Disney’s Success Story
Question:
Discuss about the Simultaneous Versus Sequential Negotiation Strategies.
The major reason behind the success of Disney was the organizational structure which was non-hierarchical in nature. The company mainly emphasized on team-work and the innovative ways of creating their Disney characters. The employees are loyal and committed towards the vision of the company. The organization has suffered huge financial constraints in after the world war period. This has led Disney to take major steps towards the expansion of the company in many other areas. Disney decided to take a huge risk by investing a large amount of money in building a park which was a risk from the part of the company. Disneyland was a major success for the company which helped them in coming out from the financial stress. The organization was able to claim a many initiatives that were taken first in the industry and this became a major reason behind the success of Disney (Kane et al. 2015).
Michael Eisner was given the position of CEO in Disney in the year 1984 and this was the start of an entire new period for the company. The major focus of Eisner was towards increasing the profits of the company and maximizing the wealth of the shareholders. Eisner focussed on managing the creativity of Disney which was one of the most important feature of the company for many years. He built many financial and strategic objectives and the company was expected to work towards fulfilling these objectives. Eisner also tried to build the movies and television division of Disney. The company stopped the production of shows for other channels so that the demand for Disney channel is not reduced. The company started giving more importance to the movies which had registered lowest profit in the year 1984. Disney started preparations to release an animated movie within every 12 to 18 months (Lillestol, Timothy and Goodman 2015). The profitability gained from the theme park was increased by investing in television advertisements, tie-ins with the retail stores and media events. These steps taken by Eisner led to the increase in the revenue of the company within the first four years of his operations as CEO of Disney.
The tenure of Eisner in the company as the CEO of Disney had ended in the year 1993. The company was taken to a new position during the term of operations of Eisner as the CEO by expanding to new markets and creating new partnerships as well. The President of the company was killed in an air crash in the year 1994 and Eisner also went through a heart surgery in the same year. Katzenberg who was the head of the film division at that time had tried to take the position of CEO. However, he was not successful in taking the position and this led to the departure of Katzenberg from the company. This further led to the change of many roles in the company and further many changes took place in the positions of executives (Dobni, Klassen and Nelson 2015).
Michael Eisner’s Contribution to Disney’s Success Story
Robert Iger was appointed by Eisner in the company so that the creative side of Disney can be managed effectively. Iger was promoted to the position of president of Disney in the year 2000. Weekly meetings were held in the organization so that the creative image of the company can be managed.
The entry of Disney into the new business had led to the damage of the brand of the company over the years. The culture differences that had occurred between the ABC company and Disney had led to huge losses for the company. The number of employees in the company had increased from 28000 to 110,000 after Disney had expanded its operations to the new areas. The business model of Disney had become too big to implement the management style that was proposed by Eisner (O’Neill 2016).
The acquisitions and the mergers that were made by Disney over the years were already too much for the company to manage. The purchase of Fox Entertainment will further lead to the increase in the problems that are already being faced by Disney in the market related to the management of relationships with the organizations (Voigt, Buliga and Michl 2017).
The growth of Nokia from a timber company started under the leadership of the CEO Kari Kairamo. The company made its first acquisition in the year 1983 and developed its position as the largest electronics company in Scandinivia. Nokia also launched its first mobile phone in the same year and they developed the second generation or 2G network. By the year 1988 Nokia became the largest player in the market of mobile handsets. The impressive performance of the company continued for the years that followed. Nokia launched its first digital phone that was produced for the mass in the year 1992 and the end of that year Nokia was the largest mobile producer in Europe. The emergence of the Nokia mobile phones as fashion accessories and the highly evolving style of the phones had built the competitive advantage for the company (Pisano 2015).
Nokia had merged its operations with Siemens in the year 2006 to keep up with the changing technologies. However, the high competition that was faced by the company from low-cost companies had led to the decline of the profits of Nokia. Nokia was also not able to enter the CDMA market which further led to losses.
The low response of Nokia towards the demands related to changes in software and apps led to the decline of the company. Nokia had also shifted its direction from US market which led to the loss of revenues. Smartphones had become a major part of the ecosystem of the consumer devices. The response of Nokia was low in this case and this led to a huge loss to the company.
The reaction of Nokia to the introduction of Apple in the market was related to the decision of elimination of the CDMA handsets production in the US market. This led to the absence of the company in the US market and helped Apple to capture the smartphone market much faster. Nokia should have continued its production in the US market so that they could give competition to Apple and stop their rapid growth (Priem, Wenzel and Koch 2017).
Robert Iger’s Role in Disney
Nokia could have made preparations to compete with the other companies in the smartphone industry and maintain its position in the market. The companies had become much more focussed towards software as compared to the development of handsets. Nokia shifted to a service-oriented style of business and Nokia launched its online store as well. The company was unable to change its business direction and this led to the struggle that was faced by Nokia.
In the year 1995 AOL needed a web platform to improve its damaging image. In the month of November. The browser deal was made between AOL and Microsoft and this led to decrease in the threat towards the core business of the AOL company. The deal was also profitable for Microsoft and many trade-offs were made by the company in the process.
The Netscape and AOL agreement was made in the month of March in the same year. The deal would let the AOL browser to be more preferred by the users and the company was to pay a license fee per copy to Netscape. AOL would get a presence in the Netscape website in return of this deal. The stock of AOL had risen by 10% after the deal and the shares of Netscape also climbed by 15% (Kong, Dirks and Ferrin 2014).
Netscape announced a deal with KPMG in the year 1997. KPMG had selected Netscape for the deal because the overall cost of the technology required to create a cross-platform base was low. On the other hand, if KPMG had chosen Microsoft for the deal, they would be committed to upgrade its software to the Microsoft level. The deal that was made between Netscape and KPMG was a major setback for Microsoft as they were analysing the problems in their systems and reasons behind the choice of KPMG.
The deal that was made by Netscape with AOL was not quite useful for the company as AOL had later made another deal with Microsoft in the same year. The deal that was made by AOL with Microsoft was able to undermine the arrangement that was made between AOL and Netscape. The Microsoft and AOL deal had proved to be a turnaround for both the companies. However, this led to a drop in the stock process of Netscape by 6%. The stock process of Microsoft had risen by around 6% (Ahern and Sosyura 2014).
On the other hand, the deal that was made by Jim Barksdale with KPMG was much more profitable for the company. The negotiation style of the CEP had changed a lot after the debacle that was caused in the Netscape deal. The license fees related payments were also made immediately and this became a major reason for the questions that were raised by the management of Microsoft (Perreault, Kida and David Piercey 2017).
References
Ahern, K.R. and Sosyura, D., 2014. Who writes the news? Corporate press releases during merger negotiations. The Journal of Finance, 69(1), pp.241-291.
Dobni, C.B., Klassen, M. and Nelson, W.T., 2015. Innovation strategy in the US: top executives offer their views. Journal of Business Strategy, 36(1), pp.3-13.
Kane, G.C., Palmer, D., Phillips, A.N., Kiron, D. and Buckley, N., 2015. Strategy, not technology, drives digital transformation. MIT Sloan Management Review and Deloitte University Press, 14.
Kong, D.T., Dirks, K.T. and Ferrin, D.L., 2014. Interpersonal trust within negotiations: Meta-analytic evidence, critical contingencies, and directions for future research. Academy of Management Journal, 57(5), pp.1235-1255.
Lillestol, T., Timothy, D.J. and Goodman, R., 2015. Competitive strategies in the US theme park industry: a popular media perspective. International Journal of Culture, Tourism and Hospitality Research, 9(3), pp.225-240.
O’Neill, J.W., 2016. The role of storytelling in affecting organizational reality in the strategic management process. Journal of Behavioral and Applied Management, 4(1).
Perreault, S., Kida, T. and David Piercey, M., 2017. The Relative Effectiveness of Simultaneous versus Sequential Negotiation Strategies in Auditor?Client Negotiations. Contemporary Accounting Research, 34(2), pp.1048-1070.
Pisano, G.P., 2015. You need an innovation strategy. Harvard Business Review, 93(6), pp.44-54.
Priem, R.L., Wenzel, M. and Koch, J., 2017. Demand-side strategy and business models: Putting value creation for consumers center stage. Long Range Planning.
Voigt, K.I., Buliga, O. and Michl, K., 2017. Making People Happy: The Case of the Walt Disney Company. In Business Model Pioneers (pp. 113-126). Springer, Cham.
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