Walt Disney - Strategic Management - Term Paper Example

Walt Disney- Strategic Management Table of Contents Question 3 Question 2 4 Question 3 6 Reference 8 Question 1. Why has Disney been successful for so long? The founder of the company, Walt Disney, was not only creative but also pragmatic. While creating immortal characters as Mickey and Goofy, he had the acumen to understand the need to diversify his business model. This strategy of diversification is deeply embedded in organisational culture and can be considered as one of the major drivers of its success. A study of the business structure of Disney would reveal that the founder tried to implement horizontal diversification to gain synergy. The core competency of the company constitutes of the cartoon characters and thus majority of its businesses are related with them. The founder of the company, Walt Disney soon realised that relying on the studio alone will be risky; hence after understanding the changing customer requirements he entered the movie making business. These movies were great hits among children as well as adults. Soon the company entered the business of theme parks where the visitors are entitled to avail entertainment for 24*7 hours. This was a unique idea because here the visitors get an opportunity to come in direct contact with the cartoon characters. They can find the cartoons to be moving, dancing and plying with them. These parks were great hit among the children and even their parents used to take active participation in it. Both the above mentioned businesses are example of horizontal diversification of the main theme of Disney, i.e. cartoon characters. Another major move of the company was to enter the retail business where the children were the target customer of the company. Products like books and magazines were sold which were manufactured in Disney press. Some special toys were also designed for the visitors. The company entered horizontal diversification to gain synergy. Almost all the businesses were targeted towards a common customer base, i.e. children. The expertise of the company helped to create innovative and attractive cartoon characters which were used in almost all the business units. For example, the movies were used to make a cartoon characters familiar to the target audience. Later on, these characters were used to attract customers to visit the theme parks. Finally, popularity of the cartoon characters was used to sell different toys and books published by Disney press. The company also developed vertical integration with internet and TV for further expansion of business and development of the market image. Apart from synergy, there were certain other factors that assisted the company to succeed in the target marks. The company knew that its success is centred on its creative and innovative products and services. Therefore, the CEO of the company introduced the concept of ‘Gong show’. During this show, the employees of Disney have to present their innovative and creative idea in the weekly meeting. It can be concluded that the success of Disney is indebted to its well defined diversification strategy where the company used both horizontal and vertical diversification strategies. The company not just diversified its business by entering different projects but also entered different countries to attract international customers. Disney is one of the successful companies that have several correlated businesses but such high degree of diversification also poses risk of poor management control and contradictory competitive strategies among different business units. Question 2 2. What’s good about having animated cartoon characters at the centre of the company? The cartoon characters played the central role in making the company Disney successful. The core competency of the company lies in its creativity and innovativeness. This creativity is channelized in developing several highly popular cartoon characters like Mickey and Goofy. Apart from these, there are many other cartoon characters that are used to attract target customers. Hence, it can be said with conviction that the success of businesses of Disney is indebted to the cartoon characters. Many have questioned the creditability of this bizarre claim. The credit goes to Walt Disney for breathing life into a mere fragment of imagination. These characters create a bonding. These characters are used to present many complex issues of human life in a simple manner. Thus not just children even adults were attracted to these cartoon characters. The company always targeted these cartoon characters in the business because these characters provide an opportunity to make ample experiment to attract the customers. Disney used to introduce such characters that resample the target customers; hence it becomes quite easy for the customer to correlate itself with the cartoon character. Each and every human being nurtures the idea of a dreamland or an imaginary world in his childhood. As the child grows older, he or she starts accepting the real world and the world of imagination soon retraces to the sub consciousness. However, these cartoon characters inspire human to relive old memories associated with the dreamland. This is the major reason that cartoons characters not just attract children but also the teenagers and the adults. Disney is a unique company that uses cartoon characters as the centre theme. Disney was the first one to prove that these imaginary cartoon characters can act as protagonist and a whole movie can be developed based on it. The concept of developing a theme park based on cartoon characters was also a big success. There are many theme parks but the concept of a whole park based on few cartoon characters was unique in itself. The company also used cartoon characters in different chart shows as host. Even, the products available in Disney retail shop capitalise the popularity of cartoons to attract people, especially the children. However, the concept of using a cartoon character as the central theme might be challenging and risky too. With time, attraction towards cartoon characters may decline and the market image may fall. The products may also loss attractiveness among the target customers. Therefore, the company should continue introducing some innovation in these characters so that they resemble the real world and people feel more related to them. Question 3 3. Do you agree with the diversification decisions of the company, specifically with being in the Hotel’s and Cruise Line’s businesses? How do they relate to the main Disney resource? Right now Disney is more into the fascinating entertainment world. Its businesses range from animation, production house, press and the most exciting theme park. All these are very much related to Disney’s aim to entertain people. The diversification into the development of the theme park has been profitable for the company. Hotel and Cruise shipping can be assumed as the opportunities of the company to secure further growth. Both the businesses are quire related to the entertainment business. Disney can opt for open hotels and can target people who will come mainly to visit their theme parks. In this case, Disney can target the families who come from other countries to visit the Disney theme parks. It would be better to open hotels near the Disney theme parks, so that the tourists, coming over there, can have easy accommodation at the Disney places. Disney has a created a special bonding with children with its animated cartoon characters. The company can bank on this image to attract the children as well as their parents. Disney can also introduce its shipping business with the cruise liners. The company can welcome the tourists to the hotels and allow them to take the view of the city with their cruise liners. Disney can give an innovative touch to hotels and cruise liners. Hotels and cruise liners full of cartoon characters and themes would definitely attract the Disney fans. Apart from that, it would not be wrong to say that the existing resources of the company would be of great help for its new businesses. Disney has been into the hospitality industry for long with its ‘theme park’ business. The company’s success is majorly dependent on the creative and innovative human resource, it has. Its employees are innovative enough to make any business attractive and appealing. The company can capitalise on its brand image and has the capability to be successful in the other businesses such as hotel and cruise liners shipping. The employees have the expertise to build a theme park. That expertise and knowledge can be used to develop the ambience within the hotels and cruise liners. The company can offer a package to the tourists with the hotels, theme parks and cruise liner business. The architectural idea of the hotels can be taken from the appealing structure of the theme parks. After all, the business of hotel and cruise liners is quite aligned with the existing resources of Disney. Moreover, the company can take the advantage of its brand image to attract more required expertise relevant to the hotel and cruise liners business. Reference Piskorski, M. J. Choosing Corporate and Global Scope. January 26, 2007. Harvard Business School. Read More