Disney Case Analysis
MBA 290 (Section #1)
Case Title: Walt Disney Co.
Case Synopsis:
* Michael Eisner became Disney’s CEO in 1984 and promised to deliver 20% annual return on equity. * During his time at Disney, Eisner ventured out and brought Disney to the TV and movie industry, opened Disney cruise line and Disney theme park in Europe, and opened to new areas, industries, and customers. * Eisner was successful in achieving his ROE goal in most of the first 10 years of his career at Disney. However, in late 90’s, ROE declined to single digit. * The decline was primarily due to too much diversification, a decreased emphasis on Disney magic (core offerings) and high turnover in leadership team - they did not agree with Eisner’s growth plan and his leadership style. * At the end of 2001, Disney reported a negative ROE.
Case Timeline:
* 1923 - Walter Disney founded Disney Brothers Studio with his older brother Roy. * 1928 - Mickey Mouse was born and Disney released the first animated film with sound “Steamboat Willie”. * 1937 - Disney released its first full-length and full-color animated movie “Snow White and the Seven Dwarfs”. * 1955 - Walt opened the first theme park - Disneyland in California. * 1965 – Walt secretly purchased 27,000 acres near Orlando, FL. * 1976 – Disney Tokyo was announced. * 1984- Michael Eisner was named as Disney’s new Chairman and CEO and Frank Wells was the President and COO. * 1994 – Frank Wells died in a plane crash; this allowed Eisner to run the company his way. * 1992 - Disney expanded the theme parks to Euro (Paris, France). * 1995 - Disney acquired Capital Cities/ABC for $19 billion. * 1999 - The first Disney Cruise Line was in operation.
Case discussion points: * The 1995 purchase of ABC proved to be a costly diversification, why didn’t the shareholders and other executives at the time created roadblocks for Eisner? * When the company got bigger and diversified in
Case Title: Walt Disney Co.
Case Synopsis:
* Michael Eisner became Disney’s CEO in 1984 and promised to deliver 20% annual return on equity. * During his time at Disney, Eisner ventured out and brought Disney to the TV and movie industry, opened Disney cruise line and Disney theme park in Europe, and opened to new areas, industries, and customers. * Eisner was successful in achieving his ROE goal in most of the first 10 years of his career at Disney. However, in late 90’s, ROE declined to single digit. * The decline was primarily due to too much diversification, a decreased emphasis on Disney magic (core offerings) and high turnover in leadership team - they did not agree with Eisner’s growth plan and his leadership style. * At the end of 2001, Disney reported a negative ROE.
Case Timeline:
* 1923 - Walter Disney founded Disney Brothers Studio with his older brother Roy. * 1928 - Mickey Mouse was born and Disney released the first animated film with sound “Steamboat Willie”. * 1937 - Disney released its first full-length and full-color animated movie “Snow White and the Seven Dwarfs”. * 1955 - Walt opened the first theme park - Disneyland in California. * 1965 – Walt secretly purchased 27,000 acres near Orlando, FL. * 1976 – Disney Tokyo was announced. * 1984- Michael Eisner was named as Disney’s new Chairman and CEO and Frank Wells was the President and COO. * 1994 – Frank Wells died in a plane crash; this allowed Eisner to run the company his way. * 1992 - Disney expanded the theme parks to Euro (Paris, France). * 1995 - Disney acquired Capital Cities/ABC for $19 billion. * 1999 - The first Disney Cruise Line was in operation.
Case discussion points: * The 1995 purchase of ABC proved to be a costly diversification, why didn’t the shareholders and other executives at the time created roadblocks for Eisner? * When the company got bigger and diversified in