04/08/2304/08/23

A Case Study A Case Study onon

04/08/2304/08/23

04/08/23

AgendaAgenda

► About DisneyAbout Disney►Divisions of DisneyDivisions of Disney► A bit of HistoryA bit of History► About the CASEAbout the CASE► SWOT AnalysisSWOT Analysis► Its Current Executive ManagementIts Current Executive Management► Recommended Organizational structuresRecommended Organizational structures

Model 1Model 1 Model 2Model 2 Model 3Model 3

04/08/23

About DisneyAbout Disney

► The Walt Disney CompanyThe Walt Disney Company (most commonly (most commonly known as known as DisneyDisney) () (NYSENYSE: : DISDIS) is one of the largest ) is one of the largest media and entertainment corporations in the world. media and entertainment corporations in the world. Founded on Founded on October 16October 16, , 19231923 by brothers by brothers WaltWalt and and Roy DisneyRoy Disney as a small animation studio as a small animation studio

► Today it is one of the largest Today it is one of the largest HollywoodHollywood studios and studios and also owns eleven also owns eleven theme parkstheme parks, two , two water parkswater parks and and several television networks, including the several television networks, including the American Broadcasting CompanyAmerican Broadcasting Company (ABC). (ABC).

► Disney's corporate headquarters and primary Disney's corporate headquarters and primary production facilities are located at the production facilities are located at the Walt Disney StudiosWalt Disney Studios in in BurbankBurbank, , CaliforniaCalifornia, , USAUSA. .

► The company is a component of the The company is a component of the Dow Jones Industrial AverageDow Jones Industrial Average. It had revenues of . It had revenues of $31.9 billion in 2005$31.9 billion in 2005

04/08/23

Continued…..Continued…..

►On June 12, 2006 Disney Mobile phone On June 12, 2006 Disney Mobile phone service is launcheservice is launchedd

►On January 23, Disney announces a deal On January 23, Disney announces a deal to purchase Pixar Animation Studios in to purchase Pixar Animation Studios in an all-stock transaction worth $7.4bnan all-stock transaction worth $7.4bn

► In July 2006, the Disney film Pirates of the In July 2006, the Disney film Pirates of the Caribbean 2 is the highest grossing movie in Caribbean 2 is the highest grossing movie in opening weekend history at $135,000,000 opening weekend history at $135,000,000 USDUSD

► Employees: Employees: 133,000 (2006)133,000 (2006)

04/08/23

Divisions of DisneyDivisions of Disney

04/08/23

Divisions of DisneyDivisions of Disney

Media and EntertainmentMedia and Entertainment American Broadcasting CompanyAmerican Broadcasting Company Buena Vista DistributionBuena Vista Distribution Buena Vista Motion Pictures GroupBuena Vista Motion Pictures Group Walt Disney Studio EntertainmentWalt Disney Studio Entertainment Walt Disney Parks and ResortsWalt Disney Parks and Resorts Disney Consumer Products Disney Consumer Products

04/08/23

A bit of HistoryA bit of HistoryFor more than eight decades, the name Walt Disney has been For more than eight decades, the name Walt Disney has been preeminent in the field of family entertainment. From humble preeminent in the field of family entertainment. From humble beginnings as a cartoon studio in the 1920s to today's global beginnings as a cartoon studio in the 1920s to today's global corporation, The Walt Disney Company continues to proudly corporation, The Walt Disney Company continues to proudly provide quality entertainment for every member of the family, provide quality entertainment for every member of the family, across America and around the worldacross America and around the world Disney LegendsDisney Legends

The Disney Legends program was established in 1987 to The Disney Legends program was established in 1987 to acknowledge and honor the many individuals whose imagination, acknowledge and honor the many individuals whose imagination, talents, and dreams have created the Disney magic. Since its talents, and dreams have created the Disney magic. Since its inception, the program has honored many gifted animators, inception, the program has honored many gifted animators, Imagineers, song writers, actors and business leaders as having Imagineers, song writers, actors and business leaders as having made a significant impact on the Disney legacymade a significant impact on the Disney legacy

The Walt Disney Family MuseumThe Walt Disney Family Museum The Disney Family Museum Web site is produced and maintained The Disney Family Museum Web site is produced and maintained by the Walt Disney Family Foundation, a nonprofit organization. by the Walt Disney Family Foundation, a nonprofit organization. Founded in 1995, the Foundation strives to promote education, Founded in 1995, the Foundation strives to promote education, writing, and scholarship about Walt Disneywriting, and scholarship about Walt Disney

To read more on history of Disney you can visit: To read more on history of Disney you can visit: http://corporate.disney.go.com/corporate/complete_history.htmlhttp://corporate.disney.go.com/corporate/complete_history.html

04/08/23

About the CASEAbout the CASE

The Walt Disney CompanyThe Walt Disney Company

► Is heralded as the world’s largest Is heralded as the world’s largest entertainment companyentertainment company

► Earned the reputation by tight controlEarned the reputation by tight control► Although control pervades the company, it Although control pervades the company, it

is not too strong a gripis not too strong a grip

04/08/23

Strict control but independentStrict control but independent► Employees are aware of their prime objectivesEmployees are aware of their prime objectives► Have freedom to think beyond limit and come up with Have freedom to think beyond limit and come up with

new innovative ideasnew innovative ideas► Company have adopted the phrase “Dream as a team”Company have adopted the phrase “Dream as a team”► The concept of independency tempered the control The concept of independency tempered the control

over each departmentover each department► Managers here do the great job of encouraging the Managers here do the great job of encouraging the

imagineers and employeesimagineers and employees

► Imagineers have a brainstorming session called “Blue Imagineers have a brainstorming session called “Blue sky”sky”

► Disney president Frank Wells believes that “If a good Disney president Frank Wells believes that “If a good idea is there. You know it, you feel it, you do it, no idea is there. You know it, you feel it, you do it, no matter where it comes from”matter where it comes from”

04/08/23

SWOT AnalysisSWOT Analysis

04/08/23

SWOT Analysis…SWOT Analysis…

STRENGHTSSTRENGHTS • Global StandardizationGlobal Standardization• Target Customer: ChildrenTarget Customer: Children• Creative ProcessCreative Process• Popular Brand NamePopular Brand Name• DiversificationDiversification• DisruptionDisruption

WEAKNESSESWEAKNESSES• High sunk costHigh sunk cost• Excessive Research & DevelopmentExcessive Research & Development• Constant Up gradationConstant Up gradation• High InvestmentHigh Investment• High Risk FactorHigh Risk Factor

04/08/23

SWOT Analysis…SWOT Analysis…OPPORTUNITIESOPPORTUNITIES• MerchandiseMerchandise• Global Localization: Think global, Act LocalGlobal Localization: Think global, Act Local• Characters of national or regional appealCharacters of national or regional appeal• Cheaper alternatives to soft toysCheaper alternatives to soft toys• Disney Music ChannelDisney Music Channel• Disney School of Management/Training Disney School of Management/Training Institute Institute

THREATSTHREATS• Competitors: National, Regional & GlobalCompetitors: National, Regional & Global• Employee RetentionEmployee Retention• Highly Demanding in terms of Sales, Highly Demanding in terms of Sales, Creativity and InnovationCreativity and Innovation• Unprofitable or hasty acquisitionUnprofitable or hasty acquisition• Brand ConsistencyBrand Consistency• Product Differentiation Product Differentiation

04/08/23

FactorsFactors

Internal Internal • Creativity ManagementCreativity Management• Resource ManagementResource Management• Task specific work cultureTask specific work culture• Target oriented approachTarget oriented approach

ExternalExternal• Buying BehaviorBuying Behavior• PreferencesPreferences• PsychologyPsychology• Marketing PatternMarketing Pattern• DifferentiationDifferentiation• Sales TurnoverSales Turnover• Customer SatisfactionCustomer Satisfaction

04/08/23

Its Current Executive Its Current Executive ManagementManagement

Robert A. IgerRobert A. Iger- President and Chief Executive Officer, The Walt Disney - President and Chief Executive Officer, The Walt Disney CompanyCompany

CORPORATECORPORATE BUSINESS UNIT BUSINESS UNIT

Walt Disney International : Walt Disney International : PresidentPresident

Disney Media Networks : Disney Media Networks :

Co-ChairmanCo-Chairman

The Walt Disney Company : The Walt Disney Company : Senior Vice President, Senior Senior Vice President, Senior Executive Vice President, Executive Vice President, Executive Vice PresidentExecutive Vice President

The Walt Disney Studios :The Walt Disney Studios :

ChairmanChairman

ABC : Co-Chairman and President ABC : Co-Chairman and President

Disney Consumer Products : Disney Consumer Products : ChairmanChairman

Walt Disney Parks and Resorts : Walt Disney Parks and Resorts : ChairmanChairman

Walt Disney Internet Group : Walt Disney Internet Group : PresidentPresident

04/08/23

Ways to Structure a BusinessWays to Structure a Business

► By functionBy function: arranging the business according : arranging the business according to what each section or department doesto what each section or department does

► By product or activityBy product or activity: organising according : organising according to the different products madeto the different products made

► By areaBy area: geographical or regional structure: geographical or regional structure► By customerBy customer: where different customer : where different customer

groups have different needsgroups have different needs► By processBy process: where products have to go : where products have to go

through stages as they are madethrough stages as they are made

04/08/23

Functional StructureFunctional Structure

AdvantagesAdvantages► Specialisation – each Specialisation – each

department focuses department focuses on its own workon its own work

► Accountability – Accountability – someone is someone is responsible for the responsible for the sectionsection

► Clarity – know your Clarity – know your and others’ rolesand others’ roles

DisadvantagesDisadvantages► Closed Closed

communication could communication could lead to lack lead to lack of focusof focus

► Departments can Departments can become resistant become resistant to changeto change

► Coordination Coordination may take too longmay take too long

► Gap between top and Gap between top and bottombottom

04/08/23

Organisation by Organisation by Product/Activity Product/Activity

AdvantagesAdvantages► Clear focus on market Clear focus on market

segment helps meet segment helps meet customers’ needscustomers’ needs

► Positive competition Positive competition between divisionsbetween divisions

► Better control as each Better control as each division can act as division can act as separate profit centreseparate profit centre

DisadvantagesDisadvantages► Duplication of Duplication of

functions (e.g. functions (e.g. different sales force different sales force for each division)for each division)

► Negative effects of Negative effects of competitioncompetition

► Lack of central Lack of central control over each control over each separate divisionseparate division

04/08/23

Organisation by AreaOrganisation by Area

AdvantagesAdvantages

► Serve local needs Serve local needs better better

► Positive Positive competitioncompetition

►More effective More effective communication communication between firm and between firm and local customerslocal customers

DisadvantagesDisadvantages

► Conflict between Conflict between local and central local and central managementmanagement

► Duplication of Duplication of resources and resources and functionsfunctions

04/08/23

Recommended Recommended Organizational structuresOrganizational structures

04/08/23

Model 1 - SBUModel 1 - SBU

SBU 1 SBU 2 SBU 3 SBU 4 SBU n

President and Board of Directors

Chief Executive

Geographical

Functional

04/08/23

Model 2 – Matrix structureModel 2 – Matrix structure

04/08/23

Model 3 – Cross FunctionalModel 3 – Cross Functional

04/08/23

Questions???Questions???

04/08/23

Thank You!!!Thank You!!!