Harvard | Business | School

Welcome to

Disney Founded by the Disney brothers, made

their debut in 1923 with Mickey Mouse in Steamboat Willie. Disney made their first debuted television

program in 1954 In 1955, Disneyland opened in California for millions of visitors.

After the Disney brother’s died, a management team led the opening of

additional parks.

By 2006, Walt Disney Company was comprised of four major business segments.

Walt Disney By 2006

Media Network

Parks and resorts

Studio Entertainment

DCP

`

Walt Disney By 2006

Media Network

Parks and resorts

Studio Entertainment

DCP

What is DCP ?

Disney consumer Products DCP was responsible

for extending the Disney brand to

merchandise, food and beverages,

electronics and art.

DCP

Traditional Model

Direct to retail model

(DTR)

Sourcing Model

Situation?

Disney was nothing short of

Situation?

However, in 2004, more than 30% American children between ages 5 and 9 were overweight

and 14% were obese

Situation?Disney branded confections and novelties were a hit among children.

Exhibit-to prove Disney’s reach out to children Activity Consumer Hours per yr.

(millions) Percentage

Cruising on Disney cruise lines 50 1

Listening to Disney Radio 20 0

www.Disney.com 20 0

Disney channel 7000 76

Reading Disney comics 350 4

Visiting theme parks 800 9

Watching Disney movies in theatre

300 3

Watching live stage shows 20 0

Video games 250 3

Watching Disney movie at home 350 4 Harvard school case

Exhibit 2

Situation?

Disney saw the growing criticism, an opportunity to look into the nutritional value of its range of food products.

In 2004, DCP leadership embarked on a mission to

make “nutritionally-beneficial changes” to

meals served to children and to cut out trans fat in

all its produce by 2008..

Situation?

But, Disney weren’t the first the to market with fresh produce-Nickelodeon packaged products had been on the shelves since mid 1990s.

Questions ?Could the Disney

magic get children to switch from sugary,

processed food to nutritious diet ? If Disney succeed in their

task of getting children to switch to nutritious diet, what will be the cost and can they gain market share and acceptance for its new undertaking?

Changing license model, retail industry, consolidation and obesity epidemic

offered DCP an opportunity to simultaneously broaden and rationalize their offerings

Alarming trend

In 2004, more than 30% American children between ages 5 and 9 were overweight and 14%

were obese

Institute of Medicine (IOM) Study

• When served, children 4 or above, tend to consume larger portions.

• In 2005, avg. child viewed about 40,000 TV commercials- half of which were fast-food and high calorie ads

IOM recommended that food and beverage companies

• Promote healthful diets for children

• Reformulate children’s product to reduce calorie

• Empirically validated industry wide system

• Strict marketing standards to be maintained

• Avoid nutritionally questionable products to admired celebrities or cartoon characters.

The effort led by Embola Ndimeant a quality range of Disney

integrated foods that answers children's daily needs in an

entertaining way

DCP derived many of its recommendations from FDA guidelines and reformulated its product or cut down on portions so that 75%of its products complied with U.S Standards

“Better For You “

Exhibit-Disney branded Foods after national audit

Activity Percentage

Product that requires no change 41

Products classified as treats 15

Products that require portion size to be changed 9

Product out of compliance- Need to reformulated 7

Product out of compliance- Need to be phased out 28

Total 100 Harvard school case Table A

Exhibit-financially successful

Harvard school case Exhibit 1

DCP Fiscal(Billion dollar)

2003 2004 2005

Revenues 2344 2511 2127

Cost and Expense 1960 1977 1607

Operating income 384 534 520

The switch to Nutritious food produce was a success to DCP, financially as the Operating incomes from 2003-2005 financial years suggests

2004- Winter Research Using focus groups, group sessions and shopping trips with

moms, DCP set out to learn product categories

market support.

Inferences drawn from the research:

• DCP discovered kids demand national Character-driven products

• Moms wanted nutritious products, including fresh fruits and vegetables

Imagination farm

Value –added products

DifferentiateCommodity

Develop child-

friendly foods

Three pronged development strategy

Competitions? Nickelodeon was watched by 89 million households

In 2001, Nickelodeon began licensing for fruits and vegetables.

Competitions? Sesame WorkshopIs a non profit educational organization known for Sesame street public program

In 2006, began licensing for Del Monte Foods in a $3billion deal

Competitions? Warner Bros In 2006, Warner Bros. began licensing for ReadyPac.

ReadyPac is a produce company that packaged cut and ready to eat fruits and vegetables.

Exhibit-Winning Over Competitions

Harvard school case Exhibit 5

Company Character Rank Worldwide retail (billion dollar)

DCP Mickey mouse,Winnie the Pooh

1 21

Warner Bros. Harry porter, Looney tunes

2 6

Nickelodeon SpongeBob 3 5.2

The DCP have considerable lead over the competition according

to the stats

Disney and Kroger DCP developed a broad range of products with Kroger Supermarket

chain, largest grocery retailers only to Walmart in US with fiscal of $ 60. 6.

billion.

Kroger had 12 % share in the market which was optimal criteria for DCP.

To be profitable Disney required 80% market share which came through

traditional licensing models.

Exhibit-Top US supermarket Companies,2006

Harvard school case Exhibit 8

Categories No of markets Est. Annual Sales (billion $)

Walmart 2089 98.7

Kroger Corp 2501 58.5

Albertsons 1765 36.3

Kroger Corp. is one among the leading

supermarkets in US

Exhibit-Private Label Share in 2006

Harvard school case Exhibit 10

Categories Mainstream companies “Better for you “

Bread 27% 0%

Soft drinks 11% 8%

Cheese 32% 19%

Yogurt 15% 19%

Cookies 14% 9%

Crackers 11% 9%

Ice cream 21% 11%

Lunch Combos 9% 11%

Cereal 10% 11%

Private share holdings in the market indicated that there were

ample opportunities with the “Better for you” products in the market

Disney magic Selection Though Kroger began

slipping Disney product in the market, Disney magic

selections officially launched in 2006.

Kroger also had two new persona for Mickey mouse

on the package products

Conclusions?Combination of wide distribution and Disney magic meant that DCP would

win over Moms from around the world .

DCP also plans to make ties with other retailers, other than Kroger.

With Imagination farm products expected to cross the number of items they produce with Kroger DCP is sure to be a success.

With the Nutritional and dieteary plan adopted by Disney the obesity epidemic can be kept controlled effectively

Special thanks • https://www.flickr.com/photos/tombricker/

• https://www.flickr.com/photos/expressmonorail/

• https://www.flickr.com/photos/jdhancock/

• https://www.flickr.com/photos/randar/

• https://www.flickr.com/photos/kalexanderson/

• https://www.flickr.com/photos/donbuciak/

• https://www.flickr.com/photos/jdhancock/

• https://www.flickr.com/photos/mnicolem/

• https://www.flickr.com/photos/markjwumaurader2124/

• https://www.flickr.com/photos/m-i-k-e/

Created by :Ashwin SasikumarGovt. Model Engineering College, Kochi

Prof. Sameer Mathur

IIM Lucknow

www.IIMinternship.com

During an internship under :