History
After Mr. Disney arrived in California in 1923, he created a cartoon in Kansas City and had a lot of hopes for it. It was about a girl in a fantasy world named Alice’s wonderland. He then decided to use it for the first film to vend a series which he named “Alice Comedies” to distributors. He was successful soon after he arrived in California. On October 16 1923, he was contacted by a distributor in New York called M.J Winkler (D23, 2019). He agreed to distribute the Alice Comedies, which is how the Disney Company began.
It was originally identified as the Disney Brothers Cartoon Studio. Walt Disney and his sibling Roy were equal partners in the company. Later, the name was changed to Walt Disney Studio due to Roy’s suggestion. After making the Alice Series for four years, Walt Disney decided to relocate to an all-cartoon series. He introduced a character called Oswald the lucky rabbit to be the star of his new series. He made 26 Oswald cartoons in just a year. Still, when he reached out to his distributor for financial assistance so that the cartoons could run for a second year, he discovered that his distributor had double-crossed him and employed all of his animators with hopes of owning the Oswald cartoons for less money.
After Walt Disney read his contract for a second time, he realized that he didn’t own the rights to Oswald, and the rightful owner was the distributor. After this painful betrayal, he made sure that the owned everything he created. After Disney accumulated enough money to rent a store to be used as a studio, Disney moved out of the original Disney studio. He utilized the studio for a few years, but after the company grew bigger, he built his studio in Hollywood on Hyperion Avenue and moved out of the store in 1926.
Business Units
The company’s CEO is Bob Chapek, and he led the company for two years, Bob Iger is the company’s chairman. The company is worth 52.47 billion USD, making it the second-largest entertainment company worldwide with 185,000 employees. The Disney Company was diversified into five main units: Disney media networks, Disney parks, resorts, interactive media, Disney consumer products, and Walt Disney studio entertainment.
Disney purchased companies and big names like Lucasfilm, Marvel, and Pixar. After purchasing fox, Disney possessed companies like fox animation, fox family, twentieth-century Fox, Fox 2000 pictures, and fox searchlight pictures. Disney also owned the televised fox content, such as twentieth-century fox television, fox 21, and FX productions (Aguilar, 2019). FX networks like national geographic were also purchased; fox international network groups star India; and Tata sky, Hulu, and Endemol shows
These are the most famous companies owned by Disney: Touchstone Pictures, Lucasfilm, ESPN (80%), A&E (50%), the history channel (50%), lifetime (50%), Hollywood Records, Pixar, and vice media. The list includes all the Disney branded properties, television and radio stations, parks, and stores. Disney also owns franchises such as Star Wars, the marvel cinematic universe, the Muppets, Disney princess, Pixar films, Pirates of the Caribbean, Indiana Jones, and Winnie the pooh.
These are some of the least famous companies fully owned or are in partnership with Disney: the venture capital firm steamboat ventures, worldwide media networks like RTL 2, ATV, RDS, Kividoo, Tele5, Earthstar incorporation, and Synergy Group. Disney has a lot of shows like the American Horror Story, American idol, the Simpsons, and family guy. There are hundreds of movies associated with Disney, including die-hard, dead pool, and night at the museum.
Revenue History
Due to covid 19, the merchandise sales and theme parks profits nose-dived. The CEO stated that the currently reserved spots are beyond 3/4 attendance levels. But the rise covid 19 cases have resulted in the cancellation of the reservations. The comeback of the amusement park industry is dangerous to the company’s bottom line in the year 2019. That segment comprised of hotels and cruises was responsible for thirty-seven per cent of the organization’s 69 billion USD total revenue. The majority of this revenue went to theme parks.
In the 3/4 parks, 25.5% of the company’s income went to products and experiences. Disney made eighty cents in each share during the final period after adjusting the 17.02 billion. The company’s attendance was boosted after the restrictions were eased (Whitten, 2021). The experience and products revenue jumped from 307.6% to 1.6billion UDS during the same period.
In the previous five quarters, Disney conveyed a loss in income due to covid 19. The operating income was 356 million USD, equated with a loss of 1.87 billion USD in the same quarter of the previous year. The majority of the profit is relatable to the segment’s consumer product commerce. The operating income was 565 million USD which was 290% compared with the previous year in the same period. Disney made more money by selling merchandise like star wars, mickey, Minnie, spider-man, and Disney princesses. Resorts, experiences, and domestic amusement parks had an income of 2million USD, which was a positive outcome, while international lost 210 million USD.
The Walt Disney resort is located in Orlando, Florida, was opened together with the Shanghai resort was. Both opened for the whole quarter at the same time. Disney world was completely shattered. Other Disney lands were opened and closed for nine months.
Industry Analysis
The Walt Disney Company has conquered the entertainment industry for the past ten years. It has bought popular properties in the show business. The Disney Company understands its audience, and they always deliver quality content. Some consumers complain and are worried that Disney is single-handedly controlling the entertainment industry despite all that.
In the late 90s and early 2000s, Walt Disney was accused of underpaying his employees. This incident impacted both the micro and macro. It also impacted Mr. Disney in positive and negative ways. Because if the employees are not happy in the working environment, they will not be passionate about their job, leading to low production levels. This occurrence will also positively impact the company because their products are produced cheaply, making more profit than other companies. They will have an increased monopoly of clients because they can reduce the prices of their goods and still make a huge profit. But it is also a setback because if other entertainment companies become aware of the several sweatshops Disney has, they may refuse to work and collaborate with Disney. They would not want to be associated with them in any way. It will be evident that losing suppliers will make them lose clients hence losing profits.
Moreover, Disney has a very strong marketing strategy that helps the company grow daily in every part of the world. The first step of their marketing plan is to target the most suitable and profitable market for their products and services (Disney: Company Analysis | Business Paper Example, n.d.). The company’s films and animations appear appealing to both children and adults. Disney uses advertisements and promotions to alert the public of an upcoming project, and they do the advertisements long before the project is released. This suspense makes the clients eagerly await with excitement until the product is released. The Walt Disney Company focuses on trending issues, and they engage the public’s opinion, for example, in films that tackle gender inequality and racism. This strategy ensures that Disney will stay relevant.
Competitors
Disney is one of the best entertainment companies globally, but to remain at the top spot, the company needs to challenge its rivals in various ways. Disney competes with a lot of media companies. The biggest competitors are Time Warner, Comcast, 21st-century fox, discovery communications, and CBS Corp. Disney has the biggest market share, making it the number one market leader. In the previous year, Disney accumulated 52.465 billion USD, which equals 31.82% of the sum of the income generated by its rivals.
Disney leads different primary business areas. Disney channels, ESPN, and ABC, broadcast exclusive content that cannot be distributed or licensed by the other media companies. The power and unique nature of the content help Disney generate a huge income through adverts and affiliate fees, which surpasses its competitors. Disney has tied most of its business units together, allowing consumers to involve with similar characters through television, consumer products, film, and parks. The company’s brand is strong and gives it power around the globe.
Disney has some industry-related risks. But Disney has invested and partnered with companies such as AT &T, DirecTV, BAMTech, Play Station Vue, Sling TV, and Hulu. These companies are vigorously tackling these concerns and shifting the corporation toward streaming services. Other risk factors are the rights of intellectual property maintainers, the decline in the economic state, and an increase in competition.
Product categories
Disney products date back to 1929, after Mr Disney licensed the Mickey Mouse image so that Children may use it on their writing tablets. On December 16 that year, the Walt Disney production company created the Walt Disney enterprises; it was in charge of handling the merchandise. The doll production of mickey mouse, which charlotte Clark did, began briefly in January 1930. The Walt Disney enterprise division also employed George Borgfeldt and the company of NYC to be the licensing agent for the mickey and Minnie mouse toys. George Borgfeldt and company decided to develop other products; they granted Walkburger, Switzerland, and tanner and the company of St Gall the first license for the mickey and Minnie mouse handkerchief. During the summer of 1930, the company expanded the Walt Disney enterprise to England, and they granted William Banks Levi a general license for mickey and Minnie merchandise.
The mickey and Minnie mouse merchandise was a success, and it generated a revenue of 386 million USD. In December 1999, MR Andrew P. Mooney was the president of Disney consumer products. He created the Disney princess license in January. Mooney is also the developer of the Disney couture clothing, princess-inspired gown line, the Walt Disney furniture and lines associated with the Pixar films toy story. He made the Disney consumer products try newly labelled women’s nightshirts and t-shirts. The clothing was more mature, but it was not a success. In 2001, he was the leader of a Mickey Mouse T-shirt promotion, which included handing them out to celebrities for advertisement, and it was a success.
Consumer products began expanding because they were also licensed in the food industry. In the early 2000s, DCP signed a licensing deal with Kellog Company. In February 2002, the Disney cereal line will be launched by Kellog. And in May 2003, Disney consumer products presented a Disney branded dairy line that incorporated milk, yoghurts and ice-creams. In May 2005, Disney collaborated will Krogers and ventured into selling dog food.
In the first quarters of 2004, DCP generated more than 388 million USD. Disney introduced animated T-shirts. They were very concerned with their brand reputation, so they also started to sell household equipment. In August 2004, the retailer was selling watches and wristbands. In 2005 DCP started selling Disney branded denim jackets and pants. Disney also wanted to sell a digital camera and a camcorder in 2004.
Innovation types
When Walt Disney presented the world with his first theme park in 1955, his desire was for the park to be joyful, but he created an extremely joyful amusement park. It was fascinating, engaging, inspiring and immersive. It was very memorable. Today his brand and creativity have a different name called innovation. It is a product of engineers with ambitions, creative artists and mind-blowing technology. It is consistently pleasant and compelling, it is the most visionary place, and to others, it is the happiest place on the planet.
In Disney land and the other eleven Disney parks, people come up with new ideas daily. But Disney is not only made great by the fairy tale ideas but also by how the ideas have been executed. Bei Yang is the vice president and the technology studio executive at Walt Disney Imagineering. The WDI designs conceives and creates attractive features in the Disney theme parks. Wald Disney did not want the public to focus on their outside world while in the park, and they should feel like they were in a completely different world.
Disney uses different approaches and ideas to improve and become better every day. Many things contribute to Disney being the great brand it is today. Things like design, architecture, digital media, animations, industrial manufacturing, 3D modelling and animatronics are all combined to give Disney the glow and success. The Disney Company is based on storytelling to give different generations lessons, advice, and knowledge. This is the basic way of communication and connection between humans. It is also the equipment used to bring transformational experiences to life.
Disney’s stories are about normal people who have an extraordinary twist and purpose. The character has a mentor who takes them through what they are supposed to do and prepares them for future outcomes. The characters face implausible challenges in a fantastical environment, and they conquer them as they become more transformed. Disney land is all about exploring new things and having an adventure of a lifetime.
New product introductions
Disney made it known to the public that they will launch a new product in collaboration with three other lines so that they may be of help in benefiting make a wish. For the past forty years, Disney has collaborated with making a wish to make a change in children’s lives together with their families. Make a wish foundation celebrated its 500,000th that was granted. Three different lines were included in the product launch, which celebrates the collaboration and the granted wishes. The blue collection will be included in the wish come true, and it will be taken to the Disney shops and stores. With every good purchased, Disney will donate twenty-five per cent of the sales until the target of 500,000 USD is achieved.
Included in the collection will be some of the things Disney did for the first time. This will include the first adjustable Mickey Mouse children’s headband; the headband will allow all the children to wear the ears comfortably. A cloth face mask will also be included in the collection, and it will serve both children and adults. Disney will donate ten thousand cloth face masks to make a wish. The merchandise will not only make a wish, but it will also help celebrate Walt Disney World and Disney Land. The collection includes spirit jerseys, hats, face masks, lounge fly wristlets, magic bands, and bags.
Corporate licensing and alliances
Disney is a big company with multiple sales grossing an income of more than 272 billion USD globally in merchandise alone last year. A licensed global magazine reported of the Disney Company is the leading licensor globally, including brands like Lucas film, ABC, ESPN, Marvel, Walt Disney Studios, and Disney Pixar. The merchandise retailed in 2016 was licensed for 56.6 billion USD. Out of one hundred and fifty brands, fifty-five were listed and said to be grossing over 1 billion USD in retail license sales the previous year. The report profiles seven new corporations that make over 1 billion USD. These include Viz media, owners of Guinness and Smirnoff, Diageo etc. Disney publishing house earned 22.8 billion USD in retail sales of licensed products.
In 2004 Walt Disney announced that they would cooperate with Microsoft for many years in the digital media field so that they may improve the security, quality and access to digital content from home through Microsoft. The goal was to increase the number of entertainment devices. Part of the agreement was for Disney to license Microsoft windows. The two companies have discovered three areas of combined focus that use effective rights management. These create high-resolution digital content, increasing the flow of digital content to the public over networks through devices and optical media, making sure that content flowing between the devices is secure and does not matter if it is a home or a portable device.
Merger and acquisition history
Disney has been at the top of its game for many years, and it has had many acquisitions. On June 30 1993, Miramax signed a 60 million dollar deal with Disney, giving Disney access to the Miramax production library. On July 31 1995, the Disney Company merged with ABC Inc. under Capital City. It was a 19 billion dollar deal. This alliance gave Disney 85% ownership of ESPN. Not only had that, but Disney also had ownership of A+ E cable channels for a lifetime. On October 24 2001, Disney had an acquisition with fox, and Disney purchased fox for 2.9 billion USD. In April 2004, Disney had the acquisition with Muppets (High, 2019). The deal was discussed in 1990, although they did not proceed because the Muppets’ creator had died. On May 5, 2006, Disney made a 7.4 billion dollar acquisition with Pixar. On April 30 2009, the Disney Company partnered with Hulu. On March 201th, 2019, Disney and 21 foxes had an acquisition.
Performance, outcomes and experience.
Walt Disney was one of the biggest organizations in the world before it was worth over 238 billion USD. It was associated with the vision of Disney himself. On March 20, 2019, Disney purchased all the properties owned by fox for 71 billion USD, making Disney the biggest media company in the world. In 1920 Walt Disney and his best friend Iwwerks did not have a job, then they decided to open up a studio. The studio was not profitable compared to the previous incarnations. They worked for universal pictures and created Oswald’s character, the lucky rabbit. He went ahead to create mickey mouse. Walt Disney then came up with the idea of creating Disney world. After Disney and Roy died, the company had financial struggles in 1957. However, from 1980 to 1990, Disney was the biggest entertainment company.
Innovation structure and future performance potential
Pandora announced that they would collaborate with the Walt Disney Company. Together the two alliances will make Disney-themed consumer products. They are planning on featuring Disney characters such as Mickey Mouse, Princess Sofia and many more on their sterling silver and fourteen karat gold charms. Once the products are in the stores, they will include twenty-five different designs, and additional sixteen designs will be available at the Disney merchandise stores.
Disney has bargaining power over suppliers because it operates in a different and unique industry with high switching costs associated with operations. Disney has a building strategy for the consumer market, and each character has its role because they are created for a specific age group. The company has a big distribution channel. Mickey’s stuff targets little children, and Mickey’s unlimited targets teenagers and adults.
References
Aguilar, C. (2019, April 2). Chart: Everything That Disney Owns. Cartoon Brew; Cartoon Brew. https://www.cartoonbrew.com/disney/chart-every-company-that-disney-owns-172130.html
D23. (2019). Disney History. D23; Disney. https://d23.com/disney-history/
Disney: Company Analysis | Business Paper Example. (n.d.). Business-Essay.com. https://business-essay.com/disney-company-analysis/
High, K. (2019, November 12). A Timeline of Disney’s Media Acquisitions. Complex. https://www.complex.com/pop-culture/2019/11/disney-acquisition-timeline
Whitten, S. (2021, August 12). Disney parks & products division returns to profit as theme park losses narrow, merchandise sales soar. CNBC. https://www.cnbc.com/2021/08/12/disney-earnings-theme-parks-post-first-profit-since-covid-struck-in-2020.html
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