The Happiest Place on Earth

1
The Happiest Place on Earth

• Ryan Parker
• Neil Birrell
• Cassie Kasteler
• Cara Cerruti
• December 6, 2004

2
Important Dates - History

• October 26, 1923 Disney Brothers Cartoon Studio
  was created
• 1928 creation of Mickey Mouse
• 1934 First feature film Snow White
• July 17, 1955 Opening of Disneyland
• December 15, 1966 Walt Disney died at 65
• 1971 Opening of Disneyworld
• 1983 Opening of Tokyo Disneyland

3
Financial Conditions

• Little Growth in the past few years
• No growth in Revenue
• Continued expansion with declining Profits
• Viacom competitor
• Includes media networks and studio entertainment
• Eisner as CEO in 1984

4
Industry Type

• Studio entertainment
• Includes motion pictures and music
• Disney Parks and Resorts
• 10 theme parks, 355 resorts, and operates two
  luxury cruises
• Consumer Products
• One of the largest licensors worldwide
• Media Networks
• Television, cable, radio, and internet

5
Organization Structure

• Related Diversification Strategy
• Span of Control is relatively narrow
• Tall, centralized structure
• Product structure
• Separate managers for their four businesses
• Share support value chain functions
• RD, Marketing, Sales, and Accounting

6
Macroenvironment

• September 11
• Travel and tourism
• Heavy hurricane season in 2004
• Tourism in Florida
• Declining Movie Revenue
• 14 films grossing 100 million vs. 21 films one
  year ago.

7
External Analysis

• Competitors
• Barriers to Entry
• Brand name
• Capital Requirements
• Synergies from various businesses.

8
External Analysis

• Substitutes
• Alternate travel packages
• Computer animation studios
• Buyers Suppliers
• International licensees
• Hong Kong government
• Pixar

9
Opportunities Threats

• Threats
• Competitors aggressive marketing.
• Economy still rebounding.
• Opportunities
• By 2005, Asia will be 35 of theme-park market.

10
Strategic Fit with External Environment

• Technology innovation
• Plan to buy stake in Infoseek (web-based search
  site)
• Disney Hong Kong
• Considered a test for future Disney products in
  China.
• Diversification
• 100 million spent at Magic Kingdom during travel
  industry recession.

11
Internal Evaluation

• Resources
• Tangible
• Intangible
• Brand Name
• Reputation
• Partnerships
• Distinctive Competencies
• Feature-length animation films The Lion King,
  Aladdin, The Little Mermaid, etc.

12
Strengths Weaknesses

• Strengths
• Resources tangible intangible
• Weaknesses
• Failed partnership with Pixar
• Low local-responsiveness with initial
  international Disney parks.

13
Current Strategies

• Functional Strategy
• Innovation partnership with Infoseek
• Customer responsiveness re-release of films
  Disney Hong Kong
• Business-level Strategy
• Profit from well-known Disney characters.
• Global Strategy
• Cost reduction through experience curve and
  location economies.
• Corporate Strategy
• Create emotional value for customer.

14
Key Issues Recommendations
1.
2.

• Hire dynamic leader to bring new magic
• New ideas to complement traditional values

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Key Issues Recommendations
1.
2.
3.

• Leverage each to drive revenue of all divisions.
• Focus on 50th anniversary
• Sports teams, cruise line, etc.

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Key Issues Recommendations
1.
2.
3.
4.

• Dont get left behind in animation
• Finding Nemo - 338 million The Incredibles
  over 200 milliion.

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Key Issues Recommendations
1.
2.
3.
4.
5.

• Infoseek search engine
• Disney.com

6.
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Key Issues Recommendations
1.

• Disney Hong Kong A test for the rest of Asian
  market
• High growth expected in Asia.

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Key Issues Recommendations
1.
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Key Issues Recommendations
D
ynamic CEO
1.
2.
ntegrate All Divisions
I
3.
S
ettle Differences with Pixar
4.
N
ew Technology
E
xplore New Markets
5.
6.
Y
our Favorite Entertainment Source
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Questions?