Disney Case Study Marketing free essay sample

Disney also broadened its adult offerings in film when then Disney Studio Chairman Jeffrey Katzenberg  acquired Miramax Films in 1993 Eisner attempted in 1994 to purchase  NBC  from GE, but the deal failed due to GE wanting to keep 51% ownership of the network. Eisner used expanding cable and home video markets to sign deals using Disney shows and films with a long-term deal with  Showtime Networks  for Disney/Touchstone releases through 1996 and entering television syndication and distribution for TV series. Disney began limited releases of its previous films on video tapes in the late 1980s. Eisners Disney purchased  KHJ, an independent Los Angeles TV station. The company successfully entered the field of television animation with a number of lavishly budgeted and acclaimed series such as  Adventures of the Gummi Bears,  Duck Tales  and  Gargoyles. Disney moved to first place in box office receipts and had increased revenues by 20% every year. The company acquired several media sources such as ABC and ESPN during early 1990s. We will write a custom essay sample on Disney Case Study Marketing or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Former CEO Michael Eisner set out to plan â€Å"The Disney Decade†, but most of the proposals made did not follow through. When the CEO at the time, Frank Wells, died in a helicopter crash, the former CEO Michael Eisner refused to give his post to Disney Studio Chairman Jeffrey Katzenberg, therefore he resigned and founded DreamWorks. Michael Ovitz was hired instead as COO, with a minimal involvement from the board. He only lasted 14 months and he engendered a long running derivative suit, which finally ended in June 2006. As the Katzenberg case dragged on as his contract included a portion of the film revenue from ancillary markets forever. Katzenberg had offered $100 to settle the case but Eisner felt the original claim amount of about half a billion too much, but then the ancillary market clause was found. Disney lawyers tried to indicate a decline situation which revealed some of the problems in the company. ABC had declining rating and increasing costs while the film segment had two film failures. In 1998, Disney began a move into the internet field with the purchase of  Starwave  and 43 percent of  Infoseek. In 1999, Disney also launched its  cruise line  with the christening of Disney Magic and a sister ship. Eisners controlling style inhibited efficiency and progress according to some critics, while other industry experts indicated that age compression theory led to a decline in the companys target market due to youth copying teenage behavior earlier 2000 brought an increase in revenue of 9% and net income of 39% with ABC and ESPN leading the way and Parks and Resorts marking its sixth consecutive year of growth. However the  September 11 attacks  led to a complete halt of vacation travel and led to a recession. The recession led to a decrease in ABC revenue. Plus, Eisner had the company make an expensive purchase of  Fox Family Worldwide. 001 was a year of cost cutting laying off 4,000 employees, Disney parks operations decreased, slashing annual live-action film investment, and minimizing Internet operations. While 2002 revenue had a small decrease from 2001 with the cost cutting, net income rose to $1. 2 billion with two creative film releases. In 2003, the Studio became the fir st studio to record over $3 billion in worldwide box office receipts. 2. Updating: Disneys earnings for 2005 reflect the impact of changes in accounting rules, resulting in the expensing of the fair value of stock options and the revaluing of certain of our FCC licenses. In aggregate, these changes reduced reported earnings by $0. 10 per share. Before giving effect to these accounting changes, Disney delivered earnings per share of $1. 32 for the year1. Comparable earnings per share in 2004 were $1. 12, yielding earnings per share growth for the year of 18%, which is particularly gratifying as it follows substantial growth in the prior two years. The last is summarized in the graph below: The revenues and the segment operation income for 2005 in the company? s different businesses are shown in the charts below: 2001| 2002| 2003| 2004| 2005| | Revenues Media Networks Parks and Resorts Studio Entertainment Consumer Products| $  9,569 7,004 6,009 2,590| $  9,733 6,465 6,691 2,440| $10,941 6,412 7,364 2,344| $11,778 7,750 8,713 2,511| $13,207 9,023 7,587 2,127| | | | $25,172| $25,329| $27,061| $30,752| $31,944| | | |   |   |   |   |   | Segment Operation Income1 Media Networks Parks and Resorts Studio Entertainment Consumer Products| $  1,758 1,586 260 401| $  Ã‚  Ã‚  986 1,169 273 394| $  1,213 957 620 384| $  2,169 1,123 662 534| $2,749 1,178 207 520| | | | $  Ã‚  4,005| $  2,822| $  3,174| $  4,488| $  4,654| The charts show below sumarize the revenues and performance in the different operative segments of the company from 2009 to 2011: | | | | | | Change%| | in millions)| | | 2011| 2010| 2009| 2011 v. s 2010| 2010 v. s 2009| Revenues| | | | | | | | | Media Networks | $ 18,71 | $ 17,16 | $ 16,21 | 9%| 6%| | Parks and Resorts| 11,797| 10,761| 10,667| 10%| 1%| | Studio Entertainment| 6,351| 6,701| 6,136| -5%| 9%| | Consumer Products| 3,049| 2,678| 2,425| 14%| 10%| | Interactive Media| 982| 761| 712| 29%| 7%| | | | $ 40,89 | $ 38,06 | $ 36,15 | 7%| 5%| Segment operating income (loss):| | | | | | | Media Networks | $ 6,15 | $ 5,13 | $ 4,77 | 20%| 8%| | Parks and Resorts| 1,553| 1,318| 1,418| 18%| -7%| Studio Entertainment| 618| 693| 175| -11%| gt;100%| | Consumer Products| 816| 677| 609| 21%| 11%| | Interactive Media| -308| -234| -295| -32%| 21%| | | | $ 8,83 | $ 7,59 | $ 6,67 | 16%| 14%| Comparing the graphs and charts from 2005 (under the direction of Michael Eisnet) with the ones from 2009, 2010 and 2010; It is evident that the revenue and the segment operating income growth was more rapid whitin the years in which the franchise strategy was already implemented than the period before that, when the growth the company experienced had an almost-flat behavior. Besides, the chart 6 shows that in the year 2009 the Studio Entertainment segment experienced a growth of more than its 100%, which coincides with the acquisition of Marvel strategy the same year. The Walt Disney Company has continued implementing its Cross-Platform strategy in several ways. Nowadays for example, the company has acquired many other networks and multimedia companies. The chart below represent the estimated subscribers to each Disney-owned network, and the percentage of the network the company owns: Estimated Subscribers(in millions) Ownership % ESPN 99 80. 0 ESPN2 99 80. 0 ESPNEWS 73 80. 0 ESPN Classic 33 80. 0 ESPNU 72 80. Disney ChannelDomestic 99 100. 0 Disney Channels–International 141 100. 0 Disney Junior 58 100. 0 Disney XD – Domestic 78 100. 0 Disney XD – International 91 100. 0 ABC Family 98 100. SOAPnet 74 100. 0 Aamp;E 99 42. 1 Lifetime Television 99 42. 1 HISTORY 99 42. 1 Lifetime Movie Network 82 42. 1 The Biography Channel 65 42. History International 64 42. 1 Lifetime Real Women 18 42. 1 The company has continued implementing its Cross-Platform strategy: In the 2012 annual report the company illustrated its significant growth in each one of its franchises and business such as: Broadcasting, Theme Parks, Resorts, Disney Cruise Line, Publishing, Merchandise licensing, Games, Online, Music Production, Theatrical Production (among many others). 3. People Involved: Michael Eisner was born March 7, 1942 in Mount Kisko, New York. He is an American businessman who was the chief executive officer of The Walt Disney Company from September 22, 1984 to September 30, 2005. Michael Eisner was hired at ABC as National Programming Director and moved up the ranks, eventually becoming the Senior Vicepresident of Programming and Development. In 1976 he became president and CEO at Paramount Pictures. Michael Eisner was brought into Disney (accompanied by Frank Wells as Disney? s COO) by its shareholders Sid Bass and Roy E. Disney to replace Ron W. Miller and turn the company around. In early 1990s, Eisner and his partners set out to plan â€Å"The Disney Decade†, which included featuring new theme parks around the world, existing park expansions, new films and new media investments. After Frank Wells died, Michael Eisner refused to appoint Jeffrey Katzenberg (Disney Studios chairman at the time) to fill the now available post, which led to the Disney Studios chairman resign. In 2004, Michael Eisner was accused of micromanagement, flops with the ABC television network, timidity in the theme park business, refusing to establish a clear succession plan, and turning The Walt Disney Company into a rapacious soul-less company. In 2005, Michael Eisner announced that he would step down as CEO one year before his contract expired. On September 30 of the same year he resigned both as an executive and as a member of the board. Robert Iger was born on February 10, 1951 in Long Island, New York. He is the current chairman and CEO of The Walt Disney Company. He has served as the company? s president since 2000 and as CEO since 2005 as Michael Eisner replacement. His career started when he joined the American Broadcasting Company in 1974 and started scaling positions. He served as president of the ABC Television Network Group from 1993 to 1994. Then he was named president and chief operating officer of ABCs corporate parent,  Capital Cities/ABC. In 1996, The Walt Disney Company bought Capital Cities/ABC and renamed it  ABC, Inc. , where Robert Iger remained president until 1999. On February 25, 1999, Disney named Iger president of Walt Disney International, the business unit that oversees Disneys international operations, as well as chairman of the ABC Group. Among the main actions held by Robert Iger at Disney, he led the acquisition of Pixar in 2006, with a subsequent period of strained relations with the animation studio. He also led the acquirement of Marvel Entertainment in 2009 and Lucasfilm in 2012. Since then he has broaden the Disney Company? s character franchises. On his first day on the board, Robert Iger told the rest of the members that the revitalization of Disney? s animation business was a top priority, and he shifted Disney? s focus to its stable of franchises. After identifying the need of refocusing the company and getting to new markets, Rober Iger? s first move was to move the Disney Channel from premium to the basic cable. He is known to be a smart, shy businessperson, who tends to lead the company in a team- and consortium based rather than autocratic manner. Iger’s first order of business was to reconcile with Pixar boss Steve Jobs. Despite the fact that an extension of the joint cooperation agreement had not been very likely under Eisner, Pixar went on to became part of the Walt Disney Company under Iger’s leadership in 2006. By taking over Pixar, the Disney CEO not only made sure to bring in the most successful production company for animated film. 4. Main Problem: Disney has always been one of the top media and entertainment companies worldwide. Since Bob Iger took the role of CEO at the Walt Disney Company, he made it clear the biggest matter, and that factor of the company he would focus the most on were the arsenal of franchises the company owns. One of the top priorities was revitalizing the animation business of the company. In order to succeed this, Bob Iger developed a serial of strategies that would reinforce not only the animation but every single franchise distributed across Disney? multiple company platforms and divisions: For this, Disney purchased Pixar (as many of the TV shows, rides and merchandise were based on Pixar? s characters). This strategy made huge sense and worked really well as it gave the company the opportunity of exploiting in a greater way the characters and the other Pixar? s creations integrated to the different franchises. Even thought the company had developed a master strategy, something was mis sing. The company had a great franchise, lots of successful business units and more characters and stories to play with, but what about the market to push all of this in? At that time, the target market, that portion or segment of the total market where all the efforts were directed to, was the young children market; a market that for several years had been enough for what the company wanted to achieve, but the flat growth of the company in the prior years indicated that this market, which was the company? s wheel at the time, was narrowing. The number of young children consuming was not enough for everything the company wanted to launch. In order to revitalize the company, Bob Iger accepted the fact of the target market not being enough; therefore, he knew that a big portion of his efforts would need to be directed into refocusing the brand into broader markets. 5. Organizations Involved: The Walt Disney Company is currently the world’s second largest media and entertainment company and includes the Walt Disney film studios and their subsidiary Touchstone, film distributor Buena Vista International, ABC, numerous niche channels such as Disney Channel, Jetix, Toon Disney and Playhouse Disney, American sports channel ESPN as well as theme parks all over the world. The company started 1923 when Walter (â€Å"Walt†) Elias Disney and his brother Roy founded the Disney Brothers Cartoon Studio, which became Walt Disney Studios only three years later. Another two years later, in 1928, Disney’s first Mickey Mouse cartoon ‘Steamboat Willie’ found its way into the cinemas. Forthwith, the mouse was the key figure and starting point for the elaborate merchandise business of the Disney Company. The first ‘Disneyland’ opened in California in 1955. Since the fifties, the company established itself in the television business with their ‘Disneyland’ show and a ‘Mickey Mouse Club’, initially on the ABC Network. Nowadays, The Walt Disney Company successfully develops several business fields, including television, internet, theme parks, film, publishing, games, musical, and mobile entertainment. Pixar Animation Studios is an American computer animation film studio located in Emeryville, California. The studio creates animated films with PhotoRealistic RenderMan used to generate high quality image. Pixar began in 1979 as the Graphics Group with Steve Jobs as its majority shareholder. The Walt Disney Company purchased Pixar in 2006 for $7,4 billion, which made Steve Jobs become the largest shareholder of Disney. Pixar? s frist feature film was Toy Story in 1995, since then it has produced over 13 others. All Pixar? s films have received critical and financial success. The studio has produced as well several short films. Two of its feature films (Finding Nemo and Toy Story 3) are among the 50 highest-grossing films of all time, with over $1 billion worldwide. Pixar Animated Studios has earned 26 Academy Awards, seven Golden Globe Awards, and eleven Grammy Awards. Marvel Entertainment Group. Inc. is the largest American publisher of comic books. The company started during the Depression and experienced a rapid growth during the 1930s and 1940s. The industry suffered a setback in the 1950s, but came back stronger in the 1960s with new characters that appealed children. After another slump during the 1970s, Marvel Entertainment rebounded in the 1980s with a larger popularity. The company started a diversification process in the 1990s. Marvel was founded in late 1930s by Martin Goodman, a pulp magazines publisher. Funnies Inc. convinced Martin Goodman in 1939 to produce complete comic books. The first comic book featured a super hero character, the Sub-Mariner. This experimental venture would eventually become the banner of the Marvel Comics empire. On December 31, 2009, The Walt Disney Company completed an acquisition of Marvel Entertainment, Inc. (Marvel). Marvel businesses are reported primarily in Disney? s Studio Entertainment and Consumer Products segments. 6. Strategy: As the Walt Disney Company current CEO had established that the brand? s target market which at the time were the young children was narrowing, the top priority besides revitalizing Disney? s animation business trough the purchase of Pixar became finding a new market to push the Disney? franchise into. In order to achieve this, the company implemented a series of strategies: The first thing that was done was moving the Disney Channel from premium to basic cable, this way the Disney? s viewership would be broaden as more and more people would have access to the Disney franchise. Another strategy implemented in this same franchise was the launching of local versions in k ey global markets, for example Disney Latino, which is a TV network of the franchise directed specifically to the Latin audience. Since the children market wasn? t enough, efforts were directed into pushing the ranchises to capture teen market: With the tween girls market for example, the launching of High School Musical, Hannah Montana and The Jonas Brothers, made it for the company a success to attract this new target market. The Pirates of the Caribbean was the first Disney film with a PG-13 rating. This strategy played a major role in refocusing the brand to broader markets as it attracted older children and even adults, something that the company hadn? t done before. With this film (accompanied with Cars) , cracking into the tween boy market in a sustainable (which is a real challenge for every media company) started. After that, many other strategies to penetrate this very same segment were implemented: The launching of the Disney XD channel which mainly includes science fiction and action-adventure shows, besides the leverage of ESPN and the acquisition of Marvel Entertainment which creates a broad arsenal of material to create content for this specific platform. Questionnaire 1. Do a brief market opportunity analysis for Disney, identifying the major markets that Disney has expanded into A great market opportunity that Disney has is that the entertainment field is no longer appealing just for children. Even adults are requiring some kind of entertainment that drives them away from the day-a-day routine, something that reminds them of the fun they used to have in their childhood, the fun they can still have. By the other hand, the tendency of the teenage girls to like what â€Å"feels like home†, something they can identify with and relay on. And as always, boys between 6 and 14 always loving the science fiction, what reminds them of technology and super heroes. Finally, the globalization has made the entertainment tendencies applicable worldwide. All of these facts of the potential consumers define a market opportunity for Disney: The creation of franchises, the leverage of ESPN and the launching of films such as The Pirates of the Caribbean (among many others), has appealed the adult market, refocusing the brand into broader markets that in earlier years, the company hadn? t really try hard to crack; teenage girls dig what they can identify with, that is why Disney launched TV shows such as Hannah Montana, High School Musical and Jonas, which are based on real people living the daily life, but always with something extra that makes teenage girls dream with. The tween boys market has been conquered with the new network Disney XD that includes science fiction and action adventure shows, this has meant a real expansion to major markets as media in general find it difficult to attract and sustain this segment. Finally, the creation of specific formats of the Disney Channel for each key market, has helped the company to reach every and each corner of the world with a cultural factor that makes the viewers identify with the channel and not seeing it as a foreign network. 2. How does Disney? s cross-platform franchising help create sustainable competitive advantage? Disney? s cross-platform franchising help the company to create a sustainable competitive advantage as it reaches many segments of the market: Some of its franchises are directed to small children, some others are directed for older children and teenagers, and there are ones who even adults feel attracted to. One specific example is given by Disney being able to crack the tween boy market, to attract those boys between the age of 6 and 14 years with franchises as Cars and Pirates of the Caribbean, besides the creation of a new TV network Disney XD with science-fiction and action-adventure shows. This is a real competitive advantage that the company has developed and will continue developing, because the tween boy market is the one that media companies have to struggle the most to crack in. This Cross-Platform franchise strategy has helped the company weather the economic downturn, as the effects of the recession continue to recede. â€Å"Disney enjoys competitive advantages that underpin all of our successes, both financial and creative. The first is our tremendous library of creative content and characters. In the long run, we prosper from the inventiveness of our film, television and other programming; our ability to connect with our audiences; enhancing our products using technological advances; delighting people around the world with our toys, clothing and other consumer products; and surprising our Guests with magical experiences at the parks, cruise lines and resorts. † 3. Describe the marketing mix for one of Disney? s franchises One of the Disney? s franchises is the Disney Channel: The product is Disney Channel, a 24-hour cable network airing original series nd movie programming targeted to children and families. Shows developed and produced internally for exhibition on Disney Channel include live-action comedy series, animated programming and educational preschool series directed to the rapidly growing teen market. Some examples are Hannah Montana, High School Musical and Jonas. Another feature of the Disney Channel franchise is that the network launches local versions in key global markets About the price, one of the changes that Bob Iger made when he first started working as Disney? CEO was making it more accessible for the public, this means, the TV network was moved from the premium cable to the basic cable, therefore the viewers would not have to pay extra for having access to the channel and the shows. The place is worldwide. Disney Channel has specially been formatted for key global markets. For example, there is a Disney Channel only for Latin America, there is another one just for the United States and an different one for the India. About Disney Channel? s promotion, there are many shows that are based on the theme parks attractions, some others are based on franchises the company has already launched. For example The Jonas Brothers first started as a teenage band sponsored by Disney, and years later a TV show named Jonas was released, therefore the prior existence of a product based on the same characters in another franchise acts as a promotion for the shows presented on Disney Channel. Besides, Disney Channel has its own Web Page were the viewers can interact, play games based on the shows, and learn more about the channel. 4. Describe the major components of Bob Iger? s strategic plan The main components of Bob Iger? s strategic plan are: A Cross-Platform franchise strategy, which means having franchises distributed across Disney? s multiple company platforms and divisions, including TV networks, consumer products, theme parks, and the Hollywood records. * The purchasing of Pixar Animated Studios in order to revitalize Disney? s animation business, since most of the Disney? s latest TV shows and theme park rides were based on Pixar characters. * Refocusing the brand into broade r markets, making it appealing not only for children since this market was narrowing. Pushing franchises to capture teen market, as teenagers are a specific segment of the market that is experiencing a significant growth. * Launching franchises that would appeal the tween boy market, which would bring a competitive advantage to the company as this market is really difficult to crack. * The acquisition of Marvel Entertainment, which would allow to integrate new content to the platform. [ 1 ]. The Disney-Wiki. Michael Eisner. En: http://disney. wikia. com/wiki/Michael_Eisner. Febrero 25, 2013. [ 2 ]. The Walt Disney Company . Company History-Corporate Information.. Febrero 26, 2013. [ 3 ]. The Walt Disney Company. 2005 Annual Report. En: http://thewaltdisneycompany. com/investors/annual_reports/2005/introduction/financial_highlights/fh. html. Febrero 27, 2013 [ 4 ]. The Walt Disney Company. 2005 Annual Report. En: http://thewaltdisneycompany. com/investors/annual_reports/2005/introduction/financial_highlights/fh. html. Febrero 27, 2013 [ 5 ]. 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[ 11 ]. Institute of Media and Communications Policy. The Walt Disney Company. En: http://www. mediadb. eu/en/datenbanken/internationale-medienkonzerne/the-walt-disney-company. html Febrero 26, 2013. [ 12 ]. Funding Universe. Pixar Animation Studios History. En: