Best Practices Report for Walt Disney Company

The Walt Disney Company is well known throughout the entire world. Imagined through the creativity of famed creator, Walt Disney, the Mickey Mouse ears are recognized internationally along with several other memorable characters such as; Winnie the Pooh, Snow White, and Peter Pan. The faces of these characters are everywhere as familial icons projected across various media sources in every developed country in the world. However, what lies behind the famous Mickey Mouse ears? Who is the Disney company and what obstacles do they face in both the present and the future?

According to information provided by Forbes (2013), Walt Disney is the largest media company throughout the world. As of May 2013, 166,000 employees worked for Disney and they made $42.84 billion in sales (Forbes, 2013). In the year before, Disney earned a total net profit of $5.7 billion dollars. Not surprisingly, the Walt Disney Company is known as one of the most popular stocks that people enter on their stock options watch lists. As reported by Buisnessweek (2013), analysts estimated that the profits for Disney were at 76 cents per share as of November 7, 2013 (Buisnessweek, 2013). This is up 8 cents from the 68 cents per share they were at in 2012.

Additionally, information available from Hoovers (2013) states that The Walt Disney Company is an international company consisting of five business segments. These segments include media networks, parks and resorts, studio entertainment, consumer products, and interactive media. Walt Disney’s media networks are composed of two divisions. The first is the Disney/ABC Television group. This group is composed of the ABC television network, ABC owned television stations group, ABC entertainment group, Disney channels worldwide, ABC family, ABC domestic television, and Disney media distribution (Hoovers, 2013). EPSN Inc. makes up the second division of the media network segment.

The parks and resorts business segment began when Disneyland first opened in California July 17, 1955. Many more parks have opened since then. They currently own eleven theme parks, five vacation destinations, and forty-four resorts scattered across North America, Europe, and Asia. In addition to all of these, there is a sixth vacation destination currently under construction in Shanghai, China. Included in the parks and resorts segment are the four ships of the Disney Cruise Line; the Disney Magic, Disney Wonder, Disney Dream, and Disney Fantasy. Furthermore, the Disney Vacation Club is also part of this segment, with twelve different properties that reach out to about 200,000 families. The largest of all of Disney’s vacation destinations is located in Orlando, Florida. This area is ingenuously designed to function as a city within a city. Vacationing families staying in Disney resorts have easy access to all the major theme parks such as; The Magic Kingdom, Epcot, MGM Studios, Disney’s Animal Kingdom, as well as the popular water parks Blizzard Beach and Typhoon Lagoon. In addition to these classic attractions, Walt Disney World in Orlando also offers great night life, golf courses, and a University as well as their own police department and water and garbage treatment. They even have their own transportation system to efficiently shuffle guests from one park to another.

Walt Disney Studios makes up the studio and entertainment business segment of the Walt Disney Company. These studios are responsible for all movies released under the Disney banners and include Walt Disney Animation Studios, Pixar Animation Studios, Disneynature, Marvel Studios, Lucasfilm, and Touchstone Pictures. These banners are distributed through Dreamworks Studios. Furthermore, Disney studios also produce many live shows on Broadway in addition to Disney on Ice shows. Walt Disney Studios also includes a music sector, which produces under the names Walt Disney Records, Hollywood Records, Labels, and Disney Music Publishing.

The consumer products segment of the Walt Disney Company is the world’s largest licensor. This segment produces toys, clothing and accessories, books, and fine art. The consumer products segment can be further divided into three separate business units. The first of these is the Licensing Unit, which is composed of Disney Media, Classics and Entertainment, Disney and Pixar Animation Studios, Disney Princess and Disney Fairies, Lucasfilm and Marvel. The second unit is the publishing unit. This unit publishes most children’s books, magazines, and digital media throughout the world. Disney Publishing also owns more than forty English Language Learning Centers throughout China, as well as a supplemental learning book program. The third unit of the consumer products unit is the famous Disney Store. Today there are more than 350 Disney stores all across North America, Europe, and Japan.

The final segment of the Walt Disney Company is known as Disney Interactive. This segment includes Disney Interactive Studios, Disney Online Stud, Disney Online, Disney Mobile, and Playdom. Disney Interactive is responsible for producing games and creating virtual worlds online, which often incorporate or build upon pre-existing Disney characters.

One organizational behavior and human resources issue is the issue of customer service. Disney’s management should deal with this by mandating that no one is allowed to have a bad day in front of a customer in any of Disney’s parks or facilities (McCafferty, 2013). All Disney employees should make it look that they are having an amazing time whenever they are in pulic to create a positive vibe in the parks. This rule would help ensure that Disney gets repeat business. Another great way that management can promote exceptional customer service is to maintain that guests must be treated like family (McCafferty, 2013). One of the main reasons that Disney has so much repeat business is because they go above and beyond in customer service. No problem should be considered too small or too impossible, all Disney employees should be determined to be as helpful as they can be and try to do everything in their power to make customers experiences memorable. Additionally, the quality of customer service can be evaluated by how the most irate and upset customers are deal with by employees. Management should take great care to make sure that employees are trained extensively on how they should deal with angry customers (McCafferty, 2013). When dealing with complaints, Disney employees should often not hesitate to offer free services in order to console the customer’s dissatisfaction. The reason that so much care should be taken to please angry customers is because Disney wants to get positive reviews. If everyone using their services views them positively, they will be destined to be even more successful. Thus, they should squash every opportunity of ever receiving a negative review.

Another organizational behavior and human resources issue is the challenge of creating a work environment where everyone feels comfortable enough to participate in collaborative processes regardless of their position in the company. One of the ways that management should address this issue is by implementing humor into all their Disney training sessions. This reason for this is the philosophy that if employees are laughing and having a good time during a training sessions, they are, psychologically speaking, more apt to retain and become motivated when it comes to work. Another way that Disney should ensure their work environment is comfortable is by ensuring that their lesson plans are easy to follow (McCafferty, 2013). Although Disney does not necessarily word it this way, many companies use the acronym K.I.S.S. (Keep It Stupid Simple). Due to the fact that Disney keeps everything positive, they do not use the word “stupid,” but it’s the same basic principle. Because, when things are too complex, employees are less likely to understand the material. Additionally, management should encourage all employees to utilize their creativity and “pursue a Mickey Mouse breathrough” (McCafferty, 2013). This would be unique of Disney. How many companies would allow the janitor, for example, to invent a superb video game that would be put on the market under their famous brandname? Disney would be smart for doing this, because if they recognize all ideas, they will have the potential to earn ever more. It also encourages employees to come up with new ideas on a regular basis, which could end up being profitable ideas for the company. Furthermore, everyone within the company should be free to adjust corporate polices (McCafferty, 2013) Once again, this ability of all employees would promote equality between all employees and reflect Disney’s message that everyone is equally important to the company in spite of whatever job they were hired to perform. Even employees earning low wages as a cashier in a food court should have the right to make changes within the company.

Another issue of organizational behavior and human resources concerns the issue of a hierarchy within the company. Management should address this issue by instilling the idea that everyone is equal, and that there is no job above or below any one person (McCafferty, 2013). If a manager should notice trash on the ground in one of the parks, they should consider it their job to pick it up despite their higher job standing. This philosophy is similar to the teachings of Gandhi, who stated that educated should not influence whether someone performs the lowly act of cleaning up garbage. All people are able to do this simple job, and all people should engage in this job to promote humility. In addition, management should also implement use of the “buddy system.” This system emphasizes teamwork by having the same co-workers work together for a day or even an entire week straight (McCafferty, 2013). This creates a friendly, positive work environment where success is dependent on how well employees are able to get along with their peers. It also encourages employees to get to know each other and formulate respect for their peers.

A fourth organizational behavior and human resources issue is the pressure to create a stimulating work environment where all employees feel like they are appreciated and are continuously motivated to keep doing their best work. One method that the Disney management should use to confront this is to always give employees gifts and cash bonuses (McCafferty, 2013). The reason for this is to ensure that employees feel appreciated for their hard work. Even something as simple as a Mickey Mouse coffee mug can bring a smile to an employee’s face. Additionally, frequent small rewards or praise should be given to continuously recognize an employee’s hard work. This would make them feel positive towards their work environment and would encourage them to keep doing their best work. Additionally, the Disney management should encourage participation in Volunteer programs (McCafferty, 2013). People feel good about themselves when they work for a community. Also, consumers recognize large corporations who make a difference. This is an excellent way to promote repeat business as well as promise new customers in addition to creating long-term, devoted employees.

According to Hoovers (2013), disney has three major competitors; Twenty-first Century Fox, Inc., Time Warner Inc., and NBC Universal Media, LLC (Hoovers, 2013). However, as stated by Jakob (2013), the largest threats towards Disney stock are the competitors of ESPN (Jakob, 2013).

On November 8, 2013, Disney stock went down because of ESPN. On Thursday the 7th, a large chunk of fees from distributors arrived at Disney bringing the stock up by 1%, totaling $3.57 billion. However, Disney had expected the stock to come up by at least 6%. Buisnessweek (2013) believes this is due to ESPN’s competitors (Buisnessweek, 2013).

According to Jakob (2013) of the Wall Street Journal, ESPN contributes approximately 40% of Disney’s earning through media. Although Disney shares are up 39%, that could easily drop through ESPN’s competitors (Jakob, 2013). With such a steady stock, a stock that people often select for their stock options watch lists on the popular forbes website, why would ESPN be such a problem? The answer is that it just does not fit in with the rest of Disney.

When people think of Disney, they think of Mickey Mouse, Snow White, Winnie the Pooh, Peter Pan, Etc. Even walking on the streets, people often see Tinker Bell Tee Shirts on both children and adults. However, these images are associated with childhood fantasies. The target audience, therefore, is families. Although sports could be considered family oriented, its general target audience is men. For example, during the super bowl, we see commercials for cars, and beer. We do not normally see advertisements for the newest coolest toys for kids during the super bowl, as we do when we watch Disney Junior, for example.

Even with Disney’s other competitors, they are, in fact, targeting the same audience. One example is Time Warner Inc. (Hoovers, 2013). Time Warner airs Looney Tunes. Is Daffy Duck a competitor to Mickey Mouse? Yes. However, Looney Tune fans are generally Disney fans as well. In Florida, Walt Disney World has one huge competitor for its theme parks. That competitor is Universal Studios. People have a choice as to whether or not they wish to go on vacation to Disney or Universal Studios. However, with Disney being the largest media company throughout the world, this is on such a small scale it doesn’t affect their overall stock (Forbes, 2013). The real problem, according to Jakob (2013) and Buisnessweek (2013) is ESPN.

Additionally, Disney owns significantly more property in Florida than Universal Studios does. This means that they have more theme parks and resorts. Therefore, even on a small scale, it becomes a miniscule competitor; especially since they have other parks in California, Hong Kong, France, Japan, and one under construction in China (Hoovers, 2013). Although sports entertainment could be considered to be family oriented, this is clearly not a product that fits in well with Disney, since Disney caters more towards families and young children. Therefore, here are two ideas to solve the problem with ESPN. The first solution is to sell ESPN. If Disney sold ESPN, they will become a more steady stock since the ESPN sector of the Walt Disney Company tends to cause stock fluctuations (Jakob, 2013). Although ESPN contributes 40% towards media, the Disney product will still earn plenty of money without ESPN through their Theme Parks, consumer products, live shows, movies, and music (Jakob, 2013). The second solution is to create their own sports. Since according to Disney management, there is no job above or beneath anyone and everyone is equal (McCafferty, 2013). Therefore, Disney could easily start sports teams with kids. Imagine having a kids’ football team that anyone could participate in. For example, in the event that family of five goes to Walt Disney World in Orlando, Florida for a two week vacation. They would have the option of auditioning the kids to join a football team, because at Disney, guests are family. This idea would bring in even more guest. ESPN could even host a reality sports TV show about this, which is hot right now.

Kids could even have their own sports program. Imagine if your kid’s little league team were aired on ESPN. This would be huge. Not only that, but it would beat the competition, because the other sports networks don’t air things like that. They only air professional sports. On the other hand, ESPN could still air professional sports, but perhaps in a manner more apt for families to watch. For example, perhaps have a talk show about professional sports hosted by kids. That would bring kids in to watch the show, and what the kids watch, the parents watch. So now this is family sports, rather than all around professional sports.

Plus, with 166,000 employees (forbes.com) and the attitude that everyone is entitled to do everything and anything (McCafferty, 2013), Disney Could easily form their own sports teams for all sorts of sports. They could have football, baseball, basketball, swimming, volleyball, rugby, hockey, etc. And if it’s new, it will sell. After all, this would be geared more towards Disney fans rather than sports fans.

If this idea of new sports teams were to be combined with a sports reality show, and airing kids sports around the country, this would make ESPN competitors less of a threat, because ESPN would be uniquely Disney, and it would no longer be ESPN. It would fit in where all of Disney entertainment coincides. The most difficult challenge Disney faces is ESPN (Jakob, 2013). Why not make it more apt to Disney and less appealing to its competitors?

References

Ahead of the Bell: Disney. (2013, November 8). Bloomberg Buisnessweek News. Retrieved from http://www.businessweek.com/ap/2013-11-08/ahead-of-the-bell-disney

Jakob, S. (2013, November 6). Disney shares don't support potential threats. Wall Street Journal. Retrieved from http://online.wsj.com/news/articles/SB10001424052702304672404579181872952318880

McCafferty, D. (2013, May 6). 12 management lessons from Disney U. CIO Insight. Retrieved from http://www.cioinsight.com/it-management/leadership/slideshows/12-management-lessons-from-disney-u-03/

The Walt Disney Company names of competitors. (n.d.). The Walt Disney Company Names of Competitors. Retrieved from http://www.hoovers.com/company-information/cs/competition.The_Walt_Disney_Company.432c15c5e0758b7d.html

Walt Disney. (n.d.). Forbes. Retrieved from http://www.forbes.com/companies/walt-disney/