What comes to mind when we first think about Disney? High-quality animated movies and theme parks with real-life experiences. But Disney isn’t limited here. It has made its place in TV channels as well as media networks. Let’s know about Disney Strategic Plan.
Reorganization
Walt Disney’s creative engine focuses on producing content for Direct-to-Customer (DTC) as well as a legacy platform. The newly streamlined distribution group focuses on dispensation and commercialization of all content worldwide.
The company’s new organization strategy aims at further enhancing its DTC strategy, in light of the massive success of Disney+.
Management
According to the new reorganization strategy, the content creation will be managed in three different groups—
1. Studios
2. Sports
3. General Entertainment
- These three groups are led by the present leaders in the company- Alan F. Horn, Peter Rice, Alan Bergman, and James Pitaro.
- Kareem Daniel, the former head of the Consumer Games, Products and Publishing led the Media and Entertainment Dispensation group.
- Disney’s Streaming Services will be headed by Rebecca Campbell.
- Chairman, Josh D’Amaro, of the Disney Parks, Resorts and Experiences, will continue to manage and operate parks under its present structure.
- Bob Iger, who acts as the Executive Chairman, will lead the Company’s creative endeavors.
Disney marks December 10 as Virtual Investor Day.
Strategy
- The Media and Entertainment business devised a strategic reorganization that develops and produces authentic content for Disney’s streaming services using exquisite creative engines. The commercialization activities will act as a centralized global Media and Entertainment.
- The distribution and ad sales will be handled by the new Media and Entertainment group. It will also take into its account the functioning of the Company’s streaming resources.
- The reorganization strategy will have the exclusive P&L liability for Disney’s media and entertainment occupation entirely.
- The company’s strategic reorganization plans to increase the shareholder value and support the growth to accelerate DTC business.
- The reorganization plans in producing franchise-based content.
- It makes use of all possible platforms to monetize the content in all optimal ways with the aid of Disney plus, the coming Star international streaming service, Hulu, and ESPN+.
STRATEGIC BUSINESS UNITS (SBUs)
The Disney Company is divided into four SBUs –
- Studio Entertainment– The Studio Entertainment unit is headed by Alan F. Horn, Chairman of the company. It covers production companies, distribution companies, and several music labels like Walt Disney Records. It also includes Disney live-action, Marvel Studios Walt Disney Animation Studios, Lucas films, 20th Century Studios, Pixar Animation Studios, and Searchlight Pictures.
The reorganization plan moves to the Direct-to-Customer (DTC) and International Business Segment.
- Media Network- Media Network covers TV channels such as Disney Channel, ESPN, ABC, Radio Stations, Internet sites, et Cetra. With the exclusion of the global Disney Channel functioning that is operating to DTC and Global business unit, the Media Network Section will continue to be the same entirely. It also includes administration of worldwide advertising sales\technology.
- Theme parks, Resorts, and Consumer products- The theme parks and resorts with real-life experiences and Consumer products segment become the hub where Disney stories, characters, and franchises come to life. Disney’s strategic planning involves the merging of the company’s prevalent customer products business with Disney’s theme parks and resorts under Bob Chapek. Disney’s worldwide consumer products operation includes the authorized business across clothing, games, toys, applications, home goods; the largest children’s publisher, and the shopDisney ecommerce platforms.
Merging Disney’s consumer products business with Disney’s theme parks and resorts strengthens the retail and e-commerce operations.
- The newly-formed Direct-to-Consumer (DTC) and International Business section– The outstanding content, generated by Disney’s Studio Entertainment and media networks group, is provided by the recently made Direct-to-Consumer and International segment, which will act as a worldwide, multiplatform media, technology, and dispensation institution.
The recent segment will include-
- Disney’s global media businesses
- Disney’s Direct-to-consumer businesses worldwide including the forthcoming Disney-identified DTC streaming service
- the Company’s titled stake in Hulu
- Upcoming ESPN+ streaming service, programmed in collaboration with ESPN.
Robert A. Iger, Chairman and Chief Executive Officer in the Walt Disney Company said,
“We are deliberately placing our businesses for the future, generating a more effectual, worldwide structure to serve consumers globally, augment growth, and optimize shareholder value. With our unmatched Studio and Media Networks accounting as content engines for the Company, we aimed at merging the operation of our direct-to-consumer distribution sites and units, technology, and international operations to convey the entertainment and sports content consumers around the world want most, with ample amount of choice, customization and comfort than previously.”
Disney’s Diversification
Diversification means the creation of new equipment and products that will be launched in new markets, thus creating new opportunities. Disney has pursued a diversification scheme; it means buying new companies that enable it to introduce new products into new markets while remaining true to its authenticity and genesis.
Today, 54% of Disney’s revenue (but only 32%of its profit) comes from its movie and parks, while the rest of commercial growth comes from the latest products in new markets.
The stretched diversification strategy has allowed Disney to be so successful lately. Popular and immense names in the entertainment world like ESPN, Disney Cruise Lines, ABC, Disney Theme parks, Pixar, just to name a few, are owned by Disney.
Disney doesn’t rely solely on movies; its vast diversification and wide reach have what makes it one of the most popular and recognized brands in the world.
The fundamentals of diversification lie in identifying new products and markets that are sufficient to the fundamental business of the company so that it can hold its internal strength to generate business maturation.
How Disney stands out from its competitors?
- Quality Over Quantity- We all have experienced the terrible feeling of scrolling endlessly through streaming services like Netflix and not being sure which movie to watch. Researches show that when consumers face the difficulty of sorting things out and couldn’t come up with a conclusion, they retreat to something they are familiar with. Disney stands out from its peers as the consumers are overwhelmed with the familiar characters and carry a nostalgic feeling for their childhood characters and franchises.
Disney has generated films worth 11 billion dollars over the past three years, more than double that produced by combining from other studios.
The rapid success of Frozen 2 and Star Wars: The Rise of Skywalker, increase Disney’s 2019 box office dominance. These massive privileges give Disney a promotion and key advantage as it initiates Disney+. These hotshot franchises help Disney allure new subscribers. With extraordinary popularity, it helps lowers subscription acquisition costs too. Disney+ might engender positive cash flow, a competition to Netflix which is difficult for it to gain.
- Distinct and Popular Brand Value-
In addition to its hotshot franchise, Disney has a unique and popular brand which no other company can claim. Everyone knows the company for its high-quality content and excellent record history for producing popular and greatest hits. This allows the company to continuously produce new stories for each of its movies and own valuable franchises like Frozen.
TV shows labeled ‘Netflix Originals’ could not claim their quality and the kind of movie or show they produce. The same goes for other studios like Warner Bros, Universal Studios. None of these built a strong brand for high-quality content like Disney. Disney+ has the advantage of being family-friendly as parents rely upon it for a high-quality and healthy environment for their young children.
- Superior capabilities for Content Monetization-
It’s Disney’s forte to monetize content far better than the other firms. Disney’s monetary success doesn’t lie solely in the Box office, but across various arrays of businesses like selling toys and other merchandise, creating attraction at theme parks. With the coming of Disney+, it accords to the library of streaming services. Disney + signifies another method to bring out money from IP that can also be monetized in various other methods. Other firms depend mainly on one monetization procedure- Gaining revenue by streaming subscription. By providing high-quality content at a cheaper price, it draws customers towards its attention.
- Long-term views on profit-
Meanwhile, Disney’s unbound capital takes a bigger extract from the Fox acquisition. In the extended period, Disney will be able to acquire a remarkable amount of worth out of the fox, along with its authority of Hulu.
Looking forward statement
Certain statements and information are deemed to be in the ‘looking forward statement’. It includes the following statements –
- Business organizational plans and business effects
- Positioning of business
- Future growth or worth
These statements are based on the management’s perspectives and supposition regarding the events in the future and business presentation.
Actual results may be different from those expressed by the company in its strategic planning. These differences can occur from the actions taken by the company, which includes restructuring or strategic initiatives.
Differences might occur from decisions that are being the company’s control. These include-
- Health concerns
- Labor markets and activities
- Developments in technology
- Natural disasters
- Adverse health conditions
- Changes in domestic economic conditions
- Changes in global economic conditions
- Consumer preferences
- International, political, regulatory, or military developments
Each such risk is further escalated by COVID-19 and related alleviated endeavors.
