It makes deals with fast-food companies for using its characters for promotions which also serve to promote Disney productions. The company has some synergy with its television network as an outlet for Disney made-for-TV films and some television shows, though in-house productions are not as prevalent on the network as they might be.
The company has the money it needs to make changes and to continue to produce films, television shows, and other products for the public to consume. It continues to develop theme parks for different parts of the world as it sees a demand. It can draw on the expertise of people in many fields. One of its primary resources is its name, which has long been an attraction in itself. Few movie studios can give a boost to a film just by putting their name on it, but the Disney Studio can.
The Disney company needs to concentrate more attention on improving the fortunes of the ABC television network, which at present is the least profitable area of Disney's business. The company has done well at developing films people want to see, but the same expertise and effort do not seem to have been expended in developing television programs that people want to see. However, while the purchase of ABC might have seemed a Type a strategy in the beginning, whether it remains so is very uncertain given the rapidity of change taking place in network television today. Even if ABC rises to the top with shows with high ratings and so a larger audience followed by higher advertising revenues, being the top of the heap may not mean as much as the size of the heap diminishes. Disney has a strong position in various cable entities as well and may be able to develop new synergies between ABS and these cable outlets, and the purchase can remain a Type a strategic decision if this comes to pass and if it is a successful strategy.
The Disney company has long had interests in filmmaking, distribution, television, publications, and theme parks, and the company has been able to make use of these different media to exploit ideas and characters in different ways. This gave the company an advantage, but that advantage is not as great as it once was now that other studios are part of media conglomerates bringing together the same fields for other companies to exploit.
Disney has failed to develop an ongoing team that can keep its interests working together and wring all the profit possible from them. The company works best when it has continuity, and Eisner has clearly failed to accomplish this. Stockholders have been unhappy about the buy-out of Michael Ovitz and the public battle with Jeffrey Katzenberg. The deaths of several key executives created openings that should have been easier to fill, but Eisner failed to develop a team that could step into these roles once the opportunity arose. These deaths could not be foreseen specifically, but the fact that there are certain to be deaths and other changes can be known and should be prepared for long before they occur. The public fights Eisner has had with some underlings could also have been handled better.
First, Eisner needs to give more attention to team development both within the studio and for overseeing ABC. His method of centralizing power is not working well. It may be necessary to spend more on development at ABC in order to turn the network around, and it will take several hit shows over the next two or three years to accomplish this. Networks do turn around quickly when they manage to do so at all, and one or two hit shows can accomplish the shift. People watch these shows and would then sample other ABC shows. Disney has done well in its cable investments, and the Disney channel, a & E, Lifetime, and the History Channel are all doing well, while the Biography Channel has not made the same inroads as yet. The creative management at ABC is the biggest problem, and Eisner's poor performance at developing an ongoing team for the Disney company is being extended to ABC as well.
Eisner should develop synergies more directly with ABC by presuming that ABC is the central creative point and by developing related products in the way Disney would do with films. This means finding music in ABC shows that can be recorded and sold, characters on ABC shows who can produce toys and other products, magazine articles generated by ABC shows, books from ABC shows, and similar means to promote ABC as an entity and its shows outside the television network itself. Disney films might serve as a source for future shows, and older ABC shows with continuing popularity might generate new versions on film.
Decision-Making at Disney
The image Disney has for the public is of a happy place, and the theme parks also promote this idea of happiness. However, the corporate culture of Disney is actually harsher and more restrictive than this might indicate:
The company is not known as a place where free-thinkers can thrive. Very quietly, Disney executives will tell you that, within the company, the California HQ is known as "Mauschwitz" (Helgadottir 1997, p. 10).
Still, the company itself is highly successful in most of its ventures, and while EuroDisney did not begin as well as expected, it has become more successful as time has passed. The company empire today includes everything from the theme parks and hotels to websites and retailing, with Hollywood's largest and most profitable studio at the center, marketing films under its own name as well as under the Touchstone, Hollywood Pictures, and Miramax labels:
Its theme parks brought in $4.5 billion in sales last year . Even the maligned EuroDisney has turned the corner-?after a revamp and rechristening, Disneyland Paris is now Europe's greatest tourist attraction (Helgadottir 1997, p. 10).
The fact that Disney sees Disneyland Paris as a valuable asset is apparent from current plans to build a 500?acre new town next to the Disneyland theme park east of Paris, showing that the park is recovering strongly from its financing crisis at the start of the decade and is now preparing to make full use of the site around the theme park. This will be known as Val D'Europe, and Disney has already completed building much of the infrastructure of the town, replacing farmland with main roads, water and sewerage pipes, and an electricity and telephone network (Newton 1997).
In the early period, management set out to reassess the way it addressed issues important in Europe by gaining a greater understanding of local political, labor, and financial issues. Disney's problem stemmed in part from the view of it as the pushy American company trying to do everything its way because it knows better. This antagonized the French in particular, and a more French approach to these mattes could assuage some of these problems.
The financial aspect was also a problem and may still reduce the value of the company in Europe, where patrons of amusement parts are simply not accustomed to paying $35 for an adult ticket and $25 for a child's ticket. This might be restructured to appeal to European consumers, to their ability to pay, and to the way they select how they spend their money. Disney's approach in the U.S. did not work well in Europe and had to be changed to something more in keeping with the European economy and the realities of the European Union, though it is not clear whether this has been done sufficiently as yet or not.
The company needed to research public tastes and preferences more thoroughly and to be more flexible in adapting what the people want and what works in the European context rather than trying to make Europeans become Americans when they enter the park. However, the change in name to Disneyland Paris was actually a move to make the park more rather than less American, and it does not seem to have harmed business. These issue are not clear-cut, and precisely what appeals and why may be a matter of trial and error and not science.
Coron, E., 1998, July 13, Why Mickey Mouse is sad, the European, 17.
Cunningham, S., 1995, September 7, Theme parks' roller-coaster ride to profit, the European, 21.
Harrison, E., 1999, the Managerial Decision-Making Process, Boston: John Wiley & Sons Australia