迪士尼公司运营案例分析报告

Analysis Disney CompanyThe Walt Disney Company is an American diversified mass media corporation with touching every aspect of the entertainment industry, including publishing, television networks, educational materials, cable channels and Internet websites (Smith, Clark, 1999). And it also owns the theme parksall around the world. Disney Company became a “world’ｓ best-known company” which was based on a lot of cartoon characters. Today it is oneof the largest media corporations in the world (Siklos, 2009).Development of DisneyDisney Company was formed on 16 October 1923, by Walt Disney and his brother Roy Disney in Los Angeles, which was named the Walt Disney Studio. “It all started with a mouse” (Wasko, p.9, 2013). Before the mouse appeared in the film, Walt did two cartoon series which was called Oswaldthe Lucky Rabbit and Alice Comedies. However, because of Oswald got involved the problem of copyright, Walt needed to search for a new character. In 1928, the idea of the mouse which was named Mickey came into his mind (Wasko, 2013). And then the great success of Mickey made the company rapidly growing up in Hollywood.During the World War 2, Disney Company has been taken over by US Army troops a lot. However, this situation did not block the development ofDisney, at that time, Donald Duck as one of the famous animal characters appeared in short film.After the war, the way that Disney Company developed their films werebecoming diversification. Walt started producing television programmingwith ABC and NBC, which made their characters to show themselves ontelevision. This successful movement let Disney Company goes further — a theme park. The first Disneyland was opened on 1955 (Grover, 1997). Due tothese great successful strategies, Disney Company finally becomes a major independent film company in Hollywood (Wasko, 2013).How does The Disney Company grow up?The Disney Company uses diversification strategies to expand its market,which make them to achieve media monopoly and create enormous revenue.Those diversification strategies can be separated into two aspects,horizontal integration and vertical integration.1.Horizontal integrationSince 1993, Disney Company never stopped their footsteps of acquisitions.Disney Company has acquired Miramax Films, Pixar, Marvel Entertainment andLucas film.“Horizontal integration enables a company to increase market power bycross-promoting or cross-selling a show” (McChesney, p.22, 1999). In 1993, Disney Company acquired Miramax which was a leader in independent film distribution (Wasko, 2013). This move made Disney Company had more marketshare for adult not only in children market. Through a series ofacquisitions, Disney Company obtained more opportunities to distributedifferent kinds of films, which created new contents to Disney Company.2. Vertical integrationIn 1995, the first Disneyland opened in California. And now, Disney Companyalready has 7 theme parks around the world which bring Disney Companyenormous income. According to the Disney annual report in 2014, Disneyparks and resorts contributed $15, profits in 2014.In 1996, Disney Company officially acquired ABC, with this merger, “Disney could acquire the entire ABC television network, key ABC affiliates, ABCradio networks, publishing enterprises, ESPN, A&E and Lifetime” (Smith, Clark, p.171, 1999). This decision combined Disney animated film,television program and radio programming together effectively. It madeDisney Company occupied a dominant position in the media industry (Wasko,2013). And in 2001, the Fox Family Worldwide was sold to Disney by NewsCorp. which known as ABC Family (Columbia Journalism Review).3. DiversificationDisney Company added diversification activities to expand areas ofDisney’ｓ operation since 1984 (Wasko, 2013). Due to the acquisition,Disney Company had opportunities to take benefits of technologies fromMiramax Films, Pixar and others company have been acquiredAccording to the annual report of Disney Company in 2014, “The Walt Disney Company, together with its subsidiaries, is a diversified worldwideentertainment company with operations in five business segments: MediaNetworks, Parks and Resorts, Studio Entertainment, Consumer Products andInteractive.” Acquisitions and cooperation help Disney to approach new aspect, which lead Disney to permeate in every aspects of life.How wide ranging are its present operations?Disney ’s industry distributes in various fields, which include medianetworks, park and resorts, studio entertainment, consumer products,interactive.Figure 1: from Disney annual report 2014Figure 2: the percetage of revenue of Disney Comany, from Disney annual report 2014 MediaNetwork43%Parks andResorts31%StudioEntertainment 15%Consumer Products 8%Interactive3%The major revenue of DisneyCompany segmentsAccording to these two graph, the revenue of media network and parks andresorts are most important contributions of Disney Company, which occupymore than half of revenue, almost 74%. And this was due to high programesales at broadcasting and high quality amenities of theme parks (Disneyannual report, 2014).How globalised are its current operations?Disney channels can be a specific example. “The Disney Channels includes over 100 channels available in 34 languages and 164 countries/territories”(Disney annual report, 2014). Therefore, Disney has reached most marketsaround the world.Figure 3: from Disney annual report 2014Figure 4: the overseas revenue of Disney Comany in 2014, from Disney annual report2014According to figure 4, United States and Canada are the most importantmarkets which contributed $36,769 million in 2014. And from figure 5, wecan see that the most income of overseas market is Europe. However Asia as the second market shows a significant increase by compared with the other areas, which shows that Asia market is becoming more important in global market of Disney.In the fields that Disney has apporached, their Theme Parks can be looklike a most useful business method to enlarge their overseas markets. For example, before the Hong Kong Disney land built, Hong Kong SpecialAdministrative Region (HKSAR) invested $2.9 billion which includedinfrastructure improvement and loans to this Disney land and also earnedabout $780 million from the joint venture (Matusitz, 2009). At the sametime, Disney made “four glocalization changes ” to adapt Chinese people ’s preference.“They are (1) reduction of prices; (2) adaptation to local visitors ‘ customs; (3) change ofd écors and settings; (4) 62236181650529903333393012951506160901000200030004000500060007000201220132014overseas revenueEurope Asia Pacific Latin America and Otheradaptation of labor practices” (Matusitz, p.671, 2009). Based on these “four glocalization changes”, Hong Kong Disneyland was more successful.How does Disney influenced by the shareholders and directors? According to Disney Company annual report in 2014, Robert A. Iger isChairman and Chief Executive Officer of Disney. And there are the fivemajor shareholders of Disney Company:Institutional SummaryNon-institutional Shares39%Institutional Shares61%Figure 5: the ownership sumary of Disney Comany, from NASDAQFigure 6: Top 5 Holders of Institutional Holdings of Disney Comany, from NASDAQ From these two pie chart, we can see that Institutional Shares hold 61% ofDisney Company’s stock. And the main shareholder of Disney Company is The Vanguard Group which is an American investment management company. Disney Company can be influenced and developed through cooperation with company from interlocking shareholders and interlocking directorships,which can be distribute in three areas: Financial institutions, food anddrink companies and digtial companies. The diversification of cooperationcan be found in many ways, like economy, political and cultural networks.Board of Directors Interlocking CompanySusan E. Aronld The Carlyle Group, McDonalds Corporation John S. Chen Blackberry, Ltd., Sybase Inc.Jack Dorsey Twitter, Inc., Square, Inc.,Robert A. Iger The Walt Disney CompanyFred H. Langhammer Estéｅ Lauder Companies Inc., The ShinseiBankAylwin B. Lewis Potbelly Sandwich, Starwood Hotels &Resorts WorldwideMonica C. Lozano U.S. Hispanic Media, Inc.,ImpremediaLLC, Bank of America CorporationRobert W. Matshullat Visa Inc., The Seagram Company Ltd.Morgan Stanley & Co. Incorporated,TheClorox CompanySheryl K. Sandberg Facebook, Inc., Google Inc., StarbucksCorp.Orin C. Smith Starbucks Corporation, Nike, Inc.,Conservation International, Deloitte &ToucheFigure 7: Board of Directors of Disney Company, from The Walt Disney CompanyThe figure 8 can clearly show the interlocking company of Disney Company.As we can see from this table, Langhammer and Lozano are two directors ofDisney, at the same time they are the directors of The Shinsei Bank andBank of America Corporation separately. They can give Disney Company abetter financial support and economic security. It is also a stable capitalchain of Disney Company.Disney Company and interlocking company cooperation may promote Disney’s market policy. For example, Smith has served as the director of Nike whichhas a great market share in Chinese market and sponsors many events inChina. Therefore, the connection between Disney and Nike may acceleratesDisney’s step to enter Chinese market and changes the attitude or policytoward Chinese market. Further more, Disney and Nike have launch sportsshoe together ever which played an advocacy role for both brand.Disney Company has its own theme parks and resorts, and those hotels andfacilities come from the interlocking companys, like Starwood Hotels &Resorts Worldwide or Deloitte & Touche. Seagram, starbucks and McDonalds companies provide Disney a great convience for food and drinks. Thoseinterlocking companies may in the Disneyland or nearby the Disneyland,which means Disney also gives them a opportunity to achieve the situationof win-win.The interlocking companies of Disney include internet engine, software andsocial network sites like Google, Facebool, Twitter and Sybase, providingDisney technical support and new platform to branding itself. Taking Googleas an example, in 2014, Google and Disney had team up to launch Disney,Pixar and Marvel movies on any device via Google Play(Buhr, 2014).This cooporation can let more people to download Disney movies, no matter whatapp people are using, they can easily download Disney movies through Google account. Disney and Marvel fans will be able to use any computer or cellphone no matter what software system and watch their movies. This shiftsatisfys the customer’s need and retain more Disney fans.Advice to Disney Company“ Disney Company covers an extremely wide rang of media/ entertainment activities, from traditional television and film viewing, to theme parkvisits and sport event attendance ” (Wasko, 2013). It is definitely a diversified entertainment company. The success of Disney Company can be related to its diversified activities. At the same time, Disney Companyrelies on wide as well as high quality range of products, establishing awell industry brand. With the expansion of Disney industry, it merger a lotof competitive companies like Miramax Films, Pixar and ABC, which reduced competition of market, promoted the capability of Disney and enlarge the extent of Disney Company. Therefore, the superior market share is one ofthe strengths of Disney Company.However, there are still some weaknesses hidden behind the great advantages of Disney Company. The continued growth of high cost of services and products is a problem for Disney. According to the Disney annual report in 2014, the cost of service increased 6% (almost $1.3 billion) compared with 2013, which was because the higher programming costs at ESPN and ABC Television Networks. And the cost of products increased 2% (almost $120 million). Besides the costs of Disney Company, how to overcome the cultural difference and policy issues are quite weakness for Disney to develop new markets. By compared with North America, the revenue from other regions is much less. Taking Asia as an example, the difference of culture background and policy, Disney Company can only has the theme parks or releases filmsin Asia, the channels like ESPN or ABC cannot have a place. It is an issuefor Disney Company to breakthrough.Disney Company still holds many opportunities which can make the company to grow up. The popularity of internet can be seen as a business opportunity. Nowadays, most of people use internet especially social networks more frequently this situation not only happens on adults also on children.Therefore Disney Company can catch this opportunity to branding themselves on internet, which can be like an advertisement or an online game. From market aspect, Asia as the most population in the world has a lot ofchances for Disney Company to develop and then Disney may has more market shares. Disney Company will grow further by taking those opportunities.There are some threats that Disney Company need to pay attention to. The economic environment is an uncontrollable risk for Disney Company. “Turmoil in the financial markets could increase our cost of borrowing and impede access to or increase the cost of financing our operations and investments” (Disney annual report, 2014). At the same time, under this condition, it can increases the cost of borrowing and makes it difficult toget financing. Another threat is potential competitors, even after Disney Company acquired many diversified corporations. Disney Company needs a large number to make it run which lead to high costs of wage, medical feesand allowance. Disney annual report stated that there are about,000 employees working in Disney Company. Therefore, the huge expenditure is not a small burden for Disney Company. However, a variety of unpredictable events are a potential threat which may reduce demand for products of Disney.Although there are a lot of weakness and threats, Disney Company has strategies to alter that. In order to avoid the threat of uncontrollable economy, it requires Disney Company to alter the business strategy or restructuring of its business, even this operation may increase the costs. Disney Company needs to attract new investments and expand new business line (Disney annual report, 2014). Maintaining a low debt ratio is usefulway to avoid the problem of financing. In addition, Disney should limit theincreasing of costs to look for cheaper labor in global markets.Disney can improve their level of localization to narrow the culturaldifference and reduce competition when they expand their global markets.For example, Happy Valley is a famous amusement park in china which willshare the market with Disneyland. Disney can increase the localization ofelements and in some extent reduce the price of ticket to promote competitiveness.Nowadays, people have variety ways to use media. Mobile phone is amainstream in people’s daily life, presenting that Disney should keep paceof technology. The apartment of Disney could develop their own applicationsfor their consumers. As Disney annual report said in 2014, “The media entertainment and internet businesses in which we participate increasinglydepend on our ability to successfully adapt to shifting patterns of content consumption through the adoption and exploitation of new technologies.”Therefore, the priority place should be given to keep pace with new mediaand new technologies for Disney in the future.ReferencesBuhr, S. (2014). Disney And Google Partner Up For Disney Movies Anywhere Access On Google Play. Techcrunch. Retrieved 16 November, 2015 fromhttp://techcrunch./2014/11/03/disney-and-google-partner-up-for-disney-movies-anywhere-access-on-google-play/Columbia Journalism Review. (2013). THE Walt Disney Company Timeline.Retrieved 13 November, 2015 from /resources/?c=disneyGrover, R. (1997). The Disney touch: Disney, ABC & the quest for the world's greatest media empire. Chicago: Irwin Professional Pub.Matusitz, J. (2011). Disney’ｓ successful adaptation in Hong Kong: A glocalization perspective. Asia Pacific Journal of Management, 28(4), 667-681.McChesney, R. W. (1997). The Global Media Giants. Extra, USA.Nasdaq. (2015). Walt Disney Company (The) Ownership Summary. Retrieved 13 November, 2015 from .nasdaq./symbol/dis/ownership-summarySiklo,R. (2009). Why Disney Wants Dreamworks. Fortune. Retrieved 16 November, 2015 fromhttp://archive.fortune./2009/02/09/news/companies/disney_dreamworks.fortune/index.htm?postversion=2009020914Smith, D. and Clark, S. (1999). Disney: The first 100 years. New York: Hyperion Books.The Walt Disney Company, Fiscal Year 2014 Annual Financial Report And Shareholder Letter. Retrieved 16 November, 2015 fromhttp://cdn.media.ir.thewaltdisneycompany./2014/annual/10k-wrap-2014.pdfWasko, J. (2001). Understanding Disney: The manufacture of fantasy.Cambridge: Polity.。