The Walt Disney Company deals with media animation, television, travel,tour and film production. Increased revenue margins have also been realized from its online media, music industry, theater and publications. Walt Disney’s major revenue generation channels include ESPN, A+E Networks, Disney Channel, Marvel, Walt Disney Studios and ABC Family (Ingersoll, 2005; Franz & Smulyan, 2011).
The Walt Disney Company has a strong mission that is founded on the need to enhance creativity and innovativeness. The company’s mission is to ensure that it remains the global “leading producer” of leisurely entertainment and information. The company aims to “make people happy”. Improving financial growth is the core focus of the Walt Disney Company. The Walt Disney Company’s vision is to foster innovation and utilize the latest existing technologies in venturing into new entertainment markets across the globe (Franz & Smulyan, 2011).
In line with its mission and vision, Walt Disney’s core objective is to be a global leader in the production and provision of information and entertainment by use of a wide scope of entertainment brands that aim at differentiating its products, services and media content from those of its competitors. Financially, the company’s objective is to maximize its cash flow and earnings while allocating capital to its growth strategies so as to boost its long-term investor value (Ingersoll, 2005).
In the 2011 fiscal year, Walt Disney’s net income was $4.8 billion. This value was a 21% increase compared to its 2010 financial performance. In the same year, the company’s revenue rose to $40.9 billion. The value was a 7% increase from the previous year’s financial performance. Its human resource systems focus on talent acquisition and retention, according fair compensation to employees, enhancing global mobility, fair labor relations, encouraging creativity and innovativeness and encouraging career growth and development.
Objectives for improving the organization’s financial position
One of the objectives for improving Walt Disney’s financial position is to finance its costly technological ventures in the entertainment industry. Sports programming remains to be the core focus of the Walt Disney Company (Franz & Smulyan, 2011). To effectively finance this costly technological venture in the dynamic entertainment industry, improvement of Walt Disney’s financial position cannot be ignored. The second reason for the improvement of the organization’s financial position is to enable the Walt Disney Company to venture into the unexploited markets. The unexploited markets include China’s 1.3 billion people who form an ever growing entertainment market and many developing countries. Its performance measure is to increase productivity based on the revenue generated. The third objective for improving Walt Disney’s financial position is aimed at providing profitable and affordable entertainment experiences to clients. While venturing into new markets by use of the modern technologies is crucial, the Walt Disney Company’s top management understands the need to provide affordable entertainment strategies to low income earners.
Performance measures and expected level of performance
The success of the Walt Disney Company lies in effectively and financing its costly technological ventures in the entertainment industry. The success can be deemed to have been achieved based on a number of factors. One of the measures is based on financing both the new and existing entertainment ventures. The increase in the number of new inventions can also reveal the achievement of this objective. The target of the performance is to increase productivity while remaining technologically relevant (Greenhalgh, 2004). On the other hand, this objective demands serious creativity in the company’s use of modern information technologies and systems. Additionally, the approach requires top level managers to realign the company’s operational strategies to the core business principles that focus on achieving the vision and mission of the organization from a financial perspective.
The measure for the second objective would be reaching new markets and the increase in revenue for the company. Less financial strain on new ventures can also reveal the achievement of this objective (Ingersoll, 2005). Faster penetration of the new markets would require the use of streamlined marketing and advertisement mechanisms aimed at promoting Walt Disney as the most affordable, reliable and cost effective provider of entertainment opportunities (Franz & Smulyan, 2011).
The measure of the achievement of successful provision of profitable yet affordable entertainment experiences to low income earners is a steady increase in the number of low income earners. There can also be an overall increase in clients’ entertainment base and acceptance of Walt Disney’s entertainment products to new markets due to the affordability of the company’s products. Creativity and innovativeness are the major standards of performance for the company at this level. Another target of this objective is to double its current customer base. Increased revenue aimed at catering for the high cost of operation, innovation and creativity is evident from the fact that in recent times, Walt Disney’s revenue has grown from $40.9 billion shillings to $42.3 billion USD. As a target for the objective, the company aims to achieve an average of $45.0 billion USD revenue by the year 2014.
Actions or programs that need to be developed
The financing of costly technological ventures can be realized by the establishment of innovative mechanisms and programs focused on programming modernized games and other family based entertainment ventures.
To effectively do business in new business environments, the Walt Disney Company’s management should develop an in-depth operational mechanism aimed at researching on the visibility of new markets. The research programs should focus on understanding market dynamics and possible challenges that can be faced in new markets. To ensure that affordable prices for some of the innovative entertainment products are realized, it is crucial for the organization to focus on minimizing its overall production and provision of leisurely information and entertainment offered by the company (Greenhalgh, 2004).
References
Franz, K. & Smulyan, S. (2011). Major Problems in American Popular Culture: Documents and Essays.Connecticut, USA: Cengage Learning.
Greenhalgh, C. (2004). Building a Strategic Balanced Scorecard: Saatchi & Saatchi Complementary Case.Liverpool, UK: University of Liverpool.
Ingersoll, D. S. (2005). Plan Your Walt Disney World Vacation in No time, fast, easy, simple.USA: Que Publishing.
Since its foundation, Disney has experienced transformations in managerial skills. The transformations have been due to the changing business environment and as Samson & Daft assert, managers should align their skills with the relevant strategies for business survival and expansion in this changing market (2009, p.83). As illustrated, managerial skill’s transformation depends on economic situation of the organization.
Participative to scientific management skills
At its foundation, Walter and his brother, Roy, clearly understood that for the company to grow stably and compete effectively, it required teamwork and cooperation. The managers therefore deployed participative skills in the organization’s administration.
In fact, Walter advocated for cooperation and teamwork among the ‘members’ of the organization regardless of the position one held. However, during Eisner’ period the focus was no more on the foundation. The managerial skills transformed from participative to scientific in which Eisner focused on the best way to do things; Eisner dedicated his strength to creativity.
Specialization to innovation skills
Walter and Roy deployed specialization and division of labour during the foundation. Walter specialized in production while Roy headed the finances. In specialization, managers focus on the output of each individual with little regard of their individual development. This managerial skill was significant for the setting of strong foundation of the Disney Company.
Eisner on his part focused on growth and development of individual employees. In order to leverage the company’s financial situation after Walter’s death, Eisner encouraged innovation among the employees through the concept of learning organization. By introduction of cross-divisional initiatives, Eisner deployed not only specialization skills but also innovation skills among the employees.
Hybrid style of leadership
Initially, Walter and Roy focused on employees’ completion of duties with little concern about their specific needs. They demonstrate leadership style in which employees are ‘free to think’. Walter emphasized on performance regardless of the position of the employee. In order to revive the company’s financial situation, Eisner deployed conglomerate of leadership skills.
Learning organization aimed to develop the employees, whereas the cross-divisional initiatives meant to improve the performance each employee. In his leadership, Eisner therefore used both skills of people-oriented and task-oriented styles. Eisner developed ‘organizational hierarchy’ through his emphasize for skilled managers. This evidences that Eisner used some bureaucratic skills to manage the organization.
Learning Organisation
Disney should adopt the concept of learning organization in order to benefit from the advantages it presents to the businesses in the dynamic market of the 21st century.
In order to realize effective expansion and fulfil the dreams of the founder, Walter, Disney management should adopt the concept of learning organization. Expansion of business requires motivated management and employees. Since for decades the management focus has been on ‘task-completion’ without regard of individual development, it is important to empower employees through learning organization.
Learning organization encourages rewards and punishment based on performance. The management should develop an evaluation strategy to reward those who perform excellently and punish underperformers. As a result, high performer feel empowered while underperformer feel challenged. Once challenged, the underperformers have to improve. In effect, the overall performance and expansion of Disney will improve.
Innovation is integral part of strategic planning for creative companies such as Disney. With the dynamic technologies in creativity, Disney has to keep its systems updated, which will guarantee it a considerable market share for its products. Learning organization enhances innovation of technologies among the employees. Such technologies should be specific for completion of tasks within the organization.
Learning organization encourages the management to provide employees with challenging tasks. Since the employees have to accomplish these tasks, despite the challenges, they have to research and consult on the effective means of handling the challenges. Research enables capacity development and growth of individual employees. At Disney, the shop floor employees will acquire more skills and boost their level of innovation and consequently, the organization will experience high-level creativity for a competitive position in the industry.
Learning organization enhances globalization. As illustrated in the case, Roy’s attempt to new ventures of the business resulted into financial crisis of the organization. Globalization and trading in international market has a direct correlation with expansion in terms of product and services of a business. Roy’s failure was a result of lack of learning organization principles. Learning organization enhances innovation and creativity.
Innovation results into creation of efficient methods and procedures of ‘production’. Efficient methods mean mass production of high quality and low cost products. Products with such features attract more customers in the market. Learning organization would therefore enhance Disney’s trade in the international market and compete with the leading players in the industry.
Eisner’s Management skills
Scientific managerial skills
Eisner’s introduction of learning organization illustrates deployment of scientific skills of management. Scientific management dictates for four strategies of management, which aligns to characteristics of learning organization. The management should reward and punish employees on their basis of performance. The employees should develop the best and creative ways of accomplishing their duties.
In scientific management, the manager should plan and control the employees and by using learning organization, Eisner introduced scientific skills of management. Some aspects of this skill could be applicable to the today’s management. However, the managers should be involved not only in planning, as depicted by the management theory, but also in active engagement of the plan. By doing so, these managers will have what Eisner refers to as ‘hand-on skill’. In turn, it enhances efficiency in accomplishment of the organizational plans.
Capacity development skills
In his leadership, Eisner focused on innovation of individual employees. Learning organization encourages innovation, as earlier noted. Eisner once noted “Synergy, For Us, Goes with Creativity” (Walt Disney Co, 2011, p.2).
This emphasizes his efforts to enhance creativity. In this way, Eisner deployed the skill of capacity development for it employees. The market dynamics experienced in the current business world is a result of changing technologies in creativity. To compete in such situations therefore, today’s managers should use this management skill.
Learning organization skill
Learning organization is a management skill in itself. Eisner introduced the skill to motivate the employees as “motivated employees develop the own-drive to undertake their duties” (Samson & Daft, 2009, p. 84). To achieve this strategy, the management should assign duties to the employees based on interest and hard work.
In this way, the employees perform their duties effectively. In fact, Eisner’ success at Disney was due to learning organization. Since learning organization acts to motivate employees, current managers can still use it to motivate their employees. With the changing market, managers should apply the learning organization skill to empower employees to meet these dynamics.
Hybrid leadership skill
As noted, Eisner combined aspects of different leadership styles to leverage the financial situation of the organization. He combined the aspects of people-oriented and task-oriented leadership. His emphasis on creativity and capacity building of individual employees manifests this fact.
Bureaucratic aspects were also eminent in his management. For instance, his focus on employing highly experienced and skilled managers reveals the ‘organizational hierarchy’ in the company. Hybrid skills are practical to the management of this century because decision-making varies with situations and time. Since these changes are complex, managers find it difficult to apply a single style of leadership in management.
References
Samson, D., & Daft, R. L. (2009). Leading in Organizations: Management. South Melbourne, Vic.: Cengage Learning Australia.
The Walt Disney Company is an American multinational mass media corporation that is located in Walt Disney Studios, California, United States. The Walt Disney Company is one of the largest mass media company in the world in terms of revenue. Walt and Roy Disney founded this company in October 16, 1923, and it was known as the Disney Brothers Cartoon Studio before attaining its current name. The Walt Disney Productions were the first to establish the American animation industry, and with time it grew and became one of the leading and largest companies in this industry.
One of the productions that made the company well-known worldwide was Mickey Mouse. Its success was attributed to the fact that it was the first cartoon to feature synchronised sound. The company then diversified into the live-action production, television, and travel. In 1986, the Disney brothers cartoon studio acquired its current name and since then has been known as the Walt Disney Company. Since then the company has expanded its operations and started divisions focused on theatre, radio, music, publishing, and online media.
The company is best known for the film studio products, the Walt Disney Studios. Today the studio is among the largest and best-known studios in Hollywood. The company does not only produce films but also operates the ABC television network, engages in publishing, merchandising, and theatre divisions; it owns and licences 14 theme parks around the world. It has also succeeded greatly in the music division. The company owns cable television networks such as Disney Channel, ESPN, A+E Networks, Life Time, and ABC Family.
The Walt Disney Company states its mission as enhancing creativity and innovativeness. The company aims to ensure that it remains the global leading producer of leisure entertainment and information (Daft, 2009). The company’s vision and objectives in the perspective of the company’s learning and growth is the creation of high performing culture.
Objectives
Objective
Measure
Target
Action
Creating- high performing culture
Creation of a high performing culture can be developed and measured through observation of the relationships between the employees in an organization and how they work together
It targets the employees in order to inspire them to work an extra mile-so as to make and execute decisions without any supervision (Rainey, 2009).
A high performance culture should be developed in a way that it reflects the goals and values of the organization. A winning culture can be developed by ensuring the employees have the right attitude towards their work
Employee satisfaction
Employee satisfaction can be measured through asking them questions on where they expect improvement and providing them with open forums to suggest solutions to their problems. A company that involves the employees in their decisions stands a greater chance of satisfying its employees
The target can be the employees or the employer or both. This is because a good working environment makes work easier for both the employer and the employee. Employee satisfaction creates a good relationship with the employer which in turn improves the revenue of the organization since employees give their best
Employee satisfaction is achieved through ensuring that employees are fairly paid and rewarding them when they do their work to perfection. In addition, this can be achieved through ensuring that the workers do their work in a conducive and enabling environment. Employers can create an enabling environment for their employees by ensuring that they have all they need to do their work effectively.
Live the values
Living the values can be developed by creating conscious awareness by bringing the workers and members together and aligning them to achieve unanimous goals (Gilley et al, 2009). An organization should implement this to ensure that all employees work towards one direction. This means working towards the attainment of the organizational goals.
The target here is the employees who need to be brought together to ensure that they do not live and work with assumed values that are not articulated, aligned or committed.
Living the values can be archived through dividing employees in groups or teams. This enables employees to work together to ensure that they all thrive towards the attainment of organizational goals (Jones, 2012).
The relations and learning objectives identified here relate to those of the previous modules in many ways. For example, providing profitable and affordable entertainment experiences to clients was discussed in module one and it relates well with employee satisfaction in module four. Entertaining the employees creates a good working environment for them, which enhances employee satisfaction. In module two, the objective of innovation and development relates with creating- high performing culture, which is an objective in module four. Innovation and development provides the employees with the required technology and resources and hence making work easier and this would increase their performance hence increasing the organizations output (King, 2009).
Improvement of the human capital available to the company is one of the objectives in module three and this relates to creating a high performing culture. This is evident since increasing the number of workers would in turn increase the output level of the organization. This in turn reflects on the performance level of the company. In order for an organization to create a high performing culture, it needs to have enough employees thus this shows the relationship between the two.
References
Daft, R. (2009). Organization Theory and Design. New York: Cengage Learning.
Gilley, J & Maycunich, A & Gilley, A. (2000). Beyond the Learning Organization: Creating a Culture of Continuous Growth and Development Through the State of the Art Human Resource Practices. New York: John Wiley and Sons.
Jones, P. (2012). Strategy Mapping for Learning Organizations: Building Agility into your Balanced Scorecard. Burlington: Gower Publishing Company.
King, W. (2009). Knowledge Management and Organizational Learning. New York: Springer.
Rainey, H. (2009). Understanding and managing Public Organizations. New Jersey: John Wiley and Sons.
This analytical treatise will attempt to explicitly review the actions of the Disney Company to attract its core customers. Besides, the treatise reviews the risks and benefits of expanding the Disney brand in new ways.
How Disney attract core customers
The marketing mix is a selling model which is made up of four elements such as price, product, promotion, and distribution. The Walt Disney Company owns a number of franchises. Examples are Mickey Mouse, Cars (film), Disney princess, Donald Duck, Disney Princesses, Indian Jones, Toy Story, The Lion King, and Monsters.
The company considers different market segments when tailoring products in order to attract customers (Kotler & Keller 2012). For instance, in the Middle Eastern market, the company has come up with products that suits girls in that location. An example of a product that suits the market segment is the Jasmine and Aladin.
The attire worn by the characters attracts girls in the Middle East since it rimes with their culture. Therefore, the product touches on their way of life. For promotion, the company uses girls from the Arabic origin to advertise the products. This has succeeded in attracting the target market segment (Kotler & Keller 2012).
In relation to pricing, the company uses skim pricing strategy since demand for its products are relatively inelastic. Concerning the place, the company uses the Walt Disney Company TV channel to keep in touch with the target segment. Apart from the TV channels, the company uses its music channel to reach out to the market segment.
From its inception, the Disney’s product line objective has been to provide quality products at the convenience of the clients. The services offered by the company targets families. The company has expanded from the US to all other continents due to its customer-centricity business model (Kotler & Keller 2012).
Specifically, the company has experienced metamorphosis from the loss leader pricing into the ‘good, better, best’ pricing due to the acceptance of its products by the satisfied customers. Therefore, the Disney Company has an unlimited potential for further growth as more people embrace their affordable prices and big discounts.
In addition, the company has a flexible and proactive advertisements meant to appeal to each customer segment. The company also has series of after sales services such as discounts, coupons, and rewards through the annual global family events. The company uses direct, online, and database marketing through its Business-to-Consumer (B2C) e-commerce model (Kotler & Keller 2012).
Expanding the Disney brand in new ways
Benefits
Disney Company’s business mission is to be the global leader in provision of affordable, convenient, and quality services within a sustainable business environment. The company’s mission has remained feasible since the mission aims at addressing the immediate and future needs of customer within friendly prices. Therefore, expansion will increase the company visibility and revenues in the global market.
Through expansion of the Disney brand in new ways, the current product multi-branding as a positioning strategy will enable it to survive competition. Besides, the company will manage to balance the elements of intangibility, inseparability, and heterogeneity in the 4Ps of its market mix, due to the improved product visibility for each target segment (Bert 2011).
The company, “together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments, these are, media networks, parks and resorts, studio entertainment and consumer products” (Walt Disney 2014, par. 8). It trades in assorted products such as cable television, publishing, movies, broadcasting, and web portals among others.
Therefore, expansion will help the business to maintain its business leader position. Besides, the Disney Company portfolio will expand since its various online platforms may be instrumental in attracting more customers. As a result, the demand for the company’s products and services will continue to grow since the objective of this expansion strategy is to attract and retain customers, who want affordable goods and services.
Risks
The potential risk factor that may face the Disney Company, through expansion of product line, is the possibility of rejection by the target market since most of the customers are used to common brands. The current economic down swing, as a result of the economic meltdown in 2009, has slowed down the market growth for the industry in which the Disney Company operates in.
Besides, competition from established firms will reduce the market share since other companies may go into the same business line of the company has intentions of expanding into.
Finally compliance with health, safety, environmental, and other regulations will be a major hindrance to the future expansion of the company since the US has very strict rules on the externalities, as a result of a business activity. These regulations change from time to time (Bert 2011).
Conclusion
The Disney Company has multiple products besides an effective marketing strategy. The business has remained sustainable due to diversification of products. The company uses the elements of affordable pricing, advertisement, and product uniqueness to attract customers. The main benefit of expansion for the company will be increased revenues. However, the strategy may face the risk of product rejection.
References
Bert, R. (2011). Marketing channels: A management view. Sydney, Australia: Thompson South-Western.
Kotler, P., & Keller, K. (2012). Marketing management (14th ed.). New Jersey, NJ: Pearson Prentice Hall
Walt Disney is one of the biggest and diversified international companies in the entertainment and media industry. Its main offices are found in Walt Disney Studios, Burbank, although it has numerous offices all over the world. Since its inception in 1923 as a carton studio, it has expanded its business to be one of the world leaders in the animation, live-action film, television, and the travel industries. During its inception, it was called Disney Brothers Cartoon Studio, but this was changed to Walt Disney Studio years later. Although it was a cartoon producing company during its start, after its incorporation in 1929 as Walt Disney Productions Limited, it expanded its business into the theatre, radio, music, and publishing industries. Some of its biggest companies include Walt Disney Studios, ABC Television Network, Disney Channel, ESPN, and numerous theme parks (Barrier, 2007, pp. 39-168).
Walt Disney Company’s Philosophy, Mission, Vision, and Values
The Growth of the Walt Disney Company to be what it is today is usually attributed to the ability of the company’s management to align its mission and vision to its philosophy and core corporate principles. Its adherence to its main philosophy of ensuring that it offers its clients world-class family entertainment services that focus on children, teens, and adults have dramatically helped it to expand its business globally. This philosophy is closely connected to its mission of aiming to be one of the world’s principal creators and providers of amusement and information, using its range of brands to make its content, services, and consumer goods inimitable. All these are done in an endeavor to come up with the most innovative and profitable entertainment experiences and related products globally. In addition to this, its simple vision of aiming to make people happy has always helped it to formulate unique and innovative products to meet new customer demands, as it appreciates the significance of its customers. On the other hand, its values of embracing consistency and detail, respect, bravery, sincerity, diversity, and always aiming to maintain its image play a central role in all its strategic plans. To maintain a cohort of specialized workers, this business giant also insists on the need to encourage learning and development and embracing of different cultures (Aswathappa & Dash, 2008, pp.85-106 and Eisner, 2003, pp. 137-184).
Structure of the Company
This business giant has four primary divisions, namely the media networks, parks and resorts, studio entertainment, and finally, the consumer goods division. The media section primarily deals with any programs that are related to television and radio. Some of the leading enterprises that are under this are Radio Disney, ABC Television, ESPN, and Disney Channel. Different from this, the parks and resorts section deals with all the entertainment amenities that are in the U.S.A, for example, Walt Disney World Resort, the ESPN Zones, and the Disneyland Resort.
On the other hand, the studio entertainment section handles all the production, marketing, and supply of all types of films. At the same time, the consumer products division is mandated with the role of providing Disney’s characters, producers, publishers, and sellers licenses. To make sure that all these sections work in unison, this company has a CEO who is also the president. The president is helped by different managers who head either corporate units that are run by the company or business units, which are typically found at Disney’s branches. Although its groups are independent of each other, they depend on each other; hence, from time to time, all the top managers and corporate management have to meet and share (Denney & Williams, 19-77).
Reference List
Aswathappa, K., & Dash, S. (2008). International Human Resource Management: Test and Cases. New Delhi: The Tata McGraw Publishing Company.
Barrier, M. (2007). The Animated Man: A life of Walt Disney. London: California University Press.
Denney, Jim & Williams, Pat. (2004). How to be like Walt: Capturing the Disney Magic Every day of your life. Deerfield Beach, Florida: Health Communications, Inc.
Eisner, M. (2003). Be our Guest: Perfecting the art of Customer Service. New York:Disney Press.
Organizational structure is critical, especially in decision making. It defines the reporting relationship in an organization. More precisely, it determines the accurate positioning of command and how they interrelate with each other. Different companies have different organizational structures to meet their objectives. For instance, the organizational structure that works best for Apple Company may not be useful for a food processing firm. Furthermore, organizational structure changes with changing circumstances. In this essay, we critically evaluate and match the organizational structure of Walt Disney to specific strategies that are aligned with organizational objectives.
Walt Disney applies a diversified strategy (related and unrelated) to achieve its goals and objectives (assignment 3.2). For instance, the company uses a related strategy to acquire businesses in the same production line to expand and increase sales in the long-run. Walt Disney applies a related integration strategy to acquire related firms such as Jim Henson Studios. This company has enabled Walt Disney to increase cash flows and support continuous growth. The company also uses an unrelated diversification strategy to enhance the creation of a robust strategic portfolio (David, 2015). Moreover, the diversified approach enables Walt Disney to realize the economic scope through proper allocation of resources to investment that creates value for shareholders.
Walt Disney also applies a focus strategy in Porter’s five generic strategies (assignment 3.1). Disney concentrates on a particular market niche targeting a specific age group. For instance, Walt Disney focuses on young kids and their families. More so, the company has concentrated on creating an emotional connection between theme parks and their guests. Focus strategy enables Disney to charge a premium price for its product.
Walt Disney has a functional organizational structure based on specialty areas. Specifically, the organization is arranged in functional business units such as marketing, finance, and management. In Disney, all functional and departmental heads are expected to report to the CEO. This structure can best fit differential strategy where specialists are assigned as departmental heads in all functional departments. The professional understands and reviews workers’ performance to ensure it is aligned with organizational goals. Different management team heads the different division of Walt Disney.
The functional organizational structure matches with differential strategy since it ensures that employees can move up to their functional units as they gain experience. This approach encourages employee loyalty toward the organization hence increased employee retention. Moreover, this structure allows knowledge sharing thus making the transfer of new skills within the organization easier. As noted by Naoum (2011) the major disadvantage of this strategy is that when the organization becomes bigger, functional divisions become difficult to manage (p.103).
Moreover, some functional departments may find it difficult to work with others. However, its rival Universal Studio uses a divisional structure in which the company is divided into different divisions operating autonomously as business units under a broader corporate framework. A separate company operates all business units under Universal Studios under a general organizational framework (Gaspar, 2006, p. 182).
Walt Disney can introduce geographical departmentalization. The departmentalization is based on the geographical location of Disney functional units. These functional groups are in charge of the management and production of products in that geographic scope.
This department’s heads ensure they direct, guide, and motivate workers toward organizational achievement goals. Moreover, introducing the divisional structure will allow Disney to evaluate, monitor, and measure organizational goals toward meeting its targets. Disney can also be able not only to measure whether performance meets set standards but also to take corrective action to improve output. For instance, Disney can introduce a divisional structure in its theme parks in the US where a specialist is in charge of all theme parks but is headed by a functional head who reports to the overall manager.
In conclusion, Disney has applied a differential strategy by the acquisition of related and unrelated businesses. The company has a functional organizational structure that supports the measurement of performance and implementation of appropriate action to improve performance.
References
David, F.R. (2015). Strategic management concepts (15th Ed.). Saddle River, NJ: Pearson Education, p. 155-168.
Gaspar, J. (2006). Introduction to business. Boston, MA: Houghton Mifflin Co, p. 178- 185.
Naoum, S. (2011). People and organizational management in construction. London Reston, VA: T. Telford ASCE Press distributor, p. 101-107.
This report reflects some of the important findings in terms of strategy, organizational behaviour as well as recommendations that should be put in place for further growth. Walt Disney has been in the forefront of the entertainment industry especially in its four consumer markets namely: Studio and Motion pictures, media networks, consumer products and theme parks and resorts.
This report further identifies some of the strengths and weaknesses that befall Walt Disney even with such glory. There are also some threats and opportunities that face this giant company.
This report also analyzes the strategic goal of Walt Disney, especially in terms of product positioning, segmentation, pricing, channelling and also promotion. The recommendations that are outlined in the end will enable this company to prepare itself in dealing with the present threats as well as those that might come up in the future.
Company History
Walt Disney was established by Walter Elias in the early 1920’s and began as a cartoon studio until its growth to a global corporation. This company provides high class entertainment for people around the world. Walt Disney owns massive networks of media together with parks all over the world and operates mainly in North America, Asia, Europe as well as Latin America.
This company has a strong brand image that enables it to draw huge numbers of customers especially to the extended entertainment products. This is a world class entertainment company with over 180,000 shareholders and employs about 60 thousand employees.
Walt Disney has over the years relied on market diversification to achieve its main goal which is to draw more customers. This has enabled the company to grow massively developing from development, marketing as well as research (Jones 273).
Walt Disney has been able to enjoy the benefits of en masse production since it has been a market leader. An example would be when this company utilized extreme amounts of money to invest in its European theme park. It is estimated that the amount totalled to about $3.6 billion, which is a huge amount for other companies to afford. Walt Disney also enjoys the involvement of the government policy which is also demanding.
It is estimated that the French government at one point invested about $1.2 billion in this project, provided transport as well as tax relief on cost of goods estimated to be 7 percent from the previous 18.6 percent. Since the entertainment industry in Disney is designed in a unique way, suppliers are less dominated hence bringing up concentration (Jones 274). Its growth is basically drawn from its size.
The company is able to establish a dependable relationship with its suppliers since it orders products in large quantities. The Disney Company has been able to compete tirelessly with competitors by upgrading all products as well as services to fit customers’ expectations.
Internal strength and weaknesses
Walt Disney is one of the Hollywood’s largest studios, owning about eleven theme parks as well as other product channels. It owns media networks, theme parks and resorts all embedded in the company’s strong brand. However, there are other aspects like competition that affect its operations in terms of pricing, which leads to low margins.
Some of the internal strengths include widened product portfolio, well established brand image as well as well-built satellite networks. All these are favourable factors that influence the target customers positively. There are also other unfavourable internal factors which can be classified as internal weaknesses.
Walt Disney has over the years experienced frail performance of the studio entertainment which has made prospect customers to have a negative image about the company (Clark 2). There is also the negative perception of the Hong Kong Disneyland which brought mixed reactions to the public.
As stated by Media Releases (pp. 11), a greater percentage of the residents in Hong Kong stated that they were disappointed with the H.K Disneyland due to its negative problems associated with it since its opening. Some of the residents demanded that the communication system in H.K Disneyland especially with the public be improved (Lai 7).
The external factors can be classified under opportunities and threats. One of the favourable external opportunities that Walt Disney has experienced is venturing into the international markets (Clark 3).
This has enabled this company to receive new attractions, especially from the expansion of the unique and demanding cruise business. Walt Disney also has the advantage of its equipment which enables them to internalize the social shift. Unfavourable conditions include stiff competition, with other companies copying their ideas. This has promoted piracy of Walt Disney’s products, thus lowering their turnover (Clark 4).
Examples of Disney’s competitors include Universal Studios which has massive targets in Disney’s customers (Clark 5). Another weakness that Walt Disney has is the protest by some of the religious groups. Some of them claimed that the materials released by the company were offensive.
Walt Disney also lacks innovative ideas that would work towards retaining customer’s attention. There have also been some negative sexual implications especially in some animated movies such as “The Lion King” and “Aladdin”, among others.
External environment surrounding Walt Disney
External Environment (p 1) states that Walt Disney is surrounded by competitors who are mainly saturated in the market especially in the U.S. Examples include Busch Entertainment which has equivalent financial resources to Walt Disney. However, with the demanding capital to enter the entertainment industry, Walt Disney finds itself comfortable with less competition.
The corporate hierarchical structure of Walt Disney is stable, with decisions made from top to bottom management. The middle management is the one responsible for carrying out the available projects with the help from the lower management. The culture of the corporation is well defined where all employees must adhere to (External Environment 4).
Disney has remarkable quantity of resources that are available for allocation. This is where Walt Disney associates with its brand name and quality to promote their products and services. The main financial objective of Walt Disney is to diversify in a tremendous rate so as to maximize their shareholder equity returns.
Another strength that Walt Disney boasts about is the proper organization of its logistics operations, HR management, as well as Information Systems. Walt Disney has been able to grow over the years because the management has been in a unique position in the industry. They have been able to relate to past experience, thereby identifying the customers’ expectations.
SWOT Analysis of Walt Disney
Though Walt Disney has since grown to be a successful company, it is clear that there are market forces that drag or affect its performance. This analysis will focus on strengths of this company as well as weaknesses, not forgetting the possible opportunities and threats that befall this company.
Strengths
The main strength of Walt Disney is stored in its brand name. This company has a famous brand that is known to almost every one around the world. This strength is basically drawn from the company’s objective to be the world’s leading entertainment provider, differentiating its products and services from the competitors’.
The Disney brand focuses on vibrant characters like Mickey Mouse, Pooh, just to mention a few, to attract customers especially children. Marimax studios together with that of Pixar have been beneficial to the company in reaching a large base of characters as well as attracting more brands (Clark 2).
Disney has always focused on low-cost strategy which has enabled them to stay in the market for a while. It is clear that a company must have new and fresh ideas to stay in the current environment of business. This company is able to control costs and at the same time provide goods and services of high quality.
Weaknesses
The large workforce in the corporation has been one of the setbacks of this company, not forgetting lofty overhead expenses. Frequently changing the management system interferes with company’s operations because sometimes it becomes more complicated. One should also not forget that this change will always be associated with unwanted expenses.
Threats
The main threat that faces Walt Disney is within its television network. TBS (Tuner Broadcasting System) has mounted much pressure that Walt Disney cannot handle. It is also important to note that in the business environment, competition is inevitable even if there are high costs involved. There are small companies that risk it all in order to fit in the market (The Walt Disney Company 9).
One threat in the Disney’s cartoon industry is the introduction of new cartoon characters. There are quite a number of new characters that are seen everyday in the Television Network. This brings us to the question, “will the characters like Mickey Mouse hold the pressure internationally?”
This can only be determined by observing the industry carefully. Walt Disney also faces major threats of its security system due to issues of terrorism. Employees also have the threat of losing their jobs because the company frequently engages in acts of introducing new executives.
Opportunities
Focusing on this SWT analysis, it is evident that Walt Disney uses demographic segmentation as its strategy. In today’s market, it would be important for this company to conduct psychographic strategy in order to increase the volume of customers.
Corporate and Business Level Strategy
Walt Disney is currently using an informal management approach which is horizontal and decentralized. The available departments are responsible for bringing up new ideas which are considered in the low hierarchy awaiting final decisions. The main focus of the management is on collective creativity of the groups as well as team work.
Walt Disney has set aside a special Sunday when all the creative individuals meet in order to share their ideas (The Walt Disney Company 16). Every employee in this meeting is supposed to participate and pass on his or her ideas to the rest of the team. Walt Disney has also benefited from the services of the executives that are brought in by employees of the top management.
These executives bring with them significant ideas and experience earned from previous entertainment industry to Walt Disney (The Walt Disney Company 19).
Walt Disney uses emergent strategies which are not specifically planned. In this strategy, ideas come from the lower to the top management without the intervention of the seniors. This is one of the best strategies to be used by companies because many people can combine ideas to come up with a concrete strategy.
Since Walt Disney has the intention of targeting families that love entertainment, it is strongly recommended that they cater for the ever changing trends as well as people’s life-styles.
The success of Walt Disney has been in the vision of customers’ value. Walt Disney has been able to visualize the expected results and work upon achieving the best. The other principle of Walt Disney’s success is the ability to demonstrate leadership courage.
Disney was able to portray his visions which inspired other people’s ambitions. He operated by trading values for values with those who felt the need to benefit from the corporation (Linetsky 3). Walt Disney also operates to provide the best quality. This is one of the ways that enables a company to establish long-term relationships with customers.
The third principle used by Walt Disney is to be perfect in all possible ways without compromising the quality of the products and services. Disney is a profound perfectionist and wanted his ideas to work in every means. All his standards are set high because they demonstrate high moral value. Along with his standards, he also considered the costs of achieving as well as failing to achieve them.
Disney maintained his high standards because they were the guide to his success. In some cases, Disney had to engage in some arguments with his employees and even family members in order to preserve the integrity of his standards.
The fourth principle was about money. Disney believed that money was not an end but rather a means. He valued money as a source of financing his ventures and this made him achieve meaningful results (Linetsky 4). The fifth principle is exceeding the expectations of the customers.
Disney ensured that his company created a positive customer experience so as to achieve great results. He believed that the most important achievement a company could have is have highly satisfied customers.
The other principle was to create experiences that are much valued through the design of the entire business. This can be witnessed by the success and design of Disneyland. Its design took much planning techniques that later contributed to the present relaxing and refreshing experience. The excellent designs are also clearly demonstrated in Walt Disney’s film and park industries (Linetsky 5).
The seventh principle was all about treating minds with total respect. In this aspect, Disney made use of the ideas of his employees to achieve his intended goals. He created a favourable working environment that enabled people to exchange ideas for better growth of the company.
The eighth principle was all about treasuring creativity. Disney believed that dreams were creative and that it is important to translate them in real life. The last principle that worked for Disney was to think from all direction. Walt encouraged his workers to think and come up with developing ideas.
At some point, he used sketches to implement his thoughts and dreams so that his workers could have a clear understanding of his ideas. He was actually comprehensive of those contributing ideas as well as insights (Linetsky 7).
Structure and Control Systems
Walt Disney has been profitable due to its use of diversification. Disney also uses synergy effectively as well as employee relation (Kirkman 1). These aspects have made this corporation to stay on top of the niche market. According to the analysis and prospects of Disney, it is clear that they are on the verge of competing with giants like Yahoo and the rest.
The ability of Walt Disney to link innovative creativity to meet customer expectations is what makes him prevail in the entertainment industry. Converting imagination to real life or physical existence positively influences other people. Disney has been on the list of people who are responsible for technological and organizational innovations in animation as well as film industry (Dilts 1).
Recommendations
The first recommendation that I would strongly suggest is that Walt Disney should expand their line of production by engaging in market segmentation. This can be done through psychographic as well as observing the lifestyle characteristics of the customers. I strongly believe that Walt Disney can greatly benefit if it ventures into other industries like fast foods.
Using the brand name Disney, they can attract a large group of customers especially kids. Walt Disney can as well consider introducing online learning software where children can learn more about animation.
Walt Disney should as well analyze all the financial capabilities as well as policies that are implemented in the organization. This can be done through trend analysis in order to determine the financial growth of the corporation. There is also another aspect to be monitored further which is liquidity. This can be used to indicate the capability of the firm to meet its obligations; both short term and long term.
Another change that would be necessary for the company’s profitability is to avoid the frequent change of the management. Though new executives bring with them new concepts, this posses a great risk in terms of communication efficiency within the organization.
It is important that Walt Disney should focus on promoting the existing employees. This is simply because they understand the rules and the regulations of the company as well as capabilities of the other employees. It would also be important for Walt Disney to specialize in providing consumer products as well as rely on its marketing strategy.
They should not only think of diversifying into a new line of products, but concentrate on the existing products and services as well. Walt Disney should put much emphasis on divisions such as the theme parks as well as film entertainment. This will avoid the risk of engaging in those markets that do not address customers’ needs in terms of products and services.
I would also recommend that the company increases its asset requirements and maintain them under strict control. In terms of product delivery, it would be wise for Walt Disney to establish its own distribution channels. This can be done through channel strategy, delivering services and products to its esteemed customers.
Promotional campaigns are also important which would see products expanded all over the market (Ali 19). Since Walt Disney is a multinational corporation, I strongly believe that they have the capability to financially promote their campaign programs.
They can have large promotional budgets since they have their own line of media, hence saving costs of running ads on other media. The issue about pricing can as well be closely monitored so as to cater for a large number of customers. The pricing strategy should in fact focus on the Kim line of products (Ali 21).
Works Cited
Ali, Shabir. Analysis of case: Walt Disney. 2009. Web.
Clark, Wendel. “Walt Disney world SWOT analysis.” Demand Media Inc., n.d. Web.
Dilts, Robert. Walt Disney: Strategies and genius, volume 3. Santa Cruz, CA: Meta Publication, 1996. Print.
External Environment. Opportunities and threats. Scribd Inc. 2012. Web.
Jones, R. Gareth. Case 21: Walt Disney Company 1995-2009. p. C273-C283, 2009. Print.
Kirkman, Christopher. Strategy analysis of the Walt Disney Company. 2001. Web.
Lai, Wilfred. Mixed opinions and less support persist with Hong Kong Disneyland. 2008. Web.
Linetsky, L. Barry. Nine principles of Walt Disney success. 2007. Web.
Media Releases. Residents have mixed opinions towards Hong Kong Disneyland. The Hong Kong Polytechnic University, 2006. Web.
The TV broadcast and cable networks industry has become increasingly competitive due to changes in aspects such as technology, content delivery, social eccentricities, and policy formulation among other dynamics in the field. This state of affairs has compelled media houses to undergo various organisational changes to meet consumer demands with the required efficiency, prudence, and timeliness.
Seemingly, competition has stiffened further amongst the media industry players in the United States. Numerous entertainment firms that offer various packages have sprouted within the media business. Therefore, the existing companies such as Walt Disney have had to review their operational and organisational strategies in attempts to offer highly competitive products and services.
This essay provides an in-depth analysis of the Walt Disney Company as one of the top US companies that are competing in the media industry by looking into the strategies that the company has embraced in an attempt to accomplish its international entertainment goals.
The Walt Disney Company
Commonly known as Disney, The Walt Disney Company is a leading US international media conglomerate that is based in California. It ranks among the oldest entertainment media houses as recorded in history. The company has undergone rigorous changes over the years of broadcasting to accomplish various goals in the media industry.
To accomplish the various goals and objectives in the telecommunication industry, the company has endured worldwide technological dynamics and shifting consumer patterns. Strengthening of generic strategies through various complimentary moves has been crucial for the overall success of the company’s business interventions.
The entertainment company functions are based on five business sectors that include media networks, parks and resorts, studio entertainment, interactive media, and consumer products (Tao and Lai 812).
Various business segments operate various subsectors within the scope of the company’s broadcasting, entertainment, and recreational goals. Its generic strategies have served as strong tools for building the brands of its entertainment products and services.
Strengthening the Generic Strategy through Complimentary Strategic Moves in the Media Industry
The company has achieved its success by applying a plethora of diversification strategies through complementary moves that have enabled it to flourish in international media markets (Thompson, Peteraf, Gamble, and Strickland 225). At the outset, The Walt Disney Company is known for its far-reaching outsourcing strategies.
The company has contracted a variety of companies around the globe to design and manufacture its products at relatively lower prices. This strategy reduces the company’s production and operational costs. Hence, it brings about huge returns on profits for the company. Through foreign outsourcing, the company has strived to gain global recognition through diversification of its film and consumer products and services, parks and resorts.
In addition, The Walt Disney Company has uses foreign direct investment business strategies to market its products in the global arena. To accomplish the objectives of this strategy, the company has established a multitude of stores in various localities not only in the United States, but also in other countries such as the United Kingdom, Spain, Italy, Latin America, Japan, and Europe among other geographic places.
This move has enabled the media multinational to reach a large number of consumers around the globe. The biggest advantage of foreign direct investment is maximisation of control over Disney’s business operations worldwide.
Furthermore, The Walt Disney Company provides direct foreign licensing to subsidiary companies that gain the privilege to produce and sell its products. Through direct foreign licensing, the company’s interventions in the media industry have aligned with multifarious cultures within the global localities in which it operates.
Tao and Lai reveal that the company places a strong focus on the economic trends and purchasing capabilities of world’s populations prior to setting up its stores in the host geographic locations (815).
Since the media industry has become increasingly competitive, Walt Disney has gone beyond its American value systems and cultural beliefs to embrace diverse socio-cultural and socioeconomic characteristics of the various populations around the globe. Out of this strategy, the company has managed to compete with potential players in the media industry such as Time Warner, Viacom, and News Corporation among others.
Disney’s Strategies for Competing in Markets
Horizontal Integration
The company operates in a very competitive business environment in the media industry. As a result, the company has deployed a number of strategies that have enabled it to maintain a competitive advantage amongst the key players in the industry such as CBS, Times Warner, Viacom, and News Corporation among other competitors.
The company uses horizontal integration strategies throughout its media interventions around the globe. Horizontal integration has enabled The Walt Disney Company to venture into various markets. The company possesses numerous media networks, studio entertainment, and consumer product businesses that have widened the scope of the company.
It uses its media networks to control its activities that pertain to TV and radio broadcasting around the globe. The company has provided these companies with autonomous power to control the operations within the scope of Disney’s functional segments. For instance, in 1996, Disney acquired the Entertainment and Sports Programming Network (ESPN) to operate under Disney Media Networks and Television.
In real sense, ESPN does not have any direct connection with the production Disney’s production process. However, Disney endowed ESPN with the required business licences to market its merchandise. Ultimately, this strategy has resulted in consolidation and cohesiveness of the company’s structure.
Following the fact that the media industry is highly competitive, consumers of the industry have a vast range of choices. As a result, the media and entertainment industries such as Disney experience continuous desire to generate the best products and services for their clients. In this context, the company has used horizontal integration to acquire other media firms in attempts to increase its market share.
The acquisition of other companies adds a plethora of skills and film practices to Disney (Tao and Lai 814). For instance, the acquisition of Marvel, Pixar, and Lucas films among other media companies increased Disney’s accessibility to over 10 thousand film characters.
Since horizontal integration involves the acquisition of new companies in the same field, Disney has opened access to new media markets both in local, national, and international grounds. Generally, this strategy has significantly reduced competition for The Walt Disney Company.
Vertical Integration
Apart from horizontal integration, Disney also uses vertical integration strategies to gain a competitive advantage in the media industry. Since the onset of 1980s, The Walt Disney Company has used vertical integration in a range of business functions such as production, marketing, and exposition of products and media services.
Under this strategy, the company exercises full management of content creation, production, and marketing strategies (Thompson et al. 234). This strategy has also helped the company to monitor creativity of content to meet market requirements. Nevertheless, Disney has used this strategy to compete in the media industry by digitising its production processes and liberalising its media business.
This move has seen the business upgrade its technologies in the various facets of operation to increase market opportunities in the media industry; hence, gaining a competitive advantage over the other media players. Through vertical integration, Disney has achieved it organisational goals in various ways that have made the company undergo significant revolution.
Primarily, the strategy has enhanced digitisation of the Disney’s production processes, a situation that has led to diversification of content and consumer products. As a result, the company has acquired various media outlet stores to sell and distribute its products and services in its areas of operation.
In 1996, the Walt Disney Company bought the American Broadcasting Company (ABC) as a part of its vertical integration strategy (Roder 24).
Product and Service Differentiation
According to Thompson et al., The Walt Disney Company has focused on differentiation of its services and consumer products in attempts to gain a competitive advantage in the media market (251). The company offers a wide range of products and services within the media industry. This strategy has enabled the company to acquire a substantial market share whilst maintaining a pliable competition gap.
The Walt Disney Company’s operations depend on consumers’ willingness to purchase a product or service of their choice. Therefore, the company has developed diversified powerful brands under the name of the company to increase the sales volume by capturing a vast range of clients.
As a result, Disney has continuously attempted to make improvements in the design, production, and distribution of pioneering products that provide mindboggling entertainment to its consumers (Tao and Lai 812). This strategy has earned the company a differentiation competitive advantage over the other key player in the industry.
Entry into Foreign Markets
The Walt Disney Company adopts various means to reach foreign markets. Primarily, the company uses its theme parks peculiarity to suit various market demands in its functional areas of operation. The concept of theme parks has lasted for over half a century ever since the establishment of Disneyland Anaheim in California.
Disney regards theme parks as a concept that inculcates enduring heart-felt experiences in its clients. The company uses this approach to access international markets. The uniqueness of the theme park approach has earned the company competitive advantage other international media conglomerates.
Theme parks have enabled The Walt Disney Company to exploit inimitable media and entertainment resources that are not within the reach of other players in the industry (Tao and Lai 813). The diversification of this unique entry mode has opened business opportunities in foreign countries that include France, Japan, and Hong Kong among other markets.
Moreover, The Walt Disney Company accesses foreign markets by localising its content to suit the ways of life of people in different parts of the world. The world populations are very diverse not only in culture but also in other aspects of life. This situation raises a need for establishing robust business means that recognises the needs and tastes of consumers around the world.
Localisation of content ensures that the company’s film products and other media services remain pertinent to its client irrespective of their geographic localities in the world. The achievement of this objective heavily depends on the company’s willingness to extend administrative assistance, coordination, and oversight functions to Disney’s international outlets.
As a result, globalisation has become inevitable for the company over its years of operation. Localisation of content has also enabled managers in the various geographic outlets to determine the best brands and film characters that resonate with consumer demands at local levels (Roder 14).
This approach to local consumers has seen the company spread its business over areas such as the Latin America, Japan, Europe, the Middle East, and Africa among other nations and continents.
Leveraging Operations Internationally
The Walt Disney Company does a great deal to leverage its diversified global operations. As one of the most reputable international media family, Disney has endured challenging market environments to ensure that its media activities continue to shine in local, regional, and global markets. At the outset, the firm offers exceptionally pioneering and state-of-the-art products that have improved consumer experiences.
Superior movies produced at The Walt Disney Company’s studios have continued to enlarge the company’s markets since the availability of such movies has increased in many retail studios.
Secondly, Disney has put forth strategies to revel native philosophies and general ways of life to make its products more germane and standard globally. The company’s appreciation of local cultures has served as an appropriate means of leveraging its operations internationally (Roder 16).
Conclusion
Unrelenting improvements in technology coupled with accompanying innovative and inventive abilities have continued to stiffen the competition amongst different companies in the media industry. As a result, there is increased diversification of pioneering products in the media market that have put business in the industry at a risk.
Therefore, there is a need for firms that operate in the TV broadcast and cable networks industry to adopt strategies that are more robust and flexible to technological and socio-economic changes.
The entertainment industry has revolutionised, owing to advancement in technological aspects of filmmaking, broadcasting, and internet serving. Consequently, to gain competitive advantage, there is a need for The Walt Disney Company to offer entertainment packages that are more attractive and exciting to its client as well as enhance its theme park strategies.
Works Cited
Roder, Fiona. Strategic Benefits and Risks of Vertical Integration in International Media Conglomerates and Their Effect on Firm Performance. 2014. Web.
Tao, Teresa, and Josephine Lai. “Globalisation and theme park: A case study of Hong Kong Disneyland.” Tourism and Global Change: On the Edge of Something Big 1.1 (2013): 812-815. Print.
Thompson, Arthur, Margaret Peteraf, John Gamble, and Alonzo Strickland. Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. New York, NY: McGraw-Hill/Irwin. 2013. Print.
Founded in 1923, Walt Disney has grown to be the world’s largest animation company (Watts, 2013). From the humble beginnings of an entertainment company that started in the 20th century, Walt Disney has been able to develop a reputable brand in the family entertainment business.
Certainly, for more than nine decades, Disney World has been able to provide quality entertainment, not only for its customers in the US, but around the world as well. With its growing success, Walt Disney has become a multifaceted conglomerate that has developed deep roots in the entertainment industry.
The company has about five main business enterprises that include “media networks, parks and resorts, studio entertainment, consumer products and interactive media” (Watts, 2013, p. 5). The company’s niche has been on content innovation and the adoption, or introduction, of new technologies (Watts, 2013).
According to the vision of the company’s founder, Mr. Disney, most of the company’s activities have focused on fulfilling the vision of the founder, which is to position the company as a leader in the creation of “fun” entertainment (Johnson, 2011).
This paper provides a critical evaluation of the company’s activities by focusing on the structures and pillars of its human resource strategy. Through this analysis, the attraction of high quality employees, excellent customer service, and the focus on the company’s profitability surfaces as the main factors outlining the company’s human resource strategy.
These findings manifest through an understanding of how Walt Disney has been able to merge its human resource strategies with its business culture and values. Comprehensively, this paper explores the main pillars of Disney’s corporate culture and human resource strategy to establish the successes and failures of the company’s plan. However, first, this paper explores Walt Disney’s industry, competitors and key customers
Industry, Competitors, and Key Customers
Walt Disney is an industry leader in the media industry. The company’s market share is strong, especially considering the fact that the company enjoys a significant market share in the movie, television, and theme park industries.
Considering Walt Disney is an entertainment industry, its main competitors are similar entertainment companies such as News Corporation, Time Warner Inc., and NBC Universal Media, LLC (Hoover’s Inc, 2013). Many researchers say Walt Disney has a strong competitive advantage because it has a strong growth potential and financial performance (Wall Street Journal, 2013).
For example, when comparing the financial performance of Walt Disney and Time Warner, both companies offer mild dividend yields of about 1.5% and 2% respectively, but Time Warner cannot match Disney’s ability to generate free cash through its diversified business segments (Wall Street Journal, 2013).
Nonetheless, Walt Disney experiences stiff competition in film production and network services because of the existence of other strong cable network companies (especially premium network companies such as HBO, which rate better than Walt Disney because its high subscription fees attracts more profits). CBS, Time Warner, and Viacom also pose equally stiff competition to Walt Disney.
Since there are many major communication and entertainment companies in the industry that pose a stiff competition for Walt Disney, a strong likelihood in the market will be price wars and increased product differentiation among the competitors.
Lastly, Walt Disney’s main target market appears to be children, but this is a wrong conceptualization of the company’s market scope because Walt Disney attempts to appeal to the entire family. Stated differently, Disney’s target market ranges from children, teenagers, and even adults.
The main criterion for defining Walt Disney’s main customer pool is therefore identifying anyone who has a “young heart.” Indeed, the criterion for defining Walt Disney’s main customers is enshrined the words of Disney’s founder, “You are dead if you aim only for children. Adults are only kids grown up, anyway” (Corrine, 2012, p. 142).
Human Resource Management Strategy
Corporate Culture
Disney’s corporate culture stems from the core values that it shares among all its business segments. According to the company’s website, Disney Careers (2013) say, “Each of our company has a special ability to harness the imagination in a way that inspires others, improves lives across the world and brings hope, laughter and smiles to those who need it most” (p. 1).
Some of the core values that inform the culture of Walt Disney premises on innovation, quality, community partnerships, storytelling, optimism, and decency (Disney Careers, 2013). However, the main company values that stand out as the most significant values to the company’s human resource strategy include the values of optimism and innovation.
Attracting Human Capital
The first principle that informs Disney’s recruitment strategy is the conviction that the company should hire the best employees and give them adequate room to perform their duties (Watts, 2013). The exception to this rule is the understanding that the best employees are not necessarily the brightest or the smartest, but the best employees who demonstrate good aptitude for working in the company.
Walt Disney therefore considers a positive employee attitude as the first criterion for hiring new employees. Walt Disney offers the same significance for searching for internal talents as they do for searching for external talents (away from the organization).
When searching for external talent, Walt Disney appreciates the importance of embracing diversity as an important corporate value (Disney Careers, 2013). Walt Disney strives to ensure its employee pool reflects its global diversity. Certainly, among the most notable characteristic of Walt Disney’s recruitment strategy is the understanding that the human resource team needs to reflect the global diversity that informs its business.
Therefore, the company’s human resource team has a very diverse workforce that comes from different parts of the world. The company expects this diverse workforce to work in its different theme parks that are located around the world (Watts, 2013).
Consequently, Walt Disney boasts of having a diverse workforce that represents its global business. The company also demonstrates a strong commitment to incorporate diverse opinions and ideas to support its goal of upholding diversity.
Walt Disney believes that by embracing diversity, it mirrors the community that it serves. Therefore, the company may connect with its customers and guests better. Similarly, through this environment, the company may easily foster innovation and creativity throughout all functions of the company’s business.
Developing Human Capital
Hiring a new employee is only the first step of Disney’s human resource strategy. Training is the second step in this sequence because the company’s human resource team should provide newly hired employees with the best training, once they are hired.
This type of training may occur in different forms, including classroom training and virtual training (Watts, 2013). Occasionally, the company also uses hands-on training. Regardless of the best methodology, Johnson (2011) explains that the company always gears its training process to align with the vision of the company.
Walt Disney also emphasizes greatly on the need for placing new employees in the correct departments for maximum use of their talents.
To realize this goal, the company has a three-month period where the company places new employees in new departments where the company evaluates their skills to ascertain if they meet the requirements for their departments (Watts, 2013). If not, the company moves the employees to another department within the company where their skill-set meets their talents.
The principle of allowing workers to choose their area of interest and suitability within the company is among Disney’s greatest strength because it helps the company to build trust and loyalty with the employees. Therefore, stated differently, Walt Disney gives its employees a second chance to redeem themselves, even if they fail to impress in their first attempt at working for the company.
Walt Disney therefore does not subscribe to the belief that if employees do not excel in one department, they are useless to the organization. Instead, the company finds another area where the employee may be useful.
Retaining Human Capital
Walt Disney admits that it reports varying employee retention rates across different departments (Hodges, 2008). However, the company’s employee turnover rate is lower than the industry’s average.
Much of the company’s commendable employee retention rates stem from the company’s commitment to provide a supportive work environment for the employees and its commitment to provide every employee with sufficient knowledge resources. The provision of knowledge resources is part of the company’s employee empowerment plan.
Walt Disney exudes a strong commitment to empower its employees so that they can exceed the expectations of their customers (Watts, 2013). This commitment premises on the understanding that customer loyalty grows where there is high quality customer services. Walt Disney believes that every employee may offer customers a “special service” that they will value about the company (Lamb, 2008).
This is especially important in making the customers have a special and exceptional experience with the company. If customers show discontent with their experience at the company, Disney authorizes its employees to give monetary compensation to the customers (Johnson, 2011).
Most companies do not accord their employees this type of privilege. Therefore, many employees of Walt Disney feel privileged to work under such conditions. This positivity improves the company’s employee retention rate.
Albeit every manager is supposed to be sensitive about the concerns of their employees, special groups of managers (service managers) ensure employees have a good experience with the company (Hodges, 2008).
Part of the role of a service manager is to avail the company’s products and services for the employees to enjoy whenever they are not working. Comprehensively, Walt Disney strives to ensure their employees have a good experience when working for the company. This commitment improves the company’s employee retention rate.
Weaknesses of the HRM Strategy
Despite the positive acclamations made about Walt Disney’s human resource strategy, the company has failed to register a high employee retention rate. Johnson (2011) blames the inability of Walt Disney to have a high employee retention rate to the weaknesses of the company’s HRM team.
While the company believes that having a positive attitude is the best criterion for evaluating employee suitability for Walt Disney, the company expects its employees to exude the same attitude, even when the workload is overbearing, or when the employees meet overbearing customers.
This may be a difficult demand for the employees because they are human and not machines that may maintain a positive attitude every day. The demand that the employees should demonstrate a positive attitude always may therefore be too demanding for some employees.
Conclusion
After weighing the findings of this paper, it is correct, to say that Walt Disney’s human resource strategy stems from the commitment by the company’s founder to employ the most positively driven employees to work in the company. This direction explains why Walt Disney does not consider talent as its first criterion for hiring new employees.
Instead, the company values an employee’s commitment as the first criterion for hiring new employees. Therefore, prospective employees who demonstrate a positive attitude to work have a higher possibility of getting a job at the multibillion-dollar company.
Indeed, Mr. Disney firmly believed that a positive employee attitude would be a very crucial component for ensuring that the company provided innovative and entertaining content to its customers. This strategy has worked successfully for the company.
Considering Walt Disney’s culture hinges on the virtues of diversity, optimism, and innovation, Disney has done a good job in merging its human resource strategy to reflect these values. Indeed, its human resource strategy demonstrates a strong willingness to recruit talents from diverse backgrounds, recruit employees who are highly optimistic about the company, and recruit highly innovative employees.
The company’s commitment to empower its workers through training and flexible skill transfer supports this strategy. Other companies can borrow from Disney’s successful human resource strategy by taking good care of their employees and nurturing employee talent.
References
Corrine, J. (2012). Finding Your Piece: 32 Principles to Help You Live Your Calling. New York: Balboa Press.
Disney Careers. (2013). Culture & Diversity. Web.
Hodges, J. (2008). Managing the Magic at Disney. Web.
Hoover’s Inc. (2013). Top Competitors for The Walt Disney Company. Web.
Johnson, C. (2011). What can be Learned from Disney HRM Practices. Web.
Lamb, C. (2008). Essentials of Marketing. New York: Cengage Learning.
Wall Street Journal. (2013). Comprehensive Analysis on Walt Disney and Time Warner: Intense Competition, Steady Returns. Web.
Watts, S. (2013). The Magic Kingdom: Walt Disney and the American Way of Life. University of Missouri Press.
Strategy & Objectives of Walt Disney Company: Essay Introduction
Walt Disney Company is a multinational corporation well known in the entertainment industry. The business has five distinguished divisions. The first division is Media Networks which comprises of several broadcast and publishing businesses such as the ABC TV (Walt Disney Company, 2012). The second division is Parks and Resorts which basically offers tour and travel services to various destinations across the globe. The other segment, Studio Entertainment has distinguished itself as a leading producer of movies and music cross the globe. Walt Disney Company also a division called Consumer Products which manufactures toys, magazines, beverages etc. Finally, its Interactive segment is known to provide a wide array of interactive entertainment to children and families using various technologies (Walt Disney Company, 2012).
Strategic goal
The goal of Walt Disney Company is to maximize its financial performance in its various business engagements (Walt Disney Company, 2012). This is a very significant goal in line with the overall strategic growth of this business. Due to stiff competition and the dynamic nature of business, Walt Disney Company needs to diversify its product offering across the globe (Kaplan & Norton, 2001). The various product divisions are meant to help the business tailor make its product offerings in line with the different cultures of consumers across the globe. To undertake this massive venture, Walt Disney Company will need solid financial asset base.
Objectives of Walt Disney Company
In order to realize its strategic goal, Walt Disney Company has identified a number of objectives; aggressive marketing, new product innovation, and minimizing operational costs (Walt Disney Company, 2012). Though these objectives, Walt Disney Company aims at achieving its main goal of growing revenues. To accomplish these objectives, Walt Disney Company must develop an action plan. The company must invest heavily in marketing. It must equally seek measures of minimizing its costs. For all the identified objectives, the action plan must detail the process to be undertaken, the timelines, the expected results and the responsible people (Mainardi, 2011).
Loopholes in the Causal Chain
A causal chain is a series of inter related activities defining the root cause of a problem and its effects (McKay 1994, pp. 293-302). Causal chains are usually related to the strategic goals and objectives of a business. Causal chains demonstrate how a positive activity can subsequently cause a positive impact such as higher financial revenues. As such, causal chains are part and parcel of the BSC (Bukh & Teemu, 2005). In the case of Walt Disney Company, two causal chains are highlighted. In the first causal chain, marketing and product innovation seeks to maximize revenues. In the second causal chain, cost minimization aims at reducing operational costs thereby expanding profit levels.
A keen analysis of the objectives reveals that each causal chain contributes towards increasing revenues – except for the cost minimization objective. This is a loophole in the causal chain (Bukh & Teemu, 2005). Walt Disney Company will only achieve its strategic goal if its objectives are well aligned (Kaplan & Norton, 2004). The objectives will achieve the strategies only if they don’t conflict with one another (Kaplan & Norton, 2006). Cost minimization appears to negate the other objectives since product innovation and aggressive marketing calls for more investments in capital.
Financial Growth Strategic Action Plans
Objective
Strategic Actions
Responsible Department
Time Frame
Indicator/Target
Cost minimization
Reducing unnecessary expenses
Finance
2013
$5 million reduction in yearly costs
Product Innovation
New product development
Production Research and development (R&D)
2013
Introduce 5 new products early
Marketing
New customer acquisition
Marketing
2013
1000 new customer recruited monthly
Source (Walt Disney Company, 2012)
The Balanced Scorecard
The BSC is a managerial tool used for implementing organizational strategies (Hannabarger et al., 2010). BSC comprises four perspectives; customer, financial, internal business process and learning (Kaplan & Norton, 2001). Customer perspective is concerned with the capability of business strategies in satisfying the customer. Financial perspective is concerned with financial results and the strategies used to achieve that result. Internal processes shows the internal operations and how their performance is measured. The learning and growth perspective relates to organizational training and education and how the business uses knowledge to enhance its competitive ability (Kaplan & Norton, 2001).
Walt Disney Balanced Scorecard
Walt Disney Company Mission: To be a leader in the production and distribution of entertainment across the globe (Walt Disney Company, 2012).
Walt Disney Company Vision: To generate the best creative material, promote innovation; utilize the latest technology and venture into emerging markets across the globe (Walt Disney Company, 2012).
Source (Kaplan & Norton)
In line with the BSC, Walt Disney Company’s strategic goal shows activities which have an impact on the customer, financial resources and internal organizational processes. However, it has no provision for measures relating to human resource training (Walt Disney Company, 2012). Thus it leaves out a very crucial aspect critical in change management in line with the businesses’ future. Training and education are catalysts for change management since they generate new business models (Bierly & Daly, 2007, pp. 493-516). To achieve organizational congruence, the business must balance all the four segments (Norreklit, 2000, pp. 65-88). In strategy formulation, the business must inculcate the goals and elements of the entire four segments of the BSC. Thus, to balance its strategic goals (Rohm, 2004) Walt Disney Company must introduce the learning and growth objectives.Source (Kaplan & Norton).
Objectives of Walt Disney Company: Essay Conclusion
Following our thesis that the balanced score card is a useful tool applicable to most organizations for identifying strategic action plans, a number of recommendations can be made from the above analysis. Using the BSC, Walt Disney Company should base its objectives on actions that flow harmoniously with one another (Gareth & George, 2011; Drummond & Stone, 2007, pp. 192-207). In this case, cost minimization is ambiguous and may imply reducing general spending, in turn curtailing many other processes. The strategy of cost minimization should be reexamined. It should mean cost-effective investments. To further expand financial income, the business should invest in emerging markets (Gareth & George, 2011). Expanding income should not just revolve around cost minimization. Instead, Walt Disney Company should adopt cost effective strategies. The business should enhance its investments and reduce the risks of losses of revenue through poor investment plans.
References
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McKay, T. (1994). Names, causal chains, and de re beliefs. Philosophical Perspectives, 8, 293-302.
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