The Walt Disney Company :

The Entertainment King

The Walt Disney Years, 1923

1966 (1)

1923: Walter Elias Disney and his older

brother, Roy, founded Disney Brothers Studio
in Hollywood
1927: A series of shorts Oswald, the Lucky
Rabbit contract: his distributor owned the
copyright
New character: Mickey Mouse (the modified
Oswald)
1937: Snow White and the Seven Dwarfs the
worlds full-length, full-color animated feature.

The Walt Disney Years, 1923

1966 (2)
1940: the company went public
World War II
1950: Cinderella
1950: Treasure Island entered live-action movie
1953: created Buena Vista Distribution saved 1/3
of a films gross revenue
1954: with ABC produced TV program Disneyland
1955: Disneyland a huge outdoor entertainment
park
1966: Walt died

The Post-Walt Disney Years,

1967 1984

Roy O. Disney as chairman

1971: Walt Disney World theme park
1976: Tokyo Disneyland announced
Film output declined, creativity in the filem
division seemed stifled
1980-1983: the companys financial performance
deteriorated heavy cost to finish EPCOT (1982)
1984: Roy E. Disney (son of Roy O. Disney)
resigned from BOD
Sid Bass, oil tycoon, invested $365M, rescuing the
company, reinstating Roy E. Disney to the board

Eisners Turnaround, 1984 1993

(1)

Eisner (from Paramount Pictures): Chairman and

CEO
Frank Wells (from Warner Brothers): President
and COO
Roy E. Disney: vice chairman
Jeffrey Katzenberg: chairman of Disneys motion
picture
Rich Frank: chairman of Disneys television
division
Eisner viewed managing creativity as disneys
most distinctive corporate skill

Eisners Turnaround, 1984 1993

(2)

Revitaling TV and Movies:

1984: Disneys share of box ofice had fallen to
4%
1986: The Disney Sunday Movie (premiered on
ABC); Golden Girls (NBC)
Movie: beginning with Down and Out in
Beverly Hills, 27 of Disneys next 33 movies
were profitable
1988: Disney Studios film division held a 19%
share of total box office, the market leader
Disney expanded its animation staff new
animated features released every 12 to 18
months

Eisners Turnaround, 1984 1993

(3)

Maximizing theme park profitability:

Disneys theme park remained popular &
profitable
1986: New attractions such as Captain EO
Michael Jackson
A several-thousand-room hotel expansion at
Disney World

Eisners Turnaround, 1984 1993

(4)

Expanding into new business, regions, and

audiences:
1987: the Disney Stores the consumer
product division pioneered the retail-asentertainment)
1989: Hollywood Records a pop music label
1990: Disney Press children books
1991: Hyperion books an adult publishing
label
1992: Eoro Disney theme park
The Little Mermaid (1989); Beauty and the
Beast (1991); Aladdin (1992) animated
features

Eisners Turnaround, 1984 1993

(5)

Expanding into new business, regions, and

audiences:
Buena Vista Home Video market leadership
role
1992: acquired a National Hockey League
expansion team The Mighty Ducks
1993: a stage version of Beauty and the Beast

Turmoil and Transition, 1994

1995 (1)
1994: Good performance of The Lion King and
Euro Disney
April 1994: Wells (Disney President & COO) was
killed in helicopter crash in Nevada
1994: Eisner underwent quadruple heart
surgery
Katzenberg (chairman of Disneys motion
picture) left the company joined forces with
Steven Spielberg
A series of key executives either left the
company or changed roles

Turmoil and Transition, 1994

1995 (2)

1995: Bought ABC:

The largest entertainment company in the U.S
A marriege between King Kong and Godzilla
Big enterprises are troublesome
A culture clash between executives ABC and
Disney

Disney Slumps to End of the

Century (1)

After acquiring ABC, Disneys financial

performance began to deteriorate (1998 &
1999)
ABC rating network from top to third place,
returned to the top after Who Wants To Be a
Millionaire (2000)
Hi budget Movie: Con Air (1997) & Armageddon
(1998)
Disneys home video revenues were dropping
Through 2000, as market leader in theme park.
Strategy: turn all of its parks into destination
resort
By 2002, expansion on theme park business

Disney Slumps to End of the

Century (2)
Failure on Go.com portal (2001)
Cost cutting plan that was projected to
save $500M starting 2001:

Leaner marketing of products

Reduced film budgets and ouputs
Tightened cost control in its TV production unit
Major review on capital spending
Club Disney & the ESPN Stores were closed
Sale non strategic assets, i.e. Fairchild
Publications

Eisners Strategic Challenges

(1)

Managing Synergies:
Disney Dimensions, a program held every few
months for 25 senior executives from every business
a synergy boot camp
Synergy group, reporting directly to Eisner, with
representative in each business unit
Synergy affected the scope of Disneys business
geographically (about 21% revenue from abroad),
horizontally (enter new type of entertainment ESPN
Zones, DisneyQuest, cruise ship & the Disney
Institute) & vertically (companys major initiatives
involved in Internet and TV).
Synergy affected Disneys cost (Merger Touchstone
TV into a division of ABC saved $50M a year)

Eisners Strategic Challenges

(2)

Managing the Brand:

Some movies created controversy (Ellen, the
Sothern Baptists, Priest, Aladdin & Kundun)
The Disney Channel ranked a distant third in
ratings behind Nickelodeon and Time-Warners

Eisners Strategic Challenges

(3)

Managing Creativity:
Importance of finding a president with a strong
background in finance, dispute mediation and
labor relations
Gong Show, a weekly meeting in which Disney
employees in each division would brainstorm for
new ideas, but it had slowly fallen into disuse
Not every body likes having his or her idea
dismissed
Between 1994 and January 2000, approx. 75
high-level executives left the company for several
reasons.

QUESTIONS

1. What do you think were the key success

factors for Disney during the Walt Disney years?
2. Evaluate Disneys corporate strategy during
the Walt Disney era. What role did Disneys
array of businesses play in its success? Which
divisions provided greater synergy than
others? Why?
3.Assess Disneys corporate strategy under
Eisner. How has the underlying logic changed
since the days of Walt Disney? Do you think
Disneys corporate strategy has become more
or less compelling?

ANSWER 1

Faktor-faktor tersebut yang membentuk competitive advantage yang

ditawarkan oleh Disney, yaitu diferensiasi melalui inovasi dan
komunikasi yang diterapkan oleh Walt Disney inilah yang kemudian
menentukan kesuksesan perusahaan untuk mencapai tujuan.
Key success factor dari disney adalah :
strategi inovasi dengan kemampuan membuat inovasi dengan
memanfaatkan kecanggihan teknologi, untuk market segmentasi
yang dibidik adalah multi segmen dimana target marketnya
adalah dunia anak-anak yang begitu luas dan akan merasa tertarik
sekaligus melibatkan dunia dewasa dimana para orang tua akan
turut serta mengantar anak-2nya
strategi marketing nya adalah dengan memanfaatkan media sosial
yang sedang in (facebook dan Twitter), media promosi TV kabel (ABC
& ESPN) dan Strategi Ekspansi yaitu dengan membuka walt Disney
di nefara2 berkembang dengan tetap membidik kalangan menengah
keatas

ANSWER 2

Dari industri yang dimasuki oleh Walt Disney,

yaitu film, TV/radio, theme park, consumer produk
dan comic, yang paling memperlihatkan sinergi
adalah bisnis film yang menjadi bisnis utama dari
Disney
dengan
amusement
park.
Sinergi
didapatkan dari keterhubungan antara unit-unit
bisnis yang dimiliki oleh Disney, kesuksesan
dicapai dari aktivitas yang saling mendukung, set
yang dibuat di Disneyland berdasarkan film yang
diproduksi oleh Disney, dan ini memberikan
pengalaman yang berbeda bagi konsumen dalam
menggunakan produk-produk Disney.

Di era kepemimpinan Walt, susunan bisnis diatur

agar saling mendukung satu dengan yang lain,
salah satu unit bisnis yang akan dikembangkan,
pembiayaannya ditopang oleh unit bisnis yang
sudah settle sebelumnya. Misalnya, pada tahun
1929 film mickey mouse mendongkrak penjualan
comic dan lisensi, tahun 1949 record label dan
distribusi film digunakan untuk mengurangi cost
pembuatan film begitu juga TV series, tahun
1955 pembangunan Disneyland didorong oleh
konsesi penjualan makanan dan merchandising.

Answer 3

Kebijakan yang diterapkan oleh Eisner sangat berbeda dengan

periode kepemimpinan Walt, Eisner lebih berani dalam
melakukan ekspansi dengan mengakuisisi beberapa perusahaan
dan menerapkan cost controlling yang ketat. Dengan strategy
yang agresif yang dilakukan oleh Eisner sejak ia mengakusisi
ABC, terjadi peningkatan ratio hutang setelah akuisisi tersebut,
hal ini berarti sinergi yang dilakukan oleh Eisner tidak berjalan
dengan baik.
Strategi yang dilakukan oleh Eisner tidak sepenuhnya
mengakomodasi business unit di bawah Disney bahwa konsep
utama sebuah sinergi adalah creates more value than its costs.
Dengan mengakuisisi beberapa perusahaan yang kurang
mendukung perkembangan bisnis utamanya, seperti akuisisi
klub hoki, strategi yang dilakukan oleh Eisner dalam upaya
untuk mengembangkan Disney terkesan dipaksakan.

Thank you