The Walt Disney Company: The Entertainment King Essay Example

as the most appropriate for the transition from VHS to DVD format. Furthermore, their competitive advantage was bolstered by the recent acquisition of BBC. The revenue in this unit rose from 4 billion between 1996 and 2000 to more than 9.5 billion. Disney took advantage of popular TV shows like "Who Wants to Be a Millionaire" to increase advertising income and broaden its network footprint. Their expanded presence on BBC networks provided strategic opportunities for showcasing Disney-created series, programs, and merchandise, leading to higher sales and greater consumer recognition of the Disney brand.

The Disney company has successfully managed creativity and its brand. Under the leadership of Disney CEO Michael Eisner, along with Frank Wells, the company has fostered a creative tension and culture that increased profitability and promoted the best ideas. Initiatives such as the Disney's corporate university, the gong show, and business unit coordination have created an atmosphere that values cohesiveness, resolving conflicts between business units and generating numerous cross-business unit ideas.

Disney utilized cost and technology advantages by replicating attractions across different parks, resulting in economies of scale. This strategy only benefitted a company of Disney's size. From the start, Disney was a pioneer in animation, transforming animated pictures into films. In the early 1900s, their computer animation production systems revolutionized the speed and quality of film production.

Disney's profits were significantly higher than its competitors due to its technological and scale advantages, driving the company's aggressive expansion efforts. Michael Eisner revitalized Disney by focusing on rebuilding the TV and movie business, resulting in an increase in net income within his first four years. One of his innovations was introducing the Disney

Sunday Movie to BBC, which successfully brought quality Disney programming to a wide audience, showcasing the company's ability to adapt to the evolving times. Additionally, Eisner leveraged syndication operations to maximize the success of new hit TV shows.

Disney's syndication operation utilized its extensive library of programming to boost revenues. In order to revitalize the movie business, Eisner enlisted Jeffery Guttenberg and Rich Frank from Paramount to head Disney's motion picture and television unit as Chairman and President respectively. This shift in leadership brought about a deliberate strategy of balancing costs and quality in film production. The focus was to produce more moderately budgeted films and establish multi-script contracts with top actors and directors. Close management of film production ensured adherence to budgetary constraints and the attainment of revenue goals.

Disney capitalized on strategic technological innovations like the Computer Animated Production System (CAPS) to digitize their animation process, which allowed them to outpace rivals in film production. During the initial period of Sinner's tenure, Disney heavily invested in enhancing their theme park attractions. Yet, they mitigated these costs by adopting strategies that boosted visitor numbers, leading to enhanced revenues and profits. To maximize returns from their theme park upgrades, Disney leveraged vertical integration through establishing retail partnerships, TV promotions, and media event broadcasts.

Disney initiated the development of a substantial portion of unutilized land at its site in Orlando, Florida. The enlargement encompassed the building of a resort hotel comprising multiple thousand rooms and an enhancement to the convention center valued at $375 million. This progress triggered an increase in business activities within the amusement parks, complying with Disney's approach of retaining customers on its

premises and subsequently leading to greater revenues per customer. The effectiveness of Disney's cross-promotion tactics for consumer goods also spread to other endeavors such as Broadway productions and purchasing sports teams, inclusive of the Anaheim Mighty Ducks, which was named after a Disney movie.

The firm founded a book publishing enterprise and consumer goods department with the aim to attract and involve customers who had gone beyond their juvenile years. They crafted products, series, and films specifically for adolescents, in addition to launching substantial autobiographical publications and catalogs for grown-ups. Disney's goal was to serve consumers from all age brackets by offering top-notch media content. Nevertheless, there are apprehensions that additional growth and investment might result in an overly large organization. In 2000, Disney recorded a minimal return on assets (ROAR) of 2%, marking its lowest point in nearly two decades.

From 1984 to 1995, the Return on Assets (ROAR) averaged at 8%, coupled with a mean debt-to-asset ratio of 16.6%. Nonetheless, there was a decrease in ROAR in two instances within these twelve years relative to the preceding year. The period from 1996 to 2000 saw an average reduction in ROAR to about 3.4% and an increase in the firm's debt-to-asset ratio, averaging at approximately 34.4%. During this time frame, ROAR experienced a decline four times when compared with the previous year. Additional asset investments could potentially lead to a negative effect on ROAR resulting in potential scaling issues and further decreasing operating margin and shareholder return. Additionally, managing diverse assets across various geographical locations while maintaining effective communication and cultural integration poses continual challenges due to the company's considerable size.