Disney’s Strategic Initiative Paper Essay Example

planning initiatives, and review the performance of existing initiatives. In reviewing the annual reports for fiscal years 2008 and 2009 for Walt Disney Corporation, Team A would recommend the company consider a new strategic initiative. The team suggests the company consider offering residents of Florida and California larger discounts for park admissions.

While the company currently has a discount program in place for local residents, increasing the discount amounts offered by these programs coupled with increasing marketing efforts could prove successful. The downturn in the economy has forced many people to revise their usual vacation plans and look for ways to save money. This often means limiting travel and spending vacations close to home. By offering local residents larger discounts, Walt Disney Company could market the new initiative as the “Disney stay-cation. This could appeal to people of all age groups as a fun and economical way to make the most of limited vacation budgets, and promoted goodwill for the company. (Current initiative from the 2009 report) Impact of Initiative on Organizational Financial Planning The strategic initiatives described above will have many impacts on several areas of the organization. The suggested strategic initiative of offering steeper discounts to Florida and California residents while concurrently increasing the staycation marketing in these areas will impact cost and sales.

The discounted price as well as the cost of increased marketing will directly affect incoming revenue and therefore may cause any previous forecasts to not be met. To management this may appear that the organization is not meeting revenue needs, when this is actually working-capital. The expected results is the increased focus on the family staycation will increase sales to the

park by local families. The initiative should be monitored to ensure that the desired result of increased sale is met and that the incoming revenue offsets the increase cost of marketing.

The second initiative involved breaking the strategic development team into four separate segments. Each segment will focus on a core area of business; Studio Entertainment, Parks and Resorts, Consumer Products and Media Networks, and Disney’s International Organization. This segmentation of the strategic planning firm will allow each sector to focus on their core area of expertise and will create a more extensive knowledge base within a core group of people. This subject matter expertise will impact costs in that, theoretically, it will cost more to manage and operate four separate departments then it would to manage and operate only one.

Alternatively, a segmented strategic development department should be able to reduce costs as they will be able to focus on their market segment without having to be concerned with how strategic initiatives will translate to other market segments. These impacts also refer to sales as well. Separate strategic departments will be able to customize their initiatives to their respective markets to increase sales without having to determine how the initiative will affect other areas of the market.

Strategically, however, it bears mentioning that the separate strategic development departments will also create silos in which ideas may not be easily shared. This lack of knowledge sharing may adversely affect both sales and cost for each department separately in that cost saving and sale increasing measures may not be shared between the departments. Risks and Financial Impacts of Strategic Initiatives In today’s economy Disney faces many strategic initiative risks.

People

are spending less money on vacations because costs are too high and jobs are not as easy to come by. Disney’s incorporation of the strategic planning department into four segments gives them a chance to look at issues pertaining to specific departments that may help them resolve issues more quickly but they will also run the risk of acquiring more employees to pay. If Disney does not find ways to bring in more business they may find themselves looking at making cutbacks after they just created new departments and jobs.

They may find themselves looking at a decrease in the financial department because of the extra people and time that they are paying for if each department cannot increase business for Disney. Disney is found to be the largest employer in the country. On an average they employ 20,000 yearly workers (Cain, 2009). The second strategic initiative plan that Disney may use is offering Florida and California larger discounts than previously offered to help increase the marketing efforts.

This plan runs the risk of bringing in less profit for Disney if the states cannot help draw in more visitors to the Disney establishments. Ever since Disney opened in California in 1955 there has been an increase in hotel rooms, major league sports, headliner concerts and thriving convention businesses around the Magic Kingdom that obtain parts of Disney’s business (Cain, 2009). Studies have shown that companies that offer discounts when times are difficult and money is tight will often be rewarded when conditions improve (Kinni, 2009).

Although these studies have been proven companies like Disney still run the risk of not bringing in enough profit to keep the establishment

running as easily. With every strategic initiative plan comes the risk of facing financial difficulties because it is a change that has to be tested before knowing if it will work for the best of the organization or not. The organization will face either an increase or decrease in business at the same time as they are facing an increase in money spent as the plans are put into motion.