.34 per share in 2014. This means that holders of the company’s common stock realized a 362.28% capital gain in the last five years. According to figure 3, the company’s share price exhibits little fluctuations despite the significant quarterly changes in revenues and EPS. This suggests that the stock is less volatile and is resilient to unfavorable changes in the company’s fundamentals and the macroeconomic environment (Jones 400-417). Overall, the upward trend indicates that Walt Disney is a growth stock that is likely to realize huge capital gains in future.

The Beta of Walt Disney’s Stock

Beta is a measure of the volatility of an equity security in relation to the stock market as a whole (Jones 368-400). Specifically, it indicates the extent to which the returns on a given equity security are likely to vary in response to swings in the stock market. Thus, investors normally use beta to assess the significance of the systematic risks associated with holding a given stock. Using quarterly closing figures of Dow Jones Industrial Average (DWJA) and the prices of Walt Disney’s listed shares, the stock’s beta was found to be 0.87.

According to the capital asset pricing model (CAPM), the stock market’s beta is always 1. In this respect, a beta of 0.87 means that Walt Disney’s stock is less volatile than the market. Specifically, the stock is at least 13% less volatile compared to the market. This confirms the trend shown in figure 3, which exhibits little volatility in the company’s stock price.

Theoretically, low risks are associated with low returns. Thus, holders of Walt Disney’s stock are likely to realize low returns. However, investors and financial analysts often use a low discount rate when pricing a stock with a low beta (less than 1). This perspective is based on the fact that holding a stock with a low beta is associated with little systematic risks. The lower the discount rate, the higher the present value of a firm’s expected future cash flows (Jones 246-262). In this context, Walt Disney’s stock is likely to be priced favorably in future due to its low beta, thereby increasing investors’ earnings.

Descriptive Statistics Analysis

Stock Price

The descriptive statistics for Walt Disney’s stock price are presented in table 4. In 2009, the company’s stock price had a mean of USD 23.77 per share. The stock price deviated from its mean by only USD 3.05 per share. This deviation implies that the stock price was moderately volatile in 2009. The positive skewness of the stock price means that investors realized frequent small capital losses, which were likely to have been offset by a few high capital gains. The kurtosis of the stock price was less than that of a normal distribution. Thus, the probability of obtaining an extremely high or low stock price in the subsequent years was higher than normal.

In 2010, the stock price averaged USD 34.05 per share with a standard deviation of USD 3.29. However, the stock price was negatively skewed and its kurtosis was less than 3. In this case, holders of the stock are likely to have realized frequent small capital gains, as well as, a few high capital losses. In 2011, the mean of the stock price increased to USD 38.87 with a standard deviation of USD 3.36. In addition, the stock price was positively skewed, which indicates reduced volatility in returns. This is confirmed by the fact that the kurtosis of the stock price improved to 1.99.

The mean stock price increased to USD 45.07 in 2012. However, its volatility increased significantly. Specifically, its standard deviation increased to USD 4.99. The frequency of short-term capital losses is likely to have increased due to the negative skewness of the stock price. In addition, the reduction in kurtosis indicates that the variance of the stock price increased. The increase in the mean of the stock price in 2013 was accompanied by high volatility. The standard deviation rose to USD 6.22, whereas the skewness reduced to -0.64. In this case, there was a significant fluctuation in the stock price, which exposed investors to the risk of making losses in the short-term. In 2014, the mean of the stock price rose to the highest level of USD 75.98. Moreover, its volatility reduced significantly since the standard deviation declined to USD 4.76. In addition, the skewness of the stock price improved to 0 (normal distribution). However, the low kurtosis suggests that the probability of an extreme price movement in future is high.

Revenue

The descriptive statistics for the company’s quarterly revenue are summarized in table 5. The mean of the revenue in 2009 was USD 9,037.25 million, with a standard deviation of USD 837.00 million. Clearly, there was a huge fluctuation in the company’s quarterly revenue due to the high standard deviation. The revenue was negatively skewed, which indicates that the company realized frequent small reduction in revenue and occasional large increases in revenue. The likelihood of obtaining an extremely high or low revenue was high since the kurtosis was only 1.29. In 2010, the mean of the revenue increased by nearly half a billion to USD 9,515.75 million. The standard deviation of the revenue reduced to USD 635.90 million, whereas its kurtosis increased to 2.25. This means that the company’s revenue were more stable in 2010 than in 2009. Nonetheless, the distribution of the revenue remained negatively skewed.

The company’s quarterly revenue averaged USD 10,223.25 million in 2011. Although the standard deviation increased slightly, the kurtosis improved to 2.25. In this regard, the variation of the quarterly revenue was relatively low. The negative skewness implies that the company is likely to have experienced regular small increases in revenue, which eventually offset large reductions. The mean quarterly revenue improved marginally to USD 10,569.5 million in 2012. However, there was a significant reduction in the volatility of the revenue. Specifically, the standard deviation reduced to USD 643.54 million, whereas the kurtosis remained above 2. In addition, the skewness improved to -0.97, which indicates a slight reduction in the risk of a significant reduction in revenue.

In 2013, the quarterly revenue averaged USD 11,260.25 million. The revenue was less volatile since its standard deviation reduced to USD 483.39 million. The reduced volatility is also confirmed by the kurtosis of 2.18, which is close to that of a normal distribution. Nonetheless, the quarterly revenue remained negatively skewed. In the first two quarters of 2014, the company’s revenue averaged USD 11,979 million. The company also recorded the lowest variation in quarterly revenue in the last five years. Overall, the company’s quarterly revenue improved steadily, whereas its variance gradually reduced.

Earnings-per-share

The descriptive statistics for the company’s earnings-per-share are reported in table 6. In 2009, the company’s quarterly EPS averaged USD 0.44. There was little variation in the EPS since its standard deviation was only USD 0.08. The negative skewness of the EPS suggests that investors were exposed to a high risk of realizing reduced returns on their investments. The probability of realizing an extremely high or low EPS was moderate since the kurtosis was only 2.11. The quarterly EPS increased moderately to USD 0.51 in 2010. However, it became more volatile as indicated by its standard deviation, which increased to USD 0.11. The EPS was positively skewed, which indicates that investors were likely to realize improved returns on their investments. The improvement of the kurtosis to 2.22 further suggests that investors were less exposed to extreme fluctuations in EPS.

In 2011, the mean of the EPS and its standard deviation increased moderately. However, the EPS was negatively skewed. In this respect, holders of the company’s stock were exposed to the risk of a significant decline in quarterly EPS. The high volatility of the EPS is further confirmed by the kurtosis, which reduced to 1.6. The increase in the EPS in 2012 was accompanied by a significant increase in volatility. This is demonstrated by the increase in the standard deviation to USD 0.17, as well as, the low kurtosis of 1.85. Nonetheless, the positive skewness indicates that the risk of realizing a very low EPS was little.

The mean of the EPS rose to USD 0.845 in 2013, whereas its standard deviation declined to USD 0.11. This implies that there was a decline in the volatility of the quarterly EPS. The kurtosis of the EPS also improved to 2.15, whereas its skewness remained positive. The improvement implies that the variance of the EPS reduced during the year. In the first two quarters of 2014, the company realized an average EPS of USD 1.05. In addition, the standard deviation declined to USD 0.04. Thus, the company realized the highest and most stable EPS in 2014. Overall, the company’s quarterly EPS has steadily increased despite its volatility.

Statistical Relationship

The correlation matrix (figure 4) shows the pair wise relationship between the measures of the company’s performance. Stock price has the expected strong and positive relationship with revenue. In addition, the relationship is statistically significant at the 5% level of significance or 95% confidence interval. Conceptually, an increase in revenue is an indication of improved financial performance, which often increases the company’s ability to pay dividends (Jones 327-345). Thus, the stock price is expected to increase when the company’s revenue is increasing.

The stock price also has a strong positive relationship with the earnings-per-share. The relationship is statistically significant at the five percent level of significance. An increase in EPS means that the company’s profitability is improving (Jones 368-391). Thus, financial investors are often interested in the stocks of companies with high EPS so that they can earn high returns. In this respect, the steady increase in Walt Disney’s EPS is likely to have contributed to the increase in its stock price.

The EPS has a strong positive relationship with revenue. Moreover, the relationship is statistically significant. Revenues normally determine the net profits realized by a firm. In particular, an increase in revenue is likely to increase the net income, which in turn increases the EPS. This explains the positive relationship between Walt Disney’s revenue and EPS.

Regression Analysis

Conceptually, the stock price is determined by firm specific factors such as profitability, revenue, and debt-to-equity ratio. In addition, the stock price is determined by macroeconomic factors such as the level of inflation, gross domestic product (GDP) growth, and interest rate. In this regard, the stock price of Walt Disney can be expressed as a function of both firm specific and external factors. This relationship can be expressed as a regression equation of the form SP=α+EPS+Rev+GDP+DWJA+ε. In this equation:

• SP – denotes stock price,
• EPS – is the earnings-per-share,
• Rev – denotes revenue,
• GDP – is the US gross domestic product, and
• DWJA – refers to the Dow Jones Industrial Average index.
• α – is the intercept, whereas
• ε – is the error term of the equation.

The results of the regression equation are presented in table 7. The data for the variables had unit roots in their levels. Consequently, they were used in their first difference to avoid spurious regression. The R-squared of the regression equation is 0.5419. This means that 54.19% of the variation in Walt Disney’s stock price is explained by the variables included in the equation. The stock price had a positive and statistically significant relationship with earnings-per-share. Generally, this relationship shows that an increase in the company’s earnings-per-share will lead to an increase in its stock price. The relationship between the stock price and the Dow Jones Industrial Average is also positive and statistically significant. This finding is not surprising since the stock’s beta of 0.87 is very close that of the market. In addition, Walt Disney is one of the companies whose stocks are included in the Dow Jones index. In this respect, the company’s stock is likely to move in the same direction as the market. Thus, investors can use the Dow Jones index to predict the possible movements in the company’s stock price.

The stock price had a positive, but statistically insignificant relationship with the US GDP. The positive sign means that an increase in GDP growth leads to an increase in the company’s stock price. The statistical insignificance of the relationship could be explained by the fact that the company’s financial performance depends on the economic growth in foreign countries where it operates. Surprisingly, the relationship between the company’s stock price and quarterly revenue is negative, but statistically significant. This relationship can be attributed to the impact of negative revenue surprises (Jones 334-336). Specifically, the stock price is likely to decline if the reported increase in revenue is significantly lower than investors’ expectations.

Conclusions

The analyses in the foregoing paragraphs indicate that Walt Disney’s financial performance has improved tremendously. The company’s stock price tripled in the last five years, thereby benefiting investors in terms of high capital gains. The stock price had a standard deviation of less than USD 5 except in 2013 when it rose to USD 6. This shows that the company’s stock price has experienced low volatility. The increase in share price is explained in part by the improvements in the company’s earnings-per share and revenue. Specifically, the company has consistently reported a steady increase in quarterly and year-on-year revenues. In addition, the variation in quarterly revenue has been declining steadily. In this respect, the company’s earnings are likely to be more stable in future, thereby improving its stock price. The company’s earnings-per-share doubled in the last five years. This indicates that the profitability of Walt Disney has been improving consistently. The strong growth in profitability is expected to increase as the global economy grows and the company improves its competitive position. Overall, the company is financially stable and its growth is backed by strong fundamentals.

Recommendation

Investors should consider buying Walt Disney’s stock due to the following reasons. First, Walt Disney is a growth stock that has a high potential of realizing a significant increase in price in future. The company’s quarterly revenue and earnings-per-share have maintained a statistically valid upward trend in the last five years. This excellent performance is likely to boost the performance of the company’s stock in the medium term. As a result, investors are likely to realize a high return if they purchase the stock. Second, the stock’s beta indicates that it is less volatile. Specifically, the stock is expected to swing less than the market, thereby cushioning investors from the risk of making huge losses in the short-term. Moreover, the stock price has showed very little seasonal variation in the last five years. In this respect, Walt Disney is appropriate for investors who are not ready to take high risks. Third, the regression analysis shows that US GDP growth has no statistically significant effect on the company’s stock price. This means that the stock is resilient to the systematic risks that often affect returns on equity securities. Consequently, investors should buy the stock because it is associated with a high growth potential and a low risk profile.

Appendix

Figure 2: Earnings-per-share.

Table 4: Stock price.

Table 5: Revenue.

Table 6: Earnings-per-share.

Figure 4: Correlation matrix.

Where * means statistically significant at 95% confidence interval

Table 7: Regression results.

Works Cited

Jones, Charles. Investments: Principles and Concepts. New Delhi: John Wiley and Sons, 2010.

Walt Disney. About Us 2014. Web.

Giving back to society is one principle that most people desire. In that regard, my organization was formed with th notion of providing outstanding services both internally and externally. The foundation has subsequently been in operation, employing several people to cultivate motives, trust, and instill the ability to take risks and achieve them. The employees are mandated to have proper guidance on delivering their duties requirements. Ultimately, it was established to do acts of charity and provide assistance to less privileged people in the community. As Christ taught, the organization employs charity’s virtue, and everyone who engages in charity is believed to be lucky. Therefore, the organization has been using a set of principles to ensure the same exquisite chores delivery notion is realized. The set of principles is the dream, belief, dare, and do; they are fundamental in shaping the workplace and society.

The dream

To start with the dream principle, often we have heard people talk about what they dreamt about in their sleep, how nice and captivating it was, or how terrible it left them. Further, we have also heard people talking about their future aspirations and wishes, and ultimately, that is the dream concept needed in management. Therefore, to establish a strong foundation, it must be anchored on a particular desire that one wants to achieve (Blankenship, 2021). For instance, an organization sets the motto that expresses the general wish of the corporation’s dreams.

Desirable aspirations inculcate employees with motives to achieve their goals. According to Disney, the wishes of a company must be in the mind of the employees, and they must sing them repeatedly (Brode, 2021). To achieve this, one has to create a state of fantasy in the mind of the employees so that they see it as the only alternative. Once that is done, the workers and followers in a church setup will see that as the primary goal and work towards realizing it. Consequently, the same story will be told over generations, and the influence will be one. Therefore, the dream concept is applicable in my place of work as when the work morale is below par; hence, it instills control to an individual to ensure it explains the objective and outline the expected outcome of those set goal in the organization. An organization’s dreams can be in the form of a mission and vision, strategies, goals, and objectives.

The Belief

The second managerial aspect is the belief, and it exacerbates that dreams are often only achievable when we believe they can be achieved. Therefore, in setting goals (dreams), one should believe that the same is achievable. The ability to impart trust within employees’ mindsets improves their responsiveness towards a desire for success. Disney feels that whatever person discovers to trust in, they should embrace it wholeheartedly (Brode, 2021). At the interception of every organization, there is a belief formed. The belief may be of something you want to achieve, how you want it achieved, and the necessary steps to ensure that it is achieved

The philosophy is enshrined in my organization that when strategies are clear, goals are easily achieved. Further, the teaching on belief forms the cornerstone of the church. Primarily, the church teaches one to believe in what they find to believe in: Jesus Christ and the existence of God the Almighty. However, just believing is not enough, as daring is one of the fundamental principles needed to achieve the idea. Our organization believes that the aim is only to get what they want in daily duties. In the teachings of Jesus Christ, for one to secure a place in the kingdom of God, that person has to believe (Ward, 2021). Like our organization, we believe that a society can beget what it deserves. We believe that we can change the lives of individuals through selfless denials and proper management.

The Dare

The drive to achieve an objective irrespective of the obstacles improves employees’ performances. According to Brode (2021), the third principle in management is the dare principle, in the notion Disney ascertains that for one to do many things, one must be curious. With a desire to learn more, one may be able to do something he never imagined he could. Thus, it is for a company to set the limits for each employee to ensure the dream and belief are achieved. The same can be realized in a business setup when each employee is given a certain target and a duration to achieve it. Nonetheless, this ought not be considered a power but a tool for achieving the corporate goal.

Further, the principle is fundamental in my organization as the employees on their motions should be able to take the risk of exploring and doing that, which enhances their development towards the business goals and objectives. Therefore, a company whose employees dare to take risks, get involved, and get work done always enjoys massive success. The same is also enhanced in church, and the believers have dared to live according to Christ and his ways. That is why most Christians would do things out of belief, dream, and dare to reach the promised land.

The Do

Lastly, the concept of action states that when one establishes a purpose, one must have a well-defined mechanism for achieving it. For even the bible says, plans without actions are dead. Just merely believing that something will be done without putting much effort towards realizing the achievement of the same cannot have it done. Therefore, in setting goals, one must ensure they also set the means of achieving them and work towards achieving them.

Moreover, the success of a project depends on the execution of the plans. Precisely, in my organization, when the plan is appropriately executed, the belief, dream, and risk can be easily achieved. However, to ensure the work is done, the leaders must consider the system or process of achieving the same. Further, my organization must assemble all the materials necessary to get the work done in the stipulated period. The other factor to consider is the human resource needed to complete the work. The human resource needed helps plan the needs and other necessary materials that may be needed to ensure the work is complete.

Application of the Managerial Skills in an Organization

The managerial principles can be applied in an organization in various ways. To start with the dreams as the founding principle of an organization, our organization has a vision and a mission that ensures the employees work towards achieving a particular set and achievable goals that the company has outlined. Additionally, the dream of an organization is manifested in its culture, organizational design, and social network. The way the employees carry out themselves in ensuring the realization of a company’s dream is worth considering. To ensure the daring aspect, the company has to be very resonant in decision making. Further, there is proper communication with the employees for accessible communication. And finally, the doing aspect is covered by strategizing and accessing the human resource necessary for the organization.

Impact of the managerial skills

A group is only as powerful as its weakest individual and vice versa. In that way, when the employees and the employers follow the managerial principles with utmost good faith, they are likely to enjoy various impacts in the firm. Further, the employers and employees will maintain their emphasis on the organization’s vision that will enshrine them with innovation spirit (Custódio et al., 2019). Secondly, the employees and the employers are likely to achieve the anticipated goals based on the desire and wishes of the company. Additionally, the managers can monitor and see that they lack to achieve their desired project goal.

Improvements

The organization draws a strategic plan with the aspiration to achieve managerial skills. Moreover, the corporation will likely have a motto, vision, and mission as part of the dream to aspire to achieve exemplary service delivery(Grabowska & Saniuk, 2022). Secondly, the organization sets its strategies and programs that will improve the rapport within the organization hence smooth running of processes. Further, the organization invests in human resource personnel with the expectation that they accomplish the set mission and objectives of the corporation.

In conclusion, one should consider Disney’s four principles of success for proper management. The principles outlined will enable the managers and the employees to develop the necessary routine required for the success of an organization. The dream of an organization, which is the organization’s vision and mission, helps shape a clear path one wants to walk through. Further, the belief defines the strong ambition to achieve the organization’s goals. Additionally, the dare makes one do what it takes to realize the dreams. However, all the wishes and aspirations cannot be achieved without action. Therefore, even as we dream, believe, and dare, action must be done to realize the organization’s goal.

Reference

Blankenship, S. C (2021). Walt Disney world as a model for brand marketing: An IMC approach to build brand loyalty.(Publication no. 1806), The University of Missippii EGrove.

Brode, D. (2021). Introduction. Disney’s version/Disney’s vision: The world according to Walt. In From Walt to Woodstock (pp. 9-34). University of Texas Press.

Custódio, C., Ferreira, M. A., & Matos, P. (2019). Do general managerial skills spur innovation?Management Science, 65(2), 459-476.

Grabowska, S., & Saniuk, S. (2022). Business models in the industry 4.0 environment—results of web of science bibliometric analysis.Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 19.

Ward, B. (2021). The Kingdom come in BAM as it is in heaven: Implications on defining the Kingdom of God in BAM businesses.Religions, 12(8), 557.

Introduction

The Walt Disney Entertainment Company is the largest media conglomerate in the world that owns theme parks, studios, television networks and producer of entertainment products. The essay is about the businesses, the products, the sales territory and the target market of Walt Disney. The major competitors of Walt Disney, the markets as well as financial performance will be analyzed. In addition, there is a discussion on the management of the company as well as the influence of management on financial performance of the company.

Summary of the Company. The Walt Disney Company began as a cartoon studio in the year 1920 and grew to be the largest media in the world. The company had begun offering the Alice in wonderland cartoons when the Mickey Mouse animations branded it the best producer of family entertainment products.

Since then the company has produced different types of family entertainment products that have recorded increased sales and made it generate huge amount of revenue. The corporate objectives of the company are to provide entertainment products that will improve the family welfare and encourage children to be responsible members of the society (Koenig 30).

The products The Company has several types of products and services, which are demanded by customers due to high quality. The first segment of the company products are the television networks where the company is the owner of the American Broadcasting Corporation.

The company has also purchased shares in the ESPN, and owns of Hyphenation books. Other than the media networks which earn the company advertizing revenues, the company is a producer of family entertainment audiovisual products especially animations such as the Mickey mouse.

The company has expanded with products such as computer games for children, which is a popular segment of the operations. In addition, the company is a provider of animation software where it sells the software to individuals and other studios at a discount. The animation software is sold in colleges as well as universities for training students about animation and video production (Tim 17).

The company has theme parks and resorts for children and family entertainment that attract many customers from different regions. They serve as a major source of revenue to the company where events for family entertainment are held. The parks are located in different parts of the world such as the Disneyland in Paris, Hong Kong, and Hollywood.

The company owns film studio that produce films such as the Pirates of the Caribbean Sea as well as other movies. The company has consumer products sold in the stores worldwide where it sells foods, beverages, electronics, and other entertainment products. The Disney Consumer products segment of the business manages this part of the merchandise. The main supplier of the electronics is currently Apple Company.

The Sales Territory. The company begun as specialist in family entertainment animations and can accommodate other segments of the media. Its major sales territory remains as the family entertainment where the company provides different products according to tastes and preferences of the customers.

It offers products demanded by all members of the family at an affordable price. The resorts and the theme parks are for family entertainment where parents can visit together with the children. This is a major segment of the company operations. The target market is usually the parents who buy products for the children. They however must produce the entertainment products attractive to the children so that they purchase according to their preference (The Walt Disney Company 2001).

Competition. Due to segments in which the company operates, it has different kinds of competitors according to the particular industry.

In the broadcasting network where they compete for advertising revenues the major competitor is the CBS Corporation. The CBS is another conglomerate that owns production studios, television networks, and is the best television networks in the United States of America.

The other competition comes from the consumer products where stores such as JC Penny stores compete with the company. However, in the area of theme parks and family entertainment, the company is still dominating and the newly formed studios cannot match the financial position of Walt Disney entertainment.

The Financials. The company recorded Revenues amounting to forty one billion shillings in the year 2011 to indicate that the company was performing well. The earnings per share in the previous financial year were $2.79 giving the shareholders good return on their investment as well as motivating them to invest.

This was an increase of thirteen percent compared to the previous financial postings in the year 2010. During the quarterly financial analysis of the company for the year 2012, the company had an increase in share value by $0.58 that was higher than the expected results. The company gross margin was of 19.76%. The price sales ratio was 1.96.

The price-earnings ratio was 15.6. The debt to equity ratio for year 2011 was 0.2 meaning that debt financed assets are twenty per cent while equity financing is eighty percent. The company is good for financial investments because there is increase in share value after a certain period (The Walt Disney Company 2011).

Challenges. In the year 2001, the company`s products were not consumed after religious companies accused it because of including sexual information in the products that were meant for children. This led to reduced sales, which decreased the profit margin of the company. Although the boycott stopped, it was a warning to the company about the consequences of changing the product (Koenig 34).

Robert Iger who is the chairperson of the board of directors is the leader of the team responsible for growth. Prior to serving as the chairman of the board Mr. Iger served as the president and Chief executive officer of the company from the year 2005. He joined the company in the year 1996 from the ABC Corporation and has since that time served in the management of the corporation’s entertainment and broadcasting segments of the company.

During his reign, Mr. Iger has spearheaded the acquisition of innovative companies such as Pixar to become part of the Disneyworld technological innovations of the company with the assistance of other directors. He is in the Fortune 100 among the twenty-five powerful business executives in the whole world. The other important person in the management of Disney is Andy Bird the chairperson of the company expansion programs. He made the company to be established in India and Hungary (The Walt Disney Company 6).

Personal Views. The Walt Disney is the most promising company due to the industry in which it operates and the fact that the market for its product is always available. However, for the company to be of relevance it must continue producing high quality entertainment products that foster its core values. Disney has changed the entertainment by providing characters and stores that are entertaining and remembered all the time. Its contribution to the entertainment will be appreciated for centuries.

Conclusion

The management team focus on the market will make the company the world’s largest media company if it continues with globalization program. However, threats such as piracy and copyright violation of its products by merchandisers in china continue to affect the revenue.

Works Cited

Koenig, David. Mouse Tales: A Behind-the-Ears Look at Disneyland. New York: McMillan, 2005. Print.

Tim, Hollis. Mouse Tracks: The Story of Walt Disney Records. New York: Sage, 2006. Print

The Walt Disney Company. Disney Annual Report 2011. 2011. Web. <https://www.thewaltdisneycompany.com/investor-relations/#reports>.

Disney’s capital structure was assessed using information acquired from Yahoo Finance. Trends in total assets, total liabilities, shareholders’ equity, and long-term debt were evaluated to arrive at a final conclusion. Additionally, three financial ratios, include debt ratio, debt-to-equity ratio, and capitalization ratio. The selected data and ration analysis results are provided in Table 1 below.

Table 1. Disney’s capital structure analysis

The balance sheet demonstrates that Disney experienced a significant rise in total assets in 2019 in comparison with previous years. The matter can be explained that Disney completed the largest acquisition in its history by buying by purchasing 21st Century Fox (particularly, the film and television catalog from 20th Century Fox). The analysis demonstrates that the purchase affected both total liabilities and total assets, which implies that the purchase was made using both debt and equity. The visual representation of trends in the selected data from the balance sheet is provided in Figure 1 below.

The historical analysis of the ratio demonstrates that Disney has been gradually increasing the share of debt in its capital structure. In 2018, all three ratios decreased as the company continued to pay off its long-term debt. However, in 2019, the company purchased the 21st Century Fox for more than $71 billion, which was partially financed by debt. As a result, the debt ratio increased by 0.08, the D/E ratio increased by 0.2, and the capitalization ratio increased by 0.05. In 2020, Disney was forced into additional debt to finance its operations due to the COVID-19 pandemic. The result of such actions was that the company’s debt ratio increased by 0.04, the D/E ratio increased by 0.21, and the capitalization ratio increased by 0.08. Thus, it can be stated that the trends in the capital structure of the company are worrying, as increased debt may lead to a decrease in the company’s flexibility and profitability. However, the current level of D/E ratio of around 1 is adequate. On average, Disney relies on debt and equity in equal shares. The trends in the three ratios are visualized in Figure 2 below.

In order to understand how Disney’s capital structure compares to the industry, two major competitors of the company, including Fox and Comcast, were analyzed using similar ratios. The weighted averages for the three ratios for the past four years are demonstrated in Table 2 below.

Table 2. Industry comparison

The analysis demonstrates that among the three companies Comcast has the highest leverage, while Fox has the lowest reliance on debt. According to all three ratios, Disney’s capital structure is adequate in comparison with its competitors. All the three companies under analysis experienced a significant increase in leverage in 2020 during the pandemic. Thus, if the situation with COVID-19 stabilizes, no concerns should arise about Disney’s capital structure.

Introduction

Disneyland, a global entertainment company running parks, restaurants, and resorts, earned a lot of revenue from most of its branches until it launched Euro Disneyland. Formerly, the new brand faced a lot of challenges that significantly hampered its income and growth. This study applies a problem-solving technique known as decision matrix analysis, to identify the events which occurred since the entry of Euro Disney into the market. Furthermore, the paper will employ Hofstede’s famous cultural dimensions: individualism, cultural avoidance, masculinity, and power or distance to analyze the differences between France’s and the United States’ cultures.

Cultural Challenges Posed by Euro Disneyland

Table 1: Causes of the Cultural Challenges faced by Euro Disneyland.

The decision matrix analysis involves scoring each of the challenges on a scale of 1 to 5 (see Table 2). Each score is then multiplied by 2 to attain the weighted scores for each option/factor combination.

Table 2: Decision Matrix Analysis.

Cultural Differences between the United States and France Based on Hofstede’s Perspective

Hofstede’s approach reveals little cultural difference between the United States (US) and France. According to Bissessar (2018), Hofstede’s applicable dimensions in this study are power/distance, masculinity versus femininity, individualism versus collectivism, and uncertainty avoidance. The masculinity trait promotes rivalry, achievement, and success (Huang & Crotts, 2019). The US is inspired to prosper based on competitions, contests, or accomplishments in which the successful ones are considered winners or the best in the field. From a young age in school, children learn this trend and live to have the same mentality in their careers.

In most cases, masculinity is demonstrated as an individual character and not a collective one. In comparison to the US, France’s level of masculinity level is lower. Research by Hofstede Insights (n.d) indicates that the US has a higher masculinity score of 62 than that of France, which is 43. Therefore, it means that the US has a high masculinity drive relative to that of France.

The individualism dimension signifies that individuals with this trait are concerned about their welfare and close friends and relatives. This is an aspect worth considering when comparing the US and France. The main issue to be addressed here is the interdependence level of a society’s members (Huang & Crotts, 2019). People with this mentality often use terms such as “I” or “We,” indicating a degree of self-centeredness. When Disney introduced the Strict Appearance Code, labor unions and the French opposed it but with no success (Luthans and Doh, 2018). Luthans and Doh narrate:

Stephane Baudet, a 28-year-old trumpet player from Paris, refused to audition for a job in a Disney brass band when he learned he would have to cut his ponytail. “Some people will turn themselves into a pumpkin to work at Euro Disneyland,” he said. “But not me.” (p. 270)

In the above scenario, both countries seem to be independent because no party cannot compromise their customs for another.

The concept of uncertainty avoidance is based on how a society handles the fact that the future is unforeseeable. People have to choose whether to prepare for the future or let it occur (Huang & Scott, 2019). This dilemma results in anxiety which can be handled in various ways from one society to another. Hofstede Insights (n.d) reports that France has a high score of 86 compared to the US with 46 in uncertainty avoidance. This implies that the former is more proactive in dealing with anxiety about the future’s unpredictability. When comparing the number of people who visited the Euro Disneyland, it can be noted that few French, less than the projected 50 percent, while the more Americans visited the place. It can be deduced that the French are much uncertain of the future, which is why they withhold themselves from visiting Euro Disneyland, unlike Americans who are receptive to new ideas and developments.

The power distance dimension posits that inequality makes influential individuals influence other people’s thoughts and conduct. It is the degree to which less powerful individuals in an organization agree that there is uneven power distribution. The research by Hofstede Insights (n.d) shows that France has a higher power score of 68 than the US, 40. These values imply that there is an unequal distribution of power between influential individuals and their subjects. The French citizens felt sidelined in the Euro Disneyland job advertisements, which were entirely made in English and distributed countrywide. Furthermore, most of the company’s leaders had an American origin and could not fluently speak the French language (Luthans and Doh, 2018). It is clear from the scenarios that there was unequal exercising of control in the administration of the company.

Euro Disneyland Mistakes

In its management, Euro Disneyland made two significant mistakes: poor management strategy that impacted marketing and social errors with regard to French culture. In terms of the social slips, their policy of not selling liquor disappointed the citizens as it contravened their customs (Luthans and Doh, 2018). In France, alcohol, especially wine, is common in most meals, be it breakfast, lunch, or dinner (Karadjova-Stoev & Mujtaba, 2016). Euro Disneyland also erred when it continued selling American foods, which the citizens did not prefer since it was offensive to their culture (Karadjova-Stoev & Mujtaba, 2016). For these shortcomings, the locals lost motivation in visiting this company’s premises for recreation. They felt as if the company had no absolute regard for their lifestyle, and hence they did not have to go there.

Poor management strategy was exhibited in various scenarios in the company. For instance, the company hired Americans who were not culturally diverse enough to understand the French culture. The move made the French feel unwanted and unsuitable for the job. The executives were also uncompetitive in their duties and hence delivered shoddy quality work at the expense of the company’s growth (Luthans and Doh, 2018).

Some of the leaders could not speak in French, which made it difficult to communicate with the country’s citizens who could fluently use the language. The Strict Appearance Code did more harm than good in promoting the organization’s growth. Much of its terms were unbearable to the French citizens and other concerned parties, so this policy faced a lot of resentment from labor unions and locals. For instance, the law employees to shave their facial hair and have their hair cut and the dressing code to depict the ‘Disney look’ similar to what is explained by (Marie, 2017). These actions exacerbated the alienation of the company’s affairs by the French.

Conclusion

Establishing a new product line is bound to face unforeseen problems. It is essential to do extensive research, which spans the customer’s culture, among other factors (Kotler et al., 2019). The organization contributed to the negative publicity that it experienced from the onset through some of its policies. For example, the employees were expected to dress in a predefined ‘Disney look,’ and hiring non-French workers created resentment among the locals, which impacted the company’s revenues. When Euro Disneyland entered France, they did not show a comprehensive understanding of the country’s way of life.

Human life is more fulfilling when there is an element of enjoyment and entertainment. Having learned this, Walt Disney proceeded to launch theme parks, resorts, and restaurants in California and Europe, among other locations. Achieving success was a difficult journey for any of the Disney brands. They faced several obstacles, both internally and externally, which endangered their development but eventually succeeded.

References

Bissessar, C. (2018). An application of Hofstede’s cultural dimension among female educational leaders. Education Sciences, 8(2), 77. Web.

Hofestede Insights (n.d). Country comparison. Web.

Huang, S. S., & Crotts, J. (2019). Relationships between Hofstede’s cultural dimensions and tourist satisfaction: A cross-country cross-sample examination. Tourism Management, 72, 232-241. Web.

Karadjova-Stoev, G., & Mujtaba, G., B. (2016). Strategic human resource management and global expansion lessons from the Euro Disney challenges in France. International Business & Economics Research Journal, 15(3), 79. Web.

Kotler, P., Manrai, L. A., Lascu, D. N., & Manrai, A. K. (2019). Influence of country and company characteristics on international business decisions: A review, conceptual model, and propositions. International Business Review, 28(3), 482-498. Web.

Luthans, F., & Doh, J. P. (2018). International Management: Culture, strategy, and behavior. New York: McGraw-Hill Education.

Marie, H. (2017). The Disney Look 101 [Video]. YouTube. Web.

Introduction: Description of products or services for Disney Company

The quality of products of a company determines whether clients will buy from it. The study focuses on Disney Company whose high-quality products have attracted the attention of many clients as evidenced by its high-sale volume. Every department has its functions and products. The first division is the studio entertainment. The products of this department include films, theatre works, and recording of labels.

These products are targeted at fulfilling the need for therapeutic relief and entertaining viewers (Cruz 8). The other department is the parks and resort that harbors products such as parks and Disney cruise line. The parks fulfill the need for leisure in customers. The third department is Disney consumer products, which has products such as clothing and toys.

The department fulfils the basic need for clothing. The other department is the Media networks. According to Woodruff, the media department is divided into the television segment, which produces media programs, and the interactive media group, which produces products like social media contents, mobile contents, computer games, virtual worlds, and internet contents (104).

The media department aims at fulfilling the need for information, entertainment, and education while the interactive media provides socialization needs. The Walt Disney Company produces excellent products that are targeted at meeting specific customer needs. For example, its film department is the largest studio in Hollywood. It is also the best studio in the world in product rating.

According to Woodruff, the Mickey Mouse cartoon network that is adored across the world is a product of Disney Company (105). One can therefore infer that products from this company are above average. Customers that want excellent products should narrow down their search to Disney Company.

Disney Company Market Research

The Walt Disney Company conducts market research through questionnaires and focused group discussions. When using questionnaires, both closed-ended and open-ended questions are used to help the company to get information about the particular perception held by customers about the company and its products.

Open-ended questions enable customers to express their divergent opinions about the company and or its products. Disney Company also makes use of focused group discussions. In these discussions, a group that consumes a certain product from the company, for example a film produced by Disney films department, is given a topic to discuss.

The researcher stays aside to listen and makes observations. Focused group discussions enable the research to gain a view about the various perspectives held by the audience.

An example of the findings of such a research is the result of a research conducted on a five-scale rating of the Disneyland program on the ABC television in 1954. The research was conducted on a sample of 500 viewers. The results were as follows:

Table 1.0 Research findings on Disneyland liking on a rating scale of five

Pie chart 2.0 Audience liking of Disneyland program

Disney Company’s consumer base has subsets. For example, the products are targeted at various consumer divisions. The televised programs are targeted at the public audience including adult consumers, teenagers, and even children who constitute the subsets of the households that Disney targets. For this reason, Disney came up with various units to ensure that it could meet the needs of the diversified consumer base.

Disney Company targets consumers differently by their demographics. In the public audience, there are different demographics such as sex, age, race, and education levels. It is out of these differences that the television department produces programs for different consumers. For example, according to Woodruff, the Mickey Mouse was meant for children while Disneyland was meant for adults (104).

The content that goes into different films is filtered using gatekeepers in order to ensure that it is right for the target audience. Tailoring the product to meet specific needs of a certain audience enables the audience to appreciate the product. It also enables the company to avoid contravening the rules of public broadcasting. For example, some programs and films should not be aired during the watershed period.

The adverts that the Disney Company produces for various consumers are also filtered to fit the demographic elements. Such gate keeping ensures that no product is abusive to children or contains libel and or slander

. In most of products from Disney Company, for example films, there is always the display of film rating to guide the audience. Some products are for children, teenagers, while and others are for adults. All these are subsets of the household audience that Disneyland films and television department targets.

A Detailed Description of Disney Products

The Walt Disney Company comprises of five units with different products. Walt Disney studio’s products include films, theatre works, and labels. The department has produced hundreds of films that have both received acceptance and criticism. The department has also recorded for great artists in the land. Various theatrical works have been produced in the department’s theatre.

According to Woodruff, Disney Theatrical group is the major division in this unit (104). It is a renowned brand worldwide. According to Cruz, the Parks and Resorts department has products such as Disneyland resort, Tokyo Disney resort, Euro Disney S.C.A, Disney vocation club, Disney cruise line, Hong Kong Disneyland resort, and Disneyland Peris (9).

The Disney Consumer division offers products of different varieties including clothes and toys. This unit also markets the properties that Disney Company owns. The major department of Walt Disney Corporation is the Media Networks. The media network also produces the largest share of Disney products comprising two segments: the interactive media and television.

According to Sperb, the interactive segment produces contents for the internet, social media, mobile phone applications, and a variety of computer games (25). These products spearhead the interactive goal of the company. The company has built a worldwide known television segment. In fact, according to Woodruff, Disney media is the largest in the world (104).

The television segment comprises Disney ABC group of television for example ABC domestic international television, ABC television network, A+E networks, Walt Disney television, and ABC News. There is also the entertainment group under this division comprising of ABC studios, Times Square studios, and ABC entertainment. The other segment is ABC family comprising of ABC spark.

The television division also produces the Live Well Network, Regional sports, Regional entertainment, and does the National television sales.

According to Miller and Washington, the television division is also responsible for production of media content for worldwide channels such as Disney junior, Hungama, Radio Disney, Disney XD, Disney Cinemagic, and Disney Television animation.

All these are television network products from Disney Company (59). In addition, the television network division also produces Hyperion books such as Voice, ABC daytime press, and ESPN Books.

Life-cycle Stage of my Number one Product in Disney Company

According to Miller and Washington, the major product of Disney is mass media production, which is at the peak stage of its life cycle (58). Currently, Disney produces the largest portion of media content in the world. The product is also giving the highest returns in the world in terms of revenue. Pete (38) asserts that Disney’s media contents for example animations are the largest in the United States.

The company feeds very many television studios with media content. The product has also been widely distributed using film and social media. The content has also been spread through theatre works and animation.

One can therefore argue that development of media content in Disney is at its maturation stage. Miller and Washington argue that the ramifications of the media content of Disney company reaching its peak is that the company must now begin diversifying its focus into other products (59). The moment a product reaches this stage, it has to be diversified using the current technology in order to remain at the peak.

If the company does not diversify its products, the product is likely to become redundant hence losing its market value. Disney Company has responded quickly on to this issue. It is not creating new products. Rather, it is diversifying its products. For example, according to Woodruff, in 2006, Disney diversified its products by acquiring Oswald the Lucky Rabbit (105). This strategy diversified its products in the animation industry.

Disney also purchased Pixar animation studios in 2006 with all its stock for $7.4 billion. According to Miller and Washington, the Chief Executive Officer of Pixar, Steve Jobs, also transferred to Disney as a member of the board of directors (59). This move aimed at diversifying the company’s product through the current information technology. Steve Jobs was an expert in information communication technologies.

In 2009, Disney also acquired Marvel Entertainment for $4.24 billion. After the acquisition, Marvel continued producing its products. Hence, the idea of product diversification was taken to another level. In 2011, Disney acquired UTV software communication. Acquisition of UTV diversified Disney’s product market to Asia and India. Finally, Disney also acquired Lucas film, which was worth $40.05 billion.

Acquisition of these media industries will further diversify the media content upon which Disney majors. Disney will therefore not produce new products. Rather, it will major on diversification of its products. Diversification will ensure retention of its huge customer base.

It will also save the company the cost of initiating, developing, and branding a new product. Some brands like the Mickey Mouse are almost synonymous with the company. Hence, they assist in personal selling, advertising, and branding.

Disney Company’s Communications Strategy

Disney Company uses open door communication strategy to reach its 166,000 employees, customers, and other publics. There is open communication that flows from the president to the Chief Executive Officer, the chairperson of the board, the vice chairpersons, chief operations officers, the supervisors, and finally to the employees. Disney is a mass media company.

Therefore, it promotes the freedom of communication amongst its employees and stakeholders. The employees and other stakeholders can therefore communicate through written communication, oral communication, and even via social media. However, when communicating to the public, Disney relays the information though the media.

For example, the chief Executive officer can send the information to television and radio newsrooms. They also use the social media segment to communicate to the people. According to Pete, the company prefers using the mass media due to the nature of its audience (98). For example, the company has a worldwide reach. Its customers are distributed across the world.

This strategy would therefore mean that, for Disney to reach is customers, suppliers, investors, and stakeholders, it has to use international media. The best international media is the international television channel and the social media.

It is for this reason that various undertakings by the company have been announced over the television. For example, according to Sperb, the company’s intention to acquire Lucas film was announced over the television, with the same information being put on the social networks (26).

Disney Company’s Internet Marketing Strategy

Disney has applied internet-marketing strategy for a considerable period. The online department does Disney’s online marketing. The department, which deals with e-commerce, comprises internet professionals. Cruz argues that a company is able to market its products to worldwide consumers through the internet (8).

It is worth noting that Disney company consumers are scattered across the globe. It is this reason that has made online marketing and communication work well for Disney Company. According to Sperb, the company use social media networks such as facebook and twitter to market its products (5).

Most of the consumers of media content are the youth. The youth are also the majority in the consumer bracket that uses the internet. This fact has made this marketing strategy very effective for Disney Company.

The company is also able to advertise its internet links, for example, its websites, facebook pages and twitter handles on the television, radio, and print publications. According to Miller and Washington, high rates of publications make the audience and customers familiar with Disney’s online activities (59).

The online department has also been very successful in advertisement of Disney products such as hotels and new channels. Online advertising and marketing begin by a conception of the idea by the operations managers or even the chief executive officer. After the idea is conceived, the creative director takes over and develops it with his/her creative team.

Sperb asserts that the creative team creates the advert and forwards it to the online department for placement on the internet (25). For example, it is placed on the social networks and on the company’s websites. This strategy has been very successful. In fact, it has increased the company’s market share.

Conclusion: Is Disney Company Ethically Responsible?

The question of whether Disney is ethically responsible is still controversial. However, Disney has always moved fast to correct any product that has been criticized as being morally wrong. For example, Disney recalled and corrected films like “The rescuers” of 1977 and “Who Framed Roger rabbit.”

Various activist groups have risen against some of the products by Disney. Such critics include the catholic league, the American Family Association, and the Assemblies of God. This League rated films like “Priest” of 1994 and the book “Growing up Gay” as unethical. Pete affirms that most of Disney’s products such as the animated films have been criticized as morally lacking due to their sexual appeal (110).

For example, the film “The Little Mermaid” of 1989, and “The Lion King” of 1994 were criticized as immoral. All these issues have made many people believe that Disney Company is unethical.

Works Cited

Cruz, Georgina. “Disney Fantasy.” Cruise Travel 34.5 (2013): 8-11. Print.

Miller, Richard, and Kelli Washington. “Part Ii: Market Profiles: 7. Market Leaders: Media Companies.” Entertainment, Media & Advertising Market Research Handbook 13.1(2013): 58-73. Print.

Pete, Martin. “Walt Disney Shoots the Works.” Saturday Evening Post 233.24(1960): 38-112. Print.

Sperb, Jason. “Reassuring Convergence: Online Fandom, Race, and Disney’s Notorious Song of the South.” Cinema Journal 49.4(2010): 25-45. Print.

Woodruff, Jay. “A Whole New World.” Fast Company 158.1(2011): 104-130. Print.