Case Brief for Walt Disney
Introduction
Although it was not the first amusement park, the founders of Walt Disney had a perfect idea of an amusement park that would grow to be the first-ever theme park that blossomed into the theme park industry. Today, the company is known for its ability to entertain people throughout the world while inspiring them thorough their exceptional storytelling abilities, creativity, and innovative technology. The Walt Disney Company was founded in 1923 by Walter Disney and Roy Disney and was initially known as the Disney Brothers Studio. Despite the challenges that it faced while starting up, Disneyland continued to be one of the most successful theme parks in history. The company has continued to expand throughout the years to become the largest family entertainment. The company has five business sections, including interactive media, direct to consumers, studio entertainment, media networks, as well as parks and resorts. To maintain the high-level status, the company has had to implement major strategic management policies and changes, some of which may limit its effectiveness. This case brief provides an analysis of some of these issues while providing recommendations on how they can be dealt with.
Analysis
The company has maintained its focus on attaining market growth and expanding its wide range of products and services to consumers. This is seen through its mergers and acquisitions, as well as its collaborative strategies with other businesses in the entertainment industry. However, the company has concentrated too much on growth and maintaining market dominance that it has neglected a very crucial factor in its management strategy, which is the change in the tastes of the consumers. Since its founding, the Walt Disney Company has been focusing on providing entertainment programs according to the tastes and preferences of the consumers. If management continues shifting its focus from this, then it could lead to the company losing its profitability and eventually to its downfall. The industry in which the company operates in is filled with competitors who have found better ways to satisfy consumer needs and preferences. For instance, competitors have found ways to better provide sports programs while Disney has failed to keep up with this technology. For this reason, the company has lost the majority of its youth audience. The company is more focused on implementing strategies that will expand its market and reach more consumers globally. But without satisfying consumer needs and preferences, its expanding presence in the market will bear no fruits if services provided do not meet the preferences and needs of consumers.
Another strategic management issue that may affect the companies effectiveness in the long term is its pricing. For a long time, the company has existed as a sort of monopoly in the industry without much competition. It has been offering products and services that the competitors have not been able to offer. For this reason, the company has been providing its services and products at higher than average prices. This strategy has helped make the company achieve good profitability in the past years. However, the industry is now crowded with a lot of competitors, who are offering the same quality services and programs at a lower price than Walt Disney Company. This has made the competitors slowly start gaining the market share and getting bigger, threatening the dominance of Walt Disney. When competitors provide the same programs as Disney at very low prices compared to the price of the company, then they act as a big threat to Walt Disney. Failure to focus on and change the pricing strategy has brought a lot of critics for the company. Another pricing strategy that has resulted in grumbles by consumers is the shift to seasonal pricing. Most visitors find the system very complicated, but Disney management argues that customers have always found new pricing strategies complicated but have always adapted to the changes. However, there is a lot of competition in the industry now than before, and unhappy customers will be more likely to shift to companies offering the services they are more comfortable with than take time to adapt to systems that they find complicated.
Current management strategies offer limited diversification and innovations for the company’s programs and services offered to the customers. In its adoption of new technologies, the company has focused so much on the quality of the product rather than focusing on continuous innovation and diversification of products too. Limited diversification has caused the company to lose millions of subscribers in a period of fewer than five years. This has, in turn, resulted in a decline in the revenue of the company. This is due to the lack of diversification from TV to internet services. Most competitors are applying new technologies like the use of the internet as opposed to the use of TV cable alone. Walt Disney, on the other hand, has maintained its focus on providing quality products and making strategy instead of diversifying its services to meet the new trends in the market. Due to the lack of innovation, the company has fallen victim to releasing irrelevant programs that are less entertaining as well as characters that consumers do not like.
Recommendations and Justifications
The company needs to shift its focus back to improving its competitiveness in the industry. Other than focusing only on increased profits through it’s pricing strategies and increased product diversification, the company needs to go back to its strategy of innovation. It is the innovation that made Walt Disney rise to become the giant company that it is today. For the company to increase its brand image and stay ahead of its competition, it needs to provide strategies that focus on innovation and the satisfaction of consumer needs. These include releasing movies and programs according to the tastes and wants of customers. To be able to do this, the company should invest more in market research to get feedback from consumers on their tastes and preferences. This will enable the company to release programs that are more enjoyable by consumers hence maintaining their market dominance. The company should also consider the price of its programs and services. By reducing its prices while still maintaining the quality of its services, the company will be able to keep its customers and bring back the customers that have been lost to competing companies due to high prices.
Competing companies also show most of the movies, games, and characters that are shown by Walt Disney companies at prices that are far less costly when compared to those by Disney. To deal with these, the company needs to adjust its prices so that they are fairer to consumers. Consumers will feel the need to watch the shoes from the original producer only if the prices are reasonable, and this will help deal with the competition. To help solve the issue of lack of innovation, the company should shift its organizational culture so that it shifts from focusing on family alone and become flexible to other parts of the market. In today’s society, people are more focused on the internet that television. Walt Disney should see this as an opportunity to diversify its markets to the internet. This will enable it to bring back a lot of consumers that it has lost to internet-oriented competitors. It needs to release capital towards funding the development of innovative and entertaining programs that will bring back consumers.