The Walt Disney Company - Research Paper Example

? The Walt Disney Company (College Table of Content Introduction II. Steve Jobs’ influence on Walt Disney III. Management of Digital Age Corporation IV. Job’s influences on Disney’s product planning V. Media convergence benefits Disney VI. Changes in Disney’s marketing strategies VII. Disney’s financial situation and past performance VIII. Conclusion IX. References The Walt Disney Company Introduction The Walt Disney is the world’s leading media and entertainment conglomerate founded by the brothers Walt Disney and Roy Disney in 1923. The company was later reincorporated in 1929 as Walt Disney Productions, Ltd, and it became a publicly-traded company in 1938. The company became a leading American animation industry before it was diversified into live-action film production, television, and travel. The Walt Disney Company is well known for its Walt Disney Pictures Group and presently it is one of the leading studios in Hollywood. The Walt Disney has formed a $7 billion agreement with Pixar Animation Studios where Steve Jobs is the Chief Executive Officer and 50.6% owner. On the strength of this deal, Jobs will become the largest shareholder at Disney and acquire a major position in its director board. This alliance ensures the collaborated business operation of both Pixar and Disney animation studios. Management experts opine that this acquisition would assist the Disney to continue its dominance in American animation industry. Presently, both the Disney and Pixar possess considerable managerial strengths which offer prosperous future for the integrated operations. This paper will evaluate the scope of the Disney-Pixar alliance by focusing more on different aspects of this acquisition strategy. Steve Jobs’ influence on Walt Disney Steve Jobs who is blessed with an innovative brain is the co-founder of Apple Inc; whereas, the Disney has already gained a good stature among its customers across the globe. The case study indicates that the Disney’s long run success can be mainly attributed to its value creation through diversification. The company’s three dimensional corporate strategies include horizontal and geographic expansion as well as vertical integration. When the Disney takes advantages of all available expansional opportunities or choices of businesses, Steve Jobs tries to develop new products in accordance with changing market interests. Hence, Disney’s repute and Jobs’ technical expertise together would assist the Walt Disney to achieve infinite heights in market. On the strength of Job’s long years’ experience in technological innovation, the Disney can minimize its research and development costs to a large extent. In addition, this strategic alliance would assist the Disney to reduce the intensity of market competition and the situation may add value to the company’s future vision and strategies. As Mungenast (2007) points out, the Pixar Animation Studios also possess a series of competitive strengths including CGI-animate feature films developed with PhotoRealistic RenderMan that generates high quality images (p.9). Therefore, the planned acquisition may assist the Disney to increase the number of its potential customer groups. It is known to everyone that Jobs’ relentless effort was the only factor that lifted Pixar and Apple sky-high. If he can bring his innovativeness to this new venture, he will uplift the staid company to a leading laboratory for media convergence. Management of Digital Age Corporation After his astounding success in Apple and Pixar, Steve Jobs sets a new bar for how to manage a Digital Age corporation. As music, movies, and photography go digital, customer interests have switched from complex product structures to elegant simple devices. From the case study, it is clear that Jobs in an obsessive perfectionist who demands total control over each and every aspect of product, from hardware and software to its applications. Jobs’ efficient leadership also contributes to the effective management of a Digital Age corporation. Although Jobs heavily depends on his executives, he outstandingly hands on in his areas of expertise. Jobs’ fruitful leadership strategies have enabled him to demand minuscule changes to product designs and rehearse for hours to make his product presentations perfect. Jobs believes that small teams with high talent will outperform hugely funded big ones. He used the same approach at Pixar. It assisted Jobs to create blockbusters like Toy Story and Finding Nemo. In addition, Jobs is not much interested in outsourcing work overseas. When other CEOs give greater emphasis on finance or sales, Steve Jobs spends his most times for the development of the next blockbuster product. Unlike conventional CEOs, Jobs personally meets suppliers with intent to keep on top of the latest technologies. As discussed earlier, Jobs has promotional tactics and it may assist him to effectively manage a Digital Age corporation. However, his brutal negotiations with partners may reduce his managerial efficiency while dealing with it. Job’s influences on Disney’s product planning The success of Jobs’ all ventures can be attributed to his thoughtful strategies and product differentiation. He believes that product/service quality is an essential element for business success. With the creative application of multimedia and computer animation, Jobs could knock out six blockbusters. Similarly, Jobs’ stance at Pixar while competing with Apple was appreciable. Jobs never feared rivals’ products; instead, he deeply concentrated on improving the aesthetic appeal and quality of his products while pursuing his business. Evidently Jobs’ successfully experimented business ideas would contribute to the profitability of the Disney. For instance, The Disney gets sincere support from ‘Pixar’s brainy staff of animators, storytellers, and technologists’ (Walt Disney, p.294). It seems that the Disney’s new product planning initiatives largely focuses on new customer segments as geographical expansion is one of the major growth strategies of the company. While targeting new market segments, the Disney must possess competitive strengths over rival firms. In the opinion of the former Disney studio chairman Peter Schneider, “The great thing about Steve is that he knows that great business comes from great product” (Walt Disney, p.293). Hence, Jobs’ innovativeness and greater product knowledge would be potential assets for the company while entering new business territories. Jobs has already helped Disney to integrate its multimedia presentations with his product lines. It is arguable that Jobs’ position as CEO at Apple has given him enough knowledge of varying media trends. This knowledge would backup Disney at each stage of its product development and marketing. Media convergence benefits Disney The Disney has attained a number of benefits through media convergence. The media convergence strategy has three elements including corporate concentration, digitization, and government deregulation (Media Convergence). Through this strategic alliance, the Disney gained unlimited channels that may assist the company to develop new online series and pod casts. The company also has the opportunity to make use of Apple’s iTunes to promote net only spin-offs of Charlie’s Angels show of 1970 among others (Walt Disney, p.296). The media convergence allows the company to get access to a fragmented audience that would aid the Disney to deal with more targeted online programming and shift its area of focus to cellphones and video digital recorders. In addition, managerial professionals hold the view that this alliance would be capable of providing the company with opportunities for backstage filming and animated sports (Disney, Pixar, and Jobs). The revolution of non programmed viewing may be beneficial for the company to take advantages of its video tidbits which are functioning on the basis of do-it-yourself entertainment. Another potential benefit of this media convergence is that it may assist the Disney to offer services to its customers at minimum cost. Different technologies can be effectively integrated through this process, which would help the Disney to meet the increasing needs of its fragmented audience efficiently. Moreover, it may be beneficial for the company to trim down labor, administrative and material costs to use the same media package across different media outlets; and to attract potential group of advertisers by offering them with good package deals; and to boost brand recognition and brand loyalty among targeted customer segments by the application of cross promotion and cross selling. Changes in Disney’s marketing strategies Jobs’ influence may bring notable changes in Disney’s marketing strategies too. It is said that Jobs gives great emphasis on ads which he believes would assist the company to attain brand repute. For instance, the Apple has constantly encouraged product promotion by means of aspirational ads with a heavy dose of counterculture rebellion (Walt Disney, p.294). Financial data show that this innovative promotional strategy has greatly added to the product positioning effort of the Apple. Such a marketing strategy may assist the Disney to promote its sales with minimum expenditure. Steve Jobs has the ability to foresee the changes occurring in firm’s technological and environmental trends. It has helped the company to design new products according to the preference and requirement of the changing world. The Disney had been practicing conventional mode of presentations before Jobs joined the firm. However, once Jobs entered the business, Disney began to demonstrate innovative plans. If Jobs integrate Apple products with the Disney show, it will offer a great experience to viewers. The Disney had not concerned about the infinite possibilities in the field of computer animation until the affiliation. The application of new technologies in computer animation would amplify the marketing activities of the Disney. Jobs’ aggressive and demanding nature is said to be a barrier to employee relation. However as the given scenario points out, with his reentry, the Apple witnessed a different manager and leader in Jobs. In the same way, the Disney would be able to introduce timely innovations and strategic changes because of the alliance with Steve Jobs. Disney’s financial situation and past performance A detailed comparison between the Walt Disney’ current financial situation and past performance would be capable of analyzing the pros and corns the Disney-Pixar strategic alliance. The 2010 financial reports of the Walt Disney Company (as cited in Bloomberg Businessweek) indicate that the company attained total revenues of $38,063 million which includes contributions from Walt Disney Studio Entertainment ($6,071 million), Disney Consumer Products ($2,678 million), Walt Disney Parks and Resorts ($10,761 million), Disney Media Networks ($17,162 million), and Disney Interactive Media Group ($761 million). As per the financial reports, the company’s net income for the 2010 fiscal year was $7,586 millions in which contribution from the Disney Media Networks had been represented the largest figure ($5,132 million). Presently, the Disney generates most of its revenues from the Disney Media Networks. The company’s financial data show a stable trend during the last few years except in 2009. Although, Disney Media Networks remained the source of major revenues at the beginning of 2000, the revenue growth was at slow pace during this period. The Disney’s net income for the fiscal year 1991 was $6,111 million whereas it was 25,402 for year 2000. During the earlier stages of 1990s, the company’s revenue sources were limited to Walt Disney Studio Entertainment, Disney Consumer Products, and Walt Disney Parks and Resorts. However, the Disney’s 2010 financial reports indicate that the company could cover its $1,773 million net income decline in 2009 by a $914 million net income rise. In short, the present financial situation predicts a prosperous future for the company. Conclusion From the above sessions, it is precise that the Walt Disney’s initiative to acquire Pixar Animation Studios would benefit both the firms. The Disney’s alliance with Jobs would greatly influence the company’s future vision and strategies since Jobs is an obsessive perfectionist along with higher technical expertise and innovativeness. Job’s long years’ experience and innovativeness may effectively contribute to his approach of managing a Digital Age corporation. Similarly, the above discussion supports that Job’s successes at Apple Computer are likely to benefit the Disney’s new product planning initiatives. Analysis on Disney’s present financial situation and past performance show that the media convergence has greatly assisted the Disney to obtain potential benefits. References Disney, Pixar, and Jobs. Edge perspectives with John Hagel. Retrieved from http://edgeperspectives.typepad.com/edge_perspectives/2006/02/disney_pixar_an.html Financial statement for Walt Disney Co/The (DIS). Bloomberg Businessweek. Retrieved from http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=DIS:US Mungenast, H. (2007). Mergers & Acquisitions. GRIN Verlag. Media Convergence. The Canadian encyclopedia. Retrieved from http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1ARTA0009695Walt Disney Co. Case study. Part 3 .“Designing Market-driven strategies”. Strategic Marketing 9th Edition. Read More