Problems Faced by Walt Disney Company
Discuss about the Case Analysis of the Walt Disney Company.
The company Walt Disney was established by an American entrepreneur, animation and film producer named Walt Disney. The Walt Disney Company was established in order to work in the animation industry and there had been several developments into the cartoon industry. The company has earned the most number of Academy Awards and won 22 Oscars from around 60 nominations (Drucker, 2017). The company received various Golden Globe awards as well. The primary purpose of the given report is to throw light on and identify the problem statement with respect to the given case related to Walt Disney (Watts, 2013).
The report will be following a structured format whereby the different problems which have been identified in the case study will be elaborated upon and discussed along with various theories. In the following section, recommendations as to how the problem must be improved will be provided along with examples. The company has been performing well, however lately it has been facing certain problems, which shall be analyzed in the sections below.
The problems being faced by the company include problems related to spoilt relationships with the Pixar studios, Old characters and the Age compression aspect. Furthermore, there are quality issues with their animated film as well.
Recently, the company has not been performing well with respect to different aspects of the firm and hence the given section will be discussing certain problems with reference to various management theories and make an analysis of how the company needs to improve performance.
Issue with Steve Jobs
The Pixar Company produces animate movies which tend to help Disney to distribute and market its products. Furthermore, Disney has a right to produce and sell different sequels to Pixar Films. In the past, the company has sold various movies like the Toy story, without indulging the involvement of Pixar. However, there arose an issue whereby the company ; Pixar, wanted to engage in a relationship with Walt Disney company but wanted to have creative as well as financial control over the films (Bratton & Gold, 2017). However, when the CEO, disagreed with this, the company was unable to proceed and the relationships became sour. Pixar began to look out for other partners and this will not be beneficial for the long term of the company. For this purpose, it became important to engage in a deal which was beneficial for the firm as well (Swift & Piff, 2014). They agreed to pay a larger price, but were not willing to combine their operations, until and unless they were given the control which was higher than the previous deal (Wheelen, Hunger, Hoffman, & Bamford, 2017).The primary reason behind this may be the spoilt relationship between the CEO of Pixar and the previous CEO of Disney.
Theory Related to Given Situation
A theory related to the given situation might be the theory of Human Relations. The Human Relations theory was formed in 1920s during the industrial revolution. The theory stresses on the belief that people tend to become a part of an organization which reflects different growth prospects and a development in the future domain. For this purpose, it is important to engage in meaningful relationships with different organizational members and partners in order to ensure that the company is doing well and prospers.
The Disney animation had another set of problems as well which was the `too old` problem. Under the too old problem, the brand has been suffering from a brand fatigues as people began to get bored of the classic but rather ageing characteristics which are the Mickey Mouse and the Winnie the Pooh (Myers, 2013). In such a scenario, although the viewers who were more than 80% percent of them liked to view the given cartoon characteristics, they did not find it interesting enough. They were however, unable to relate to them as the concept seemed too old for them (Wild, Wild, & Han, 2014). Hence, for this purpose, the popularity of the given brand has been going down comparatively. This poses a threat for the company as the company might face certain problems and a restrained demand as the customers may not be willing to watch characters which have aged and become obsolete. The company needs to urgently come up with a new concept and creative ideas which will enable the firm to perform well within its realm (Brigham, Ehrhardt, Nason, & Gessaroli, 2016).
The innovations management theory states that the companies cannot remain stable though out and is required to evolve and bring about creativity in its operations so as to ensure that the given firm is able to place its foot well in the firm and ensure that it is able to compete with the latest trends. If the firm is unable to do so then it will not be able to survive in the given industry for a long period of time.
The firm is comparatively very young and currently suffers from age compression problems. It means that it appeals to only the younger crowd and not even the teenagers who are between the ages of 13-20. Hence, as the market selected for the given channel is very restricted the success and the growth has become increasingly restricted. For this purpose, it has been advised that the company needs to incorporate a wider customer base and also ensure that the given company is able to provide fresher contents which will be able to target viewers belonging to every age group. This shall ensure that the firm is able to tap the larger crowd and ensure success in the given domain.
Recommendations for Walt Disney Company
According to the given case study, the company has been facing certain problems related to the poor quality of the films which it makes as well (Hill, Jones, & Schilling, 2014). The company has been engaging itself in the production of various legendary animated films over the time and has performed well in that given domain, however recently, the quality of the products has gone down drastically and the company has been engaging in poor quality production, weak acting skills and weak scripts (Adekola & Sergi, 2016). The examples of such disasters are the High school musical 33, Beverly Hills Chihuahua, Bolt and the Confessions of a shopaholic. Such movies although appeared to be of a good content were unable to attract the audience and lagged the power to impress the customers. Wetmore, apart from appearing to be a bore to the given audience, the given films did not perform well financially as well (Armstrong, Kotler, Harker, & Brennan, 2015). The company has realized this situation and has tried to come up with new concepts and ideas, but has not been performing well and has been facing problems, with respect to the quality. If the given company is unable to perform well, it will succumb under the competition which is quite cut throated at present.
Furthermore, although Disney has been acquiring new brands and products, the given conglomerate together has not been performing well and for this purpose, there have been situations where the company has considered whether it should be applying a retrenchment strategy or a stable one.
A theory in relation to the given situation might be the theory related to Total quality Management (Gollenia, 2016). The Total Quality management theory states that the given company needs to adopt a large variety of strategies which will ensure that the company is able to perform well and that, the quality of the goods or the services which have been produced under the realm of the given firm are optimum (Chang, 2016). This is because; quality plays a key role in impressing the audience. If the quality of the goods and services being delivered by the company are optimum, then it will be able to easily ensure that it achieves success.
The theory of Quality Management defines a relation between the quality of the goods produced and the popularity amongst the customers. It stresses upon the fact that if a company is able to produce good quality products then it will be able to fulfill consumer need. Furthermore, goods sold at better quality also possess the power and can be charged high for. Hence, the company needs to bring about its focus on quality at present. Through the given initiative it needs to ensure that the company brings about quality in its productions.
Conclusion
Therefore, from the given analysis it can be stated that, the Walt Disney Company is not being able to live up to its name. This is because, the company had a popular image earlier and it was not going through any related problems, however recently, the company has been facing sever strategic problems and it needs to seen to it that the company adopts a proper strategy to combat with all the given problems (Baden-Fuller & Mangematin, 2013). Once the company will be able to successfully face all the problems, it will be able to ensure that it is successfully engaging in a relationship with its stakeholders which will bring about its long term growth and prosperity.
The following recommendations have been made for the given company in order to see to it that it will be able to overcome the current problems that it has been facing in the given domain:
Quality is often described as the key to success and thus, it is advised, that for the long term benefit of the given organization, the company needs to engage in production of goods and services which are of premium quality. Quality uplifts the brand image of the company and it also ensures that the firm remains in competition for a long time. It is commonly known that although the prices of the products and services can be competed with however, it is not possible for the given organization to compete with the firm in terms of quality. Hence, if Disney is able to produce fewer films, but ensure the quality of the movie is good and the story is interesting, it will easily be able to achieve success in the given domain and ensure that it performs well.
The Pixar partners are crucial partners of the firm who need to be engaged in a strong bond with firm. The Pixar Company has got proper experience in the domain of the business of movies and for this purpose; it can be easily relied upon. Furthermore, apart from experience, the given firm also has long term resources like creativity and popularity which are often crucial in a film`s success (Tukker & Tischner, 2017). For this reason, although the demands of the current CEO may appear to be inconsistent with the given scenario of the business, but they have strategy experience which is beneficial for the firm.
The company needs to concentrate on innovation. Disney has been focusing on a limited type of movies and films since a very long time and for this reason the concept and image associated with the Walt Disney movies company has become a rather obsolete one (Mannheim, 2016). The company needs to ensure that in order to be able to achieve success in the given business domain, it will be required to engage in practices which will gave rise to proper relationships. Such proper relationships will then give rise to engagement in work which will be able to appeal to all crowds and compete with the latest innovations as well. This innovation can come in form of new characters or stories.
The company needs to keep a hold on its various domains. The company needs to ensure that it is being able to easily maintain quality in the given offerings instead of spreading out into other domains (Thomas, 2017). From the analysis of the given case, it could be easily analyzed that the firm is not being able to manage its current resources well. However, if the company follows a stabilize strategy, then it will easily be able to ensure that it is keeping an eye on all its units.
As the company is not being able to perform well in the given animated section, it has been advised that the company should retrench the Animation film domain. The company should produce a fewer films in a year and invest in stories that are bound to be a success.
References
Adekola, A., & Sergi, B. S. (2016). Global business management: A cross-cultural perspective. . .Routledge.
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.
Baden-Fuller, C., & Mangematin, V. (2013). Business models: A challenging agenda. Strategic Organization. 11(4), , 418-427.
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. . Palgrave.
Brigham, E. F., Ehrhardt, M. C., Nason, R. R., & Gessaroli, J. (2016). Financial Managment: Theory And Practice, Canadian Edition.. Nelson Education.
Chang, J. F. (2016). Business process management systems: strategy and implementation. . CRC Press.
Drucker, P. F. (2017). The Theory of the Business. In (Harvard Business Review Classics). Harvard Business Press.
Gollenia, L. A. (2016). Business transformation management methodology. Routledge.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. . Cengage Learning.
Mannheim, S. (2016). Walt Disney and the quest for community. Routledge.
Myers, M. D. (2013). Qualitative research in business and management. . Sage.
Swift, L., & Piff, S. (2014). Quantitative methods: for business, management and finance. Palgrave Macmillan.
Thomas, B. (2017). Walt Disney: An American Original. . Disney Electronic Content.
Tukker, A., & Tischner, U. (2017). New business for old Europe. . Taylor & Francis.
Watts, S. (2013). The magic kingdom: Walt Disney and the American way of life. . University of Missouri Press.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.
Wild, J. J., Wild, K. L., & Han, J. C. (2014). International business. . Pearson Education Limited.
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