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DisneyCase
- 4. WHOFOUNDEDTHE BILLIONDOLLAR COMPANY? • Walt Elias Disney along with his brother Roy founded Disney Brothers Cartoon Studio in 1923. • Focused on animated Film Making. • In 1954 entered the television with a series “The Wonderful World of Disney”. • In 1955 expanded and built amusement park “DISNEYLAND”
- 5. DISNEY WITH MC DONALD’S • In 1996, DCP signed an exclusive, 10 year, $2 billion licensing deal with McDonald’s that gave the fast food giant the right to feature Disney Characters in its promotions and to offer Disney toys with its meals.
- 6. By 2006, Walt Disney Company was comprised of four major business segments: • Media Networks • Parks and Resorts • Studio Entertainment • DCP
- 7. In 2006 it became a $32 billion company with a net income of $2.5 billion.
- 9. 96% 92% 94% CHARACTER AWARENESS AMONG CHILDREN OF AGES FROM 2-11 YEARS…
- 10. AFTER ENJOYING DECADES OF 25% ANNUAL GROWTH, IN 1998 AND 1999, DCP EXPERIENCED 10- 15% DECLINES IN SALES IN THE U.S. AND JAPANESE MARKETS.
- 11. DCP DECIDED TO USE 3 TYPES OF LICENSING MODELS TRADITIONAL MODEL SOURCING MODEL(designed & create products by Disney but manufactured and marketed by licensee) DIRECT-TO-RETAIN MODEL
- 12. Current situation • Disney is being held responsible for rising obesity epidemic. • It is facing pressure from parents, activists, government to check their offerings and advertisements activities.
- 15. In the United Kingdom, the Advertising Standards Code of the Communications Act of 2003 ensured that broadcasters followed a tough set of rules regarding advertising food to children, including a rule that said that advertisements must not encourage or condone excessive consumption of food.
- 16. SITUATION • DCP Had Been A Long-time Licensor Of Packaged Foods, But The Portfolio Was Mostly Sweets And Treats. • In 2004, DCP Estimated That Its Branded Food Products Accounted For Less Than 1% Of The Children’s Food Market.
- 17. DCP EXECUTIVES BELIEVED THAT THE COMPANY’S CHANGING LICENSING MODELS, RETAIL INDUSTRY CONSOLIDATION AND THE OBESITY EPIDEMIC OFFERED DCP AN OPPORTUNITY TO SIMULTANEOUSLY BROADEN AND RATIONALIZE ITS PRODUCT OFFERINGS.
- 18. WILL DISNEY BE ABLE TO MEET THE NUTRITIONAL GUIDELINES SET BY FDA?
- 19. To meet the requirements Disney arranged it’s portfolio into 5 categories:- Main Meal Side Dish Snacks Drinks Treats
- 20. products met nutritional guidelines for category –no changes were required41% Products out of compliance-to be phased out 28%
- 23. Though as of June 2006 the company’s policy stated that all new licensing contracts needed to adhere to the guidelines, existing, long-term contracts could only be changed as they came up for renewal. DCP then used the opportunity to share its nutritional guidelines with its licensees. Though as of June 2006 the company’s policy stated that all new licensing contracts needed to adhere to the guidelines, existing, long-term contracts could only be changed as they came up for renewal. DCP then used the opportunity to share its nutritional guidelines with its licensees.
- 24. DCP knew that along with satisfying nutrient requirements the food also had to appeal children.
- 25. MARKET SURVEY DCP discovered there was a GAP between the foods children requested and the foods their mothers were willing to buy for them.
- 26. Company adopted 3 approaches 1/3 First, DCP would offer products that already had broad appeal such as milk or peanut butter.
- 27. The second was to take products that were already healthy and make them more “fun.”
- 28. The third was to use packaging to inspire product sampling, such as making water bottles in the shape of characters.
- 30. SWOT Analysis
- 31. STRENGTH Brand recognition Creative Process Strong diversification Corporate with big retailers WEAKNESS Large R&D cost High risk factor No own manufacturing for DCP OPPURTUNITY Mother’s Positive perception of the Disney brand Disney’s Popularity THREAT Competitors Differentiation from natural produced product Pricing competition
- 33. DCP and Imagination Farms used a three-pronged product development strategy: Differentiate commodity produce through promotion, Create value-added products through product preparation or packaging, and Develop exclusive produce varieties that would yield more child-friendly foods.
- 34. “The normal size of a potato is six or seven ounces but we package four or five ounce potatoes for kids or perhaps higher-flavor, yellow potatoes,” said Goodwin.
- 35. In Fall 2005, spinach, baby carrots and clementines bearing SpongeBob Squarepants and Dora the Explorer character images, licensed by children’s cable television channel Nickelodeon, began to appear on supermarket shelves. By the end of the 2005, unit sales of Darling clementines increased by almost 25% after the Dora and SpongeBob characters were added to the product packaging COMPETITORS
- 36. Sesame Workshop found that preschoolers’ consumption of broccoli increased by 28% when the vegetable was branded with a Sesame Street character In June 2006 Del Monte Foods, a $3 billion U. S. manufacturer of branded and private label canned vegetables and fruit, announced that it had signed a licensing deal with Sesame Workshop, a nonprofit educational organization best known for its Sesame Street public television program.
- 37. NEW PLANS EXECUTED October 16, 2006 • Make nutritionally beneficial changes to the meals served • Eliminate added trans fats to served foods • Children’s meals with low fat milk, fruit juice or water instead of soda and other replacements
- 38. THE FUTURE Publishing cookbooks, televising cooking shows for children, and linking its nutritional efforts with exercise programs. Extending its offerings from retail supermarket products to food service (school lunch programs) and out-of-home consumption in restaurants.