Overview
Introduction
When one thinks of Walt Disney, the mindsets visions of characters, animated films, and amusement parks. There was more to Disney than those few obvious things that one notices. There was a man of magic, dreams, and optimism. Behind the imagination lived a role model who, from the heart, made the world a better place for both animals and humankind. Disney went through many struggles that influenced him to set goals and expand his opportunities for his future.1 With Walt Disney’s efforts, he changed and inclined the world through his entertainment, accomplishments, and even his struggles.
The Walt Disney Company was founded by brothers Walt and Roy Disney on October 16, 1923, as a small animation studio and grew into an empire. After Walt’s death in 1966, the company became increasingly detached from its original vision. The Walt Disney Company is a diversified worldwide entertainment company with operations in four business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products.
For much of its history, the company was known as Walt Disney Productions, Ltd.; it took its current name in 1986. Disney’s long-term prosperity fundamentally rests on their ability to create exceptional content that audiences around the world embrace, to deliver that content, to the greatest extent possible, to consumers when, how, and where they want it, and to do so in a way that delivers economic value to their shareholders over the long term. In 2005, Disney had revenues of $31.9 billion.
1 Walt Disney himself talks about the most meaningful and emotional moments of his life that explore the extraordinary hardships he overcame to achieve what he did in his lifetime. He had one foot in the past and one in the future. He wanted to inspire the young creative minds of today to help invent the future.”
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Background
“Walt Disney Company, the entertainment and Media Corporation based in Burbank, California. A leading name in family entertainment for much of the 20thcentury.” In the early 1920s, Walter E. Disney began a cartoon company, in Kansas City,
Missouri, with fellow artist Ub Iwerks. Pitfalls in distribution rights nearly sank Walt and his company. Disney joined his brother Roy in Hollywood, California, in 1923 and together they established The Disney Brothers Studio. The studio produced a series of animated short subjects allied with Alice in Cartoonland (1924-1927). In 1928 Walt Disney came up with the idea for Mickey Mouse, a good-natured, lovable mouse who often finds himself in difficult situations, the creation of Mickey Mouse saved their dwindling business. Iwerks helped design the character and Walt Disney Productions produced Plane Crazy (1928), black-and-white silent featuring the mouse.
By 1932, the Disney Company won its first Academy Award for Best Cartoon, for the Silly Symphony. 1934 marked the production of Disney’s first full-length feature film, Snow White and the Seven Dwarfs, which was released in 1937 and became the highest-grossing film of its time. But afterward, the expenses of production caused difficulties with the next few animated films; then the advent of World War II halted the production of films as the Walt Disney Company contributed its skills to the war effort.2 After the war, it was difficult for the company to pick up where it had left off, but 1950 proved a turning point with the production of its first live-action film, Treasure Island, and another animated film, Cinderella. In that time period, Disney also began several television series …2 the advent of World War II halted the production of films as the Walt Disney Company contributed its skills to the war effort.
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His brother Roy took over supervision at that time, and then was succeeded by an executive team, “Team Disney” in 1971. Several more projects, from merchandising to the continuing production of animated and live-action films to the construction of more theme parks filled the years. In 1983, Disney went international with the opening of Tokyo Disneyland. It produced dozens of animated motion picture hits, including Bambi (1942), The Jungle Book (1967), and The Lion King (1994). Disney has also produced a large number of live-action films, ranging from the family musical Mary Poppins (1964) to the violent thriller Pulp Fiction (1994). Since the mid-1980s Disney has diversified its holdings by branching into broadcasting, sports, the Internet, publishing, and the retail business.
Organizational Context
Disney Company believed in ten guiding leadership and motivational principles to have an effective organization:
- Make Everyone’s Dream Come True,
- You Better Believe it,
- Never a Customer, Always a Guest,
- All for One, One for All,
- Share the Spotlight,
- Dare to Dare,
- Practice, Practice, Practice,
- Make your elephant Fly,
- Capture the Magic with Storyboards,
- Give Details Top Billing.
The role of the leader is to create an environment in which all members of an organization have the opportunity to realize their own potential. The leader is not to enhance his or her own power but to create the conditions under which followers can achieve their potential.3.
3 Disney, each is responsible for upholding excellence and integrity. This means acting responsibly in all professional relationships, in a manner consistent with the high standards set for company’s business conduct.”
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Growth
Walt Disney maintained tight control over the company in both creative and business aspects. He oversaw the company’s expansion into live-action films, television programming, theme parks, and mass merchandising.4 Disney’s death in 1966 had transformed the family entertainment industry and influenced more than one generation.
Walt Disney Co. expanded its production units to include Touchstone Pictures and Miramax, makers of films for more mature audiences, and revitalized its animation division, producing films such as The Little Mermaid (1989) and Toy Story (1995), the first full-length computer-animated film. The company took an active role in reviving and commercializing New York City’s Times Square, including the recreation of some of its animated films, such as The Lion King (1994), like Broadway musicals. In 1994 it opened Celebration, a planned community in central Florida.
Under Eisner’s reign, Disney acquired Capital Cities/ABC in 1996, a $19 billion deal that increased the company’s stature enormously. The acquisition of Capital Cities/ABC gave Disney the power of broadcasting and the ability to meld entertainment content with programming. Later in the 1990s, the company was aggressively building a presence on the Internet and adopting a concerted approach to international expansion. In 1998, Disney acquired Starwave, which maintained ESPN.com and Mr. Showbiz and other websites including 43% of Infoseek, Eisner also acquired two professional sports clubs, the Mighty Ducks of Anaheim, a professional hockey team, and Major League Baseball’s Anaheim Angels.
4 The additions to the Disney group turned an already expansive empire into an all-around entertainment company of amazing proportions, but no matter the size of a company, success depended on implementation and execution.
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Recent Developments
Although films continue to be a major component of the Disney Company, they constitute but one of many successful ventures of recent years. New Disney theme parks were opened in Paris and Tokyo, and Disney Quests debuted in Orlando, Florida, and Chicago. The Disney Magic, the first ship in the Disney Cruise Line, was launched on July 30, 1998, and offered vacation packages to the Caribbean islands. In addition to the long-running Disney Channel cable network, broadcasting interests were expanded to include the ABC network, the ESPN sports cable network, and Radio Disney.
The Media Networks segment is centered on the American Broadcasting Corp. (ABC) television network, which it acquired through a merger with Capital Cities/ABC in 1996 The company’s most visible and noteworthy enterprise of the 1990s was its venture into Broadway musicals. Stage adaptations of the animated features Beauty and the Beast and The Lion King, both visually stunning and long-running successes, premiered in 1994 and 1997, respectively. The company purchased Broadway’s New Amsterdam Theatre in 1997 and has been credited with many civic improvements in the Broadway area. Disney’s most ambitious stage production is a modern version of Aida in 2000.
In March 2007, it was reported that Disney is launching a new Web Site, Disney Family which is a one-stop site for parents, especially mothers.
To get community right, you need to have the right mix between homegrown content plus the ability to loop in people and content from outside Disney is launching this new website aimed at moms who are increasingly turning to the Internet for answers to everything from problems with teething babies to financing college
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Consumer Products works with licensees, manufacturers, publishers, and retailers throughout the world to design, promote and sell a wide variety of products based on Disney characters and other subjects.
Disney operates its own publishing company, the Hyperion which recently published books by comedian-author Steve Martin and bestselling author Mitch Albom.
Parks and Resorts include Disneyland Resort, Walt Disney World Resort, Disneyland Resort Paris, Hong Kong Disneyland, Walt Disney Imagineering, Tokyo Disney Resort, and Disney Cruise Line. This segment generates revenues from the sale of admissions to theme parks, hotel reservations, and rentals at the resort properties.
At the end of the 20th century the Walt Disney Company was one of the world’s largest entertainment conglomerates, and it consistently ranked among America’s top 50 corporations.
Revenues & Profits
Disney started off 2008 with another outstanding quarter, marked by strong creative and operational performances.6 Media network revenues for the quarter increased 10% to $4.2 billion. Cable networks increased $125 million to $586 million for the quarter driven by the increases at ABC Family Channel and domestic Disney Channels. Broadcasting increased $75 million to $322 million primarily due to the higher advertising rates and sold inventory. Parks and Resorts increased 11% to $2.8 billion. Walt Disney Studio Entertainment decreased 15% to $14 million.
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Strategies
Disney’s corporate-level strategy is based on a horizontal and decentralized and informal management approach. Ideas are born from within the departments and are worked up throughout the relatively low hierarchy, where the final decisions are made. The management focuses on group creativity and in-teamwork. For instance, the most creative employees usually met every Sunday for the purpose of coming up with new ideas and new business concepts/strategies. The Sunday meetings are referred to as “Gong Shows”, where all participants have to come up with a unique idea. A large emphasis is placed on employee participation, especially on the most talented employees.
Furthermore, the company is frequently refreshing its top management with new executives. “Top-flight” managers from the entertainment and financial business bring with them new ideas and concepts which can be applied in the Disney Company. There is however a significant increase in expense attached to lure the very best to join the company. This increase in expense is directly related to special perk packages, higher bonuses, and escalated salaries that are offered to the top executives.
Equipped with the latest technologies and staffed with talented professionals and artists, the Company offers film and television producers, directors, and studios, as well as television advertisers effective solutions to their creative needs. The Company’s technology outsourcing solutions offer clients low operating costs, improved response time and reliability, access to new technology, and high standards of quality recognized by the international technical community.
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Changes
The frequent changes of corporate officers should be stopped. It is true that a new leader not required from within the organization will bring with him/her new ideas and concepts. But, such a person also brings a foreign corporate culture to Disney’s organization. That fact may lead to communication efficiency and moral problems within by promoting from within, employees will know the new corporate officers, and understand the new rules of the game.
Liquidity ratio appears to be a bit low for the corporation. It was suggested that the company should increase current asset requirements and keep current liabilities under strict control.
Outlook
The simmering feud for control of Disney Co. has described the company’s outlook as murky. However, the improved performance in the entertainment company’s film and TV operations and improved financial performance of the ABC television network posed positive outlook in the next two years. One of the two new markets Disney has already incorporated their business model into is the PC market. Integrating the ears of Mickey Mouse on their new personal computers will create a new source of revenue because as the standard of living and digital medium continue to increase more consumers will purchase personal computers. “The success of Walt Disney Company depends upon their ability to recognize new technology trends and develop plans to minimize the risks associated with technology.” (Khayat, 2004).
Walt Disney Co.’s objective is to be one of the world’s leading producers and providers of entertainment, and information using its portfolio of brand to differentiate its contents, services and consumer products. (Khayat, 2004).
Bibliography
- Birnbaum, S. (1987). The Best of Disneyland, Boston: Houghton Mifflin. 2008.
- Friedland, J. (2008).Walt Disney Company Reports First Quarter Earnings. MSN Money: Businesswire. Web.
- Khayat, S. (2004).The Walt Disney Case Study. Researching Nanotechnology. Web.
- Sanders, A.L. (2008).The Walt Disney Company. About.com:Animation. The New York Times Company. Web.
- The Walt Disney Company – Competitive Benchmarking Report. (2008). Research and Markets. Web.
- Walt Disney in Relationships (2003). Top Synergy. Web.