Every corporation has a code of conduct that outlines its treatment of workers, among other activities in the company. These codes are usually aimed at ensuring that, among other things, rights of workers are protected.
It is common knowledge that globalization led to expansion of markets and factories. In fact, most multinational businesses have increasingly shifted their production units to developing countries. These include Disney Company, and mobile as well as computer companies, among others. The countries involved usually comprise of India, China, Indonesia, and Singapore, among others. This is mainly attributed to cheap labor that is highly exploited in those regions.
Of great concern is the fact that despite cheap labor, which is achievable in those regions to reduce cost of production, these goods are sold for high prices in developed countries with deplorable conditions facing workers back in China. This paper will explore Disney Company, its worker’s conditions in China as well as criticism it faces over the same.
Disney Company
This is the largest of media conglomerates in the globe when it comes to revenue generation. The company was founded in early 1920s and continued to expand throughout the decades. In the process, it has acquired other corporations like, Marvel and Capital, among others.
In addition, it has gone into radio, and television broadcasting as well as expansions in movie production. The company has also developed a code of conduct amid criticism over its treatment of workers, especially in China, where its garment merchandise are manufactured.
Criticism
The company has received varied criticism especially those related to working conditions in its China factories. According to Anne Stewart of China Post, the company has neglected its responsibilities regarding protection of worker rights and conditions of work as well as wages. This has led to attacks from rights groups all over the globe, especially those from Southern China and the United States.
Moreover, religious groups have also expressed their concerns over the same and planned to change policies relating to rights of workers and their remuneration in annual general meeting, which was scheduled in Seattle. They also allege that the company offers about 600 Yuan, which translates to just over $588 per month.
This is amid appalling working conditions that expose them to toxic wastes as well as working for over 16hrs a day. It is also said that the workers go without pay for over seven months and may at times be fined for taking leave as well as be forced to pay for employment. These conditions are quite appalling, given the revenue this company earns.
Response to Criticism
In responding to such criticism, the company has set up codes of conduct to be followed in every production area. In addition, they have passed policies that are friendly to international workers. However, this has not been successful because information is still received of workers’ mistreatment in China.
Moreover, other problems that face the company relates to environmental degradation, which causes great concern. It is also quite important to note that workers are not allowed to talk freely on issues relating to working conditions. This further jeopardizes their steps towards achieving good working conditions.
Conclusion
Disney is a multinational Company that is ranked among the best in revenue generation as well as service delivery. However, it is quite ironical that their workers are mistreated and forced to work under deplorable conditions. Since the company is a frontrunner in technology and media network, it needs to be aware of environmental effects of these activities. It is therefore quite humiliating for a company of Disney’s caliber to find itself entangled in issues relating to basic human rights, globalization, and remuneration.
The most successful business organizations in today’s business world started small. It is normally the hope of the visionary founders of any business organization that, their venture will continue to realize improved financial performance and expand in terms of increasing its capital base and winning new business deals.
Even though, a prolonged monopoly in a relatively new market can give a new business entrant an upper hand, leadership and management play a critical role in determining how well and quick an organization manages to realize sustainable growth and expansion especially in a market with well-established competitors. This task is a case analysis of Michael Eisner’s management success story, which positioned Walt Disney Co. as a competitive force in the dynamic American and global entertainment industry.
How skills for a successful manager at Disney have changed over the decades
Two brothers, Walter Disney and Roy Disney in 1923, founded Walt Disney Corporation, popularly known as Disney. In terms of revenue generation, Disney is currently the largest media corporation in the world (Draft & Marcic 2005, p.593). Disney has managed to establish itself as a leader in the American animation industry. The Walt Disney Motion Pictures Group is a common household name and this popularizes the Walt Disney Corporation. It is presently one of the biggest and well-known studios in Hollywood.
Disney’s fortunes and the emergence as a giant entertainment company are attributed to the leadership of Michael Eisner. According to Draft & Marcic (2005, p. 593), Michael Eisner’s management of the loved Disney brand is one the great management stories of the twentieth century. Even though, changing times in business bring up need for new skills in doing things, viable corporate values should be preserved.
For instance, with Disney’s expansion into new global markets such as Asia, Australia and New Zealand, a successful manager at Disney must have proven international business management skills. Such skills would enable a successful manager at Disney guide branch managers in winning the loyalty of customers in new global markets. A proficient manager should for instance, be able to know how to deal with foreign customer’s reaction to foreign products introduced by Disney.
In addition, given the firm foundation established by Walt and his brother, a successful manager over the decades have had be flexible in his or her personal managerial approach and leadership style. Such flexibility would enable him or her adjust successfully to all manners of changes taking place in the industry in order to sustain the Disney’s enormous market niche.
In particular, a successful manager at Disney over the decades has had to be sensitive to technological changes touching on Disney’s line of business. It is important to note that technology changes so fast such that it can be challenging at times to keep pace with it. Therefore, a successful manager over the decades at Disney decades had to be able to influence all relevant stakeholders in to keeping on the look out for changes.
For instance, Eisner brought in a hands-on managerial approach in to the company’s management and managed to turn around its fortunes in less than a decade. He was able to push virtually every employee to the company’s shop floor where new ideas and products were being created. He, however, preserved Disney’s corporate culture and values (Draft & Marcic 2005, p.593). He was also skillful in influencing the company to sustain creativity, quality, entrepreneurship, and teamwork.
Disney as a learning organization
Well-established business organizations are players in industries with diverse features due to the differing nature of different kinds of business activities. Disney is a player in an industry that is ever changing and one in which consumers’ tastes and preferences keep on changing, along with the surge of new information and communication technologies. In addition, there is an unprecedented globalization of all forms of business activities, thanks to information and communication technologies (ICT).
It is therefore, critical for Disney to be a learning organization so that, first, it can keep abreast with the relevant technological changes in the industry. Keeping pace with technological changes and even taking part in revolutionizing technological application in its line of business, by inventing new technological applications, has enabled Disney to leverage its competitive advantages.
This has in turn enabled Disney to come up with unique and original products that are naturally attractive to consumers thereby giving it an upper hand in the industry at the domestic and international levels (Draft & Marcic, 2005, p.593).
For example, it was not until Walt added a new technological feature to their newly developed character known as Mickey Mouse that it received notice from the target audience (Draft & Marcic 2005, p.593). Second, since Disney’s line of business relies heavily on creativity and innovation of its employees, learning ensures that the employees’ imagination is alert and always on the look out for new ways of satisfying changing needs of their customers.
It is also critical for Disney to be a learning organization in order to ensure that, its new employees learn the company’s unique ways of doing business coupled with adapting Disney’s organizational cultures. Doing so ensures that new employees are introduced to opportunities of exploiting their potentials for the benefit of the company on top of getting a chance to learn new things.
Positioning Disney as a learning organization reduces costs of research and development for the company. Moreover, such a move can even earn the company revenue from other players who seek learning services from the organization. Furthermore, learning enables Disney to acquire knowledge on how globalization of business affects the company and identify opportunities in new global markets beyond America where it has already established itself as an icon of ingenuity and creativity (Draft & Marcic 2005, p.593).
Concisely, failure to sustain high levels of creativity and innovation and keep pace with other changes occurring in the entertainment industry where Disney is a player is the surest way of getting out of the market. Disney founders, Walt and Roy, as well as Michael Eisner who turned around its fortunes after the death of Walt Disney, knew this fact very well.
Important Management skills that Michael Eisner brought to Disney
Michael Eisner took over as the new chairperson of Disney in 1984 at a time when the company was experiencing a serious financial deterioration. However, irrespective of Disney’s poor financial performance during his entrance, Eisner managed to turn around its fortunes.
After fifteen years of his leadership, the company’s revenues increased drastically from $1.65 to a staggering $25 billion with a net income of $1.2 billion from $0.2 (Draft & Marcic 2005, p.593). First and most importantly, Eisner sought to build a refreshed Disney brand while at the same time preserving the company’s values of teamwork, entrepreneurship, quality and creativity (Draft & Marcic 2005, p.593).
Furthermore, his managerial style ensured that every employee participated in the company’s ground for innovative ideas and products. Just like Walt, Eisner believed that the worth of an individual employee, in terms of bringing on board new ideas, mattered more than titles. He also brought in new skilled talents from his former company (Draft & Marcic 2005, p.593). He initiated a three-day coaching program to ensure that all employees understood and became part of Disney’s history and legacy.
Moreover, he introduced new ways of doing things while at the same time safeguarding Disney’s organizational culture. Eisner brought in a transformative leadership that positioned Disney as a learning organization committed to creativity (Draft & Marcic 2005, p.593). This enabled Disney to come up with not only unique innovations, but also to read the public and respond to its ever-changing tastes and preferences.
In a recap, Eisner’s managerial skills are still relevant in today’s world of business. Managers, just like Eisner and Walt, should be able to manage creativity and improve the quality of their products due to the increasing competitiveness in virtually all industries.
They should also preserve viable corporate values and cultures; create an environment that is conducive to teamwork, communication, and cooperation. Most importantly, their management and leadership should bring in transformative elements that can steer up an organization to great heights of success from where they initially found them.
Reference
Daft, R. L., & Marcic, D., 2005. Understanding management. New York, NY: Cengage Learning.
Euro Disney was a company on the verge of economic collapse reflected on the grim figures of its financial statements. Below is an illustration of the statement from 1993/1994.
To steer the organization into profitability to become a market player and strategically position it in the market, the organization’s risk-taking intellectual executives had to embrace knowledge management skills integrated in the organization’s culture, behavior and vision to be a market leader, to gain a strategic market position.
One of the key elements for the management was to use value addition and analysis techniques in the design and implementation of its value chain activities in addition to embracing the four concepts of product, price, promotion and place in the pursuit of a bigger market share, a strong brand name and image which are vital for any business interest.
These value chain activities could help position Euro Disney at a strategic position if the business managers envisaged them in the infrastructure of the company by identifying the human resources available, their knowledge and skills, the technology they had. Technology was catered for by integrating different subsidiary companies in addition to identifying logistical needs of the company and its subsidiary companies.
These value addition activities are a chain of events and activities which add value to the final product making it more valuable than the original product and competitive in the market. In addition to that, as illustrated in the case study, these value chain activities lead to the final cost of the product being lower than the value of the final value-added product. This is a combination of activities such as economies of scale, experience, supply costs, and the product design process. Euro Disney failed in this (Strategic Management 1).
Euro Disney has integrated the above factors in its value addition process particularly in the development and design of many of its unique products tailored to reflect the target market. The unique products include identification of cultural values of the target market such as the European markets and the Japanese market.
One of the successful integration of value addition activities included the Japanese Tokyo Disney land, a target market. The management of Euro Disney identified the unique market characterized by the 2 million customers annually, its potential as a tourist destination, readily available infrastructure, and a large market for its unique products.
The management, strategically thinking like their customers, tailoring and adding value to their products, strategically used the value chain analysis to identify the market potential and improve the quality of their product offerings.
According to the article Value chain (Business Edition) (1), one of the primary activities the management of Euro Disney in its value chain analysis incorporated in the infrastructure of the organization was identifying strategic value addition activities such as the creation of resorts for family vacation entertainment centers, large and unique cultural offerings for its customers, and family vacations for those who wanted to stay for a short period of time in those parks.
However, Euro Disney’s management in its business strategies was using the same value addition activities to destroy itself. The decision by Walt Disney to build Euro Disney was a financial disaster culminating in the loss of $43 million against an investment of $ 600 million, reflecting poor management decisions in the use of the value chain analysis concepts. In addition to that, these value addition activities were clearly illustrated in the development phase the company invested in. These included phase one and phase two of the development plans (Strategic management 1).
The above chart clearly illustrates Euro Disney’s value chain activities and the financial management activities of the company in terms of the subsidiary companies it formed in its value chain activities incorporated in its strategic management plans.
The unique financial management structure illustrated above clearly illustrates the unique relationship between different European subsidiaries and Euro Disney. In addition to that other subsidiaries were managed by different companies such as the Euro Disney SCA by Euro Disney SA a subsidiary of Euro Disney.
According to the article Strategic Management (1) additional value chain analysis activities by Euro Disney included the management’s ability to identify logistical activities incorporated in the structure of the management as illustrated in the case study, out bound logistics, and the operations leading to it, the marketing and selling activities and tasks, services provided after the product had reached the market in this case including the kind of services customers received when enjoying the facilities and services of Euro Disney and those offered by subsidiary companies culminating in the company’s margins.
The organization was keen in factoring intellectual needs of the customers by identifying cultural and intellectual needs. This was vital in knowledge management initiatives of the organization. The wide variety of strategies in customer needs and customer behavior were deciding factors in value addition activities. These cultural needs included the French culture in addition to knowledge management skills of identifying and emphasizing on intellectual needs in the design of its products.
The use of value chain analysis was directly linked to the organization’s failure realized in the first year of business when students demonstrated identifying inherent design problems which did not factor customer needs in the event of a rise in the number of customers. The design did not incorporate the organization’s image in the context of European needs with an emphasis on European cultural context.
It clearly bore the characteristics of the American culture, thus a failure in the part of the organization in using its knowledge management skills and value chain analysis techniques in addressing customer needs. Such a poor image does not place a company in a strategic market position, particularly in its initial stages entry into the market. The company was plagued with loss-making financial statements, bad economic situation, and plummeting number of customers in addition to dwindling profits. The organization was on the verge of collapse.
It was incumbent upon the management of the company and its subsidiary companies to take bold and decisive actions to redesign its value chain activities and align the company with a vision that could integrate it into the exiting market create a good brand name and image in its value chain activities.
Disney Corporation is planning to move its operations to other parts of the world. For the company to compete favourably in these markets it has to come up with workable strategies. The targeted market is in the far- east and Australia specifically Shanghai and Sydney. Disney has a burning desire to serve as many cultures as possible all over the world.
The Company’s unique sense of creativity and imagination can be well utilized to conform to the culture of both Sydney and Shanghai communities. In every place all over the world, there is always a desire to create some sense of learning within the young generation. This can be achieved through improvement of the facilities that are used to foster the love for learning. This idea gives the young people the confidence to tackle new discoveries identified throughout the world (Fogler and LeBlanc, 2008).
Brainstorm and Mind-map
The following mind-map helps in generating ideas on how to approach the operations within the targeted areas. It gives valid information concerning various segments that are of great interest.
In the case of Shanghai, there are some elements that must be considered to generate an idea on how to plan and approach the market. The population of Shanghai should be considered in order to determine the amount of space required to establish the operations. The average income per person should also be considered, the likes and dislikes of the community and the tourists.
Majority of the young population within this area like products with cartoon pictures on them, this provides a good market base. The urban population is considered the wealthiest; however they should be grouped according to their financial ability. The criterion to be used to estimate the economic status of the market should be addressed. The city is reach in domestic tourism; this provides Disney Corporation with a sure and available market.
Disney Corporation can do well in the entertainment sector in Sydney, majority of the children in Sydney enjoy watching Disney’s animated films. However, the older generation must be convinced that the films are free from staff that may endanger their children’s social lives.
Problem Statement
In both markets majority of the rural population live in poverty, this is a limitation on Disneyland. This is a problem since Disney Corporation will not be able to profit from this market. The city lacks middle income earners, this shows that there is a very big disparity between the rich and the poor.
The area is dominated by communist and this puts a lot of risk to Disney Corporation unless they give the government a big share to control. There is also the risk of terrorist attack and wars which is a big threat to tourism within the region, and also the risk to natural disasters since China is a country prone to Natural calamities.
In the entertainment sector, Disney Corporation is considered to present their films in a discriminating manner encouraging anti-socialization between cultural groups; they present their films in an acceptable manner. The films are considered to abuse cultural integrity.
There is the challenge of using meaningful scribbles to suit every local culture served, this might seem a challenge especially when it comes to Chinese way of writing. The use of magic does not at interest at all majority of the cultures in the far-east (Brand Channel, 2009).
K-T Problem Analysis
Situation Appraisal
The market demand for Disney Corporation is growing weaker due to the nature of services it offers to consumers. A lot of questions have been raised on the cultural integrity of Disney productions and the impact it has on the younger generation.
Problem Analysis
The situation within the cities provides some risks that have to be faced by Disney Corporation before penetrating the market. In Shanghai there is the problem of natural disasters and also the risk of facing it off with a communist society where there is a big disparity between the rich and the poor. Then there is the sharp criticism from the Sydney community which believes that though Disney’s animated films attract millions supplies, they are more stereotypical. This is believed to promote social division amongst individual races and communities.
Decision Analysis
One of the best actions to be taken by Disney is to first of all monitor the economic and general performance of some related companies involved in the same targeted opportunity, and then evaluate on what steps they need to take in order to deal with the shortcomings. This presents a good channel on which point they should start exploring the market.
Potential Problem Analysis
The question lies on how to convince the general community that the services provided are culturally friendly and means no harm to children. The other issue how much finances will be required to cater for the risks involved which includes terrorism, wars, community risk and natural disasters (Sawyer, 2008).
K-T Situation and Decision Analysis
Decision Analysis
Decision statement: It is a good move for Disney Corporation to explore Shanghai and Sydney Markets. This would make sure that there is an increase in income and revenue collection, it will also ensure that Disney has a wider market to satisfy presenting it with opportunity to build its brand name (Fogler and LeBlanc, 2008).
Objectives to be achieved by the decision
Must
To develop a strong image amongst the consumers.
To develop a strong economic and social status amongst different communities having diverse cultural set-up.
Wants
To ensure that every consumer all over the world is reached by the services offered.
To attract and serve foreign, urban and rural markets.
To nurture close ties with the governments within the countries they serve.
List of alternative or options (Fogler and LeBlanc, 2008).
Alternative solutions
A
B
C
Parks
Hotels and resorts
Animated films
ALTERNATIVE SOLUTION
A
B
C
Musts
1. Develop strong image brand.
2. Strong economical and social status
Go
Go
Go
Not Go
Go
Not go
Wants weight
Rating score
Rating Score
Rating score
1.Services to all – 9 consumers
GO
NOT GO
NOT GO
2.serve foreign, – 7
urban and rural markets
GO
NOT GO
NOT GO
3.Nurture close ties 5 with Govt
GO
NOT GO
NOT GO
Concise Decision Statement
The company must incorporate social responsibility to its audience so as to gain the ability to penetrate market as fast as possible. However, there are several benefits involved that outweigh the disadvantages, this makes it very ideal for Disney Corporation to stage its foot in these regions, focus on the rate of return and face the challenges which will ultimately lead to more gain.
Recommendation of Disney’s location
Disney Corporation should first of all monitor at a close range the performance of other companies offering the same services in these areas. This is of advantage since it could give Disney the chance to evaluate and set its investment priorities right.
It should first of all start by building a theme park to assess the market potential then include other projects like hotels later. The shanghai government also regulates the number of films to be released in the market annually; this might pose a big challenge to Disney’s animated films (Brand Channel, 2009).
Disney Corporation should first of all test the market’s worth through the building of parks. This may help in determining the actual size and status of the market since it serves both local population and foreigners.
It is easier to influence local community and foreigners to visit parks than hotels or buy animated films. In addition Disney should put strategies on how to attract through their services, the large number of tourists that visit these areas. The amount of money it will cost to put up these projects must be calculated based on the level of risks involved.
Conclusion
The success of Disney Corporation has long been linked with the generation it served at an early age. This means that taking Disneyland to Shanghai will not attract much attention since their children are nurtured on a totally different culture. This may lead to poor sales because the services might not seem to be of much interest, hence better they focus on Sydney as opposed to Shanghai.
Reference
Brand Channel, 2009. Is Disney’s Shanghai Dream a World of Make Believe?. Web.
Fogler, H. S. & LeBlanc, S., 2008. Strategies for Creative Problem Solving, Prentice- Hall, New Jersey.
Sawyer, K., 2008. Group Genius: The Creative Power of Collaboration. New York: Basic Books, Perseus Books Group.
Disney Corporation is planning to move its operations to other parts of the world. For the company to compete favourably in these markets it has to come up with workable strategies. The targeted market is in the far- east and Australia specifically Shanghai and Sydney. Disney has a burning desire to serve as many cultures as possible all over the world.
The Company’s unique sense of creativity and imagination can be well utilized to conform to the culture of both Sydney and Shanghai communities. In every place all over the world, there is always a desire to create some sense of learning within the young generation. This can be achieved through improvement of the facilities that are used to foster the love for learning. This idea gives the young people the confidence to tackle new discoveries identified throughout the world (Fogler and LeBlanc, 2008).
Brainstorm and Mind-map
The following mind-map helps in generating ideas on how to approach the operations within the targeted areas. It gives valid information concerning various segments that are of great interest.
In the case of Shanghai, there are some elements that must be considered to generate an idea on how to plan and approach the market. The population of Shanghai should be considered in order to determine the amount of space required to establish the operations. The average income per person should also be considered, the likes and dislikes of the community and the tourists.
Majority of the young population within this area like products with cartoon pictures on them, this provides a good market base. The urban population is considered the wealthiest; however they should be grouped according to their financial ability. The criterion to be used to estimate the economic status of the market should be addressed. The city is reach in domestic tourism; this provides Disney Corporation with a sure and available market.
Disney Corporation can do well in the entertainment sector in Sydney, majority of the children in Sydney enjoy watching Disney’s animated films. However, the older generation must be convinced that the films are free from staff that may endanger their children’s social lives.
Problem Statement
In both markets majority of the rural population live in poverty, this is a limitation on Disneyland. This is a problem since Disney Corporation will not be able to profit from this market. The city lacks middle income earners, this shows that there is a very big disparity between the rich and the poor.
The area is dominated by communist and this puts a lot of risk to Disney Corporation unless they give the government a big share to control. There is also the risk of terrorist attack and wars which is a big threat to tourism within the region, and also the risk to natural disasters since China is a country prone to Natural calamities.
In the entertainment sector, Disney Corporation is considered to present their films in a discriminating manner encouraging anti-socialization between cultural groups; they present their films in an acceptable manner. The films are considered to abuse cultural integrity.
There is the challenge of using meaningful scribbles to suit every local culture served, this might seem a challenge especially when it comes to Chinese way of writing. The use of magic does not at interest at all majority of the cultures in the far-east (Brand Channel, 2009).
K-T Problem Analysis
Situation Appraisal
The market demand for Disney Corporation is growing weaker due to the nature of services it offers to consumers. A lot of questions have been raised on the cultural integrity of Disney productions and the impact it has on the younger generation.
Problem Analysis
The situation within the cities provides some risks that have to be faced by Disney Corporation before penetrating the market. In Shanghai there is the problem of natural disasters and also the risk of facing it off with a communist society where there is a big disparity between the rich and the poor. Then there is the sharp criticism from the Sydney community which believes that though Disney’s animated films attract millions supplies, they are more stereotypical. This is believed to promote social division amongst individual races and communities.
Decision Analysis
One of the best actions to be taken by Disney is to first of all monitor the economic and general performance of some related companies involved in the same targeted opportunity, and then evaluate on what steps they need to take in order to deal with the shortcomings. This presents a good channel on which point they should start exploring the market.
Potential Problem Analysis
The question lies on how to convince the general community that the services provided are culturally friendly and means no harm to children. The other issue how much finances will be required to cater for the risks involved which includes terrorism, wars, community risk and natural disasters (Sawyer, 2008).
K-T Situation and Decision Analysis
Decision Analysis
Decision statement: It is a good move for Disney Corporation to explore Shanghai and Sydney Markets. This would make sure that there is an increase in income and revenue collection, it will also ensure that Disney has a wider market to satisfy presenting it with opportunity to build its brand name (Fogler and LeBlanc, 2008).
Objectives to be achieved by the decision
Must
To develop a strong image amongst the consumers.
To develop a strong economic and social status amongst different communities having diverse cultural set-up.
Wants
To ensure that every consumer all over the world is reached by the services offered.
To attract and serve foreign, urban and rural markets.
To nurture close ties with the governments within the countries they serve.
List of alternative or options (Fogler and LeBlanc, 2008).
Alternative solutions
A
B
C
Parks
Hotels and resorts
Animated films
ALTERNATIVE SOLUTION
A
B
C
Musts
1. Develop strong image brand.
2. Strong economical and social status
Go
Go
Go
Not Go
Go
Not go
Wants weight
Rating score
Rating Score
Rating score
1.Services to all – 9 consumers
GO
NOT GO
NOT GO
2.serve foreign, – 7
urban and rural markets
GO
NOT GO
NOT GO
3.Nurture close ties 5 with Govt
GO
NOT GO
NOT GO
Concise Decision Statement
The company must incorporate social responsibility to its audience so as to gain the ability to penetrate market as fast as possible. However, there are several benefits involved that outweigh the disadvantages, this makes it very ideal for Disney Corporation to stage its foot in these regions, focus on the rate of return and face the challenges which will ultimately lead to more gain.
Recommendation of Disney’s location
Disney Corporation should first of all monitor at a close range the performance of other companies offering the same services in these areas. This is of advantage since it could give Disney the chance to evaluate and set its investment priorities right.
It should first of all start by building a theme park to assess the market potential then include other projects like hotels later. The shanghai government also regulates the number of films to be released in the market annually; this might pose a big challenge to Disney’s animated films (Brand Channel, 2009).
Disney Corporation should first of all test the market’s worth through the building of parks. This may help in determining the actual size and status of the market since it serves both local population and foreigners.
It is easier to influence local community and foreigners to visit parks than hotels or buy animated films. In addition Disney should put strategies on how to attract through their services, the large number of tourists that visit these areas. The amount of money it will cost to put up these projects must be calculated based on the level of risks involved.
Conclusion
The success of Disney Corporation has long been linked with the generation it served at an early age. This means that taking Disneyland to Shanghai will not attract much attention since their children are nurtured on a totally different culture. This may lead to poor sales because the services might not seem to be of much interest, hence better they focus on Sydney as opposed to Shanghai.
Reference
Brand Channel, 2009. Is Disney’s Shanghai Dream a World of Make Believe?. Web.
Fogler, H. S. & LeBlanc, S., 2008. Strategies for Creative Problem Solving, Prentice- Hall, New Jersey.
Sawyer, K., 2008. Group Genius: The Creative Power of Collaboration. New York: Basic Books, Perseus Books Group.
The Walt Disney Company was founded by the Disney brothers Walt and Roy in 1923. It is known as the leading animation industry in America; however, it has diversified into live film production, theatre, radio and online media (The Walt Disney Company, 2011). Disney owns ABC broadcasting television network, Disney channel, and ABC family among others.
The company has mainly focused on children programs such as Mickey Mouse, snow white and the seven dwarfs. In addition, the company consists of four divisions, namely, Walt Disney studios, parks, and resorts, Disney consumer products that include toys and clothing, and media networks, which consists of internet and television services.
By the end of 2010, the company’s net income was $7,586 million. The company has managed to maintain sustainability over the years, maintaining its productivity, and providing quality entertainment to families around the world. What is Disney’s secret? This paper will critically discuss the steps taken by Disney to operationilize sustainability, giving future recommendations as well.
Disney’s economic analysis
Sustainability in an organization is influenced by certain sustainability strategies; these strategies drive the organization towards long-run profitability, while providing the organization with competitive advantage opportunities. Competitive advantage can be attained via cost leadership and product/service differentiation. Walt Disney, being the largest media and entertainment company globally, has ensured that it remains at a competitive advantage; it has maintained its high levels of profits.
According to Hart & Milstein (2003, p.56), a sustainable enterprise is one that contributes towards sustainable development via delivering economic, environmental, and social benefits. Disney makes wise decisions concerning the resources and capabilities that they should acquire, invest in and develop. Housley (2003, p.2) explains that, Disney’s success can be attributed to its creativity and innovation, and in addition, a unique culture that is hardly imitable.
Disney also enjoys legal protection, which makes it impossible for its competitors to imitate their services (Housley, 2003, p.3). Disney world’s choice of location is advantageous, situated inside the park, thus contributing to family eating in Disney’s restaurants and purchasing their products, which are of high value. The parks provide a chance for families to meet their favorite Disney characters, an experience that increases the demand for books, videos, and television broadcast.
According to Bellet (2004, p.2), Disney’s assets and activities complement each other including its culture, characters, and brand, making it impossible for a competitor to imitate. In an attempt to maintain its sustainability Disney has resulted to financial saving, which involves a sound stage re-use program, whereby, old materials are donated to schools for re-use, contributing to $500,000 and reducing disposable fees by $110,000 (The Walt Disney Company, 2011).
Social analysis
A message of the Disney’s CEO, Robert Iger, to the stakeholders towards the end of 2010 indicated that the company is still geared towards creating ethical activities that consider the consequences of the company’s decisions on human beings and the environment (Corporate citizenship report, 2010). The company also aims at inspiring employees and communities towards creating a positive change globally. In addition, the company’s focus has been its commitment to the communities and its employees.
The company respects human rights through its activities, labor conditions, workplace practices, and its role in promoting the well-being of children (Disney’s human rights, 2010). In addition, Disney’s policies are against child labor, discrimination at the place of work, and unsafe practices.
Therefore, the company is geared towards ethical and responsible practices, and therefore respecting and promoting human rights. Nevertheless, employee unions are present in Disney, as they protect the interest of employees, ensuring that the needs of employees are taken care of. According to mouse planet (2008), the employee union took its demonstration to the streets, as a result of a contract dispute.
Environmental analysis
Walt Disney can be said to be an environment friendly organization. According to HP eco-solutions (2010), the company has managed to identify environmental responsibility via printing solutions that use technology. This aims at promoting green standards by managing printing needs as well as environmental needs, which reduced over 18% energy use and over 407, 000 lbs of carbon dioxide within 3years. Indeed, environmental sustainability is vital, since it involves the natural resources required by human beings.
Disney has shown a great commitment to the environment; it has in the past been named in the 100 most sustainable companies by the world economic forum. Its involvement in cutting emissions aims at cutting the emissions by half come 2012, and in addition, reduction of electricity by 10%. Disney’s harvest program distributes 50,000 pounds of food to the second harvest food bank. Used cooking oil at the Walt Disney world resort is recycled to bio fuel inclusive of other products used by other companies.
Leftovers from their animal kingdom are used in the creation of fertilizer. The company also has a cleaning policy, which was launched with the aim of reducing environmental impact of its cleaning products. This is made possible by the use of chemicals that protect health and the environment (Disney sustainability, 2010).nevertheless, Disney monitors the use of energy and water in its resort; wastewater is reclaimed and used for irrigation.
The Disney wildlife conservation fund assists in the protection of the endangered species globally via projects from over 160 organizations in 100 countries (Disney sustainability, 2010). The company also encourages tree planting, which has led to over 500,000 trees plantation. Disney’s environmental goals include zero waste, zero gas emissions from fuels and electricity consumption, and minimization of water use. It is however evident that Walt Disney balances environmental commitment with its business development.
Theory Related To Economic, Social and Environmental Sustainability
Sustainability Theory
Sustainability involves maintaining an outcome over time. The sustainability theory entails that we must sustain the opportunities of capital, human dignity, and the ecological system.
This involves making use of an opportunity that will yield returns while sustaining natural resources and human dignity throughout business operations (Jenkins, N.d, p.383). Needless to say, an organization must strike a balance between economic, environmental, and social priorities to enable sustainable development.
Measurement of sustainability
Walt Disney’s mission is “to become one of the world’s leading producers and providers of entertainment and information using its portfolio of brands to differentiate its contents, services, and consumer products” (The Walt Disney company, 2011). Disney’s mission statement has elements of sustainability, which the company has struggled to achieve and maintain. In addition, the company has received numerous awards for its sustainability, economically, environmentally and socially.
In addition, “the Walt Disney company won a CR reporting award from corporate register.com, in the best first time report category in 2008 corporate responsibility award” (Award and indices, 2011).
Moreover, Disneyland resort won California’s top environmental leadership award as a result of recycling cooking oil and paradise bay refills, which were considered as sustainable practices (PR Newswire, 2011). This is a clear indication of the existence of sustainability in Disney Company, which is recognized, appreciated, and awarded for its tireless efforts.
Recommendation
As a result of many demonstrations by labor unions concerning employee wages, Disney should try and satisfy employee’s needs in order to motivate them. As a result, customer satisfaction will increase.
When employees are motivated, they observe punctuality and increase their performance, which contributes to increase in productivity. Therefore, employee motivation does not only benefit the employees themselves, but the organization as well. Needless to say, Disney is an organization that has attained sustainability.
Generally, sustainability falls in three categories – economic, social, and environmental. For the company to continue enjoying a competitive advantage, it has to maintain its customers and attract more, and therefore, Disney should not leave any stone unturned.
Conclusion
Sustainability in an organization is vital; it grants organizations, opportunities for achieving a competitive advantage. Nevertheless, an organization must honor economic, social, and environmental sustainability. Economically, an organization must be capable of implementing strategies that will contribute to profitability, such as differentiation strategy.
Socially, the organization must respect human dignity, provide appropriate working conditions for employees, and give back to the society. Environmentally, the organization should work towards maintaining a healthy environment via reducing carbon emissions or any other form of pollution. Walt Disney is one such company, which has attained sustainability, hence receiving recognition globally; however, sustainability must be maintained in order to retain employees, customers, and a competitive advantage.
References
Award and indices. (2011). Disney company. Web.
Bellet, L. (2004). The Walt Disney Company Sustainable Success. Web.
Organizational culture is a pattern of shared basic assumption that a group has learned as it solves its problems. The assumptions must have worked well enough to be considered valid.
They are then taught to new members as the correct way to perceive, and feel relative to those problems. This paper analyses how organizational culture affects Disney Institute basing on Hofstedes dimensions of organizational culture.
To begin with, Disney Institute is result oriented. In every section of their operations, each employee strives to exceed customer expectations (Disney, 2008).
For more than 80 years this singular pursuit of excellence in delivering consistent quality service has earned the Disney organization world-renowned reputation and continual business success. Other companies emulate its prosperity in customer satisfaction.
Disney Institute is both job oriented and employee oriented. It is employee oriented because it fosters a culture that inspires employees to have a feeling of pride and ownership (Disney, 2008). The employees feel as part of the organization.
The institute offers a supportive environment that enables its employees to deliver outstanding services and realize their full potential. It is also a job oriented because it is concerned about offering quality services to its customers always.
Thus, they strive hard to consistently exceed customer expectations. All the employees are required to deliver quality results while working regardless of the working conditions.
The Institute upholds an open system as part of its valued culture. This is shown by various ways of approaching and relating to customers and business partners. The institute does it through customized programs, presentations, and workshops for groups and individual.
It has an enrollment programs for professionals scheduled throughout the year. Customized programs are the institute’s way of approaching its customers. All customers and partners are allowed to visit the institute at will. Both the institute and its customers meet and work together regularly (Disney Institute, 2008). This culture is believed to contribute to the tremendous success.
Disney is an entertainment organization which has both parochial and professional system of employment. It is parochial because some of its employees get training, support and recognition from the institute itself. The institute offers training to most of its employees which concern major activities in their operational areas.
Some employees joined without formal training. It also embraces professional system because members of top management team are graduates (bachelor’s degree) and some have advanced degrees. Its culture is generally hybrid.
Besides the above, Disney institute portray tight control in its activities. Employees have to sign when reporting and leaving the institute’s place of work. This discourages absenteeism and lateness among employees. Through this, individual employee progress is monitored. However, when attending to their customers’ needs, they flex their operations to offer quality services.
Finally Disney institute is pragmatic in its activities. It offers a full portfolio of programs that let chief executives and frontline leaders from other organizations to experience magic behind their success. Individual business professionals and small groups are offered full package of professional development programs available throughout the year.
Therefore, it has become one of the most recognized business names in the professional development industry both in United States and other countries. They also approach their customers and partners directly (Disney Institute, 2008).
Being an entertainment organization, Disney Institute has offered a wide range of food, drinks and events to cater for a large range of customer needs (Minkov, 2007). All these are signs of its flexibility signifying pragmatic culture.
References
Disney Institute. (2008). Disney Institute Fact Sheet. Web.
Disney, W. (2008). Disney’s Approach to Quality Service. Web.
Minkov, M. (2007). What Makes Us Different and Similar: A new interpretation of the World Values Survey and other cross-cultural data. Sofia, Bulgaria: Klasika i Stil Publishing House.
Disney’s has different characters that have proven successful in different market segments and as such, cross-platform franchising has enabled the company to create a sustainable competitive advantage (Russell 2012). For example, the company targets children and young teens with its princess and Cars franchises.
In addition, Disney’s uses music labels such as Hanna Montana or Jonas Brothers to reach out to a diversified consumer group. On the other hand, the Pirates of Caribbean targets the adults and older teens’ markets. Through product differentiation, Disney has managed to reach out to multiple markets, and this has helped to promote the Disney brand as a whole (Russell 2012).
Disney has also adopted product differentiation through its Pirates franchise. This is aimed at gaining sustainable competitive advantage. The Pirates franchise comprises of a series of products such as DVDS, movies, figurines/ships and toys, customers, and Disney world ride. All these products have been integrated into a single franchise that targets different consumer markets.
The movie Car is among the major brands that has created a competitive advantage for the company. After the hit movie Cars, Disney went ahead to produce a series under the brand name Cars. To reach out to customers, Disney used DVDs in addition to launching the Disney TV channel. As a result, the company has managed to reach out to different consumers of different age groups and locations.
The Cars brand is also available through an online virtual gaming world which targets teens and children. All these practices are part of the company’s product differentiation strategies which the company has adopted in an attempt at reaching out to different customers, thereby creating a competitive advantage.
Disney has developed a strong brand which differentiates the company from other competitors in the industry. For example, the brand name, “Pirates” is used on Disney’s products to appeal to target customers from different segments of the market. Product appeal results in consumer loyalty among the targeted consumer markets thus giving the company an upper hand over its competitors.
As noted by Bob Iger, the company has manaed to create multiple experiences through product appeal thus generating consumer enthusiasm (Disney Institute 2012). This has enabled Disney to give its consumers a reason to come back and share the same experience.
The application of market diversification has also given Disney competitive advantage in the market. For example, Disney has been moving its franchises with the objective of capturing the growing teens’ market. In addition, the company has broadened its viewership on its Disney Channel franchise in a bid to capture new markets.
Under the leadership of Bob Iger, the company has moved Disney Channel from premium channels to basic channels. In addition, it has also focused on launching local versions its major key markets around the globe. All these activities have led to a sustainable market share of the company.
Marketing mix entails the 4ps that is, product, price, place/distribution, and promotion. Disney’s Cars franchise is one of the company’s leading franchises. According to Disney (2012), the Car franchise has helped the company to achieve huge success in the film industry. As part of its marketing mix, Disney produced the hit movie Cars, which was followed by series of Cars in the form of animations available to targeted markets.
The company also produced Cars 2 which promoted the Cars franchise. Other accessories associated with the Disney Cars franchise include personal care, food, apparel, home décor, electronics and toys (Disney 2012). Different products of the Car franchise are promoted through the Disney Channel, personal selling, displays, and advertisements.
For instance, Cars was introduced to the movie theaters and to the public by designing cartoon car characters which were later displayed in merchandise stores along with the real Car movie as part of its promotion exercise. The Cars franchise is currently promoted through Cars e-magazine, internet platform and other mobile phone applications such as Cars’ Lightning Was Here (Disney 2012).
The products are found in movie theaters’, online platforms, and leading merchandise stores. Disney has adopted a strong distribution network in order to ensure that the products are available to consumers within the stipulated timeframe.
Disney uses premium prices as part of its pricing strategy (Garcia 2011). The prices offered by Disney are modest and affordable given the high level of competition in the entertainment industry.
Considering that the company’s executives constantly under pressure to increase profit margins the company has adopted aggressive pricing. This strategy is intended to increase sales. Since Disney has already gained its market share, it uses competitive pricing. Competitive pricing is associated with quality products such as the products associated with Cars franchise.
Based on the case study, Disney’s major focus has been on family-friendly fairs with a major emphasis on teens and young children. However, due to increased competition in the industry, Disney should consider choosing another market segment. A good example of a new market segment for Disney to target would be young girls in Middle East.
Through the Disney Princess franchise (Walt Disney 2012) the company could target an untapped market in the Middle East. Jasmine as portrayed in the film Aladdin is a girl who was later captured and treated like a slave (Walt Disney 2012).
Middle East is an emerging economy with a fast growing population of women. The Middle East market is promising especially the female segment (Krupnick 2011). Therefore, targeting girls in Middle East is appropriate because the population has an increasing purchasing power.
Krupnick (2011) add that the Middle East market is composed of oil-rich nations whose purchasing power has been on rise. For instance, Middle East has a purchasing power of more than 8% (Newman 2006). Therefore, it is important to note that the targeted market will afford Disney branded dolls and other feminine related accessories.
Some products such as body and hair perfumes for girls which are a reflection of Jasmine would be highly marketable. Furthermore, Middle East Women inclusive of girls have larger influence on products because of their family spending.
Arab females have been categorized as an attractive market target group because they form the largest group of media consumers (Carter 1997). In addition, they have a higher buying power just like other buyers in Western markets. The population of females of ages below 30 years is higher compared to that of men.
This means that there is a ready population which can be targeted (Carter 1997). Advertising through the media and magazines are the most appropriate methods of reaching the target market. This is because traditionally, magazines and media have been the key advertising medium for existing and emerging brands (Carter 1997).
If at all Disney is to reposition itself in the Middle East market, the management should take in to consideration market changes and market trends. Products diversification would be a viable option as it would ensure that the target market gets to enjoy a variety of Disney’s products.
For example, Jasmine diversified fragrances, perfumes, dolls, t-shirts, and clothing have the capacity to evoke various feelings among the target market. Perfumes with different scents and sizes have different effects on different people and are thus recommended. Jasmine dolls should be of different sizes, color, and be clothed differently in order to meet new market trends and customers’ preferences.
Also, Disney needs to invest heavily on TV commercials and magazines because females from the Middle East are heavy consumers of TV commercials (Carter 1997). In addition, Disney could upgrade its products and give them a youthful look which create memorable experiences and brand image in the minds of the consumers. Finally, the company should improve its current products by adding new features as a way of making them more appealing to the target customers.
Works Cited
Carter, Meg. “The Buying Power of Arab women. (Latest Developments in Advertising in the Middle East). ” Campaign. 6 Jun. 1997: 1. Print.
Disney. Disney Consumer Products: Disney-Pixar Cars. 2011. Web.
Disney Institute. Disney’s approach to Brand Loyalty. 2012. Web.
Garcia, Jason. “Disney Pricing Strategy: Seeking More Profits out of Long-Term visitors.” Orlando Sentinel. 20 Jun. 2011: 1. Print.
Disney’s corporate level strategy is anchored on Walt Disney’s corporate vision to “create universal timeless family entertainment”. The synergy and strategies applied by Disney has helped the firm’s market growth and expansion strategy.
Disney was informed of the importance of vertical integration and total control by “Oswald, the Lucky Rabbit”. As a result, “Oswald, the Lucky Rabbit” taught Disney the important lesson of total control and vertical integration.
“Disney established its own distribution house, film studio, music label and so on to better control quality content and costs. The effectiveness and efficiency of the communication and production department was made possible by the synergy developed by having similar corporate culture” (Smith 2003, p.15).
Acquisition strategy
Disney successfully acquired ABC which helped it increase market share and reduce competition as it increased its synergy.
Brand Image
Brand Image is an important corporate strategy that has helped to differentiate and promote the image of Disney among its competitions. To do this Disney has employed horizontal integration strategy to promote its products thus gaining a lot of customer interest and loyalty.
To do this Disney used a number of ways such as the Disney Broadway shows which were meant to improve its brand image and the use of parades to get the attention of clients. Disney also licensed its characters as a means of keeping them longer in client’s mind and as opposed to using it as a cash flow mechanism.
Geographical and horizontal expansion leading to synergies and leverage in capabilities and resources. Disney had to apply horizontal integration to increase it market niche and awareness. It was able to use cross-promotions to expand its market segment.
The company introduced more adult content that was more than the normal family content with animations, movies and theme parks and others that formed part of the market. Geographic expansion was a logical strategy applied by Disney where it ventured to markets in Tokyo, Japan.
Leadership and creativity
Disney had one executive whom it relied heavily to implement the creativity of the firm. “Walt Disney created the animated film then led his theme park vision to create a total entertainment for the whole family (Smith 2003, p. 56).
Business level strategy
Differentiation strategy
Disney has succeeded to differentiate its products in various ways by providing a range of products which include movies, consumer products, introduction of vacation resorts, development of TV and Radio, it has successfully developed theme parks and lastly it has publishing services.
This differentiation strategy has enable Disney command a huge market and it has been able to remain in the minds of customers for long. Clients are able to identify themselves with Disney due to its wide range of products.
Product level development
Disney has successfully invested in research development to come up with unique products to meet the ever increasing needs of its customers. To this end, Disney has successfully developed zoological parks for animals which are a major source of revenue, it has introduced food concessions and it has developed Water Park. These are key product developments that were added to Disney line of services.
Market development
Disney has not only served the local market but it has also ventured in international market. It has global markets such as in Tokyo Japan, Canada, India, Canada, Hong Kong, parts of Europe and china as well as other regions of the world.
Disney structure
“Since the company started in 1923, quality, creativity, entrepreneurship, and teamwork have been the core of Disney’s corporate values. Walt E. Disney himself was known for his commitment to excellence and hardworking management style” (Smith 2003). Before this, the structure was non-hierarchical with no one with a title.
This helped Disney to improve quality of work as it achieved synergy in the company. After the death of Disney in 1966, the company’s values started to fade away as the management of the film section had difficulties in coming up with creative ideas.
“In 1984, Eisner took over Disney as an outsider but he quickly instilled the same corporate values introduced by Walt Disney and simultaneously introduced frictions based on his promise of maximizing shareholder’s return of 20%” (Smith 2003).
The hierarchy of the company changed since Eisner recruited from outside people who would run the motion pictures section, he developed a strategic planning group and came up with marketing segment and this led Disney to have a hierarchical structure. Eisner put emphasis on financial performance and innovativeness. This led to conflict between the creative and financial group in the firm.
Control Structures
Behavioral control
There is an effective leadership and conflict management control system headed by Eisner. The behavioral control ensures the relationship between the employees themselves and between the employee and the company. They have established a mechanism to reward good behavior and to punish wrong behavior. There is an Imagineering unit in the company meant to improve the corporate behavior of the company.
Output control
There is output control responsible for all that comes out of the firm. This includes the studio skills. There are controls to monitor all the segments of the customers served and their buying behavior. The firm has also developed licensing and brand name as a control mechanism. There are many control mechanisms to control its distribution channel.
Works Cited
Smith, David. Disney: The First 100 Years. New York: Disney Editions, 2003. Print.
Michael Eisner’s had distributed leadership roles to other junior members of staff in Disney which made them feel like they were part of the organization. He brought into the organization an alternative way of thinking which had a big influence on the way different processes in the organization were performed. This approach made some employees to follow his style but some were quick to dismiss him.
Some board members felt that he did not consult them whenever he made big decisions that had an impact on the company’s future. However, he failed to put in place succession planning, which would have ensured more employees acquire leadership skills to make them capable of running the organization effectively.
He failed to understand that power systems in a big organization have an impact on the way it is managed. Therefore, he left an organizational climate of mistrust and disunity, in the last days of his tenure. He was not able to manage key relationships with the board and this led to antagonism between him and other board members.
Eisner needs to cultivate an organizational climate of trust, loyalty and improvement. His reforms in the company antagonized some creative employees who had been instrumental in improving its performance in the market. Eisner needs to collaborate with other members of the board to bring more unity to the organization.
This will make it possible for the firm to avoid board room wrangles which have a negative effect on the firm’s operations in the market. Eisner needs to make other board members and fellow managers trust him to ensure that he strengthens their confidence in his leadership.
This will make it possible for Disney to improve the way it operates in the industry. Eisner needs to consult more before making crucial decisions to ensure that other stakeholders in the firm do not view him as an authoritarian leader. He needs to understand the concerns of people he works with to improve the way he relates with them.
Eisner made the organization to suffer from poor corporate governance. The firm was not able to plan for the future because the resignation of Roy Disney and the exit of Stanley Gold showed that Eisner did not have a good relationship with the two. He also made Steve Jobs to end the partnership between his firm, Pixar and Disney.
His failure to sign the contract to extend the relationship between Disney and Pixar was detrimental to the company’s finances. He failed to make necessary compromises to safeguard the strategic association between Disney and Pixar.
He had entrenched himself in power which made him lack a future vision for the company. Eisner made major decisions which had an impact on the operations of the firm without involving the board and other senior employees. This disunity made the firm not to have any long term plans to guide its operations in the market.
In conclusion, Eisner’s mistakes exposed the firm adversely. He was not ready to cede power to other members of the organization which caused disunity and mistrust.
He failed to operate effectively at the strategic level which had a negative impact on the performance of Disney in the market. However, Eisner improved the creative process in the company. He encouraged workers to be innovative in their operations which improved the firm’s organizational culture.