What Did Michael Eisner Do to Rejuvenate Disney? Specifically, How Did He Increase Net Income in His First Four Years?

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  • Topic: Who Framed Roger Rabbit, Animation, Jeffrey Katzenberg
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  • Published : May 18, 2012
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What did Michael Eisner do to rejuvenate Disney? Specifically, how did he increase net income in his first four years?

When Eisner joined Disney in 1984, he committed himself to maximizing shareholder wealth through annual revenue growth of 20%. Eisner took several steps to rejuvenate Disney. His plan was to build the Disney brand while preserving the corporate values of quality, creativity, entrepreneurship, and teamwork.

To maintain Disney’s culture and to develop pride in the Disney tradition, Eisner introduced a three-day-training program, which required all new employees (including executives) to spend a day dressed as characters at the theme park. Eisner put lot of emphasis on managing creativity and financial performance. Under his management spending was readily approved if necessary to achieve creativity.

One of the Eisner’s management team’s top priorities was to revitalizing Disney’s TV and Movie business. His team brought back network program by premiering “The Disney Sunday Movie” on ABC. The show helped to demonstrate that Disney could be inventive and contemporary. This was followed by the release of several hit sitcoms and non-network shows. In Disney’s movie-division, Eisner increased the company’s production of new films and improved the content of films to suit a more contemporary audience. Eisner recruited Jeffrey Katzenberg as chairman of Disney’s motion pictures. Under Katzenberg, Disney pursued strong scripts and moderately budgeted films that helped them to produce the film in below the industry average budget. As a result of improved cost control and brilliant scripting, casting, and production, Disney won at the box office. From 1984 to 1988, market share increased from 4% to 19%.

Eisner’s management team accelerated production of animated movies by expanding animation staff to support the release of new animated feature every 12 to 18 months. Disney invested $30 million in CAPS (computer-animated-production-system) that...
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