Figure 11. Iron Man Experience
Social Media
Today social media is a part of people’s lives, and a pretty big one too. The
internet allows firms to reach its customers faster and cheaper. Disney’s official
Facebook page alone has over 50 million likes, Disneyland and Walt Disney World
have around 33 million likes combined; and we are just getting started. Listed below
are the statistics extracted from Disney’s different social media platforms.
Table 14. Social Media Platform and User Statistics
Social Media Platform Statistics
Facebook 50 million likes
Twitter 5.13 million followers
Instagram 7.6 million followers
Youtube 1.9 million subscribers
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Apart from social medias, Disney also runs its own “Buzzfeed” website called
“Oh My Disney” and the “Disney Parks Blog”, which continuously provide contents
about Disney, including new attractions in theme parks, promotion of current releases,
TV series, Movies, trivia, quizzes, and etc. This keeps the fans updated and interested
between their visits to the parks and resorts.
In order to attract the more “mature” customers to Disney Parks and Resorts,
Disney had launched some interesting campaigns. One of them is the “Disney Dream
Portraits”, where Disney casted Hollywood A-list stars as iconic Disney characters in
a set of photo shoots. This marketing activity obviously targeted at customers aside
from children, and appeals to adults (eg. parents) and older fans.
Figure 12. Taylor Swift as Rapunzel
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Fairy Tale Weddings
Many of Disney’s fairy tales are stories of princesses living happily ever after
with the princes they fell in love with, and what more can a girl ask for when it comes
to the ultimate princess experience: getting married in a Disney castle?
Figure 13. Disney wedding
Starting from 2012, happy couples are able to book weddings at Disney Parks in
Florida, California, Tokyo, and Hong Kong. Packages often include ceremony at the
castle, reception at the hotel hall, princess-inspired wedding gowns and bridesmaid
dresses, and so on.
7.9 Service
As Disney parks and resorts offers entertainment it can be considered as a service
company, Service is a good opportunity for the company to improve their guests stay.
The company offers many services to its customers. Here is the list of services
provided by Walt Disney World, no less than 56 extra services are listed to fulfil the
need of most of the visitors and deliver a personalized experience. The list includes
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umbrella rentals, mosquito prevention, laundry service, child care services or car care
center… Service is a key strength of the company and contribute to the main goal of
the company that is providing a unique immersive experience.
Where does the value come from?
Disney Parks and Resorts are magical kingdoms where dreams come true,
bringing happiness and joy to its loyal guests. Being a benchmark business entity in
the leisure industry, the value of Disney theme parks is difficult to be measured in
numbers and diagrams. The value comes from the synergy of all departments within
the organization, thriving to provide the best entertainment for each and every
customer. It is in the technology department, where the animations are so life-like
when projected in 3D; it is in the human resource management and service, where
employees are trained to alway smile to the guest, to be happy to assist the guest in the
best fashion possible; it is in marketing, spreading words and creating trends on the
internet, causing ticket sales to skyrocket every year. Overall, the value of Disney
Parks and Resorts comes from its forever-progressing innovation and quality customer
services.
Differentiation or low cost strategy?
In industries that are more conventional, such as manufacturing or farming, the
low-cost strategy is usually implemented. However, with an entertainment business
such as Disney, all has to give way to the content; they would definitely try to reduce
redundant expenses, but in the end in all come down to differentiation, what differs
Disney Parks and Resorts from its competitors. Running a theme park, especially a
successful theme park, is not cheap, so it would take outstanding contents and
attractions to bring in visitors, to make them feel their ticket price is worthwhile.
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Disney differentiate in its contents, the one and only Mickey Mouse and his friends,
and other classic franchises that are found nowhere in the world. Disney also
differentiate in its service, employees are well-trained in an unique “Disney style”, it
can be seen in their looks, behaviors, and attitude, unlike any other theme parks. In
conclusion, Disney expertise in differentiation, resulting it to be one of the most
successful business in history and the years to come.
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Chapter 8 BCG Matrix and Synergies
Introduction
This week we focused on the BCG growth-share matrix and the synergies that
Disney has created within the conglomerate. Disney is such an entertainment empire
that it operates in many different industries: theme parks, studios, cable network,
consumer merchandises, and etc. We looked at several SBUs that are more
well-known to the general public, and discuss their positions on the BCG matrix, and
what kind of synergies were produced.
Figure 14. Strategic Level of Disney
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8.1 BCG Analysis
Figure 15. BCG Analysis
8.1.1 ESPN Inc. – Dog
ESPN is part of the Cable Networks division. In 2016, there was no growth in
that division and in particular a decrease in overall revenue as the company faces
lower advertising and affiliation revenue and higher operational and production costs.
The TV industry is not going to have a bright future as new generations spend less and
less time watching shows and more and more time on the Internet. In the BCG matrix
we can consider ESPN Inc. as a Dog.
8.1.2 Lucasfilm – Star
The last major acquisition from Disney group in 2012, Lucasfilm, for $4.06
billion was a smart and profitable move. The phenomenally successful return of Star
Wars, and Studio’s record-breaking $7.5 billion in total box office made the Studio
Entertainment division operating results grew by 28% for fiscal year 2016. We can say
that LucasFilm SBU is a Star in the BCG matrix that will bring growth and profits to
the group with future Star Wars movie currently being produced.
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8.1.3 Disney Channels Worldwide-Question Mark
Disney Channels Worldwide (ABC Cable Networks Group) is under ABC
television Group, which provide television channels ans radio network. This
subsidiary has variety of channels such as Disney Junior (for children 8 years and
under), Disney Channel (kids ages 9–16), Disney XD (pre-teens and young teenagers),
Disney Cinemagic (movie channel in European market), Dlife (women and family
targeted channel), and Hungama TV (for children in India).
Revenue
As we can see on the report, the revenue in cable network (Disney Channels
Worldwide) has growth 10% from 15,110 million (2014) to 16,581 million (2015).
And the segment operating income also increase about 5%.
Table 15. Revenue in Cable network
Viewer ranking
The network viewer ranking of Disney Channel is number nine in 2015. They
have 1,784,000 viewers. Although they had decrease about 9% watcher from 2014 to
2015, they can still keep their ranking in the front.
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Table 16. Network Viewers
Market share
When it comes to market share, Disney Channel Worldwide have almost 29% of
market rate. The other 71% market share are occupied by their competitors, including
Cbs Corporation, Comcast Corp, Discovery Communications, Inc., Twenty-first
Century Fox, Inc., News Corp, NEWS CORPORATION, Viacom Inc., and others. It
is easy to see how Disney Channel Worldwide take part in this pie.
Figure 16. Cable Networks Segment Market Share
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We consider Disney Channel Worldwide belongs to Question Mark. Nowadays,
there are so many media consumers can choose from. Every step they do may
influence their position in this competitive industry.
8.1.4 Walt Disney Animation Studios – Star
Walt Disney Animation Studios (WDAS) has a long-running history dating all
the way back to Snow White and the Seven Dwarfs, 1937, with the classic fairytales
such as Cinderella and Sleeping Beauty, WDAS has developed and evolved as time
went on. Oscar-winning films including Frozen and Big Hero 6 are also the amazing
artworks produced by WDAS.
Figure 17. Walt Disney Animation Studios
As a SBU of Disney, WDAS does not really have a stock price of its own. To
attempt to declare its position on the BCG matrix, we looked at how well WDAS is
profiting comparing to its competitors over the last few years, mimicking the indicator
of market share.
As the table suggested below, WDAS is one of the top four firms in the animated
film industry (US). Over the last three years, WDAS has generated over 680 million
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USD in box office, occupying approximately 14.5% of the market. Pixar is the leading
studio in this industry, that being said, it is also a SBU of Disney, so overall, we could
say that Disney is ahead of the game. Judging from their results (see appendix table 1),
Zootopia was definitely an exciting success after the already-pretty-successful Big
Hero 6, and it looks like WDAS did not plan on stopping. Moana’s 119 million box
office was achieved in two weeks’ time, as different foreign release date coming up, it
is possible for WDAS to reach a new high.