Ebenezer Amare
Disney Case
Disney is a highly diversified company which operates in a wide range of industries such as theme parks and resorts, consumer products, television networks, and the film industry. These constituent businesses have invaded many different economies and often generate their income via disparate business models. With such diverse operations, Disney is less affected by changes in external environment than its competitors are. In order to achieve such a wide-reaching enterprise, Disney often utilized vertical integration. Many consumer products like books, magazines, videotapes, computer software, and so on were sold in Disney stores. Disney’s buyout of ABC in 1996 ...view middle of the document...
During its lifespan, Disney’s leadership adopted different innovative strategies to manage and cultivate creativity in the best way. Under the helm of Michael Eisner, creativity was fostered through “Gong shows” where Disney employees from different departments would meet and ideas.
This leads to the strength of Disney's management strategy. Walt Disney started the company with the rule that everyone addressed each other by their first name and that no one had titles in a successful effort to instill a spirit of teamwork and cooperation which existed even as the company grew to over a 100,000 employees. With this informal approach, ideas are born within departments and are later discussed with top-level management in making final decisions. The most creative employees tend to thrive in such situations. Another proven capability of Disney is their efficiency. In the movie industry, film costs tend to increase rapidly and thus, have a direct effect on the bottom line of a company. By reducing the costs involved in making and marketing Disney films, more profitable movies can be produced. Tightening budgets as they’ve done in the past will force directors and producers to be more resourceful and help Disney produce more efficiently and profitably than its competition.
Of the Porter’s 5 forces model, the bargaining power of customers is especially high in the service and in the entertainment industry to which Disney belongs. Having a lot of loyal customers help make Disney's operations run seamlessly. Take the entrance fee charged at Disney's theme parks, for instance. It has been found that maximum amount of money that customers are willing to pay is $33. If Disney increased this fee at all, it is likely that they would lose a lot of theme park customers.
A technological external factor affecting Disney’s current and future strategic options is the pervasiveness of the internet and the waning lifetime of physical mediums for entertainment content. CDs, DVDs, and other physical formats are becoming obsolete. Streaming content over the internet through services such as Netflix is increasing competition for content distribution...
