The Walt Disney Company: The Entertainment King
Disney’s philosophy was to create universal timeless family. It built a brand ‘Disney’ which defined a way of life for families, and not just the kids or teenagers. Disney’s corporate culture emphasized creativity and managed synergies of its extremely diverse businesses. All their businesses were interrelated and complemented each other. For example, Disneyland provided a platform to advertise all of Disney’s products, services and the brand Disney. It helped grow every other business, eventually creating value for the shareholders. Apart from diversification, Disney also controlled the environment to prevent situation of supplier having all the power, which turned out to be a competitive advantage unique to Disney. Eisner rejuvenated Disney, when he took over in 1984, with tactical recruitment, controlled expenses and maximizing profits through the following activities: (1)
launched Disney Channel and increased its demand by halting show productions for other networks. Disney invested in digitising the animation process, enabling it to produce animated films every 12-18 months instead of every 4-5 years. (2)
maximized theme park profitability by focussing on attendance-building strategies. He capitalized the value of the brand Disney by hiking prices. (3)
pioneered the retail stores, generating sales twice the average in the industry. In the recent years, Disney’s certain efforts did not follow Porter’s essential test. For example, the over-paid acquisition of ABC – the television network did not provide the attractiveness and competitive advantage. Disney couldn’t possible produce all shows for the ABC network, meaning, it would eventually lose control over a lot of their businesses. The merging of 2 big enterprises diverted the focus on solving synergy issues rather than focusing on brand, growth, profitability and creativity.
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