Walt Disney is one of the largest media and entertainment companies in the world. The company has 11 parks, four cruise lines, and 43 resorts. In this essay, we critically analyze Disney corporate-level strategies that enable the firm to remain competitive in the market. Disney competitive advantage arises from the fact that management has been able to diversify business operations in different geographical locations. The company has an impressive opportunity to expand and grow by taking advantage of new opportunities in Europe and Asia-Pacific.
Disney’s theme parks and resorts undoubtedly represent the ability of the company to invest and manage businesses in multiple market segments. According to Goold & Luchs (2010) this is a unique part of the company since account for a significant value of the company (p.139). For instance, in 2013 Disney theme parks sales increased by an estimated 8.5 percent, while operating income increased by 15 percent. The company intends to grow sales by opening new theme parks in China, Russia, and India.
The long-term objective of Walt Disney is to become the best company in terms of service delivery in its theme parks. For instance, the Shanghai Disney Resort in China is expanding its operations, and it is expected to be the best theme park in China. The Shanghai resort plans to expand its operations by adding two themed hotels and resorts.
Walt Disney ventured internationally with an objective of increasing sales, expanding its operations and diversifying its theme parks to minimize potential risk. Moreover, the company intends to ‘go green’ by reducing greenhouse gas emission by at least 50 percent by 2020.
The company has the potential not only to attract new clients, but also to retain low-cost laborers in its theme parks. Walt Disney applies backward and forwards integration strategy by acquiring ABC television network. Through this acquisition, Disney controls a distribution channel for its content. Forward and backward integration strategy can be employed when the company intends to control inputs and outputs it uses.
Competitive dynamic is one of the best strategies that play a significant role in policy formulations. Applying this approach will allow the organization to respond in many ways to the dynamic in the industry. Disney theme parks and resorts employ a defensive strategy such as aggressive competition to increase market share and diminish the ability of a competitor to compete.
For instance, Walt Disney uses the most talented workforce to produce animated films aimed at decreasing the ability of it main rival Universal Studio to compete in the same industry (Enz, 2010, p. 57). The company then uses an aggressive advertisement and promotion strategy to gain market share.
Disney should use this strategy internationally to expand into new market segments through acquisitions and mergers. In the theme parks, the company uses high-tech; world-class entertainment to create a ‘magical’ place that is most appealing to families and young people. An aggressive strategy can only be successfully executed after Walt Disney has acquired adequate resources to create a product that is rare and challenging to imitate.
Walt Disney pursues a diversified corporate-level strategy through its horizontal integration strategy aimed at increasing market share. The company is expanding internationally to exploit emerging market opportunities in China and Russia through the acquisition of related businesses.
According to David (2015), acquiring affiliated companies reduce not only competition, but also enhance efficiency in the acquirer (p.136). Moreover, acquisition of related firms is easier to manage since managers of the acquirer are more likely to understand business operations of their targeted company.
Disney’s intensive and diversified strategies are purely driven by the growing need to expand it business internationally that will give Disney strong dominance in the industry. These procedures can be executed successfully especially when Walt Disney is facing stiff competition from a rival firm that can be acquired with available resources in the organization.
For example, Walt Disney applied horizontal integration strategy through the acquisition of Jim Henson Studios and Lucas films after accumulating enough cash flows. These entities have given Disney more resources and a large market share that supports continuous growth. Hitt, Ireland & Hokinson (2009) posits that Walt Disney applies unrelated diversification strategy that creates value through financial economies(p.165). The firm has been able to realize economic of scope by proper allocation of investment capital in a diversified portfolio.
Walt Disney uses joint ventures to penetrate into new market segments. For instance, Disney has a joint venture in France that enables the company to compete effectively with local theme parks. Disney theme parks have applied integration strategy through a combination of hotels, dining, merchandise and accommodation. When a family visits Walt Disney theme parks, they eat there, book hotel rooms (owned by Disney theme parks) and buy Disney merchandise. Moreover, families can also buy videos and books that leave a long lasting emotional experience.
In conclusion, Walt Disney intends to expand its operations to other geographic regions to increase sale while minimizing risk. Walt Disney has a long-term objective of ‘going green’ by reducing the rate of greenhouse gas emission. Disney intends to rely more on renewable sources of energy that are not only environmental friendly, but also reduce greenhouse gas emissions.
The company uses both related and unrelated strategy (diversified strategy) to create economies of scope through corporate relatedness. Although these strategies have worked in favor of Walt Disney, management should consider sharing activities among its different Theme Parks and resorts to gain economy of scope. Moreover, in case of an acquisition, management should target businesses in the same industry because they are more likely to create synergies. Acquiring a competitor in the same business line reduces duplication of facilities thus creating efficiency in operation management.
References
David, F.R. (2015). Strategic management concepts (15th Ed.). Saddle River, NJ: Pearson Education, p. 155-168.
Enz, C. (2010). Hospitality strategic management concepts and cases. Hoboken, N.J: John Wiley & Sons, p. 55-68.
Goold, M., & Luchs, K. (2010). Managing the multibusiness company: strategic issues for diversified groups. London New York: Routledge, p.135-140.
Hitt, M., Ireland, R., & Hoskisson, R. (2009). Strategic management: competitiveness and globalization: concepts. Mason, OH: South-Western Cengage Learning,p. 162-163.
The quality customer service relies on organizational culture fostering among the employees. In this respect, sound leadership is a critical indicator of maintaining the core values and competencies among the followers, who focus on the realization of the organizational goals and objectives. Additionally, networking is a vital element for enhancing coordination and interdependence.
Disney is one of the multiple enterprises that have valued a corporate culture like a facilitator of sustainability after incorporation. The content of the article A ‘Mickey Mouse’ Class – For Real reveals various features of the corporate culture and empathy networking that is peculiar for Disney. Thus, this paper analyzes the Disney’s organizational culture. Moreover, it discloses a personal reflection of the basic feasible networking ideas that are adopted by the company.
Disney’s Corporate Culture
The corporate culture created a powerful impact on Disney’s reputation that was supported by the enterprise for many years. Therefore, the organization strives to inculcate this culture in its workforce. The management of the corporation practices diverse seminars and training programs so that to emphasize the essence of sound leadership and customer satisfaction within Disney.
The administration of the company attracts highly efficient specialists since it puts a strong emphasize on a powerful Disney workforce. The recruitment procedure runs in two stages. First, it strives to provide the candidates with consistent training so that they had an excellent understanding of the work processes. Second, it conducts an actual recruitment procedure. On this stage, the primary assets of a corporate culture, as well as the key competencies among the interested professionals, are promoted. For example, the pixie dust formula that incorporates training, communication, and care shows that executives are expected to perform two tasks. Thus, they should embrace the corporate culture of Disney as well as spread it to the workforce as a part of the recruitment process.
The company values the strategy of informing the employees of the basic expectations, which enhances the quality of customer service. Disney uses various platforms such as newsletters and ubiquitous signs to achieve effective communication. The issue mainly regards the principles of the organizational culture functioning. For example, publishing 30,000 copies of the Eyes & Ears newsletters supports the idea of communication efficiency. Moreover, the signs on parking lots and bulletin boards also enhance communication of the corporate culture.
Further, the organizational culture emphasizes the learning of the company’s traditions as one of the primary principles of recruitment, which stipulates success. Therefore, new employees are traditionally instructed on the essential historical aspects of Disney’s work. The strategy usually maintains the core values of the corporation’s culture as well as evokes some positive responses among customers. For instance, the training programs highlight the importance of smiling. According to the principles of Disney’s corporate culture, the experience improves the customers’ attitude towards the services.
Therefore, various strategies that are adopted by Disney corporation transmit the strengths of its corporate culture. The years of the company’s functioning prove that creating an impact on the executives creates a favorable ground for the customers’ satisfaction. The winning values are communicated through different platforms. Specifically, the influential training programs and seminars contribute to the support of Disney’s status. For example, the competitive wages and work benefits contribute to the process of workforce’s motivation, which results in both the employees’ and the clients’ happiness.
Fitting into the Disney Culture
Since Disney recruits the highly professional employees, one differentiates several personal and professional attributes that have to be considered. Regarding the basic principles of Disney’s culture, I conclude that I possess the qualities that let me fit into the company’s corporate culture. My experience allows me to foster its success in the mass media as well as in entertainment industry. Since I am motivated to master the principles of Disney’s work, I claim the work type to be well fitted for my professional activity. The ease of adapting to the new culture principles would be critical for my working experience at Disney.
The complex understanding of my duties as a Disney employee would also stipulate the quality of my future work. The standards of effective working tasks accomplishment account for both personal success in a large company as well meeting the expectancies of the corporation and contributing to the attainment of collective ends. Therefore, an active participation together with the cultural requirements of the enterprise favors quick and smooth adaptation to the parameters of organizational culture.
The empathy networking aspect of the Disney’s leadership strategies, which target the integration of the corporate culture, are compatible with my leadership ambitions. In this case, the working environment would cultivate the development of my leadership qualities. Moreover, my professionalism would influence the colleagues’ aspirations and help them to conform to the expected values and norms.
My current manager, Smith Johnson, could also fit into the organizational culture that is supported by Disney. As a motivated and talented manager, Johnson evinces some strong leadership qualities. His personal features account for both creating happiness among the workers and improving the clients’ experiences as they seek the company’s products and services. This attribute qualifies him for leadership tasks at the organization since the management of large work teams requires the creation of a favorable corporate environment.
Additionally, the transformative leadership skills that are applied by Johnson in his professional activities comply with the principles of Disney’s culture. Thus, the company strives to create a suitable working environment for culturally diverse workforce members. Under such conditions, networking within the organization is nurtured as individualized attention standard. Moreover, intellectual conditioning boosts working relations towards productivity, which is evidenced by customer satisfaction and the realization of the ultimate objectives. In this regard, I believe that both Johnson and I would fit into the Disney’s working environment. As the company’s members, we would continue supporting the rich organizational culture as well as promoting the reputation of the corporation in the mass media and entertainment industry.
Networking Ideas for Disney
The creation of acquaintance groups is essential as an indicator of communication efficiency. One differentiates some formal and informal ideas that enhance the quality of networking activities.
The informal networking ideas regard the organization of special work projects that bring professional workers together. Moreover, informal classes would be organized to facilitate discussions that aim at improving the results of networking project execution. Moreover, community and volunteering programs could also be developed to enhance the building of relationships.
The formal ideas for networking at Disney could involve the development of network events, the use of online platforms, and informational interviews. Networking events could help the executives to discuss the issues of mutual interests. Online platforms like LinkedIn could be utilized as the methods of experience sharing. Finally, informational interviews could contribute to gathering the relevant information about the company’s functioning.
The Walt Disney Company serves the needs of different consumers. In particular, they primarily focus on the needs of children and adolescents (Verma 25). Nevertheless, they have recently tried to target young adults (Verma 25; Baysya 23).
In turn, this organization has been able to design efficient policies that are required for connecting with the target audience. In particular, this enterprise creates a broad array of interrelated products and services that will be easily recognized by children and adolescents throughout the world. For instance, one can mention cartoons, video games, theme parks, live performances, and so forth. They rely on the characters or stories that are familiar to many children as well as their parents.
For example, Mickey Mouse is featured in various media products offered by the company. Nevertheless, it is not the only example that should be considered. Much attention should be paid to the video game named Pirates of the Caribbean that is based on the blockbuster movie of the same name. It explores the adventures of a famous character, Captain Jack Sparrow. Overall, the strategies of this company are premised on the assumption that a single creative idea can lead to the development of many products (Aaker 39). In this way, this organization can interact with consumers on a regular basis. It is one of the aspects that should be identified.
Overall, this strategy can be successful if this organization can attract the best professionals who can create high-quality media products. For instance, one can consider screenwriters, actors, animators, film directors, software designers, and so forth. These participants ensure that Disney’s brand remains synonymous with excellence. Additionally, this approach is successful because the company gains in-depth insights into the lifestyles and values of the target audience. Thus, one can say that the marketing strategies of this enterprise have been efficient.
Additionally, the company enables the clients to learn about the new products that will soon be released. For instance, one can mention such practices as the interviews with the employees of the company. Moreover, the company produces video clips that can tell people about the on-coming films, cartoons, or games. These details are helpful for showing how this business can interact with customers. Due to this policy, Disney can retain the status of a leading multi-media company.
To a large degree, this approach has been rather successful. In particular, the revenues of this organization have consistently increased during the last decade. During this period, they have grown by more than 200 percent (McDuling par. 1). Thus, this policy should be continued in the future.
The risks and benefits of the company’s strategy
The strategies adopted by this company can be associated with several risks. The organization can enter many markets in which the level of competition is very high. For instance, one can mention the production of video games. This industry is already dominated by various companies that have established their reputation in this field. Among them, Nintendo and Sony can be distinguished because they can create video games for different age groups.
There is a considerable risk that the investments made by Disney will not break even. Under such circumstances, any unsuccessful project can lead to multi-million losses. In part, this risk has already manifested itself. For example, the profits derived from radio entertainment tend to decline during the last five years (McDuling par. 1). Apart from that, the company can lose its strategic focus. In other words, the management may fail to identify the areas that are crucial for the financial sustainability of Disney. Thus, the company should not overlook these threats.
Admittedly, this risk is partly mitigated by the popularity of this brand. One should consider the reputation of this corporation that is renowned for the high quality of its media products. However, this threat should not be overlooked by senior executives. Overall, they can minimize possible risks by anticipating the impacts of new technologies on the lifestyles of children, teenagers, and their parents.
Nevertheless, certain advantages should be taken into account. The chosen approach helps the organization attract new clients. One can refer to adults who associated Disney with the production of animated cartoons. For instance, they achieve this goal by producing some science-fiction films and adventure movies that prove to be successful from a commercial viewpoint (West 196). Among them, one can distinguish Tron: Legacy and Pirates of the Caribbean.
These films greatly appeal to many young adults (Sexton, 241). Moreover, the company can establish its presence in foreign countries such as India or China (Baysya 23). This organization has made considerable progress and increased the diversity of its brand. It is one of the arguments that can be put forward.
Furthermore, this policy enables Disney to diversify the sources of its revenues. For instance, they do not rely on the profits related to the release of their cartoons. Therefore, this approach can make this enterprise more resilient to external stressors. They can better withstand the competition from such companies as Pixar Animation. Thus, the selected strategies are rather efficient.
Works Cited
Aaker, David. Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity, New York: Simon and Schuster, 2009. Print.
Baysya, Rejat. Branding in a Competitive Marketplace, Delhi: SAGE Publications India, 2013. Print.
Sexton, Donald. Value Above Cost: Driving Superior Financial Performance with CVA, the Most Important Metric You’ve Never Used, New York: Pearson Prentice Hall, 2009. Print.
Verma, Harsh. Brand Management: Text and Cases, Delhi: Excel Books India, 2006. Print.
The complexity of modern society and the tendency towards the sophistication of all spheres of human activities result in the emergence of a need for effective management tools that will help to solve the majority of arising problems and create the basis for the further evolution of various organisations. At the same time, there is the tendency towards the growing importance of business and the increased significance of giant corporations that impact the development of economies.
Under these conditions, strategic management acquires the top priority as one of the approaches to drive positive change via the analysis of the current situation and all possible options. Moreover, regarding the constantly growing level of rivalry in various market segments and the appearance of new competitors, the ability to generate a competitive advantage becomes fundamental for successful outcomes. That is why the choice of the effective strategy is a critical element of organisations’ functioning as it impacts their work and results. In this regard, the paper is devoted to the analysis of Disney’s strategic decision to diversify its products via buying popular brands such as Marvel and Lucasfilm.
Background
The central reason for choosing the Walt Disney Company for the investigation is the corporations fundamental role in the sphere of entertainment and cinema. At the moment, it is one of the most powerful conglomerates that function in the mass-media segment and provide content to viewers and other individuals. The company is headquartered in Burbank, California; however, it offers products for various countries in the world. London Stock Exchange considers it a promising and profitable brand with a high potential for further evolution and growth (Walt Disney CO n.d.).
At the same time, the rising popularity of movies and media products in the modern world stipulated the high level of rivalry in the market segment, and Disney has to compete with such corporations as Sony, CBS, Warner Media. The existence of powerful rivals as well as a particular decrease in popularity preconditioned the need for the implementation of a new strategic incentive aimed at the diversification of products via the purchase of new brands and creation of new products.
Strategic Incentive
Outlining the central details of the utilised strategy, it is critical to state that the approach presupposed the improvement of Disney’s functioning via a chain of popular brands’ acquisitions to diversify products and enlarge the target population affected by the corporation. Pixar’s purchase can be considered the background for this strategic decision as it showed that the existence of multiple opportunities associated with this sort of deal and the positive impact on the conglomerate’s functioning (Whitten 2018). Moreover, in accordance with Robert Iger’s (Disney’s CEO) strategic plan, the company should create a new value and diversify its products, which can be achieved by acquiring rights for popular franchises and utilising them to offer new products.
For this reason, the strategic incentive presupposing buying Marvel Studios and Lucasfilm was accepted as the potent way to continue the evolution of the company and create a competitive advantage that will help to overcome rivals and hold leading positions in the sphere of entertainment. Marvel was bought in 2009 for $4 billion, and Lucasfilm was purchased in 2012 for $4,2 billion (Clark 2009; Whitten 2018). These deals became the most significant events in the given market segment as Disney got rights for all products created by these two brands, which provided multiple options for the further rise and extension because of their popularity among various populations regardless of the gender, age, location, and cultural peculiarities.
SWOT Analysis
To understand factors that preconditioned the implementation of this incentive, the analysis of the conditions, threats, and opportunities that impacted the strategy development should be performed. First of all, utilising the SWOT framework, the state of the company that can be analysed:
Strengths – the company’s main strength was the existence of multiple resources for the engagement in new projects and supporting already known and popular products. Being a popular brand, Disney benefited from the particular target audience and conglomerate’s recognised character.
Weaknesses – regardless of the high potential and existence of multiple facilities and resources, Disney lacked diversification of its products as they were mainly focused on children of different age with the prevalence of girls who were inspired by princesses and fairies (Whitten 2018). The company also had no clear strategic plan for its development regarding the new characteristics of the market and people’s demands.
Opportunities – the powerful financial base supported by numerous facilities, creative ideas, and resources provided multiple opportunities for the implementation of new strategic plans that would help to reconsider the company’s functioning. Additionally, the positive image of the brand and the existence of devoted clients provides the ground for new projects.
Threats – there is the growing popularity of the content that is not covered by the company such as comics and superheroes. There is also the diversification of clients’ needs and reducing interest to classic cartoons.
The analysis shows that regardless of the existence of multiple opportunities for evolution, the company experienced problems because of the growing rivalry and absence of diverse products to gain new clients.
PESTEL
Application of the PESTEL framework can help to evaluate the grounds for the strategic decision to buy Marvel and Lucasfilm from another perspective as it provides a list of influences on the accepted strategy and its success.
Political – the existing political impacts were beneficial for making a deal as there were no limits on purchases of this sort. Antimonopoly commission’s decision was also positive as there were no signs of unfair competition or ethical issues (Duyne 2016).
Economic – Disney benefited from the powerful economic position because of the existence of various theme parks and the target audience. Additionally, the growing popularity of cinema stipulated the growth in the level of revenues associated with the industry.
Social – the existing trends indicated the emergence of diversified requirements to the quality of content provided by filmmakers and entertainment companies. For this reason, there are prerequisites for the acquisition of famous and potent brands to diversify products and achieve success.
Technological – the existing level of technological development provides opportunities for the creation of more realistic and attractive visual content to interest consumers and expand the target audience.
Environmental – the given aspect is not as significant as other ones regarding the company’s nature; however, the positive image of the brand contributes to its popularity globally.
Legal – the existing legal environment was not considered a barrier for the planned change because of the absence of prohibitions or penalties.
In such a way, in accordance with this model, the decision to acquire Marvel and Disney as a part of the strategic incentive can be considered a successful one as there was the positive environment preconditioning the deal.
Porter’s Five Forces
Finally, Porter’s 5 Forces Model can be applied to the discussed solution to analyse all factors impacting the strategy selected by Disney. Regarding this paradigm, there are five central forces affecting competition intensity and profitability of a market which are:
The threat of entry – comparatively low because of the dominance of giant corporations such as Disney, Warner Bros and a need for substantial financing for running a new business venture in this market segment.
Bargaining power of buyers – significant and continues to increase because of the growing popularity of cinema as a potent entertainment tool.
The threat of substitutes – high because of the constant emergence of new products that are designed to attract new customers and preserve their interest at appropriate levels.
Bargaining power of suppliers – constantly increasing because of the rise of the industry and opportunities to earn money by supplying the demanded products.
Rivalry – severe rivalry preconditioned by revenues and the necessity to attract individuals to sell products and evolve (Iyer 2014).
The application of the given model also proves the fact that the implementation of the discussed strategic incentive was preconditioned by the beneficial situation at the market and existence of multiple options for the further evolution via the utilisation of the new plan presupposing the purchase of well-known franchises.
Factors Impacting Strategy
The in-depth investigation of all factors helped to determine the existence of a set of aspects introducing the need for the implementation of the strategy and its use. As it becomes clear, being a powerful corporation, Disney still lacked diversity of its products which resulted in the narrowing of the target audience and inability to satisfy the growing demands of other population groups. It was dangerous for the corporation’s leading position because of rivals’ effective work and their focus on products that would be able to satisfy clients (Pherson & Pherson 2016).
For this reason, the strategic incentive presupposing the purchase of Marvel and Lucasfilm results from a need for diversification, creation of new value, and the further company’s rise. Additionally, the necessity to engage in new activities to avoid stagnation was another factor that stipulated the adherence to this plan and its support by all departments of Disney corporation.
Main Features
The discussed incentive can be determined as a generic strategy that is focused on the differentiation and diversification of existing products via the acquisition of new brands and creation of products under these franchises (Johnson et al. 2014). The given approach presupposes that the company will try to affect wide populations by making its products as exclusive as it is possible to increase their attractiveness and competitiveness (Dobbs & Dobbs 2016). For instance, possessing the rights for Lucasfilm products, Disney is the only corporation that can make Star Wars movies, souvenirs, and other related goods (Baidawi 2016).
In such a way, the effectiveness of the strategy is preconditioned by the existence of unique opportunities for the creation of new offerings that will be welcomed by the audience (Kotler & Armstrong 2015). Additionally, there is the focus on the diversification as Marvel and Lucasfilm interest people all over the world regardless of their age, gender, and social position which helps Disney to reconsider its functioning and transform into a company that is attractive not only for children.
Results
Nevertheless, the application of the analytic tools helped to conclude that the majority of factors evidenced the success of the planned intervention and its ability to improve the state of the company. In fact, the purchase of Marvel and Lucasfilm became one of the most successful deals in the modern history of the media market (Duyne 2016). Disney managed to acquire rights for the two most popular franchises that are appreciated in all parts of the globe. It also helped to significantly diversify the target audience and products, which is critical for the company’s functioning and evolution (Rothaermel 2018).
The beneficial impact of the given deal can also be evidenced by the fact that the Star Wars Episode VII managed to generate about $2 billion at box offices because of high viewers’ expectations and their desire to see a new part of the most famous saga (The Walt Disney Company 2018). Disney managed to cover all spending associated with this deal and now benefits from the ability to create products associated with Marvel and Lucasfilm’s Universes.
Conclusion
Altogether, the analysis of the strategic incentive of Disney to buy two famous brands shows that there are multiple factors impacting the decision making and the choice of the way to evolve. The utilisation of Porter’s 5, PESTEL, and SWOT analysis helped to determine the existence of a set of factors that served as the background for the given decision.
These included the high level of rivalry, a need for the diversification and differentiation of products, the necessity to create new value, expansion of the target audience, and the introduction of popular products. Having evaluated all these aspects, the corporation made the only possible decision to purchase brands that acquired popularity. This solution turned out to be successful as it generated stable income and promoted the basis for the further development of Disney.
Kimley-Horn and Associates and Disney are in top 100 of the Fortune 500 list. Both organizations offer 100% healthcare coverage for employees, as well as their partners. However, the corporations have slightly different benefit requirements.
At Kimley-Horn, the insurance coverage is provided to both spouses and domestic partners (either same- or opposite-sex). The company purchases CIGNA insurance which is associated with the similar requirements for both married individuals and registered same-sex domestic partners: “both individuals must share a primary residence,” and should not be in legal relationships with other individuals (CIGNA, 2010, p. 1).
At the same time, it is implied that most of the eligible opposite-sex couples are married because the opposite-sex domestic partnerships can be registered only if “one partner is at least 62 years of age” (CIGNA, 2010, p. 1). The insurance benefits for employees and their family members are effective thirty days after the date of recruitment. There is no waiting period after the divorce before a new spouse/partner will become eligible. The only requirement for an employee is to provide the supporting documentation (e.g., partnership registration license, etc.) within thirty days after any qualifying event such as marriage or divorce (Kimley-Horn and Associates, 2016).
At Disney, employees’ spouses and same- or opposite-sex partners are eligible for coverage as well. The married couples are eligible regardless of the length of their relationships − they are only required to provide the supporting documentation. In the case of domestic partners, they should be in relationships for at least one year, share a mutual residence, and be financially interdependent (Disney, n.d.). To prove that the given criteria are followed, employees are asked to show evidence such as bills, mortgage documents, and so on. Similarly to Kimley-Horn, in the event of divorce or other changes in relationships, employees are required to provide documentation within thirty days.
The inclusion of these stipulations is largely influenced by the state and federal laws which require organizations to treat domestic-partner benefits in a similar way as the coverage of married couples (Smith, 2015). The major prerequisite for the increase in the same-sex partner benefits at Fortune 500 enterprises was the demolition of the Defense of Marriage Act by the U.S. Supreme Court. It was one of the government’s attempts to combat discrimination at the nation-wide level.
At the same time, it is noted by Smith (2015) that “with same-sex marriage legal in all 50 states, it is likely that more employers will require that same-sex couples be married to be eligible for benefits coverage” (par. 2). The given tendency s provoked by organizations’ efforts to make coverage stipulations more uniform and equal for individuals in different types of relationships and avoid abuse of benefits. Nevertheless, most of the insurers prefer to work with corporations that offer both same-sex and opposite-sex partner coverage. Thus, those employers who are not willing to include opposite-sex partners in the eligible group usually end up eliminating these benefits (Smith, 2015).
Workplace Discrimination
It is possible to assume that the identified tendency for the exclusion of domestic partners from the eligible group will likely not affect Kimley-Horn as it adheres to non-discrimination policies, but may influence the managerial decision making at Disney. According to Kimley-Horn and Associates’ Equal Employment Opportunity and Affirmative Action Policy, the company ensures equal treatment of all employees regardless of their ethnicity, age, gender, sexual orientation, marital status, qualified disability, and so on (Kimley-Horn and Associates, 2014).
The given policies allow the company to avoid such detrimental phenomena as glass walls or the sticky floor that interfere with the professional growth of members of minor ethnic and demographic population groups. Disney corporation adheres to principles of ethical conduct as well. However, recently it was reported that Disney discriminated against the U.S. workers of advanced age by replacing them with expatriate workers, mainly from India, to increase cost-efficiency (Garcia, 2015). Such managerial behavior may be regarded as an example of glass escalator.
Although the term is originally used to describe the “rapid advancement of men working in female-dominated occupations into management” (Bell, 2016, p. 318), the similar discriminatory principle of human resource management can be observed in the conduct of Disney corporation as its management decided to filter the staff members based on their national origin and some demographic features rather than consider their actual abilities and talents. Additionally, it is possible to say that the term “sticky floor” can be applied to the description of the organizational work environment at Disney as well because, although immigrants were provided with the occupation, they are also given with limited opportunities for the career growth and are poorly paid (Garcia, 2015).
Overall, Kimley-Horn’s managerial decision making is more conform to the non-discrimination values. The company does not practice discrimination at any level − there are no glass ceilings as employees are rewarded proportionally to their efforts and provided with equal opportunities to succeed. The given attitude shows that the organization values its employees, and this favorable and respectful treatment extends to their family members as well. Kimley-Horn demonstrates a great level of commitment to federal regulations and ethical standards, and such a behavior contributes to the development and maintenance of positive work climate within the enterprise.
References
Bell, M. P. (2016). Diversity in organizations. Place of publication not identified: Cengage Learning.
CIGNA. (2010). Washington domestic partner legislation. Web.
Kimley-Horn and Associates. (2016). 2016 benefits information.
Kimley-Horn and Associates. (2014). Equal Employment Opportunity (EEO) And Affirmative Action Policy (AAP) statement of Kimley-Horn and Associates, Inc.
Disney. (n.d.). Who you can cover under your Disney benefits.
Smith, A. (2015). Dropping (or keeping) domestic-partner benefits has ramifications. SHRM. Web.
The failure of Disney’s America can be considered one of the biggest PR missteps that Disney has experienced since the start of Michael Eisner’s era. The presented case covers most of the missteps the company has done during the development of the project. This paper will describe two of the main problems the company faced while trying to develop this theme park.
The Missteps
Michael Eisner was responsible for Disney’s recovery after the death of Walt Disney. He was a very competitive businessman, and most of his projects were successful at bringing the company back into the public’s eye. However, during the early 1990s, the company started experiencing financial issues. The project that would eventually become Disneyland Paris was projected to open with a large amount of debt, leaving the company with no choice but to cancel a series of projects.
To continue expansion on a smaller budget, Michael Eisner proposed a project called “Disney’s America.” It was supposed to attract tourists visiting Washington D.C. by showing historical events and landmarks in the form of a theme park. Unfortunately for Disney, the lower budget project became much more costly due to the public outcry from the citizens of Virginia. As the case points out, the cost of the project became much higher due to possible legal action, negative PR, and modifications to the plan of the park. This increase in costs was one of the main problems that the company experienced at the time. With the shaky opening of Disneyland Paris, the company could not afford another unprofitable park (Knight, 2014).
As it was mentioned earlier in the paper, negative PR became a colossal problem for the company. This issue was multifaceted and included such things as the location of the park being close to a memorial site, unwanted urbanization of nearby communities, perceived lack of respect toward history, possibility of drawing tourists away from the historical sites in the area, emotional outbursts of Eisner during his interviews with the press, John Dreyer’s dislike of the press, and even the name of the park was seen as a possible attempt to commercialize the country. With so many parts being involved in the negative PR it is important to choose a few of the bigger ones.
According to a quote from Michael Eisner’s book provided in the case, the company was blindsided by the public reaction to the location of the park. The park was to be built only three miles away from Manassas Battlefield Park, a site of two major Civil War battles, and a place of death of thousand American soldiers. It is a highly revered place, that is visited by hundreds of thousands people each year. Citizens of Virginia saw this as a clear disrespect to the historical sight. The case shows that the company announced this project without preparing the people living in Virginia, which led to their immediate distrust of the company.
Another, part of the negative PR that deserves extra attention is the treatment of press by Dreyer. His distrust and hostility towards the press eliminated all the reporters in the Washington D.C. area who could have helped the company recover from the initial public outcry. Without the positive press, the project quickly ran out of control with the outcry spreading outside the state of Virginia and onto the national level. This issue, combined with the unstable financial situation of the company led to the cancellation of the project (Bonilla, 2013).
Conclusion
Not all PR is good PR if you are unwilling to work with the press. Negative PR turned the project unprofitable and therefore unfeasible for the company. After the failure of Disney’s America, the company tried to reshape the project multiple times, but none of the plans proved viable. The plan for the smaller American park would eventually be realized in “Disney’s California Adventure” which would also open to a very negative public reaction.
References
Bonilla, Y. (2013). History unchained. Transition, 112. Web.
Knight, C. (2014). Power and paradise in Walt Disney’s world. Gainesville, FL: University Press of Florida.
Household Life Cycle Stages That Disney May Want to Consider
Nowadays, Disney is one of the leaders in providing entertainment for different consumer groups such as families, youngsters, children, and young adults. Nonetheless, the concepts of the household life cycle tend to modify due to the changes in consumer preferences (Du & Kamakura, 2006). Consequently, the primary goal of the paper is to describe three stages that Disney should consider in the future.
The first option that Disney should continue focusing on is a large family with children under 15 years old, as these families have enough savings, targeted audience (children), and the need for entertainment (Du & Kamakura, 2006). Disney is one of the most popular locations for this audience, so focusing on it will boost the company’s revenues. Another cycle that has to be considered is a small family with children over 15 years old. The primary reason for that is the fact that many attractions in theme parks are targeted at the older audience.
The representatives of this family life cycle have enough savings and time for recreational activities, and a combination of these factors make them a favorable target market in the future (Du & Kamakura, 2006). In this case, targeting this consumer group will help generate additional revenues and positive emotions simultaneously. Lastly, apart from having no children and savings, single or married individuals at the age of 22-30 could also be considered, as a future target audience. The study indicates that this group spends money on traveling, and they are flexible with their vacation times (Du & Kamakura, 2006). Consequently, Disney has to consider them as potential customers who can also have a pleasant experience and bring their children to Disney parks in the future.
Target Corporation’s Customer Information
External sources from Target to augment its customer information and enhance analytical capability
In the modern world, companies like Target should continue gathering information about their customers from external sources for successful augmentation of the market (Oberhofer, Hechler, Milman, Schumacher, & Wolfson, 2014). In this case, the enterprises can collect information about the clients with the help of the statistical reports (demographics) and annual reports of the competitors to gain more insights. Alternatively, Target can learn more about the preferences and needs of the customers with the help of social media (Oberhofer et al., 2014). Using social media marketing and brand community groups online can help monitor the ways that the customers use to interact with the company (consumer behavior). Additionally, Target can collect various qualitative (needs, preferences, and behavior) and quantitative information (age, gender, and visits) with the help of surveys and questionnaires.
Issues for companies implementing market research
One of the major issues is the fact that information provided online may not represent the real behavioral patterns of an individual. Alternatively, data can be misinterpreted, as personal bias may take place. A combination of these factors will lead to designing the marketing campaigns that may not be effective. Apart from these disadvantages, companies should consider the benefits of social media. In this case, the information in the social networks can provide additional details about the target audience with the help of likes and comments, and these findings can be used to develop social media marketing campaigns, engage customers in the decision-making process, and design products that comply with their needs and preferences.
“Dark sides” of big data and business analytics
It seems that collecting information from internal and external sources is easy to accomplish. Nonetheless, the company has to pay vehement attention to the fact that its actions do not violate the freedoms and privacy of the clients (Oberhofer et al., 2014). In this case, Target has to ensure that its actions comply with the current legislation. Being insensitive to the complaints of the offended customers will hurt the brand image of the company and may lead to lawsuits. Overall, these violations will harm the company’s brand image and financial stability.
References
Du, R., & Kamakura, W. (2006). Household lifecycles and lifestyle in the United States. Journal of Marketing Research, 43(1), 121-132.
Oberhofer, M., Hechler, E., Milman, I., Schumacher, S., & Wolfson, D. (2014). Beyond big data: Using social MDM to drive deep customer insight. Upper Saddle River, NJ: Pearson Education.
Although the significance of semiotics may be taken for granted in everyday life, it defines the choices that people make in the realm of the global economy regularly (Belk 1988). Allowing one to explore the impact that a certain combination of signs and their visual elements produces on target demographics because of the appeal to their cultural specifics, semiotics serves as the foundation for developing a deep understanding of the factors that compel people to define a particular symbol or logo as appealing (Mick 1986). By applying the specified theory to the images that have patented themselves as extraordinarily memorable and incredibly appealing, one will be able to define the reasons for global brands to have their staying power. Even though the branding philosophies of Disney and the Penguin Publishing are quite different from each other, both companies have managed to cement their unforgettable images in the minds of their audiences, thus, creating an opportunity to make their products both relatable and unique.
Creators and Realities
The initial Penguin logo was created by Edward Young, a 21-year-old employee at the Penguin Publishing Company (The tale behind the Penguin logo 2013). The Drawing was inspired partially by the Albatross Library that was about to cease to exist at the time, and partially by Young’s personal experience at the North Sea. Therefore, despite the lack of connection between the image and the company’s products, the logo had a clear and strong legacy (Ng & Lee 2015).
The image of a castle, which has become inseparable from the Disney Company over the years, in turn, also has a peculiar history. The castle was initially designed after the one in the Cinderella movie, yet it had to be simplified for better perception by target viewers. With Walt Disney’s name in the foreground, the castle managed to become an iconic Disney brand (The history of Disney and its logo design 2017).
Codes
The use of semiotic codes is crucial to the success of a company’s logo. As a explains, it is crucial for an organization to “understand the unspoken cultural rules or codes that underpin contemporary communications and determine how people make sense of what everyone else is on about” (Lawes 2002, p. 253). Thus, the foundation for appealing to the target demographics is created, and the premises for helping customers bond with the company, thus, building a strong connection and developing loyalty toward it and its brands, can be created.
Dominant Readings
Even though in the present-day multicultural environment, audiences are largely provided with a chance to imbue signs and other elements of visual media with the meanings that pertain to their culture, it is important to consider the dominant ideas that are typically associated with the logos of Disney and the Penguin Publishing. It should be noted, though, that, at this point, both companies have become household names, which means that their public images have been worn out to death by now. Nevertheless, the logos that are traditionally used by the organizations mentioned above manage to retain their authenticity. Nevertheless, the impact of the firms that own them defines the reading of the signs to a considerable degree. For instance, in Disney’s case, the castle is typically associated with family-friendly, unambiguous, and entirely unthreatening entertainment (Wattanasuwan 2005). Although the identified representation of the organization does not allow taking risks and pushing the envelope, it helps cement the image of the company, thus, increasing the levels of loyalty among its target customers (Guenther & Vittori 2012).
The Penguin logo, in turn, was originally supposed to be both a reference to the situation in which the author of the drawing once found himself while sailing across the North Sea (Penguin logo evolution, 2012). Therefore, the key interpretation of the logo had to revolve around the idea of environmentalism and the image of a submarine in the ocean, as the company’s records say (Penguin logo evolution, 2012). In other words, the logo as supposed to reference both the war and environmentalism at the same time:
Edward Young, who designed Penguin’s famous ‘dignified but flippant’ logo and the color scheme for its book covers was a submariner during the war. His boat was involved in a collision that saw it sank to the bottom of the North Sea, but Young escaped by swimming to the surface. (Penguin logo evolution, 2012)
Needless to say, the specified interpretation turned out to be far too complex, with its elements failing to be connected in any way that could help create a strong brand image and a powerful message. As a result, the image of a penguin on the covers of books published by the company, at best, represents a reference to environmentalism and animal rights and, at worst, is entirely devoid of meaning for most audiences in the present-day world (Kuttnig 2015).
Context Change
As stressed above, the Penguin Publishing logo is, perhaps, the one that has suffered the greatest number of changes and, therefore, has lost the largest amount of its meaning since the day when it was created. Therefore, a massive alteration of the context can be observed in the specified case. While the logo was started as an attempt to pay homage to a once huge library and was, later on, expanded with an additional layer of meaning about the author’s experience in the North Sea, the logo was finally reduced to a rather basic environmental message. Even though the change occurred when the company had already cemented itself in the publishing market and was globally renowned, the narrowing of the initially profound meaning can be seen as slightly discouraging (Lee, Yao & Mizerski 2015).
The Disney logo, in turn, seems to have not only kept its original appeal but also managed to retain its timelessness. What at first glance might seem like a commonplace idea works nowadays to the advantage of the organization, allowing it to appeal to a vast range of demographics? Therefore, an initially shallow concept of a fairy-tale castle was gradually expanded into the image that could embrace an extremely wide range of audiences and, thus, help the company keep its position in the global entertainment industry, at the same time attracting new buyers. Therefore, when considering the context change and the evolution that both logos have experienced over time, one must give credit to Disney for being more creative and more reasonable with the changes in their logo’s history (Keller, Marino & Wallace 2016).
Relationships with Audiences
Both signs try to communicate unique ideas to their target demographics and establish strong relationships with the people that they view as their customers. Despite the difference in the type of products that the firms are trying to sell their buyers, both Disney and the Penguin Publishers are attempting at creating the environment of comfort and certainty that contributes to their audiences developing trust toward the organizations. The specified attempt becomes especially visible when considering the semantics of the sign, particularly, the absence of any negative connotations that could be attributed to the signs. Neither the castle represented in Disney’s official logo nor the penguin pictured on every book issued by the Penguin Publishing Company can be interpreted as threatening or disturbing. The specified characteristic is true for not only the ideas and notions implanted in the images but also the color scheme thereof; both include only two colors (blue and white in Disney’s logo and black and white in the Penguin Publishing Company’s sign). While the meaning of the identified colors and the notions that are typically associated with them may vary depending on the culture through the lens of which they are viewed, the signs were designed to make audiences feel comfortable and cozy, thus, helping build their loyalty toward the firms (Robbins & Polite 2014).
Allusions
Even though both logos might seem simplistic in their design, they contain several important allusions that make them easier to attach to the organizations and, therefore, having a lasting impact on the target audience. For instance, the logo created by the Disney Company can be viewed as the allusion to fairy-tales that are typically set in Medieval times and tell the stories of princesses and adventures. Although it would be rather difficult to pinpoint the exact fairy-tale based on which the logo was created, it could be argued that the famous castle alludes to one of the Grimm brothers’ tales, particularly, the Sleeping Beauty (The history of Disney and their logo design 2017). It should be borne in mind, though, that the Disney Company has been clever enough to refrain from pinpointing the actual fairy-tale from which the castle was taken; thus, the company’s target audiences can choose the story to which they relate most and, thus, make a stronger connection to the image.
The Penguin Publishing Company, in turn, is more direct in its endeavor at building its brand image based on a preexisting history of successful marketing. The concept of a bird being used to represent the organization was borrowed from the Albatross Library (Penguin logo evolution, 2012). While the idea that sparked the creation of the logo might seem as simplistic, it could be argued that, by using the specified concept, the Penguin Publishing alludes to not simply the Albatross Library but to the notion of a library as a repository of the human knowledge, in general. As a result, a very strong and powerful message about the company keeping the tradition of reading being the key source of learning and development since the times immemorial up to present days seems to be a very elegant way of building a brand image (Penguin Books Penguin logo 2014). Similarly, to the Disney Company, which uses a rather generic image of a castle to avoid cultural misrepresentations, the Penguin Publishing Company decided to choose the bird that was not linked directly to either of its audiences’ backgrounds, yet could be easily relatable because of its very recognizable image, as well as rather unthreatening and charming looks (Butler & Tischler 2015).
Other Texts
The use of the signs in question in other texts is a rather intricate issue (Davis, Greenhill & LaFountain 2015). On the one hand, Disney’s logo has the advantage of being placed on every possible product related to the Disney franchise, from movies to toys to clothes, etc. Thus, more people can see it every day and connect with the company on personal and subconscious levels (Lantos 2015). On the other hand, the Penguin Publishing logo has the advantage of appearing next to a literal text that people will read and to which they may return. Furthermore, the number of novels top in which the Penguin Publishing logo is attached is beyond immense. Consequently, the sign-in question can be regarded as a highly memorable symbol (Wheeler 2017).
Conclusion
By using the images and concepts that are both universal and abstract enough to be easily relatable and extraordinarily memorable for all members of the target demographic, both Disney and the Penguin Publishing manage to make their logos unique and unforgettable. With an impressive history to support the specified signs, the logos speak to every single member of the target population on a very personal level. Thus, what might seem as a nonsensical choice resulted in immediate success and the development of a cult status among a significant number of people all over the world. By using signs in a very clever and well thought out manner, Disney and the penguin Publishing created the legacy that has survived massive challenges in the past and is likely to withstand the ones that the companies may face in the future. The universality of the logos and the simplicity of the design is what speaks to every member of the target demographics on a very personal level, therefore, allowing for the signs to remain extraordinarily popular even when their novelty faded. Simple yet appealing and charming in their simplicity, the signs in question can be viewed as perfect examples of a logo created to target customers from any culture or ethnic background.
Reference List
Andragogy: adult learning. 2012. Web.
Belk, RW. 1988, ‘Possessions and the extended self’, Journal of Consumer Research, vol. 15, no. 2, pp. 139-168.
Butler. D & Tischler, L. 2015, Design to grow: how Coca-Cola learned to combine scale and agility (and how you can too), Simon and Schuster, New York, NY.
Davis, J, Greenhill, JA & LaFountain, JD. 2015, A companion to American art, John Wiley & Sons, New York, NY.
Guenther, R & Vittori, G. 2012, Sustainable healthcare architecture, 2nd edn, John Wiley & Sons, New York, NY.
Keller, A, Marino. R & Wallace, D. 2016, The physics of brand: understand the forces behind brands that matter, Simon and Schuster, New York, NY.
Kuttnig, C. 2015, International online marketing communication strategies of global players. a linguistic study with special reference to T-Mobile, GRIN Verlag, New York, NY.
Lantos, JP. 2015, Consumer behavior in action: real-life applications for marketing managers, Routledge, New York, NY.
Lawes, R. 2002, ‘Demystifying semiotics: Some key questions answered’, International Journal of Market Research, vol. 44, no. 3, pp. 251.
Lee, A, Yao, J & Mizerski, R. 2015, The strategy of global branding and brand equity, Routledge, New York, NY.
Mick, DG. 1986, ‘Consumer research and semiotics: exploring the morphology of signs, symbols, and significance’, Journal of Consumer Research, vol. 13, no. 2, pp. 196-213.
Ng, S & Lee, AY. 2015, Handbook of culture and consumer behavior, OUP, Oxford.
Robbins, M & Polite, FG. 2014, ‘The most powerful mouse in the world: the globalization of the Disney brand’, Global Journal of Management And Business Research, vol. 14, no. 1, pp. 11-20.
Smith, V & Jones, R. 2012, ‘Individual assignments and academic dishonesty: exploring the conundrum’, The Educational Researcher, vol. 35, no. 1, pp. 37-56.
Disneyland Paris is, by far, one of the best-known entertainment areas in Europe. With the name Walt Disney attached to it, the theme park is understandably the most visited tourist destination in Europe. Seeing that the company has gained cult status, its French subdivision, as understandably enough, gained an impressive competitive advantage in the European entertainment industry market comparatively fast.
Nevertheless, Disneyland Paris has developed a range of issues over the past few years due to the rigid policies and the uncompromising compliance with the policy that was set by the company.
It is assumed that the adoption of a sustainable strategy that will allow for a more flexible allocation of the corporate resources and assets, as well as the implementation of a better-balanced leadership approach, will help improve the quality of the services provided by Disneyland Paris to a considerable extent.
Current Situation
Current Performance
The French Disneyland is currently at the top of the state’s entertainment-related attractions. Despite being outstandingly popular, the company has been suffering significant expenses over the past few years, as the 2015 report indicates. Indeed, according to the latest information on Disney’s financial indicators, the firm’s revenues grew by 10.9% compared to 2014 (from €533,300,000 to €591,700,000), whereas the expenses skyrocketed from €644,100,000 to €709,600,000 (10.16%). Depreciation and amortization have also taken their toll on the company’s financial performance, leaving the French Disney in a tight economy (“Euro Disney S.C.A.” 1).
One must admit that the identified changes have not had a drastic impact on the organization’s performance – quite on the contrary, Disneyland, France (DF) experienced an 11% increase in revenues in 2015, which could be attributed to the successful promotion campaign and the phenomenal popularity of the brand image and products of the organization. Nevertheless, the lack of innovation and the sloppy progress suggest that the company’s current approach toward marketing could use redesigning.
Strategic Posture
Mission
The current mission and vision of DF concern creating an entertainment area that will incorporate the latest technological advances and provide its visitors with comfort and the opportunity to have an unforgettable fun. According to the official statement of the organization, DF personnel strives “To act, support and inspire to protect the environment where the magic happens and to build a leading innovating and sustainable destination in Europe” (“Our commitment to the environment” par. 1). Therefore, it can be assumed that the organization has managed to adjust the corporate philosophy of Disney to the environment of the European market and determine the objectives that will allow it to advance in the identified economic environment.
Objectives
The objectives of the organization revolve primarily around gaining more influence in the European market and retaining its top position in the entertainment industry. While aligning with the corporate tradition, the specified objectives could use the introduction of sustainability principles and the focus on diversity issues. Thus, the needs of a wider range of tourists could be satisfied.
Strategies
The current strategies of DF include the principles of Corporate Social Responsibility (CSR). In other words, DF has been putting a heavy emphasis on the reinforcement of the green economy. The tendency of the firm to pay close attention to the responsibility-related concerns can be used as the foundation for building a more reasonable strategy for using corporate resources.
Policies
Since 2016, DF has been deploying innovative Human Resource Management (HRM) policies (“Disneyland Paris: Innovating Human Resources Policies Since 1992” 1). The specified step is rather sensible, given the fact that the firm has been suffering an extensive drop in its revenues. By focusing on improving service quality, DF will be able to gain the trust of a wider audience.
Relevance to International Operations
Seeing that the company aims at further expansion, diversification of its services and the promotion of multiculturalism must continue. Moreover, the exploration of other markets, as well as possibilities for mergers and acquisitions, should become one of DF’s strategies.
Corporate Governance
Board of Directors
Axel Duroux is the Chairman of the Supervisory Board, Gerard Bouche owns the E. Leclerc Shopping Center of Coulommiers, and Michel Corbiereis the leader of the Forest Hill Group (“Corporate Governance” par. 1-4).
Top Management
Catherine Powell is the President of Euro Disney S.A.S., Daniel Delcourt performs the role of the Senior Vice President and Chief Operating Officer, Darlene Papalini is the Senior Vice President, and she heads Sales and Marketing Europe (“Management Team” par. 1-6).
External Environment: Opportunities and Threats
Societal Environment
Seeing that DF applies a rather flexible approach when addressing the needs of the local population, it can be assumed that DF feels rather comfortable in the societal environment. Catering to the needs of all local po[pulsation, the organization provides its visitors with a plethora of opportunities for having fun for both children and adults.
Task Environment
The threat of new entrants
Given the immense popularity of the organization, claiming that it may be affected by new entrants would be quite a stretch. Nevertheless, offering customers discount-related opportunities may help reduce the threats of competition to an even greater degree.
Bargaining power of buyers
Since Disney is a one-of-a-king company that has overshadowed most of its competitors in the target market, it can be assumed that the bargaining power of buyers is considerably low.
The threat of substitutes’ products and services
As long as DF continues using the brand image and products that the Walt Disney Company owns, it will remain quite competitive. Therefore, the threat of substitutes is currently low.
Bargaining power of suppliers
The bargaining power of suppliers, in its turn, is rather low. The buyer price sensitivity barely exists since the product is unique and, therefore, people are willing to pay a significant amount of money to receive the corresponding services. Furthermore, because of a well-developed, elaborate branding strategy, customers view the product as important – the Disney legacy has become part and parcel of many people’s childhood /
Rivalry among competing firms
As stressed above, the incredibly rich history, the unforgettable brand images, and a huge customer base make DF a part of the Walt Disney Corporation, an unbeatable rival. Therefore, the level of competition among similar organizations operating in the French economic environment is minuscule. Put differently, DF can be deemed as by far the most successful family entertainment business in entire France.
The relative power of different groups
Similarly, the groups currently existing in France do not have any tangible effect on DF because of the experience and the weight gained over the past few decades. Because of its rich history and the reputation that it has gained over the years of its operations, DF can be viewed as the corporate monster of the French entertainment industry. Nevertheless, with the recent drop in customer safety levels, Df may face the threat of a new competitor that will offer similar services with higher safety rates.
PEST Analysis
Political factors
The current political situation in France does not affect DF negatively. However, the lack of governmental support may reduce its chances of successfully expanding into the target market. Therefore, investors will be sought as the primary source of extra financial resources.
Economic factors
The fact that France has been witnessing economic issues over the past few years indicates that DF may suffer serious consequences. Particularly, with the rise in the unemployment levels among the members of the French population, as well as the reduction in the number of government finances, the opportunities enjoying the support of the government will be missed. Similarly, given the high prices set by the organization, as well as the rise of the unemployment levels in the state, fewer people will be able to enjoy rather expensive services offered by DF.
Sociocultural factors
Seeing that DF as a part of the Walt Disney Corporation is viewed as entertainment for the whole family, it is not affected by sociocultural factors. Offering solely safe content, the firm has been wisely staying away from the contemporary political agenda.
Technological factors
The company is currently experiencing issues with the maintenance of its services and the provision of customer safety. Therefore, the technological aspect of the firm’s performance will have to be addressed immediately. Particularly, the reallocation of DF’s financial resources for the further support of the R&D team, as well as the acquisition of better equipment and the focus on quality management, will have to be considered an option.
Summary of External Factors
The current external factors can be deemed as rather favorable for the company’s further foray into the French market and the development of business ties with other organizations. However, the lack of emphasis on the significance of technological progress, particularly the enhancement of customer security and equipment maintenance, may jeopardize the company’s chances to advance in the French market.
Internal Environment: Strengths and Weaknesses
Corporate Structure
The corporate structure is rather rigid, which does not allow for uninhibited information flow. However, the framework helps keep essential operations in order.
Corporate Culture
The corporate culture of DF is linked directly to the one that is actively promoted as the foundation for interactions between the staff members in Walt Disney. As a result, the quality of relationships between the members of the company is surprisingly good.
Corporate Resources
Marketing
Disney has been known for its rather aggressive marketing for quite a while (Kohler 17). PDF follows the same set of principles that the Walt Disney Corporation does. As a result, the brand image and associated concepts are used to create a wide range of products.
The images form beloved animated films are used actively so that the target audiences could be attracted successfully. Furthermore, the company has been deploying the system of a rather elaborate segmentation. On the one hand, the identified approach helps learn more about the target audiences. On the other hand, however, the said framework makes the corporate product less universal; as a result, the firm has been omitting the opportunity to market its goods to male customers.
Finance
The current finances management framework lacks sustainability.
Research and Development
The R&D department could use a better safety-related framework.
Operations and logistics
Supply chain management helps deliver relevant tools and data fast and successfully.
Information Systems
With the latest IT tools deployed, the information management system at DF works impeccably.
SWOT Analysis
Strengths
The large customer base and the popularity that the firm enjoys can be viewed as the essential strengths that need to be used actively.
Weaknesses
The lack of a sustainable approach toward the allocation of the financial resources coupled with the recent maintenance issues is a weakness. Therefore, the current focus must be on improving services’ quality and the provision of customer safety.
Opportunities
Success in the French market and the title of the leading organization in the entertainment industry are the opportunities that DF should currently pursue. Furthermore, DF is facing the chance to attract a wider range of customers by reconsidering its marketing approach. By focusing on other types of customer demographics, such as teenage boys, the organization will be able to gain even greater influence.
Threats
At present, the failure to address the safety issue is the greatest threat to DF. As soon as the company becomes notorious for its safety problems, it will face an imminent downfall.
Summary of Internal Factors
While the values and principles that make the foundation of DF are relatively sensible, the present-day safety issues and the marketing approach, seem to require closer attention. Therefore, DF must redesign its current approach toward the management of its finances.
Analysis of Strategic Factors
Review of Mission and Objectives
The current missions and objectives of the organization are aimed at following the Walt Disney standards and values to the T, which is an admittedly good start. However, to expand into the target market successfully, DF will have to push the envelope by exploring new opportunities and challenging its current philosophy. Particularly, the reconsideration of the current approach toward resources management and the importance of quality services and the provision of customer safety will have to be taken into account.
Strategic Alternatives and Recommended Strategy
Strategic Alternatives
As stressed above, it is strongly recommended that the company should consider using the principles of economic sustainability to redesign the allocation of resources. However, the company could also consider attracting more investments. By organizing an event that could draw the attention of potential benefactors, DF could create the foundation for its further quality improvement. As a result, Total Quality Management principles could be implemented to focus on the provision of safety and instructing the staff members.
Recommended Strategy
It is strongly suggested that the company consider the principles of diversity as the essential corporate philosophy that will define future decision-making processes. Additionally, a different approach toward the leadership process will have to be suggested.
Also, the principles of a sustainable allocation of resources and a cost-efficient framework for addressing the expenses-associated issues are strongly advised. Even though the organization’s recent financial statement shows that DF’s debts have not reached a drastic stage of maturity, the financial accounts point to a possible problem in DF’s financial approach. To increase the revenue level, DF will have to consider a more aggressive branding strategy and a promotion campaign that will attract a wider audience. Finally, DF should consider the idea of a merger or acquisition as the means of expanding its influence and gaining the trust of the residents of the French community.
As soon as a company acquires stability and success in its own country, its management team starts thinking about expanding the services or products they produce to the global market. Frequently, such a strategy brings enormous success and provides good profit. However, there are cases when some crucial factors are not analyzed before expanding. In such situations, not only do the organizations lack the profit they expected to gain but also they may experience severe disadvantages and losses. The case of Euro Disney in France is one of the most well-known examples of an unsuccessful expansion campaign.
The major mistake of Disney’s expansion process that is noted by analytics is that the company used an ethnocentric management approach (Karadjova-Stoev & Mujtaba, 2009). This method involves establishing the home management style in a foreign country. A common assumption, which is also a common mistake, is that what works well in one’s native country should also work well in another one. However, Disney’s human resource (HR) team did not take into account a large number of cultural differences between the Americans and Europeans, which led to a number of failures.
Although Disney’s chairman Robert Fitzpatrick had many connections with France, he made a number of mistakes when predicting the situation (Matusitz, 2010). One of the biggest problems was misjudging the Europeans’ vacation habits (Karadjova-Stoev & Mujtaba, 2009). While in America, people often took their children away from school to take them to Disneyland, in Europe, such a tendency was not popular. The HR team’s hopes to alter Frenchmen’s vacation preferences failed, which led to the division of the park’s work into high and low seasons. The division into seasons led to another serious issue – the realization of differences between labor law in France and the US (Karadjova-Stoev & Mujtaba, 2009). French employees refused to be sent home in low season – the practice that was frequently employed in America. The need to accommodate to the country’s labor law and create a stable schedule for all employees also caused problems for Euro Disney.
Some of the greatest losses appeared due to the miscalculation of Europeans’ eating and drinking habits (Karadjova-Stoev & Mujtaba, 2009). The primary aim of coming to the park was entertainment. However, since the people were staying for the whole day, they felt the need to eat something during their stay. As it appeared, Europeans’ food norms differed greatly from Americans’ ones. One of the biggest mistakes was not allowing any alcohol in the theme park whereas French people did not imagine lunch without a glass of wine (Karadjova-Stoev & Mujtaba, 2009). Also, Europeans preferred sit-down breakfast and lunch, and Disney’s team did not predict such a demand.
Another example of an organization that made mistakes during its expansion process is the introduction of eBay to the Chinese market (Lu, 2011). The major mistake made by eBay was that it wanted to win the audience by its methods without adjusting the latter to the local requirements. One of the most considerable shortcomings was that users were not able to communicate with a seller and had to rely on other buyers’ feedback. Such a practice was popular in the US, but it was not accepted well by the Chinese users. Therefore, eBay in China made the same mistake as Disney in France – both companies wanted to introduce their product in a foreign country without accommodating to local people’s needs.
The major lesson learned from eBay’s expansion is that it is necessary to evaluate the requirements of prospective customers prior to introducing one’s products or services in a foreign country. Another issue to be considered is that local organizations producing similar functions may be favored by the customers who may feel distrustful of a foreign company. Thus, it is necessary to perform a thorough analysis of a local market and take into account all details before trying to win the attention of the new audience.
References
Karadjova-Stoev, G., & Mujtaba, B. G. (2009). Strategic human resource management and global expansion lessons from the Euro Disney challenges in France. International Business & Economics Research Journal, 8(1), 69-78.
Lu, J. (2011). American internet companies’ predicament in China: Google, eBay, and MSN messenger. Javnost – The Public, 18(1), 75-92.
Matusitz, J. (2010). Disneyland Paris: A case analysis demonstrating how glocalization works. Journal of Strategic Marketing, 18(3), 223-237.