Professional Documents
Culture Documents
Content is King
By Peter Louis
Instituto de Empresa
December 2001
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Agenda
Disneys strategy Is there a competitive advantage? Current strategic challenges Recommendations Conclusions
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Disneys strategy
1. 2. 3. 4.
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Innovative brands
Develop brands that were:
Highly differentiated Were wholesome and expressed American values Fun and fallible
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Employee buy-in
Employee identification made them:
Customer focused Customer friendly
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Diversification
Brand extension
2 versions of Winnie-the-Pooh
Channel occupation
Beauty & the Beast, the movie Beauty & the Beast, the Broadway musical
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2001 1
7
Sony
18
18
20
Sony
14.2
16.4
15
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Yes!
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Is it sustainable?
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Yes
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but only if
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1. 2. 3. 4. 5. 6.
Recession & September 11 ABC Talent drain Wheres Mickeys magic touch? Video Games Context is Queen
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US to grow by:
0.7 per cent in 2002 (IMF) 3 per cent in 2003 (OECD)
EU to grow by
3 per cent in 2003 (OECD)
ABC
A strategic fit but:
1. How do we produce Disney hits? 2. How do we realize synergies in costs / revenues? 3. How do we reconcile different business cultures?
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Talent drain
1994 2000, 75 high-level executive departures. This can affect:
Employee morale Productivity Company direction Bottom line
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($millions)
1983 1985 1987 1989 1991 1993 1995 1997 1999 Years
Source: Annual reports
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Percent
19 84
19 86
19 88
19 90
19 92
19 94
19 96
19 98
Years
20
20 00
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Warner Bros. expects to make 7 movies Gross revenue expected to be > $2 billion (box-office receipts, merchandise, DVDs, etc.) Current estimates suggest that this is an underestimation
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Video Games
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Video Games
Actual and projected Value of Video Game Industry
21.3
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Context is Queen
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Context is Queen
Rationale behind CapCities / ABC acquisition. It gave Disney: ESPN, ESPN2
cable access for NHL The Might Ducks franchise
ABC
mass distribution network for Disney program library
Publications
To distribute Disney material and promote Disney
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Publishing 12%
AOL 21%
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Video Gamers!
High Interest Responses to Potential Connectivity Applications Download new games/levels Broadband Gaming Service Pay-per-view games Online Gaming Web surf/email 51% 65% 62% 60% 76%
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Yes
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but only if
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Recommendations
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Recommendations
Reduce the attrition of executives Licence (or buy) innovative content Develop innovative local content Create an Interactive Games Division (to target the serious gamer)
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Use new video expertise to create new Disney themes that are:
Interactive, immersive or simulations
Leverage publisher to position for emerging subscription based Web gaming services that allow:
Individual, cooperative or combative play
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Conclusions
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Conclusions
Disney can achieve 20 per cent ROE. However, this requires a focused strategy that:
Allows effective managers to manage ( la GE) Realizes brand values Kindles internal and external innovation Exploits areas of growth Realizes synergies, and Maintains incremental revenue growth (e.g. gate receipts)
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Thank you
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