8/12/2019 WD Bitan

1/8

Introduction

The Walt Disney Company has truly been the entertainment king in the 83

years since its founding. This is largely due to the vision of Walt Disney as !ell as the

strategic management skills of "ichael #isner. The !ork of these t!o men as !ell as

countless others at The Walt Disney Company has created an innovative business model

!ith universal appeal.

A History of Disney

The Disney $rothers Cartoon %tudio !as founded in California in &'(3 by Walt

and )oy Disney. The brothers had a contract to produce *lice Comedy films about a

live girl in an animated !orld. +ver the ne,t four years around -- films are produced in

the series. n &'(/ The Disney %tudio began indirect production for 0niversal 1ictures2

films +s!ald the ucky )abbit. The brothers produced (4 films in their first year. n

&'(8 0niversal took the contract from the Disney %tudio and Walt Disney created

"ickey "ouse by !idening +s!ald2s ears and changing his clothes slightly. "ickey2s

film debut !as also in &'(8 in the film %teamboat Willie.

&'3/ sa! the release of Disney2s first feature5length animated film Snow White

and the Seven Dwarfs. n &'67 the company made its initial public stock offering and

ten years later Treasure Island Disney2s first entirely live5action film !as released.

Walt Disney himself also appeared on television for the first time in &'-7. n &'-- Walt

Disney realied his dream for a family5based theme park !ith the opening of Disneyland

in *naheim California. #leven years later Walt Disney died of lung cancer and his

8/12/2019 WD Bitan

2/8

brother )oy became the ne! chairman of The Walt Disney Company. The company

opened its second theme park Walt Disney World in +rlando 9lorida in &'/&.

Walt Disney World2s #1C+T Center !as opened in &'8( !ith a central globe

based on the 0nisphere from the &'46 World2s 9air in :e! ;ork City. #1C+T features

pavilions representing eight countries. Disney e,panded its international focus !ith the

opening of Tokyo Disneyland in &'83. Tokyo Disneyland !as designed by the creators

of Walt Disney World and features a similar look and many of the same attractions. *

shift in the company occurred !ith the board of directors unanimous decision to elect

"ichael #isner as chairman and chief e,ecutive officer and 9rank Wells as president and

chief operating officer in &'86. )oy #d!ard Disney son of )oy Disney became head of

the animation division.

The Reason for Disneys Success

The Walt Disney Company2s success up until the selection of "ichael #isner !as

due to Disney2s ability to create uni

8/12/2019 WD Bitan

3/8

The Michael Eisner Years

The Walt Disney Company sa! many changes under the command of "ichael

#isner. Disney made a large entrance into the retail market in &'8/ !ith the opening of

the first Disney %tore. n &'88 Disney5o!ned Touchstone 1ictures released the first

live5action and animated feature film. Who Framed Roger Rabbitcost over >87 million

to create and market and received four of Disney2s si, *cademy *!ards. *nother

addition to Walt Disney World Disney5"=" %tudios Theme 1ark opened in &'8'

further increasing the pull of the +rlando 1ark. *fter this success and the over!helming

popularity of Tokyo Disneyland The Walt Disney Company decided to open The #uro

Disney )esort and #uro Disneyland in "arne5la ?all@e 9rance.

n &''(Beauty and the Beastbecame the first animated picture nominated for

best picture a maAor milestone in the animation industry. The death of C#+ 9rank Wells

in &''6 created a void in the company and #isner took over many of Wells2 duties

distributing very fe! among other members of top management. n &''- Disney

purchased the *$C T? net!ork for >&' billion making it one of the largest players in

the television and radio industry. n &''8 Disney further e,panded its reach by

launching its first cruise ship the Disney Magic. * further e,pansion to Walt Disney

World !as the opening of *nimal Bingdom also in &''8.

Key Issues in the Case

The case covers four key issues other than the management of "ichael #isner.

These issues are the revitaliation of T? and movies e,panding into ne! businesses

8/12/2019 WD Bitan

4/8

regions and audiences ma,imiing theme park profitability and coordination among

businesses.

Revitalization of T and Movies

*fter the creation of the Disney Channel Disney stopped production of net!ork

television sho!s. "ichael #isner decided to rene! their -7 billion

each. $y &'88 Disney held &' of bo, office shares and led the industry in ticket sales.

Disney began a program of releasing &-&8 films per year.

The animation department took longer to revive than television or movies. When

#isner took over the animation !as averaging a ne! film every four to five years. #isner

e,panded the department and reduced the time it took to release a film to &(5&8 months.

>37 million !as invested in the Computer *nimated 1roduction %ystem EC*1%F !hich

!as used to create movies such as Who Framed Roger Rabbit. This investment ((7 million in bo, office sales and

also sold large amounts of related merchandise.

8/12/2019 WD Bitan

5/8

E!"andin# into $e% &usinesses' Re#ions' and Audiences

*n e,tremely beneficial move for Disney !as the operation of its consumer

products division as a retail5as5entertainment concept. This helped Disney generate

sales per s

8/12/2019 WD Bitan

6/8

out roar among Disney customers eventually leading to a public apology by the

company. The purchase of "irama, proved to be a good ac& billion !orth of ne! attractions to keep up !ith cultural

changes over the ne,t fe! years. These attractions included !ater5based attraction

Typhoon agoon Disney5"=" %tudios and Toonto!n. The constant addition of ne!

attractions not only increased the length of customer visits but also the number of return

visitors. $y the year (777 Walt Disney World

8/12/2019 WD Bitan

7/8

resemble Disney World. Disney received &7 of gate receipts and - of other sales as

!ell as ongoing consulting fees.

#uro Disney nearly proved to be a disastrous decision for The Walt Disney

Company. Cultural clashes as !ell as !eather issues shocked a company !hich had

previously e,perienced only success. * professor of 9rench literature !as recruited to

oversee the park2s development and integrate the company2s culture into the culture of

9rance. Disney made the decision to allo! !ine in on5site restaurantsI but male cast

members !ere still re

8/12/2019 WD Bitan

8/8

f a conflict arose bet!een division e,ecutives #isner and Wells encouraged them

to resolve it among themselves but they also provided the option of arbitration for

difficult problems. "anagement focused on