...WALT DISNEY PRODUCTIONS, JUNE 1984 One of the best examples of service through people is Walt Disney Productions… How Disney looks upon people, internally and externally, handles them, communicates with them, rewards them, is in my view the basic foundation upon which its five decades of success stand. —Peters and Waterman, In Search of Excellence In Search of Excellence didn’t simplify enough! In the private or public sector, in big business or small, we observe that there are only two ways to create and sustain superior performance over the long haul. First, take exceptional care of your customers via superior service and superior quality. Second, constantly innovate. That’s it. There are no alternatives in achieving long-term superior performance. Financial control is vital but one does not sell financial control. —Peters and Austin, A Passion for Excellence Ron Miller, president and chief executive officer of Disney Productions Inc., pondered the essence of his dilemma. For the past two-and-a-half months, his company had been the subject of a takeover attempt by Saul Steinberg, a well-known raider. The attempt had started innocently enough with the announcement of the purchase of 6.3% of Disney’s outstanding common stock. In subsequent announcements, Steinberg’s holdings rose to 12.1%. When Steinberg announced his intention of acquiring 25% of Disney, Miller undertook a series of evasive actions, including the purchase of Arvida Corporation for $200 million in common...
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...Olin Business School Washington University S-02-001 Published: 2002 Revised: 2009 Disney Corporate Strategy (A) Barbarians at the Magic Kingdom’s Gate* Introduction The next big takeover fight – and it would be a beauty – may involve Walt Disney Productions. By the time you get this issue, Disney’s defense strategy may already be unfolding. But it will produce no quick victory for Disney even if a white knight comes along, and even if the principle attacker, Saul Steinberg, can be bought off. One by one, Hollywood’s great studios have been plucked by the smart out-of-town moneymen. Paramount by the late Charles Bluhdorn. Twentieth Century-Fox by Marvin Davis and Marc Rich. MGMUnited Artists by Kirk Kerkorian. Columbia by Coca-Cola. Now, it may be Disney’s turn. But Disney will not go quietly. - Forbes, June 4, 1984 Ron Miller, Disney Productions’ CEO reflected on the remarkable events of the past several months. Disney, the symbol of wholesome family entertainment, had become the target of a hostile takeover attempt by a well-known raider, Saul Steinberg. Steinberg now owned 12% of the firm and was threatening to acquire more. While Miller had orchestrated several defensive maneuvers, Steinberg had now announced a public tender offer to purchase 49% of the equity at a price that was a 45% premium over where the stock had been prior to the raid. To fund this purchase, Steinberg was promising to sell the film library and certain real estate assets to outside investors...
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...Steinberg Walt Disney Productions should repurchase Saul Steinberg’s shares. The management for Walt Disney has lost their focus over the course of the last few years, prior to June, 1984. After the death of Walt Disney in 1966, the company has found it hard to replace his leadership and the ability to make sound decisions. Business Strategy In the past, Walt Disney Productions’ business strategy has been focused on their theme parks and motion pictures. This strategy propelled Disney to become the most well-known company in the world and it was very profitable. Recently, Disney’s strategy has been real estate development and trying to gain a foothold in the cable programming services. They have not been entirely focused on increasing their revenues from the very aspects of the company that made them successful. Up until 1983, the attendance at their theme parks has been generally flat and has not created a substantial return. The opening of the EPCOT Center helped boost attendance for the first 3 quarters of 1983, but the last quarter saw attendance drop 8% and another 19% for the first quarter of 1984 (see Exhibit 1). The reverse is true for the motion picture segment. This segment has increased revenue every year until 1983 when it decreased 18% from the previous year (see Exhibit 2). The management has not been focused on the business strategy that Mr. Walt Disney created for his company. I believe that the EPCOT center has cost Disney too much money and...
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...WALT DISNEY PRODUCTIONS, JUNE 1984 One of the best examples of service through people is Walt Disney Productions… How Disney looks upon people, internally and externally, handles them, communicates with them, rewards them, is in my view the basic foundation upon which its five decades of success stand. —Peters and Waterman, In Search of Excellence In Search of Excellence didn’t simplify enough! In the private or public sector, in big business or small, we observe that there are only two ways to create and sustain superior performance over the long haul. First, take exceptional care of your customers via superior service and superior quality. Second, constantly innovate. That’s it. There are no alternatives in achieving long-term superior performance. Financial control is vital but one does not sell financial control. —Peters and Austin, A Passion for Excellence Ron Miller, president and chief executive officer of Disney Productions Inc., pondered the essence of his dilemma. For the past two-and-a-half months, his company had been the subject of a takeover attempt by Saul Steinberg, a well-known raider. The attempt had started innocently enough with the announcement of the purchase of 6.3% of Disney’s outstanding common stock. In subsequent announcements, Steinberg’s holdings rose to 12.1%. When Steinberg announced his intention of acquiring 25% of Disney, Miller undertook a series of evasive actions, including the purchase of Arvida Corporation for...
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...The Fluidity of Disney. Gender Norms & Racial Bias in the Study of the Modern “Disney” The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media corporation headquartered at the Walt Disney Studios in Burbank, California. It is the world's second largest broadcasting and cable company in terms of revenue, after Comcast. Disney was founded on October 16, 1923, by Walt Disney and Roy O. Disney as the Disney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks. The company also operated under the names The Walt Disney Studio, then Walt Disney Productions. Taking on its current name in 1986, it expanded its existing operations and also started divisions focused upon theater, radio, music, publishing, and online media. In addition, Disney has created new corporate divisions in order to market more mature content than is typically associated with its flagship family-oriented brands. The company is best known for the products of its film studio, the Walt Disney Studios, which is today one of the largest and best-known studios in Hollywood. Disney also owns and operates the ABC broadcast television network; cable television networks such as Disney Channel, ESPN, A+E Networks, and ABC Family; publishing, merchandising, and theatre divisions; and owns and licenses 14 theme parks around the world. It also has a...
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...1. Why has Disney been successful for so long? • Disney has been an extremely successful company for almost 90 years. They have been able to maintain a high level of profit, but most importantly keeping entertainment as the main essence of the company. Their value proposition begun as a child-oriented business, and soon after realized they could be far more successful if they appealed to an audience of all ages. They met the entertainment needs of their audience, and were able to charge a relatively high price, close to their willingness to pay where the consumers still felt they were getting their moneys worth.1 • They have been successful for so long because of the internal strategies they used. Even though they have different strategies for each company, they have managed to maintain a central one as a whole. For example, the company was divided into many business units (media networks, studio entertainment, theme parks and resorts, consumer products and internet and direct marketing, see Exhibit 3) and Asner was able to create a synergy group in which he selected different representatives in each unit that report to him directly in order to maintain a culture of cooperation and teamwork inside the company. For this objective they created the synergy “boot camp” in which great executives have to work at the bottom of the hierarchical system, in order to create bonds between each employee of the firm. • A huge part of their success comes from their ability to evolve as time...
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...Executive Summary Walt Disney Productions Inc. (Disney) is the target of a takeover attempt by Saul Steinberg. Over the course of several months, Disney management has resisted the takeover in several ways including the acquisition of Arvida Corporation in a "for stock" deal and the pending acquisition of Gibson Greeting Inc. (Gibson). Steinberg has countered these moves with a public tender offer of $67.50 per share if Disney acquires Gibson and $72.50 if Disney does not acquire Gibson.With a current price of approximately $50 per share, Steinberg's offer is 35% to 45% above market value. This paper addresses two questions. The first question is answered from the perspective of the shareholders while the second question is answered from the perspective of Disney management. From the shareholder perspective, the tender offer is advantageous from a financial perspective and should be accepted if profit is the sole motivation. The answer to the second question depends heavily on management's good faith in the current leadership and their ability to grow Disney, as the case clearly provides evidence of management inefficiencies that are consistently reflected in Disney’s declining profit margins and ROE since 1981 (Exhibit 6). Analysis: As a Shareholder Regular shareholders with limited financial education should look for three things in an investment: 1. Per-share growth and earnings history- As a shareholder, the incentive that comes from investing in a company...
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...For more than nine decades, the name Walt Disney has been preeminent in the field of family entertainment. From humble beginnings as a cartoon studio in the 1920s to today's global corporation, The Walt Disney Company continues to proudly provide quality entertainment for every member of the family, across America and around the world. The Birth of a US Icon October 16, 1923 Walt signed a contract with M. J. Winkler to produce a series of Alice Comedies — this date is considered the start of the Disney company first known as The Disney Brothers Studio. In 1923, Disney joined his brother Roy O. Disney in Hollywood. By the time he arrived on the West Coast, word came from New York that a company wanted to purchase the rights to a series of Disney's live-action cartoon reels, ultimately titled Alice Comedies. A distributor named M.J. Winkler offered $1,500 per reel, and Disney joined her as a production partner. November 18, 1928 Steamboat Willie is released at the Colony Theatre in New York -- this marks the release of the very first Mickey Mouse cartoon, and the first appearance by Minnie Mouse. Taking on Television: 1950s In 1954, the "Disneyland" television series premiered. The show included an introduction by Walt Disney and incorporated film clips from Disney productions with live action and coverage of Disneyland. Some four million people tuned in each week. Disney also made a national folk hero out of Davy Crockett when he devoted a three-part program to coverage...
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...Walt Disney Company is an American leading diversified international family entertainment variety and media enterprise that has five different segments for its business: Media networks, parks and resorts, studio entertainment, consumer products and interactive media. Each segment has different elements and helps the company in numerous ways as its gradients. They are the reasons why Disney has diversity and always kept making people’s dream come true in their creative world they’d been creating since its birth. Disney’s Path, Now and Future. -Disney’s magic even works in business- “We keep moving forward, opening new doors, and doing new things, because we're curious and curiosity keeps leading us down new paths.” The Largest Media Company in the World Walt Disney Company is the largest media company from many aspects such as Market Capitalization, Number of employees, customers, fans, parks & resorts, Disney stores (where they sell Disney goods), recognition, popularity, globalize, profit, sales volume and market shares. - Employees: 166,000 * Customers (per year): 27,503,000 (Tokyo Disney Land& Sea 2012 park guest) * Parks& Resorts: 11theme parks at five location world wide * Disney’s stores (outlet): 54 stores * Profit: $5.6 Billions * Assets: $80.64 Billions * Sales Revenue: $42.84 Billions * Market shares: 13% - Market Capitalization:$103.96 Billions ...
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...Disney Case Analysis 3. What sort of company did Eisner inherit? Provide a brief summary of the company at the time Eisner took over (discuss each of its business lines in 1-2 sentences that highlight the most important issues). Eisner inherited a family entertainment company that began as a nonhierarchical organization where no one had titles and everyone was on a first name basis. Walt’s theory was that you didn’t need a title because you knew if you were important. Disney’s philosophy was to create universal timeless family entertainment and believed in the importance of family life maintaining its adherence to the Disney formula for family recreation. The company believed and always aimed to provide an experience that the families would be able to participate in and take joy in together and always with a commitment to excellent in all facets of the business. When Eisner took over the company’s financial performance had deteriorated. Disney was incurring heavy costs trying to complete projects on time i.e. EPCOT center and Euro Disney and the Disney Channel. He viewed “managing creativity” as Disney’s most distinctive corporate skill and pursued with the development of synergy through vertical integration. With this philosophy, Eisner inspired and managed Disney. Disney mushroomed with Eisner’s extreme corporate vision which he targeted at an annual revenue growth target and return on stockholders’...
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...It was early 1991, and Michael Eisner, chairman and CEO of the Walt Disney Company, was sitting down with Frank Wells, president and chief operating officer, and Gary Wilson, executive vice president and chief financial officer, to discuss Disney's prospects for the new year. These men were still basking in the glow generated by another record revenue- and profit-breaking year in Disney's history. Disney's businesses were performing at an unprecedented level, and confidence was high. The problem facing the trio who had engineered Disney's turnaround was how to maintain Disney's explosive growth rate and its return-on-investment goal of increasing earnings per share by 20 percent over any five-year period to achieve a 20 percent annual return on equity. Paradoxically, the very success of their strategy, which had originated to protect an underperforming Disney from the rampages of corporate raiders and the threat of takeover, was causing the opposite problem: how to maintain the company's explosive growth in a business environment where attractive opportunities for expansion were becoming increasingly scarce. The men were reflecting on how to develop a five-year plan that would cement the strategy that had led to their present enviable situation and make the 1990s the "Disney Decade." This case is intended to be used as a basis for class discussion rather than as an illustration of either effective or ineffective handling of the situation. This case was...
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...The Walt Disney Co.: The Entertainment King Marta Aparici Hornero Business Strategy MG530 1. Why has Disney been successful for so long? Nowadays, the small animation studio which was created in 1923 by Walt and Roy Disney has been converted in one of the biggest Companies in the entertainment field. With a $30.000 million annual income. The Walt Disney Company manages eighteen theme parks, thirty-nine hotels, eight cinematographic studios, and eleven TV channels. Walt Disney pictures, the most important cinematographic studio, continues producing animated feature film, in a pretty fast pace. In May 2006, The Walt Disney Company acquired the animations studios Pixar. Although Pixar movies achieved a greater success, Walt Disney was the pioneer to animations in creating irreplaceable characters, which became extremely popular among children and adults. Its creativity was unreachable by anyone; they had a talent that nobody could approach. But not only Walt Disney was creative, also Roy Disney had a business talent, he handled money pretty good. Both of their skills and knowledge guided them to what the world wanted to see, to hear, to imagine at that time. Walt always wanted emphasized teamwork, communication, and cooperation. For example, when Walt learnt that his distributor owned the copyright of the Oswald franchise. Instead of fighting for it, and wasting time and money they decided to create a new character, Mickey Mouse. After creating him, to attract...
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...SLIDE 1. The Walt Disney Company. The Entertainment King. SLIDE 2. “All our dreams can come true, if we have the courage to pursue them.” Walt Disney SLIDE 3. Case question: Had The Disney magic begun to fade? SLIDE 4. About The Company SLIDE 5. Walt Disney Company is largest media and entertainment conglomerate Other ventures: -Studio Entertainment -Parks and Resorts -Consumer Products -Media Networks SLIDE 6. Walter Elias Disney SLIDE 7. • Walter Elias Disney was born on December 5, 1901. • In 1911 at school he met Walter Pfeiffer who came from a family of theatre aficionados, and introduced Walt to the world of vaudeville and motion pictures. • In 1917, Elias acquired shares in the O-Zell jelly factory in Chicago and moved his family back to the city, where in the fall Disney began his freshman year at McKinley High School and took night courses at the Chicago Art Institute. • He became the cartoonist for the school newspaper, drawing patriotic topics and focusing on World War I. Despite dropping out of high school at the age of sixteen to join the army, Disney was rejected for being underage. • After his rejection by the army, Walt and a friend decided to join the Red Cross. Soon after joining he was sent to France for a year, where he drove an ambulance, but only after the armistice was signed on November 11, 1918. SLIDE 8. • Hoping to find work outside the Chicago O-Zell factory, in 1919 Walt moved back to Kansas...
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...potential opportunities and risks regarding the products and services that the company offer and provide. SWOT ANALYSIS Weaknesses - Limit target public; - High Costs of operation; - No guarantee of success; Strengths - Strong brand and image; - High Quality products and services; - Strong cable network; Threats - Intense competition; - Weak economy; - Piracy; - Difficult to find and afford creative labor; - Management Style; Opportunities - New attractions; - Park plus Hotel packages; - Expansion to international market; Strengths: Is undeniable that Disney is a strong brand, it can be recognized in most parts of the globe, and also can be linked with high quality products and services, family, vacations, happiness, fantasy, Mickey Mouse, etc. Disney built its powerful brand over the years, what is an attractive to other companies from various segments interested in borrow its magic. Disney has to carefully choose which companies will be associated with its name without losing its identity. This is a potential way to increase revenues to the company. Cable and media network are considered other strength of the company, which was responsible for the total of $ 9,615 million in revenues in the end of 2000 fiscal year, which was 37.85% of company’s total revenue for that year. Despite the success cable and media network has potential growing market and can expand more worldwide. Weaknesses: One of the most visible Disney’s weaknesses is that it targets a limited...
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...I. Situation and Problem The Walt Disney Company, founded in 1938, is an international company operating diversified business portfolio including motion pictures production, consumer products, entertainment and recreational complexes operation and community real estate projects. Heardquartered in Burbank, California, the company operates entertainment and recreation businesses across the United States. In addition, royalties on revenues generated by Tokyo Disneyland also contribute to the company’s revenue. In 1984, consolidated revenues for The Walt Disney Company was $1.7 billion and net income totaled $97.8 million. Despite fast growth of all lines of businesses, Mr. Anderson, the director of finance at The Walt Disney Company was concerned about the company’s exposure to exchange risks as the yen swung wildly in the past years. Hedging off the exchange risks benefits the company by stabilizing the cash inflows, which grants the company with easier cash management, more room for investment-planning and lower risks of financial distress. High expectation on the future growth of yen royalty receipts makes hedging even more imperative since declining exchange rate could possibly wipe out the future increasing yen revenue. Table 1 demonstrates how exchange risk may reduce profitability of the bank using the exchanges rate over the past five years. Assuming the royalty revenues grow with CPI, as yen depreciated, the revenue can only afford less and less equivalent goods or...
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