The Walt Disney Company

Alicia Jelks Matt Brenan Cora Jones Chris Altobello Taylor Fernandez Laura Sweeney

It was all started by a Mouse. Walt Disney

Introduction

Fun Facts
Walt was the voice of Mickey Mouse for over 20 years

Reported that Walt was dyslexic

1000 Hidden Mickeys

History of the Industry

Studio Entertainment, Theme Parks and Resorts, Consumer Products, Media Networks, and Interactive Media. Animation Industry
Walt Disney is known for dominating in all industries in which it is involved. originated from the mid 1500s in England. What we think of as a modern day Amusement Park originated in 1950 with Disneyland. Snow White: 1st successful film, 1937 8 released before this but were not successful & arent around today

The theme park industry

The animated film industry

Porter's 5 Forces Model

1) Threat of Entry 2) Threat of Substitutes 3) Buyer Power 4) Supplier Power 5) Industry Rivaly

Threat of Entry
TV & MOVIES:
Low Average budget for producing films:
1994: $30 million 1999: $52 million

THEME PARKS:

Low Large amounts of capital requirements

Threat of Substitutes
TV & Movies:
Low Redbox, Netflix

Theme Parks:
Amusement Parks: Low Vacation destination: High

Buyer Power
Low
Consumers are willing to pay higher prices to enter Disney amusement parks than other parks

Supplier Power
High through vertical integration:
Media networks Studio entertainment Theme parks and resorts Direct retail distribution of consumer products Internet and direct marketing

Industry Rivalry
TV & Movies:
High Disneys largest competitors in TV:
NBC & CBS

Theme Parks:
Low

Intra-Industry Analysis of Disney's Strategies

Diversification
Movies TV Theme Parks Consumer Products

Cross-Promotion
Retail-as-entertainment Disney Store

Vertical Integration
From studio to distribution Sell through approach purchase by consumer & not video rental stores

Direct mail & catalog marketing

Intra-Industry Competition

Disney vs. Time Warner

Movies Warner Bros. New Line Cinema TV

Turner Broadcasting Network (merged in 1996) Cartoon Network competes against the Disney Channel Looney Tunes exclusively on Cartoon Network, previously aired reruns on ABC

Theme Parks Owned Six Flags until 1998 had to sell it because of increasing risk of bankruptcy, Looney Tune characters

Disney vs. News Corp.

Movies 20th Century Fox TV

Fox Broadcasting Company Fox competes against ABC and is by some considered to be in the "Big Four

Disney vs. Viacom

Movies

Paramount Pictures (acquired Dreamworks- 2006)

TV

BET, MTV, VH1 compete against ABC for a young adult demographic Nickelodeon competes against Disney Channel for viewers ages 7 to 17

Theme Parks

Nickelodeon Studios is a TV studio/attraction at Universal Studios Florida

Other Competitors
CBS Corporation

One of the five major media conglomerates CBS one of the "Big Three" television networks

NBC Universal

NBC the other member of the "Big Three" in television Universal Studios a big rival of Disney World because it is only 15 miles apart One of the six major movie studios

Sony Corporation of America

Columbia Pictures

Six Flags

Future of the Media Industry

Movies 1930, 5 major Hollywood movie studios: Paramount, RKO, 20th Century Fox, MGM, and Warner Brothers

Todays "Big Six Walt Disney Pictures, Time Warner, Paramount, 20th Century Fox, Columbia Pictures, & Universal Pictures

Future of the Media Industry

Television Past, consisted of the "Big Three" which was ABC, NBC, and CBS controlling 99% of TV broadcasting 2005, "Big Three" only controlled 32% of the broadcasting due to FOX, the CW, satellite and cable TV channels ABC, NBC, CBS, and FOX spent 60% of television advertising in 2009 to see a decrease in revenues of 9%

Future of the Media Industry

Theme Parks

Disney parks - Disney cruises dock at nearby ports to bring the guest to the theme parks Nickelodeon at Sea has partnered with Norwegian Cruise Line Six Flags filed for Chapter 11 bankruptcy protection in 2009 and exited in 2010, they are now coming out with new rides and attractions like the X-Flight Universal Studios - new ride is the Harry Potter the Forbidden Journey
2012, developing two new 3-D attractions

History of Walt Disney

Objective & Mission world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products. Primary financial goals: to maximize earnings and cash flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value. Target Market- families & people of every age. Employs approximately 150,000 people.

History of Walt Disney

1923, formal beginning of Walt Disney Co. Company Originally known as Disney Brothers Cartoon Studio.
Began with Alice Comedies, Oswald, Mickey Mouse Fame of Mickey Mouse

1929, Consumer Products began with Mickey Mouse notebooks

1934, Animated feature film, Snow White- highest grossing film of all time, record held until Gone With the Wind.
1940, Pinocchio and Fantasia released

1955, Amusement Park Disney Land

History of Walt Disney

1971, Disney World opened 1983, Tokyo Disneyland opened & Disney Channel initiated established Touchstone Pictures

1991, Beauty and the Beast aired- only animated film to be nominated for Academy Award for Best Picture
1994, Lion King shattered box offices, with grossing $312 M in US and $783 WW

1995, teamed with Pixar and created first computer animated feature film-Toy Story
1996, Acquisition of ABC, $19B and 2nd largest acquisition at the time

1998, Animal Kingdom opened in Disney World

Disney's Strategy
Use their 5 major business segments to produce unparalleled entertainment experiences based on the rich legacy of quality creative content and exceptional story telling.

Disney's Competitive Advantages

Copyrights
Protect characters Consumer products Complimentary assets & activities Ex: High School Musical Michael Iger, CEO Creativity, Quality, Entrepreneurship, Teamwork Disney Institute

Synergy

Corporate Culture

Recent Disney Opportunities

Purchased Marvel Comics for $4 billion Began distributing content in new ways
Video On-Demand TV shows on ipod In-house video game capabilities

Future of Disney
Increasing growth

Revenue in 2000: $25 billion Revenue Today: $38 billion Snow Whites 50 anniversary, Mickeys 60 Birthday 2000, launch new Mickey Mouse clothing line Lion King in 3D

Emphasis on Disney original characters/movies than new th th

Increase international sales

Disney: 21% of its revenue from abroad Coca-Cola: 63% McDonalds: 61% Big conglomerate ran by 1 person may lose creativity Disney Magic Value tangible assets & controlling costs more than intangible assets Management control & succession

Threat:

Strategic Issues:

Recommendations for Disney

1. Decentralize decision-making

A: more creativity, increase revenue D: may be costly (cannot control everyones decisions, can only give incentives to influence decisions)

2. Research international cultures

A: avoid culture clash, more customers, increase international revenue D: more research costs

Recommendations for Disney

3. Revamp the Disney culture

Walts Belief: Money is no substitute for animation

Creativity

Eisners Era: too much conflict

Gong show Inner competition

Make it fun Google A: retain valuable, happy employees D: not everyone will like change

Recommendations for Disney

4. Update more theme parks with rides that match hit movies

Roger Rabit in Cali A: incentive to visit parks D: costs to update rides, replace rides that customers may be used to

5. Movie theaters inside theme parks

Play movies from vaults A: incentive to visit parks, increase revenue D: wage costs