Technology has changed the way we do business in the world. The marketplace tempo and pace has quickened from a light trot to a sprint, and the global consumer has placed new demands on corporations worldwide. How companies have responded to these demands has been the fruit or the poison of their survival. To keep up to date with technology, companies must plan for and analyze current and future trends in available technology. One company that has done so is Walt Disney Company, the famed children’s entertainment corporation.
The Disney Company was started on October 16, 1923 by a partnership of two brothers, Walt and Roy Disney. It was originally known as Disney Brothers Cartoon Studio, which later became Walt Disney Studio. One of the first memorable creations Disney films made with sound was the Mickey Mouse cartoon call Steamboat Willie, which opened in New York on November 18, 1928. This was Mickey Mouse’s introduction to adults and children everywhere. This new character instantaneously became very well-liked. Their first full-colored cartoon, Flowers and Trees, won an Academy Award in 1932 for “Best Cartoon”, and Disney would win an Oscar every year for ten years. Not only was Disney growing in leaps and bounds with their success, they were also hitting it big with both their movies and their merchandise. About twenty years later, Disney created their first live film called Treasure Island.
Walt Disney Parks and Resorts is where the magic lives and home to Disney’s beloved characters. The segment traces its roots to 1952, when Walt Disney formed what is now known as Walt Disney Imagineering to build Disneyland in Anaheim, California. Today, Walt Disney Parks and Resorts operates or licenses 10 theme parks on three continents with an 11th park currently under construction in Hong Kong, along with 35 resort hotels, two luxury cruise ships and a wide variety of other entertainment offerings.
The Studio Entertainment unit is the foundation on which The Walt Disney Company was built, and at its heart are world-renowned animated features and live-action motion pictures. Movies are distributed under Walt Disney Pictures, Touchtone Pictures, Miramax Films, Dimension Films, and Buena Vista Home Entertainment.
Disney merchandising began in 1929 when Walt Disney was approached by a businessman interested in placing Mickey Mouse on the cover of a children’s writing tablet. The Consumer Products segment now extends the Disney brand to merchandise ranging from apparel, toys, home dÃ©cor and books to interactive games, foods and beverages, electronics and fine art.
VALUE CHAIN ANALYSIS
In order to understand the Walt Disney Company’s value chain, it is necessary to understand how businesses use a value chain. The concept of the value chain model was introduced in 1985 by Michael Porter in his book, Competitive Advantage. His concept explains how a sequence of activities “when combined, create and build value which result in a competitive advantage” (NetMBA, 2005).
The components of the value chain that include:
Inbound Logistics- goods or services coming into the company, operations,
Operations- the activities that transform the input into the final product
Outbound Logistics- the process to get the product to the customer
Marketing and Sales- Advertisements and other activities to attract customers
Service- the maintenance of the products and customer service
The primary components are supported through Procurement, Technology Development, Human Resource Management and Firm Infrastructure. The structure is then combined to:
The Walt Disney Company’s value chain is complex. Each business unit represents its own sequence resulting in an entertainment service. Through the synergistic applications of this worldwide company, the value chains are then intertwined creating new profit streams from the same initial source.
STUDIO ENTERTAINMENT VALUE CHAIN
The first business segment is where it all began- Disney Studio Entertainment. The value chain begins with ideas. These can be internal ideas or concepts the company has sought out to produce or support. The ideas began with Walt’s first cartoons of Mickey Mouse. The idea and the equipment to bring it to life is the inbound logistic, the operation is the animators creating the film, the outbound logistics are showing the film to moviegoers, the marketing is commercials, billboards or word of mouth, the service is enjoyment value of the film, and how it makes people feel. All these come together to make a profit. This process is the same from Steamboat Willie in 1928 to the summer 2006 release Cars. The difference lies in the technology.
Each step of the Studios’ value chain has been enhanced by technology. The ideas come now from many different angles, but the equipment is ever more advanced. Computers and software are the inbound log the Cars is an example of computer animated film. The process is still long and laborious, but the computer creates the three-dimensional realities of the characters. This 3D animation has become the expectation of today’s consumer and Disney has embraced the change. The operational activities are a direct result of the equipment. Gone are the days of hand drawn animation, the computer is the master. The finished film is product put out to consumers. Today, the movie theatre is not the only place to watch a Disney film. Home theaters are a huge business and large share of the profit from any new movie.
PARKS AND RESORTS VALUE CHAIN
The Parks and Resorts division of the Walt Disney Company is really an amalgamation of all the other business units. The base for many attractions (the inbound logistic of ideas) are often the films and televisions shows on the Studio Entertainment and Media Networks divisions. Merchandising within the parks is not part of Consumer Products division but aligns directly with the business strategies of that segment. The operations activities of Parks and Resorts are bringing the magic to life. At the parks, visitors live in the fairytales from the Studios. Or the attraction takes them to places they would never go otherwise- around the world at Epcot or on to Mars in Mission Space. “The parks are about delivering fantasy, wonder, discovery and adventure” (Disney, 2006).
SYNERGY VALUE CHAIN
The best current example of synergy and a blended value chain within the Walt Disney Company is the Pirate’s of the Caribbean franchise. It began with the popular Disneyland attraction then expanded to Walt Disney World, Disneyland Paris and Tokyo Disneyland. Each follows the basic premise of pirates and treasure. Then in 2004, Jerry Bruckheimer produced a movie based on the attraction. “Now, the attraction is getting a Bruckheimer injection with new animatronics figures of Captain Jack Sparrow and his ghostly nemesis from the wildly successful movie” (Disney, 2006).
Upholding social standards is the responsibility of every employee at The Walt Disney Company. All members of are to maintain high ethical standards in a manner that is consistent with professional business conduct. Disney implemented the Standards of Business Conduct as a guideline for social responsibility. The Standards of Business Conduct promotes integrity, honesty, trust, respect, fair play and teamwork.
The Standards of Business Conduct is document which explains Walt Disney’s legal and ethical standards. The Standards of Business Conduct is published in the form of a booklet. This document is also electronically stored on the company’s Intranet.
Employees are instructed to become familiar with the material within the Standards of Business Conduct.
CORPORATE LEGAL DEPARTMENT
The employee may contact any of these groups by phone or email. However, they are encouraging to consult in person.
The Walt Disney Company claims that “all our international labor practices and licensing are in direct sourcing operations throughout the world, and are in accordance with all labor practices across the world” (Disney, 2006). Disney’s global operations are comprised of four business segments: Parks and Resorts, Studio Entertainment, Consumer Products and Media networks. In our opinion, Disney has continued to keep a good reputation and has little to no reports about labor practices across the world.
The company also has a secure telephone line to report safety concerns if the employee is concerned about reporting to leadership. This commitment engages leaders with employees through safety committees and safety awards for areas with exemplary safety records. Safety awareness tips are posted on the company’s Intranet in addition to being discussed in department meetings. Improved safety awareness and strategies create a win/win situation for employees and the company. Within this process, employees feel appreciated and the company saves money on worker compensation claims.
The Walt Disney Internet Group (WDIG) launched their first Internet site in 1995. The site was invented to promote Internet safety practices in regards to children. In addition, over several years, “Walt Disney has participated in numerous public education outreach programs which focus on safety.” (Disney, 2006) The Walt Disney Internet Group also provides tools such as GetNetWise, which helps parents, control their children’s Internet usage.
One area of concern for Disney is their international image. The fiasco-turned-success of the theme park formerly known as Euro Disney continues to be one of Disney’s greatest (and worst) accomplishments. “Forcing ââ‚¬ËœAmerican’ methods and Disney’s failure to understand cultural differences led to the initial failure of Euro Disney. They imported ideas antithetical to their anticipated customers and future employees, banning wine, for example, at park restaurants and dictating employee dress and behavior. They also failed to comprehend that labor unions in France play a different role in the labor-management-government equation than in the United States, that Europeans vacation differently than Americans, that the French jealously guard their culture, and so on. After several years of disappointing results, Disney finally altered their methods. (Leverette, 2002)”
Though Disney has succeeded in other foreign markets, like Japan and Hong Kong, Euro Disney was a near train wreck for the company. Efforts to recognize cultural differences and technological usage in other countries have served Disney well in the last few years. Their website can now be viewed in several different languages, and offer content that the local consumer would consider enjoyable.
Walt Disney Imagineering (WDI) was formed in 1952. WDI is responsible for creating Disney resorts, theme parks, and attractions around the world. The unit is composed of approximately 1,400 writers, artists, sculptors, show designers, ride designers, programmers, engineers and architects. (Disney, 2006) These individuals are paid to plan, design, Walt Disney Parks and Resorts.
Walt Disney Imagineering is responsible for alls aspects of Disney’s attractions. The group works hard to keep guest entertained. The group builds, installs and maintains the: architecture, software, machinery and landscaping that brings every Walt Disney’s story to life.
Recently, this group has been severely affected by the emergence of new technology. Now, CAD technology is used to create animated films. Disney is implementing computer graphic technology to create 3D imagery. Computer graphic technology increases effectiveness by reducing materials, cost, and labor.
Due to this process, freehand artist that originally drew characters by hand are no-longer sought after. Many of Disney’s freehand artists refuse to embrace computer graphic technology for artistic reasons. Therefore, these artists must find alternative work within the organization.
Managing organizational change caused by technology is a very complex job for any organization. Managers must work hard to control sudden and drastic organizational changes within and act with their scope of responsibility. There are many cases world-wide in which technology has affected staffing. In this situation, Disney must realign their staff. To aid in retention, and employee satisfaction, employees should be transferred to various departments within the organization.
In addition, current employees should be given a chance to find other positions within the company. These individuals should be given priority in the job selection process by having preference for job interviews. Employees should also be offered adequate compensation packages if they are unwilling, or unable, to find employment within the company.
Through a leaders innovation, new ideas for polices and procedures can be acquired. An effective leader creates the vision of what the final organizational state will look like, feel like and be like. These qualities can greatly contribute to a healthy organizational culture. A strong vision will help to create a shared meaning, generate energy, enlighten people, and help employees and their customers perform at peak. When a leader displays relationship building techniques such as loyalty and coaching, it builds a positive vision within an organization. This process is especially important when identifying standards for human resources, functional business resources, technological capability and organizational abilities.
The role of a manager is to maximize the output of the organization through administrative tasks. The duties of a manager are to execute the following organizational functions: planning, staffing, directing, and controlling. Managers must put the consideration of human dignity first rather than pay, promotion, or working conditions. Coaching will also help to promote healthy relationships. By coaching, leaders will win the respect and admiration of their co-workers and customers. This process is import when working with individuals to move from their present state to a desired future state in order to increase their effectiveness.
Managers must have knowledge of many motivational strategies. Motivation is an effective tool that helps individuals to reach organizational goals. Every few months in some locations, the leaders at Disney rotate. This process allows each manager to work with new groups to identify new motivational strategies.
Other areas in which managers must be knowledgeable are finances and training. Manager must know the financial capacities of their company. The organization must understand all finical responsibilities to purchase, support, and maintain new technology. The organization must also understand the training that is associated with each employee.
Walt Disney was ahead of his time in the early 30’s, targeting children and adults to crave interactive entertainment. The company he built will undoubtedly remain unscathed for years to come. Technology has never been lacking in his facilities, merchandise or his films. The company has built its reputation upon the imaginations of millions of Americans, and several other countries. Disney has been, and is currently, viewed as a leader and innovator of technological entertainment. With few hiccups along the way, Disney has captured the mass imagination and wonder of millions, and become a household name that is associated with joy. They have effectively managed change throughout the course or their continued and astronomical growth over the decades. And moreover, they have allowed and encouraged cultural unity in the world. If only more companies were like Disney.
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