Part 3
Internal assessment
Disney was an entertainment company that was in existence as early as 1984. The Company had so much success stories to tell over theyears in which it was in full operation. Just like any other company, it never missed its own share of ups and downs in the business cycle. The primary mission of the company was to create an outdoor entertainment park for the members of the public.
The business model was designed in 1987 where it mainly focused on generating sales that were rated a t twice the price of the average retail. The Disney stores that were used during that time were supposed to evoke a feeling of satisfaction out of the consumers. People were supposed to feel as if they were already stepped into the Disney sound stage (Gomery, 1994).
The primary target consumer were children especially those that came from the high end families who could purchase the relatively expensive toys. Apart from that, the company also targeted the Disney’s grown-ups who showed interest in the products of the company. The company made a number of steps towards maintaining their customer base through the creation of a publishing unit. There were a number of books and magazines that were published for the children.
In order to make enough sales that could generate good profits, the company came up with a system where the distribution of the products was done through direct-mailing. There were also some incidents in which the distribution of the products was done through the catalog marketing
Corporate and business level strategies.
One of the strategies that worked for Disney was the idea of taking their level of creativity to the next level as compared to that of their rival within the industry. The idea of coming up with unique characters and also using animated movies worked quite well for the company. Apart from that, the firm decided to venture into a number of licensed portfolios thereby making it to compete effectively in terms of generating profits. The strategic location for the theme park also worked to the strategic advantage of the company. Most targeted consumers attention were attracted to the firms themes due to their strategic location thereby earning the company massive profits.
Sources of competitive advantage
In order to achieve a competitive advantage over their rivals in the industry, the company had to buy CapCities as a strategy of owning a programming distribution channel. The acquisition of the distribution channel made the company to be the largest entertainment company In America thereby beating its closest rival in the business (Gomery, 1994). The acquisition also helped the company make improvements in terms of the debts ratio that was initially at twenty percent but improved to thirty four percent.
Apart from that, the company also launched a new strategy where it could sell most of its products online as opposed to the manual process that was being used by most of the closest rivals. Disney managed to make a lot of sales through its online sales thereby boosting the financial coffers of the company.
Financial performance
In the year 1983, the company could manage to generate revenue worth 1307 million dollars while for the year 2000 the same revenue collections had shot up to 25, 402 million dollars. It therefore shows that the company was making improvements in terms of the revenues it generated from sales of its products over the years.
Company’sstrength and weaknesses
The strength of the company was in the acquisition of the distribution channels as well as the increase in the number of targeted consumers within a short period. On the flipside, the weaknesses of the company were the desire to expand the business at a time when the company was not ready for such an expansion. Such huge desires made the company to run into financial losses. Additionally, the death of Disney was the first step towards the end times of the company since no one else had the same management skills like those of Disney (Weinraub, 1995).
Part 4
Strategy Alternative Development
Strategic issue: Decrease in Creativity
In the year 1996, the company hired Michael Ovitz who was supposed to work as the president of the company. He worked for just a few months out of which he was very ineffective in his job, therefore forcing the company to part ways with him. When Michael left, no one was hired to take his place at the company. Since Eisner had no training in that particular field of management, his error was viewed as dictatorial and commanding.
Alternative 1
It was known that Eisner was the creative mind behind the huge success of the company and his absence could as well lead to the downfall of the firm. The best alternative was for Eisner to get an alternative person to take the position of the president of the company. Such a move would ease the commitment of Eisner to the company by concentrating on other aspects of the organization.
Alternative 2
The company had a system where the strategic planning unit of the company was always in conflict with the managers due to their conflict in duties. Eisner’sbelieved that pitting the two factions against one another would eventually result in a development of a brilliant idea. However, on the flipside, the company ended up losing close to seventy five high-level executives ended up quitting the company (Weinraub, 1995). The best idea would be to give definite and precise roles to each department so that such conflicts do not arise. Additionally, the level of creativity would most likely double up when the employees concentrate on their duties rather than concentrating on outshining the other employees. Every department should be given the freedom to exercise the freedom to make independent decisions without getting interference from external parties. In as much as the firm wants to concentrate on making money, it should first treat the employees with utmost respect that they deserve before thinking of generating cash in such poor working environment. Most of the employees who left the company did so because they thought that they were not being treated with the respect they deserve.
Part 6
If the company borrowed money from creditors to finance its operations, the best policy to have been chosen is the long term payback period that has low interest rates. The sales growth over the years was good enough to take care of the loan that the company may have borrowed. The market share of the company could also increase due to increase in total worth of the business.
References
Bernard Weinraub (1995) “Clouds Over Disneyland,” The New York Times, sec. 3, p. 12.
Douglas Gomery (1994) “Disney’s Business History: A Reinterpretation,” in Disney Discourse. Eric Smoodin, ed., New York, Routledge, p. 72.
