Resource and Capability Analysis
Chapter 6 Resource and Capability Analysis
Introduction
“It is important to distinguish between the resources and the capabilities of the
firm: resources are the productive assets owned by the firm; capabilities are what the
firm can do.” (Robert M.Grant,2007.)
In the entertainment industry, Disney must compete in a complex and
challenging environment to maintain its position as the master of globalization. Hence,
the importance of understanding the firm’s capabilities and resources, finding out the
firm’s competitive advantages, is unneglectable. On one hand, it is beneficial to
understand and enhance those capabilities, and reinforce on weaknesses – it helps to
increase customers’ satisfaction and strengthens customer relationship. On the other
hand, competitive advantages help Disney to be sustainable over time, generate
revenues and profits year by year.
Therefore, in this report, we’ve carried out an analysis of capabilities and
resource of Disney Parks and Resorts to find out how Disney has reached its success.
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6.1 Resources
Below are some tangible and intangible resources of Disney, including financial
and physical resources, technology, reputation, patents, entertainment and culture, and
human resources.
Table 3. Resources
Resource Details Indicators
Tangible
Resources
Financial Income Ticket sales, restaurants
income, hotel revenue
Physical
Parks Asset
Rides Many attractive rides
Land
Intangible
Resources
Technology
Technological know-how
Animation technology
Reputation
Brand equity
Brand names 13 rank
Customer’s attendance large number visitor
every year
Patents Media Technology
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Entertainment Characters and plots (from
Films and TV series)
Culture Organizational Culture
Human Resources Loyalty of employees Good salary rate,
restrictions, welfare
6.1.1 Tangible resource
Financial
Income:
Disney park and resort has sustainable and large income every year from park
Tickets, restaurants, hotel and resort service. The revenue of Disney Park and Resort
increased yearly (14.087M $ in 2013 and 15.099M S in2014), while the profit is also
high (2.220M$ in 2013 and 2.663M$ in 2014). (By Walt Disney). As we know,
capital is one of the most important factor which contribute to the success of a firm,
and Disney has strong advantage in this factor.
Physical
Parks:
Disney has six park and resorts in different location including California, Florida,
Tokyo, Paris, Hong Kong, and Shanghai, which can attract visitors around the world.
People from America to Asia, and even Europe can enjoy Disney atmosphere.
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Rides:
The rides in Disney fit almost every age level person. There are many rides in
Disney park with Disney characters or icons. The top three Disney classic rides are
Dumbo, Peter Pan’s Flight, and Its’s a small world.
Land:
The land area of Disney is an advantage especially when comparing to other
amusement park. The largest one is in Florida, the USA, which has 12228 hectares
with four theme parks, two water parks, some other attractions, and thirty-four resorts
and hotels. The second largest is in Paris, which has 1951 hectare with five themed
land. The third is large location is located in Shanghai with 700-hectare land with
seven themed lands. California and Tokyo has similar area of land, one is 206 hectares
and the other is 201 hectares. The smallest Disney is in Hong Kong with 126 hectares
of land, but still larger than many other parks.
6.1.2 Intangible resource
Technology
Animation technology:
Disney is famous for its work of art in the field of animation, numerous films and
TV series are the results of Disney’s hardworking animation artists. They constantly
develop new technology to bring their creation to the next level; for example,
animated hair/fur on human/animal characters has become more and more realistic
overtime, from Monster Inc. to this year’s Zootopia.
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Technological know-how:
Being technologically advanced is crucial for Disney Parks and Resorts, as it
helps operation around the parks, providing better guest experiences. For example, the
introduction of the Magic Band. Magic bands are small, wearable bracelets that has an
RFID chip connected directly to your credit card, hotel room, and park tickets. A
super easy way to get around the parks and resorts without any hassle. Fast Pass+ is
also a great example, Disney use crowd projections to allocate a certain number of
spots per ride per time frame, so that the guests can pre-select when they want to ride.
And then, having those reservations made and tied directly to your MagicBand makes
it that much easier.
Reputation
Brand Equity:
The Walt Disney was ranked 2nd in the world’s Most Reputation Companies,
2016, because of the citizenship and governance categories. Nielsen said: “The Walt
Disney Company is number one in the world when it comes to being perceived as a
good corporate citizen and also as a company with fair and ethical business
practices.”
The Walt Disney Company Case Study
39 FCU e-Paper (2016-2017)