Chapter 1:

Walt Disney Company

Disney, the kingdom of entertainment founded by Walt Disney and Roy O. Disney in 1923, is
hands down a benchmark in its industry. The Walt Disney Company continues to bring joy and
happiness to its consumers around the globe, and would never stop surprising us with its visions.

1.1 Introduction:
Behind all the wonders that Disney has brought us, are the visionaries of Disney’s leadership team
who strive to generate creativity, foster innovation, and utilize the latest technologies. Disney is a
multinational, cross-platform conglomerate. Their business flourish in many different domains,
including parks and resorts, consumer products, studio entertainment, media networks, and
interactive media. The company is currently operating in more than 40 countries, and they really
have taken issues such as labor, ethics, environment, philanthropy and etc., very seriously.

1.2 facts and statistics:

The rich backstory of Disney could not be easily simplified into a few pages of writing, therefore
certain facts and statistics that we found important to illustrate this company has been cherry-
picked and listed below.

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 Company Division Subsidiaries

1.2.1 Company:
 Founding Date: October 16, 1923 (93 years ago)
 Products: Theme parks, cable television, films, publishing, broadcasting, radio, web portals,
music, video games
 Number of employees: 180,000 (2014)
 Net income: US$8.38 billion (2015)
 Total assets: US$88.18 billion (2015)
1.2.2 Division:
 Walt Disney Parks and Resorts
 Featuring the company's theme parks, cruise line, and other travel-related
 Walt Disney Studios
 Includes the company's film, music recording label, and theatrical divisions.
 Disney Media Networks
 Includes the company's television properties.
 Disney Consumer Products and Interactive Media
 Produces toys, clothing, and other merchandising based upon Disney-owned
properties, as well as including Disney's Internet, mobile, social media, virtual worlds,
and computer games operations.

1.2.3 subsidiaries:
 Walt Disney Studios
 Walt Disney Animation Studios
 Disney Theatrical Productions
 The Walt Disney Company India
 Pixar Animation Studios
 Marvel Entertainment
 Marvel Studios
 Market studio
 Radio Disney

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1.3 mission statement:
What we do?
 Operating a business strategic
 Motivational creates
 Provides focus building a company laying bricks
1.4 vision statement:

1.5 objectives:
Why we do it?
 Sharing a dreams
 Cultural aspirational
 Building a community
 Building cathedrals
 Creating happiness

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Chapter 2
Strategy level
For this assignment, we are attempting to describe the strategies that The Walt Disney Company
took in different levels and segments of its business. However, Disney operates in many aspects
of entertainment, including amusement parks, TV channels, consumer products, movies, and so
on. We chose to study about Disney’s parks and resorts in further detail, making this segment of
the Disney entertainment kingdom our focus in this course.

2.1 Disney corporate level strategy:

As we have introduced in previous passages, Disney’s businesses flourish in different aspects of
entertainment industries, its divisions include: Walt Disney Parks and Resorts, Walt Disney
Studios, Disney Media Networks, and Disney Consumer Products and Interactive Media. Despite
their differences in operation, the core of these businesses are united, that is Disney’s mission
statement. The Walt Disney Company is to be one of the world's leading producers and providers
of entertainment and information. Using our portfolio of brands to differentiate our content,
services and consumer products, we seek to develop the most creative, innovative and profitable
entertainment experiences and related products in the world.

2.2 Disney’s Business Level Strategy:

Walt Disney Parks and Resorts is one of Disney’s most profitable business units, currently
operating in six different locations around the world, including California, Florida, Paris, Tokyo,
Hong Kong, and Shanghai. When it came to expanding overseas, entering international markets,
Disney did more than just copy its success at home. Instead, based on past experiences and
conditions of the hosting country, Disney went with one of two ways: licensing or joint venture.
Disney licensed its brand to a Japanese company called Oriental Land Company, Disney had not
been involved in operation, only did they receive royalties and parts of Tokyo Disney Resort’s
(TDR) revenue in return. Whereas in Paris, Hong Kong, and Shanghai, Disney chose to collaborate
with local entities and run its business in the form of joint venture. Due to these different strategies,
different functional level strategies were then sketched out and performed.

2.3 Disney functional level strategy:

2.3.1 Research and development
According to the financial report posted on Disney official website, people can know that Disney
Company had invested in park and resorts more and more for R&D each year until now. As a
result, it is obvious that they really put emphasis on Research and Development this part to meet
this changing world. The main capital expenditures for the Parks and Resorts are expansion, new
attractions, cruise ships, capital improvements and systems infrastructure. The increase capital
expenditure in domestic parks and resorts was to construct new attractions in Walt Disney World

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Resort. While the higher capital expenditures are in international park and resorts are due to the
construction of Shanghai Disney Resort.

2.3.2 Human resources

The strategy of Human resource in Disney Park and Resorts is one of the factors make them such
success. They have standard operation procedure when hiring, training, and encouraging their
employees. When recruiting new employees, the first priority is “attitude”, then their skills.
At Walt Disney, the culture and HRM policies play a vital role. Managing cross cultures is the key
factor of HRM function of the global context. HR policies are very important for any organization
as it can also be very effective at supporting and building the desired organizational culture.
Through regulatory HR policies, Disney has been able to manage their intellectual property rights
across the organization from its employees as well as from the external parties.

2.3.3 Finance
Owns and operates:
 Walt Disney World Resort in Florida
 Disneyland Resort in California
Manages and has effective’s ownership interests:
 81% in Disneyland Paris (recapitalization)
 47% in Hong Kong Disneyland Resort
 43% in Shanghai Disney Resort
Licenses intellectual property to a third party for the operations:
 Tokyo Disney Resort in Japan

2.3.4 Marketing
Disney puts a lot of emphasis on marketing to continually attract visitors. The following were what
they effort:
Embrace New Technology:
The park has always been quick to embrace technological advantages, like launching an app to
keep visitors informed, or their new Magic Bands wearable’s.
Use Data to Inform Decisions:
The Magic Band provides tracking data on all of the park’s guests, which allows Disneyland to
optimize everything from staffing to the location of a food vendor.

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Optimize User Experience:
Disney always consider customer experience and work to streamline the process of purchasing,
using, and servicing product. Balance Accessibility with Exclusivity Design a way to make
customers feel special, and they will respond with customer loyalty.

2.3.5 Long term strategy:

TDR had planned out its future strategies, surrounding its core plan of maintaining a theme park
attendance figure of 30 million guest per year. To achieve that number, TDR aimed to “build
stronger family entertainment” and “increase guest comfort”. Budgets and plans were invested and
planned out to be carried out through the next decade.

Chapter 3
Five forces analysis
Building on the previous parts we have discussed on Disney’s theme park segment, Disney Park
and Resorts, we continue to look into this case with a critical eye. Using Porter’s five forces
analysis, we studied what kind of external threats that Disney might have encountered, or would
come across in the future. By understanding more about the industrial environment, the business
is in, it helps the company to navigate its way towards sustainability and success.

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3.1 Industrial Rivalry
For Disney Parks and Resorts, there are four main rivalry in the amusement park industry, they are
Universal Parks and Resorts, Cedar Fair, Six Flags, Cedar Fair, and Merlin Entertainment. These
amusement parks are located mainly in the US, some expanded abroad globally like Disney itself.
Disney also competes with local theme parks in locations outside USA, such as China.

3.2 Threaths of subsitute

In this case of Disney Parks and Resorts we think the Threat of Substitutes is relatively high for
the following reasons:
● Cheaper alternatives to active entertainment, such as: Zoo, Museum, Movie, Concert, Sports.
Theme parks are meant for active entertainment. Consumers could choose to go to the movies,
park, sporting event or concert, just to name a few, instead of going to a theme park.
● Disney maintains relevance because of unique experience. Because Disney theme parks have a
distinctive competency of their animated characters and their family fun rides, consumers cannot
get the Disney experience anywhere else – making Disney relevant.

3.3 Potential entrants:

In Western countries the threat of potential entrants is low. The market of amusement park is
mature with more than 400 amusement parks and attractions in the U.S. and about 300 in Europe.
Building a new park requires a significant capital. In China there are many opportunities in the
amusement park market however the competition is already intense with many new theme park
projects. So it is difficult for a newcomer to succeed. Disney parks have by far the strongest brand
and loyal customers. Another strength that limits the threat of new entrants.

3.4 bargaining power of suplier:

In the case of Disney Park and Resorts we think the Bargaining Power of Supplier is Medium for
the following reasons:
● Limited suppliers
Not many companies are in the industry of producing, building and maintaining amusement rides.
The few major of them are Bollinger & Mabillard, Intamin, Vekoma, Arrow, Premier Rides, The
Gravity Group, and S & S Power. Their products could be found in most of the theme parks
throughout the world. Thus, those companies have large flexibility to bargain with Disney.
● Switching costs
The unique products and service is not only unique but also popular among Disney’s customers.
For the industry of producing toys or character related products, they had lower bargaining power.
Disney has the pattern right on it, so it can ask any company to produce merchandise. However,

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in amusement rides industry, Disney can only buy specific rides from limited company. If Disney
wants to change the supplier, the switching cost would be high.
● Supplier sustainability
The company size may be an advantage to Disney. Suppliers do not control the bargaining power
strongly because Disney they would want to keep their business. Suppliers know that Disney is a
stable company that could provide business for many years to come.

3.5 Bargaining Power of Buyers

In the parking and entertainment industry, there are four big bosses that are Disney, Six Flags,
Seawood and Universal. While Disney is the leader in this Oligopoly service industry, buyers’
bargaining power is much lower.
The buyers group is non concentrated: Disney park and resort has three competitors in their
amusement park operate. For the 7 billions population in the world, they have no many choices for
this kind of entertainment and the fact that, Disney Park and resort still stand steadily at first rate.
The buyer group demand is higher suppliers
There are fun facts about Disneyland:
● 0-25 minutes: 0-25 minutes is the average waiting time in line in low attendance day in
Disneyland. But this is rarely happened, and you might have to wait for an hour + often.
● Forecast rain: It might be larger attendance days before rain forecasted days.
● Busy days: Week days are the least busy days. Saturdays are busier than Sundays. Long
Weekends can be 3 times busier.
● Discount ticket: Disney rarely offers discounts on single ticket. Because Walt Disney focuses
on middle class, its prices are reasonable. The price changes are based on season which is high
when the market is good and reduced during low season.

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Chapter 4
BCG matrix and synergy
This week we focused on the BCG growth-share matrix and the synergies that Disney has created
within the conglomerate. Disney is such an entertainment empire that it operates in many different
industries: theme parks, studios, cable network, consumer merchandises, and etc. We looked at
several SBUs that are more well-known to the general public, and discuss their positions on the
BCG matrix, and what kind of synergies were produced.

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4.1 BCG analysis

4.1.1 ESPN Inc. - Dog

ESPN is part of the Cable Networks division. In 2016, there was no growth in that division and
in particular a decrease in overall revenue as the company faces lower advertising and affiliation
revenue and higher operational and production costs. The TV industry is not going to have a bright
future as new generations spend less and less time watching shows and more and more time on the
Internet. In the BCG matrix we can consider ESPN Inc. as a Dog.
4.1.2 Lucas film - Star
The last major acquisition from Disney group in 2012, Lucas film, for $4.06 Billion was a smart
and profitable move. The phenomenally successful return of Star Wars, and Studio’s record-
breaking $7.5 billion in total box office made the Studio Entertainment division operating results
grew by 28% for fiscal year 2016. We can say that Lucas Film SBU is a Star in the BCG matrix
that will bring growth and profits to the group with future Star Wars movie currently being
produced.
4.1.3 Walt Disney Animation Studios - Star
Walt Disney Animation Studios (WDAS) has a long-running history dating all the way back to
Snow White and the Seven Dwarfs, 1937, with the classic fairytales such as Cinderella and
Sleeping Beauty, WDAS has developed and evolved as time went on. Oscar-winning films
including Frozen and Big Hero 6 are also the amazing artworks produced by WDAS.

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4.1.5 Pixar Animation Studios - Star
Pixar Animation Studios, similar to WDAS above, is in the animated film industry. Pixar made its
debut in 1995 with the legendary Toy Story, which we could say paved Pixar the golden path
towards its success. Until this day, even after Disney’s acquisition in 2006, Pixar continues to offer
the world amazing stories and dazzling images.

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4.2 Synergy among SBUs
Disney being this enormous entertainment empire, and its businesses so closely interlinked, is
certain to have a certain level of synergy created through its operation and management. The most
obvious synergy would be marketing synergy. A successful Disney movie would positively affect
the sales of its related merchandises, motivate people to visit its attraction or ride (in the Disney
theme park), and promote related programs on the Disney Channel. For example, the success of
the Star Wars movies boosted sales in its merchandises, and got people excited about the upcoming
theme attraction in the theme parks.
Operating synergy happens when two or more divisions pool their resources and create a superior
performance together. A suitable example would be the more and more common 3D rides in
Disney theme parks, where the craft of animation and the thrill of roller-coasters join forces to
create incredible memories for the guests, the new Finding Dory ride in Tokyo Disney and Iron
Man ride in Hong Kong Disney. People would think that now Pixar belongs to Disney, their
animation team could merge and form a “dream team”, but actually they still have their own
separate teams of animators and story-tellers. They do share high-level executives and sometimes
give each other feedbacks on their work; we could say there has been a bit of synergy going on
between the two.

Conclusion:
In conclusion, Walt Disney is the master of globalization. Besides the manufacturing industries,
services industries are also a key factor which plays an important role in the economy. Walt Disney
is the largest company in entertainment business, and they also create a big volume of revenues in
worldwide top industries. By analyzing this company strategies, we get the general view on
why/how Walt Disney achieved their goals today and how they established themselves to become
as a global brand. Furthermore, Walt Disney has been developing and changing continuously as a
result of merchandising. With a great strategy like this, it would be a long way for their competitors
to catch up with their amazing cooperation.

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References:
 https://econsultancy.com/blog/67860-10-examples-of-great-disney-marketing campaigns/
 https://www.marketingcloud.com/blog/5-pieces-of-marketing-magic-from-disneyland/
 http://www.slideshare.net/aditisehgal2/walt-disney-strategy-management
 http://www.businessbrief.com/walt-disneys-8-secrets-to-success/
 https://www.coursehero.com/file/pvvmme/Boston-Consulting-Group-Matrix-f

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