Disney consumer products and theme parks are very essential to Disney’s ultimate goal of making money. The placement of Disney products on school supplies, lunchboxes and backpacks, in malls across the country, and within the walls of their marketing-giant theme parks themselves is, “a daily advertisement…for our cartoons, [that] keeps them all [consumers] Mickey Mouse minded,” as stated by Walt’s brother Roy Disney (Rowan, 2005). No matter the means behind the ultimate goal, the goal never changes.
As stated in the Walt Disney Company’s Mission Statement, another of their goals is to be, “one of the world’s leading producers and providers of entertainment and information,” (Walt Disney Co., 2007). For the accomplishment of this goal Disney already has a substantial foot in the door with organizations in studio entertainment and theatrical productions for children, teens and adults of all ages; television stations targeting a wide variety of audiences – ABC for news and families, the Disney Channel for children, ESPN, ESPN2, ESPNEWS, and ESPNU for the sports fanatics and even SOAPnet for the stay at home mothers and fathers; theme parks like Disneyland, Disneyworld and the Disney World Resort to attract families with younger children looking for a good vacation; and one of their newest additions is the Disney Cruise Line that tour the Bahamas and Caribbean Islands and even make a stop at Disney’s privately owned Castaway Cay Island (Walt Disney Co., 2007).
Disneyland in particular, the first park ever to construct rides, shows and attractions around separate themes–the themes of Walt Disney’s motion pictures (Wikipedia.com, 2007)–was constructed and dedicated by Walt Disney to those people who want to “relive memories of the past and [that]…youth may savor,” (Wikipedia.com, Disneyland, 2007). Disneyland itself was not just built to entertain young children, but also to give their parents a vacation in a place that they could remember from their pasts and relate to in a way for them to enjoy the experience.
With this impressive display lineup and many more to support the Walt Disney Company’s goal of being a leader in entertainment it is safe to say they are well on their way to accomplishing this feat. Disney’s reach is global, with theme parks in China, France, Japan, and all around the United States. They also have Disney stores across the globe selling Disney consumer products throughout the United States and also globally, both within their Disney resorts and theme parks and in globally placed retailers. The Disney trademark is recognized all over the world, once again keeping consumers “Mickey Mouse minded,” and showing what kind of a leader Disney can be simply through the reach of its grasps.
To become a leader in information Disney has constructed a team of people and engineers and tasked them for this assignment. They call the process of developing new technology Disney Imagineering. This is basically the research and development section of Disney which thinks up, designs, and implements all aspects of the Walt Disney Company. From developing rides and attractions of Disney’s theme parks, water parks, and cruise ships to their Disney resorts, Disney Imagineering is involved in all development.
The goal of the Disney Imagineering section is to continuously design and implement new, fun and exciting products for the Disney Company that will attract, amaze, and excite their customers. By developing fun new rides for Disneyland parks that drop you faster than gravity, new movie technologies offering cutting edge visual effects, or even combining the two into one gut wrenching, heart stopping, scream-of-a-good-time they have realized their goal.
The latest example of innovation at the Walt Disney Company is discussed in an issue of Business Week on November 12, and it outlines plans by Disney to release a mobile phone service in Japan. Disney will be involved in the phone from the ground up, from developing the handsets to dealing with subscriptions. In order to stay true to Disney practices, they will be offering content dealing with their characters and distributing cartoons to their subscribers (Telecom Asia, 2007). The cell phone market is one of the fastest growing markets in the world, growing in leaps and bounds–-from 110,000,000 people in the United States in the year 2000 to 159,000,000 people in just 2003 (Bergman, 2004, and Johanson, & King, 2002). As the use of cell phones continues to increase at an exponential rate it becomes more clear how important it is to have a stake in them, and Disney, realizing this, has become a player in the market and is using cell phones to spread their company name. To do this they offer many things that are popular among cellphone users, such as ringtones, graphics for wallpapers, games, and text message updates. Disney offers a cellphone in the United States, however Disney has recently announced it will be discontinuing their cellphone service as of the end of the year, December 31, 2007. They did not give any specific reasons for the cessation (Disneymobile.go.com, 2007).
The utilization Disney has made of the mobile phone service brings to light their trend of target marketing. Cellphone users continue to grow younger as the devices become more popular and easier to afford, and Disney is trying to reach them. In an article by Merissa Marr in the Wall Street Journal on November 19, 2007, this marketing strategy is shown even more profoundly. For years Disney has attracted young girls through the Disney Princesses Belle, Ariel, Sleeping Beauty, Snow White, Cinderella, and Jasmine. Now Disney is under continuous pressure to continue growing their Disney Princess Sector, and the result is the targeting of even younger girls – girls still in the crib. To accomplish this Disney will be making products such as cribs and various infant products picturing the various princesses and even some new princesses who are due to make their appearances in the near future (Marr, 2007, B1).
The Walt Disney Company’s Industry Analysis
The Walt Disney Company is in the entertainment industry. This is a very simple way of saying something much more complicated: The Walt Disney Company is in business to produce entertaining theatrical productions that are family oriented and family friendly; they are in business to create products and toys that will promote their theatrical productions that are both entertaining and safe for children, and also stimulating enough to attract new customers; they are in business to entertain families with children who are looking for a fun, interactive and safe vacation spot both with resorts and parks, and also cruise lines; and finally they are in the business in keeping their name reputable and substantial in a growing business.
A key point that is very important to staying reputable in the consumer products industry is safety. An extreme example of this is portrayed in the Wall Street Journal by Nicholas Casey on November 20, 2007. This article highlights the problems Mattel has been having with their toy manufacturers in China and lead paint levels in the paints that are dangerous for children (B8). The rise in these dangers have raised lawsuits against Mattel and Toys “R” Us, a lead distributor, and it is in question whether or not the Mattel Company will survive because its name is now tarnished.
The Walt Disney Company has a long history and an established name, not only in the United States but throughout the world. Walt and Roy Disney founded the Walt Disney Studios in 1923, produced its first full length animated feature film, Snow White, in 1937, and the rest is history (Datamonitor, 2007, p. 9). From there they grew into an entertainment powerhouse acquiring TV channels, building theme parks based on their animated films and youthful dreams, and growing into one of the most recognizably-named companies in the world. If The Walt Disney Company were to incur a spot on their name in the same way Mattel suffered due to the lead scandals, how would Disney fare? If history were to repeat itself, it would say that a tarnished name spells a bad fate for any company.
As generations change so do their goals and views of life. For example, the Baby Boomer generation is very work oriented and dedicated to their professional life, and sometimes their family lives suffered because of it. On the other hand, Generation X are more family oriented than their parents generation. As described by Lamb, Hair, and McDaniel in Marketing 9th Edition (2008), “Gen Xers are a highly desired target for travel providers…Gen Xers have no qualms about taking a midweek trip for fun,” (p. 80). Generation X like to take spur of the moment trips and are not necessarily as worried about the completion of their job tasks, which not only makes them more attractive to travel providers but also to companies who provide vacation resorts, or, more specifically, theme parks.
Because the generations are changing and families are more prone to taking vacations, the entertainment industry is a hot commodity. This produces a demand for entertainment and many opportunities for new players to enter the mix. This also creates a lot of competition, even for Disney, a well-established entertainment company. In Disney’s case, a lot of their competitors for their vacation spots are the same as their competitors for their theatrical productions: Universal Studios has theme parks and, like Disney, is a global organization with operations in the United States, Japan, Singapore, Dubai, and Korea; Paramount Parks is a more local example with many parks situated throughout the United States and one in Canada; and Disney’s most adverse competitor, and the leader in numbers in the industry of theme parks and amusement parks, is Six Flags Theme Parks who is also associated with Warner Brothers Studios (Wikipedia.com, 2007). Disney however has the advantage in its global reach, where Six Flags is domestic. Also, industry wide, Disney’s name and history in the entertainment industry supersedes all of their competitors.
The history and name of Disney are very important when it comes to competition in terms of positioning their products and services in the minds of their consumers. Position as defined by Hair, Lamb, and McDaniel (2008) is, “the place a product, brand, or group of products occupies in the consumers’ minds relative to competing offerings,” (pg. 231). The Walt Disney Company utilizes multiple positioning bases to their advantage, due to their long, successful history.
The attribute base is employed within Disney by the customer benefit–-a family-friendly, safe, fun environment that is open for business all year. Disney offers specials for families, such as discounts on flights, car rentals and hotel rooms–many are seasonal–to attract more people to their parks, and this tactic is considered in the price and quality base indicating a value bargain to their potential customers. But the most important positioning base utilized by the Walt Disney Company is the one that distinctly sets them apart from any of their competitors: Emotion (Hair, Lamb & McDaniel, 2008, p. 233).
Emotion is, “how the product makes customers feel,” (Hair, Lamb & McDaniel, 2008, p. 233). This is where the Disney history comes into play in a huge part because, being founded as a cartooning company in 1923 that produced widely popular children’s videos, the name Disney has been a part of people’s lives for a very long time. Entering a place called Disneyland, which embodies the characters every child has enjoyed since 1923, can have the effect of bringing the fond memories of their childhood back to them, producing a sense of eternal youth. Another advantage for Disney is that not only can it have an attracting effect on adults, but because Disney is now a powerhouse in the entertainment industry and recognized throughout the world, they can attract children of various ages. Disney can attract younger children who identify with the Disney characters and enjoy seeing them in full life form. Disney can also attract the older children who still identify with the characters in the form of knowing them and enjoying the movies they have seen them in, but also enjoy the themed rides that feature their favorite movies and characters in them.
To conclude the industry analysis the entertainment business is a growing business due to the change in demographics and the orientations of today’s generations. Disney has a strong foothold in the industry, a feat accomplished mainly due to their history and roots in the American culture. Their reach to the four corners of the United States and beyond has aided Disney’s stronghold on the entertainment industry.
The Walt Disney Company’s S.W.O.T Analysis
There are four things an organization should consider and analyze during various stages throughout the fiscal year that are crucial to keeping up with the competition and giving a relatively accurate perspective on where they stand. Those four things are the companies Strengths, Weaknesses, Opportunities and Threats (often referred to as the SWOT analysis). The SWOT analysis helps an organization understand the current and potential environment for their particular product and service (Hair, Lamb & McDaniel, 2008, p. 40) which allows them to adjust their marketing tactics in order to help focus their strategy. When doing a SWOT analysis it is important to recognize that the Strengths and Weaknesses are internal reflections, whereas the Opportunities and Threats are external reflections.
The Walt Disney Company’s Strengths
"I knew if this business was ever to get anywhere, if this business was ever to grow, it could never do it by having to answer to someone unsympathetic to its possibilities, by having to answer to someone with only one thought or interest, namely profits. For my idea of how to make profits has differed greatly from those who generally control businesses such as ours. I have blind faith in the policy that quality, tempered with good judgment and showmanship, will win against all odds." –Walt Disney (Disney Dreamer 2007).
Walt Disney had many ideas that helped the Walt Disney Company gain the strength of having such a tremendous foothold in the market to this day; The Walt Disney Company is the second largest media and entertainment corporation in the world, after , according to . In a report by Datamonitor (2007) the Walt Disney Company, together with its subsidiaries, is a diversified entertainment company. It owns media networks as well as parks and resorts. It also makes movies and markets consumer products.
Furthermore, the company clearly has developed a very strong and well known "brand-name and image" over many years. Disney has one the most recognized and powerful brand names in the entertainment industry. According to Datamonitor 2007, the Walt Disney Company was ranked 8th in the Top 100 Global Brands ranking of the BusinessWeek Magazine and Interbrand, a branding consultancy, in 2006. Not only does the company have a strong corporate brand, they have additional brands such as ESPN (one of the biggest sports channels in the world), Miramax, Touchstone, and Pixar. These, being other brands of Disney, have high brand equity. Because of this, the availability of entering new businesses and being able to produce new brand products is quite accessible.
According to Telephonyonline, the Walt Disney Company is attempting to expand and team with Sprint to create a mobile virtual network operator (MVNO) service that targets families with children and adult Disneyphiles. With this said, they are going a different direction to expand their already broad product portfolio. The company already operates through four different business segments. These segments consist of media networks, parks and resorts, studio entertainment and consumer products.
The Walt Disney Company’s Weaknesses
Two of the Walt Disney Company’s main weaknesses relate with a great possibility of problems. The idea of Disney’s frequent change in top management and the tremendous amount of employees is where the problems all arrive. As of September 2007, there were 130, 000 people working for Disney in some way or another. By expanding their broad product portfolio and gaining many different niches it gives them a bigger image, but it also means that there are going to be that many more workers. This means greater possibilities for miscommunication and a high chance for a bureaucracy in the company.
The most recent weakness of the Walt Disney Company has come from Hong Kong Disneyland Resort. According to many, the resort has yet to live up to the expectations of Disney’s resorts and parks. “The $1.8 billion theme park has only 16 attractions, only one of which is a classic Disney thrill ride (Space Mountain), compared to 52 at Disneyland Resort Paris. A recent study of Hong Kong Polytechnic University showed that 70% of the local residents had a negative opinion of Hong Kong Disneyland Resort.” (Datamonitor, 2007). If the downward sloping performance of this resort continues, the image of the Disney Company will also start to take that direction.
The Walt Disney Company’s Opportunities
The markets of today are becoming more versatile to outsourcing and globalization. The trend towards globalization is not immune to the entertainment business and The Walt Disney Company is revealing this by expanding outside of the United States and offering theme parks in France, Japan and China. According to Datamonitor, nearly 25% of their operating income comes from outside the United States and Canada (Datamonitor, 2007, pg. 22). Another expansion opportunity from U.S. soil was mentioned earlier regarding the Disney Cruise Line, a service well placed and growing in popularity.
Another opportunity for Disney was also mentioned earlier considering Disney and their Imagineering section. Research and Development has promised to provide new attractions such as the Finding Nemo Submarine Voyage presenting an “under the sea experience” for consumers (Datamonitor, 2007, pg. 23).
The Walt Disney Company’s Threats
Threats that are more prevalent in the era of globalization are the laws and regulations of other countries. There is a need for constant monitoring of the differences in the laws of other countries and the United States when organizations are outsourcing. In Disney’s case their theme parks must meet the safety regulations of the countries in which they operate in order to stay in business and maintain their international status.
As with any business a main aspect of the Threat analysis is the competition. The analysis of what competitors are selling, how they are selling it, whether or not they are selling it effectively and profitably and how your product or service differentiates from theirs is a crucial way to know how to attract more customers to your organization.
In the case of The Walt Disney Company and the theme park industry there are many competitors, such as Paramount Parks, Universal Studios and Six Flags Theme Parks, as mentioned earlier. However, there are many other less visible competitors that one might not naturally think of when assessing the competitive market in which Disney deals. For example, there are hundreds of water parks and various funplexes that can also be considered as cheaper or more valuable competition for Disney. Competition, in any form, can diminish Disney’s market share in the entertainment industry (Datamonitor, 2007, pg. 23).
The Walt Disney Company’s Marketing Mix
According to Lamb, Hair, and McDaniel in Marketing 9th Edition (2008), “the marketing mix is a unique blend of product, place, promotion and pricing,” (p. 48). Those four Ps are the skeletal aspects for a product industry, however, it is clear that The Walt Disney Company does not solely provide products but also, in the case of their theme parks, they are providing a service. Therefore, three additional Ps are needed people, process, and presentation.
The Four Ps of The Walt Disney Company
The Walt Disney Company is very good at the product and placing aspects of the four Ps, resulting from over eighty years experience in the business. This history has given them an advantage of instinct and familiarity when it comes to selling their products. As new theatrical productions are released, it allows for new product lines based off the feature’s characters to be made and sold in strategically placed stores throughout the United States. The stores are located in malls and super centers, in urban locations in order to for them to be visible, and they are nationally located within their theme parks where they will be heavily sought after by eager vacationing families.
The next two Ps are promotion and pricing. Promotion is intertwined throughout The Walt Disney Company, surfacing in theatrical productions, books, consumer products and theme parks. Every aspect of Disney promotes not only itself but every other aspect as well in a circular rotation and, as Roy Disney was quoted earlier, “keeps [consumers] Mickey Mouse minded.”
Since Disney is a family oriented company they want to be able to attract families of median incomes. Therefore, the pricing, relative to the theme parks and true to the pricing strategy is, “the quickest element to change,” (Hair, Lamb & McDaniel, 2008, p. 49). The prices for admission are subject to the seasons. Disney ads on television are often seen offering packages for “round trip airfare for cheap,” “kids fly free,” and “hotel packages” all to attract consumers to their parks and resorts.
The Three Additional Ps of The Walt Disney Company
To address the three additional Ps (people, process, and presentation) Disney has constructed its own University that employees must attend and complete before ever being allowed to work at a Disney Theme Park. According to Jim Cunningham the customer service of The Walt Disney Company is known as being the best in the world, and Disney University emphasizes two key points: “The front line is the bottom line,” and, “It’s 10 percent product and 90 percent service,” (Service, 1997). This break down shows Disney’s devotion to their customers and their customers’ experiences while encountering the Disney tradition.
Conclusion
After careful and in depth analysis from an outside perspective there are many things that we have found to be true: The Walt Disney Company in very interdependent on its various sections; it is a global leader in the industry of entertainment; and it is a continuously growing company with a strong foothold on several aspects of business practices. Because Disney depends on it’s studio productions to act not only as an instigator of their product lines, but also as a continuous advertisement, everything seems to be codependent on this starting point. The studio productions seem to get the ball rolling, providing characters to base their products after, and themes to model their attractions.
Because of the rich selection Disney has from which to produce its products and attractions, it enables Disney to have many options and opportunities to expand their product lines. They certainly are a leader in the domestic market in the United States, and with their reach into many different diverse countries their global expansion is also among the tops in the industry.
The most basic goal of The Walt Disney Company is, “To make people happy.” Because they have been producing films for children since 1923, and their ability to invoke a feeling of eternal youth just through the mention of their name, it would seem that they have done an excellent job in fulfilling that goal.
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