CASE STUDY Case Study Analysis Task Walt Disney Company Headquarters, Burbank, C

Question

CASE STUDY
Case Study Analysis Task
Walt Disney Company Headquarters, Burbank, California
Over two decades, your predecessor and boss, CEO Michael Eisner, accomplished much, starting the Disney
Channel, the Disney Stores and Disneyland Paris, and acquiring ABC television, Starwave Web services (from
Microsoft cofounder Paul Allan) and Infoseek (an early Web search engine). But his strong personality and
critical management style created conflict with shareholders, creative partners and board members, including
Roy Disney, nephew of founder Walt Disney.
One of your first moves as Disney’s new CEO was to repair relationships with Pixar Studios and its then
CEO Steve Jobs. Pixar produced computer-animated movies for Disney to distribute and market. Disney also
had the right to produce sequels to Pixar Films, such as Toy Story, without Pixar’s involvement. Jobs argued,
however, that Pixar should have total financial and creative control over its films. When Disney CEO Michael
Eisner disagreed, relations broke down, with Pixar seeking other partners. On becoming CEO, you approached
Jobs about Disney buying Pixar for $7 billion. More important than the price, however, was promising Jobs and
Pixar’s leadership, President Ed Catmull and creative guru John Lasseter, total creative control of Pixar’s films
and Disney’s storied but struggling animation unit. Said Jobs, ‘I wasn’t sure I could get Ed and John to come to
Disney unless they had that control.’
Although Pixar and Disney animation thrived under the new arrangement, Disney still had a number of
critical strategic problems to address. Disney was ‘too old’ and suffering from brand fatigue as its classic but
ageing characters, Mickey Mouse (created in 1928) and Winnie-the-Pooh (licensed by Disney in 1961),
accounted for 80 per cent of consumer sales. On the other hand, Disney was also ‘too young’ and suffering from
‘age compression’, meaning it appealed only to young children and not preteens, who gravitated to
Nickelodeon, and certainly not to teens at all. Finally, despite its legendary animated films, over time Disney
products had developed a reputation for low-quality production, poor acting and weak scripts. Movies High
School Musical 3: Senior Year, Beverly Hills Chihuahua, Bolt, Confessions of a Shopaholic, Race to Witch
Mountain and Bedtime Stories disappointed audiences and failed to meet financial goals. As you told your board
of directors, ‘It’s not the marketplace: it’s our slate [of TV shows and movies].’
With many of Disney’s brands and products clearly suffering, you face a basic decision: Should Disney
grow, stabilise or retrench? Disney is an entertainment conglomerate with Walt Disney Studios (films), parks
and resorts (including Disney Cruise lines and vacations), consumer products (i.e. toys, clothing, books,
magazines and merchandise) and media networks such as TV (ABC, ESPN, Disney Channels and ABC
Family), radio and the Disney Interactive Media Group (online, mobile, and video games and products). Further,
in 2009 Disney acquired Marvel Entertainment (including the Avengers franchises) and in 2012 it acquired
Lucasfilm (Star Wars and Indiana Jones franchises).
NOTE:
For these assessments, no further information on Disney is needed. The emphasis is on applying
and identifying management issues in terms of this unit (Management Concepts).
Sources:
D. Fonda, L. Locke, J. Ressner & R. Corliss, ‘When Woody Met Mickey’, Time, 6 February 2006: 46–7; R.
Grover, ‘How Bob Iger Unchained Disney’, BusinessWeek, 5 February 2007: 74–9; M. Marr, ‘Better Mousetrap:
In Shakeup, Disney Rethinks How It Reaches Audiences; Iger Seeks High-Tech Delivery Of Movies, TV Shows;
Theater Owners Worry; “Housewives” on a Handheld’, Wall Street Journal, 1 October 2005: A1; R. Siklos,
‘Q&A, The Iger Difference’, Fortune, 28 April 2008: 90–4; R. Siklos, ‘Bob Iger Rocks Disney’, Fortune, 19
January 2009: 80–6; T. Stanley, ‘Iger Needs Superpowers for Quick Fix at Disney’, Advertising Age, 21 March
2005: 33–4.

MANAGEMENT PROBLEM STATEMENT THIS IS A SAMPLE ONLY – FROM ANOTHER CASE STUDY
After the termination of the Brisbane Roar’s high profile soccer coach, a new leader, Postecoglou, was recruited to implement change. The management problem for Roar was the short term transactional leadership approach Postecoglou took that caused controversy with loss of players, and failed to create long term change as demonstrated by the lack of shared values, beliefs and attitudes. The functions of management; planning, leading, organizing and controlling underpin the success of an organization. Focusing on the transactional leadership strategy of Postecoglou where the leader was motivated by self interests to promote change through compliance to increase performance can be difficult to implement long-term change.

This task comprises of the submission of a management problem statement and bibliography relating to the Report assessment item. This activity is designed to provide students preliminary feedback on the two central skills needed to complete the Report. These skills are management case study problem identification and, locating and referencing academic journal articles used for analysing the identified problem. The case study you will need to read and respond to for your assignments in this course this semester is: Walt Disney Company 1c enelt ll1::r%, }turla n , ( rie till it, h eill imy atveit.ihe sia ..éjudy nt is. T FINA p Formulating a problem (or potential problem) statement is an important academic (and practical) skill for managers. The management concepts presented in this unit are important because they can equip you to identify and solve problems in order to reach managerial and organisational goals. The first step is to identify the problem/s or potential problem in a particular situation by narrowing in stating and supporting a clear bold statement. In this assessment, please write 200 words on your management problem statement, with reference to one theory that will be used and present a bibliography of at least 5 scholarly articles that you intend to use to support your argument. Marks will be allocated as follows: 1. Management Problem Statement: * Link to the Functions of Management (planning, leading, organising and controlling) * Clearly indicate a management problem or potential problem » Should not include a solution or imply a solution » Well written (grammar, structure, flow) 2. Bibliography list You do not need to use In-text referencing for this assessment Please ensure you list and find at least 5 scholarly relevant articles (peer reviewed) * The articles presented should have the potential to create the critical evaluation for your report. * These references will not necessarily be used but are to be presented as a reference list * These references must clearly relate to the management problem statement. Non-relevant articles (articles on a different topic other than the one you presented) will not be counted towards your grade

Explanation / Answer

Hi,

Thanks for the question.

Management problem statement will be as follows:

Micheal Eisner, the last CEO had done commendable work but had few problems during his tenure. As the new CEO of the company, the management now faces multiple problems:

The Walt Disney adopted the product differentiation strategy in order to differentiae its products from its competitors. The differentiation means providing the different and unique products from your competitors and charging some premium for the same. It has a wide and unmatched breadth of media platforms, that they use to produce and distribute its various content in the market. The five segments that serve the major part of The Walt Disney's sales revenues are:

The Walt Disney Company has gone for a strategy by which they are currently dominating the market and are currently holding a major market share. The target customer segment of The Walt Disney Company is not price-sensitive. Since they are giving a complete network of products as well as the services, the added price of the services is not problematic for the customers.

Maximizing the market share is the complementary strategy for growth adapted by The Walt Disney Company. Pushing their products and services to the new markets and increasing the sales volume and revenue are their prime targets. It is also trying to optimize the capacity of the new markets.

The timing for these kind of changes in the strategy and acquiring new customers in the new markets could not be better. As currently the complete industry is going through major changes due to the increasing competition:

The Walt Disney Company is actively trying to enter new markets and they are planning to do it through acquisition. Following this path, in March 2014 they bought Maker Studios from Youtube whose main target segments are teenagers and young adults and also generating a huge volume of views and revenues. Further, In May 2014, in order to air an English dub of Doraemon anime series on Disney XD in Japan, Walt Disney shook hands with the TV Asian Corporation. This came at a time when Walt Disney is looking to increase its presence in Asian countries. Since, the complementary strategy of Walt Disney is to maximize market share, in July 2014, Walt Disney launched the beginning of 11 startups that would accelerate the company's growth.

The Alternative stretegy that Walt Disney can take is to take the content online. This provides an option for low cost and competitive market scenarios. Since it is a digital world and technology is changing rapidly, earlier they take the steps, more will be the benefits.

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