Company Briefing

 Generated $55 Billion in revenue Turnover in Million USD

 Disney park visitors - 150 Million
 Total Earnings $6.45 Billion
 Most Powerful Brand in the world
 4th Most reputable company in the world
(a) Why has Disney been successful for so long?

• The culture in Disney emphasized teamwork, communication, and cooperation from the time
of Walt to Eisner who committed himself to introducing the corporate values of quality,
creativity, entrepreneurship, and teamwork while preserving core Disney values. Each new
employee had to don a character costume at Disneyland upon orientation to understand the
values.

• Creativity with fiscal responsibility was the strategy. Eisner “on the one hand encouraged
expansive and innovative ideas. On the other hand, businesses were expected to deliver against
well-defined strategic and financial objectives.”

• Disney didn’t put all their eggs in one basket. They diversified their business form short
cartoons to full length live action, animation, comedy etc. in the movie side of things. They also
invested heavily in creating theme parts that were worlds of their own and successfully made it a
holiday destination. So if one segment did not do well ,the other segments would be able to
make up for it.
(b) What did Michael Eisner do to rejuvenate Disney? Specifically, how did he
increase net income in his first four years?

Eisner had his task cut out!

1. Maximising shareholder wealth

2. Culture and value preservation
3. Fiscal prudence - “Managing Creativity”
The Eisner way:
ABC, NBC and Disney Channel
Budgeting – moderate rather than extravagant; new talent acquisition to cut external
dependence; unknown and out of spotlight artists to reduce salary budgets, which was below
industry average
Investment in technology to rely more on animated characters – USD 30mn in CAPS etc.,
PR and brand story in control – through animated characters against stars
In-house distribution, technology and studios to reduce costs, thereby increasing profitability
Licensing characters and TM for merchandise revenues – cross-promotion
The Mighty Ducks – NHL expansion team
Theatre production
Revitalizing TV and movies
Produced 15-20 new movies every year compared to the 2-4 during Walt’s time
Movies the whole family could watch – comedies and light hearted content relatable to
families
Touchstone and Paramount distribution streams, Buena Vista Home Video
Out of 33 movies, 27 were profitable – cash cow; old classics were periodically remade
By 1988, Disney Studios’ film division held a 19% share of the total U.S. box office, making it
the market leader
Large investments like 30 million (in CAPS) were made into expanding the animation
department and producing 1-2 movies a year
Maximizing theme park profitability
Highly atomised and highly invested in attractions that ensured audience attendance -
strategies designed to generate rapid revenue and profit growth
Turned into a holiday destination in all locations – Tokyo, Paris

Coordination among businesses

Conflict and overlapping were quickly resolved making all departments effective
Arbitration vs micro-managing/conflict resolution interference
Monthly meetings to coordinate verticals

Synergy – Brand - Creativity

(c) Has Disney diversified too far in recent years?

 Disney identifies itself as an entertainment company catering to everyone in the family –

justifies its diversification strategy
 Disneyland is a family theme park – children to adults; Star Wars: Galaxy’s Edge
 Distribution: 20th Century Fox, 21st Century Fox etc.
 Pixar, ESPN, Lucas Film, Marvel Studios, ABC, Disney Channel etc.
 Streaming – HBO, Hulu, Netflix, Amazon etc.
 digital content consumption moving away from cable/aggregator set-up
 Licensing – royalty from characters, franchises etc.

 Synergy and managing the core Disney culture

 Vertical integration – core competence