MICHAEL EISNER‟S DISNEY Prepared For: Mohammad Hannan MiahPrepared By:Khandker Sabbir Hasan 073656030Syed Mashhud Quader 1010792030Syed Shafquat Huq 0910337030Syeda Tubla Tasneem 083194530Tahia Asad 0930544530
Outline History and development Porter’s five forces SWOT analysis 3 “I” analysis Corporate level strategy Business level strategy Structure, control and organizational structure Recommendation
Disney’s history and development1922-1928 The Silent Era -Company was found -Created the short film: Alice in wonderland1928-1934 Mickey Mouse and Silly Symphonies -Created the most successful Disney character: Mickey Mouse -Experience in cartoons developed; contract with Technicolor to produce cartoons in color -Won its first Oscar1934-1945 Snow White and seven dwarfs and War World II -Snow white and seven dwarfs was introduced which was a huge success to hit the box office -Revenue to set up studio at Burbank -Issued 155,000 shares which raised the working capital to $3,500,000 Onset of World War II, box-office profits began to dry up
Continued..1946-1954 Post War and Television -foray into television -Movies such as Water Birds, The Alaskan Eskimo and many others were produced which were huge successes and are still1955-1965 popular Disneyland -Walt Disney opened Disneyland to the general public -Disney World, Orlando ‡ -The long-running anthology series1966-1971 The Deaths of Walt and Roy Disney and the opening of Walt Disney world -Walt Disney died -Michael Eisner took over and Walt‟s brother Roy took over the management of Disney world -The first part of Disney world was built: The Magic Kingdom
Continued..1972-2004 The Eisner Era -Michael Eisner and Jeffrey Katzenberg from Paramount pictures were brought on board --Disney channel came online with 532,000 subscribers but was not as successful -Disney‟s acquired Mirmax films -Ronald Miller became the CEO and with his turnaround strategy brought Splash which was a huge hit - In September Michael Eisner took complete control on Disney -Hired Gary L. Wilson for developing and expanding further -Profits from Disney world and Disney land rose by 38%2005- -Another part of Disney was built which was a huge success: The Iger Erapresent Typhoon Lagoon -sales jumped from $1.46billion to $4.59billion -Michael Eisner replaced by Robert Iger as CEO -Expected profits to increase by 20% -Purchased Pixar Animation Studio
Porter’sfive L Threat of Oforces W new entrants Current H L Bargaining Bargaining power of competition: power of I O suppliers customers G W STABLE H L O Threat of substitutes W
Strengths Popular brand name with popular characters, famous logo with high awareness among people Walt Disney was a creative genius and he and his company then were always at the forefront of technological developments His invention on various techniques won him Oscars After Walt, Michael Eisner was the savior of the fortunes of the corporation Entertainment and recreation Motion pictures and home videos Consumer products
Built shops, bars, restaurants and took control over the food operations of their parks Their Imagineering Unit is responsible for all technical advances Opened hotels for Disney guests to stay instead of them staying in other hotels not owned by Disney. Disney was involved in selling its organizational culture which is centered on high-quality customer service for its new recruits.
Weakness The motion picture FANTASIA was a commercial disaster, coincided with the unpopularity of cartoons during World War, plunged Walt Disney Productions into debt. After Walt‟s death, Disney‟s movie operations suffered, because they failed to find good scripts and projects and there was also the start of fighting between Disney‟s managers and stockholders Before the arrival of Eisner, none of the business segments followed any clearly defined strategy to exploit the Disney resources
Opportunity With the end of the war, public was open to fun and fantasy and Disney took it as an opportunity to search for new projects. Disney took popular fictional characters and turned them into movies, embarked on a series of nature or wildlife projects, took their projects to the television screen Its entry to the home video market Disney recognizing the possibilities of water attraction from Sea World, and created Typhoon Lagoon
Opened Euro Disney Theme park in Europe Signed an agreement with Mattel, to sell toys worldwide Disney also announced that it would open a new record division called Hollywood records Disney music channel and develop more attractions in the park
Threats After Walt Disney died, nobody could provide the creative vision to lead a company whose mission was to provide fun and fantasy The profits being earned by businesses in the vicinity of the park were vastly more than the revenues Disney received. The open conflicts inside the organization after Walt‟s death increased possibility of unfriendly takeover by corporate raiders. For every dollar, Disney was collecting in revenues
THREE “I” ANALYSIS IMMEDIATE COMPETITORS: Universal Studios, MCA, Sea World, Six Flags Theme Park, Hyatt Hotels, Hilton Hotels, CBS, Time Warner, Fox Entertainment, Paramount Parks, Orlando Theme park IMPENDING COMPETITORS: China and UK Theme Parks INVISIBLE COMPETITORS: Play Station, Xbox, Virtual gaming centers
Corporate Level Strategy Walt Disney started full length cartoon motion picture. In 1940 they went public raising $3,500,000. Walt invested into television sector. He further invested in making theme parks. In 1966 after the death of Walt his brother Roy took over management. Roy planned on investing on a huge tract of land to realize some dreams of Walt.
In 1971 a new CEO came forward Cardon Walker after the death of Roy Disney. He wanted to liquidate the movie making sector which was the core business. Due to unrest because of his attitude soon enough a new CEO was appointed named Ronald Miller in 1983. He opened a new division known as Touchstone Films. Roy II, nephew of Walt lost confidence on the management and appointed Michael Eisner as the CEO.
Eisner aided the concept of new attraction and brought forward a new water park and also went on collaboration with MGM. He took hold of the food selling vendors aspect inside the park. In 1985 Eisner announced collaboration with George Lucas for a Star Wars attraction at Disney Land. In 1983 they opened one in Tokyo, Japan. In 1991 they opened one in France, Europe. He distributed movies to television and as Videos.
Eisner kept in mind „new attraction‟ bit and decided to make one classic a year so that customers would always be with them along the journey. In 1989 Disney bought KHU-TV a station and changed the name to KCAL-TV. On the same year, Disney established a third motion picture company called Hollywood Pictures. In 1987 he made a deal with Sears for clothing and toy which was for 10 years. In 1988 Disney paid $52 million to buy Childcraft Education Corporation which sells educational toys.
Business Level Strategy Differentiator: Movies TV and Radio Publishing Theme Parks Vacation Resorts Consumer Products
Business Level Strategy Product Development- Introduction of zoological park, food concessions, water park etc. Opening hotels and resorts near theme parks Market Development- Going global- Canada, Europe, China, Japan, Hong Kong, India etc.
Structure Decision making Triad Mark Eisner(CEO) Frank wells Gary Wilson COO CFO
StructureDivisional structure Disney Motion Pictures and Entertainment and Home video Consumer Products Recreation Jeff Katzenberg Creative head
ControlPersonal control Michael Eisner‟s Personal control The influence of Walt Disney
ControlBehavioral Control Leadership and Conflict before Eisner Imagineering Unit
ControlOutput Control: Studio skills. Monitor customer segments and behavior. Licensing and Brand Name. Distribution control.
Organizational culture Pixie Dust- training, communication and care. High quality customer service. Trained employee. Empowered employees to learn to take their own decision. Innovation.
Recommendations Expand in Persian Gulf Countries (Dubai) which can be a lucrative market given their growing popularity as tourist hub Get into E-learning Open institutes to train animators Develop to stop piracy (esp. China)