Managing Diversity at Disney

The acquisition of Marvel by Disney helped the company to create a unique portfolio of opportunities for long-term growth, which led to significant revenue generation from consumer products. However, managing a diverse business like Disney can be challenging, with key issues including employee resistance to change, cultural and ethnic differences leading to communication gaps, and disorientation. To overcome these challenges, management must prioritize fairness, transparency, and respect among employees, encourage informal approaches, and demonstrate a willingness to embrace diversity.

NATURE AND SOURCE OF COMPETITIVE ADVANTAGE:
DISNEY
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Table of Contents
1. How does the concept of economies of scope help to explain Disney’s diversification strategy?
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2. What are the pros and cons for Disney of operating television and cable network?...................4
3. In 2009, Disney announced it acquired marvel entertainment a comic book and action hero
company for $4 billion. How will you evaluate the value creating a potential of this decision?....4
4. What are the key challenges Disney’s senior manager face in running such a diverse business?
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Reference List..................................................................................................................................7
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1. How does the concept of economies of scope help to explain Disney’s
diversification strategy?
Diversification is a marketing process adapted by various organisations when it tries to expand
its business when it tries to launch a new product or enters a new market. The organisation might
not be familiar with the product or with the market. This is quite risky. The Walt Disney was
entertaining kids of many generations by creating Mickey Mouse, Donald Duck, goofy, Minnie
mouse, daisy duck etc. After achieving new heights of success it entered in the field of feature
and animated movies and after a series of success the organisation diversified its resources to
other fields, which happens to be as follows;
Media Network: The media network of Walt Disney consists of the radio station and television
of United States, cables network, and distribution houses through which the organisation
distributed it media to the households of the country. When an organisation access both the
distribution and
content of its media the profit of the company goes sky high as it can promote its content and
shape and has the freedom to take independent decision how and when it is going to be
broadcasted. In the year 1995 the organisation bought Capital Cities which is a radio and
television company for $19 billion. Today the media industry like Disney is concentrating more
on conglomerate giants like Time Warner the importance of content providers have increased
dramatically.
Resorts and parks: Apart from making animated cartoons, resorts and theme parks were the first
business areas the company got a hold of. The world famous Disneyland was formed in the year
of 1955 in California and in the year of 1971, Walt Disney World Resort was formed in Orlando
Florida. Till now Walt Disney has opened its theme parks in countries like Japan, France and
one is under construction in China. With passing time Disney became very skilful in handling
tourists experience and had formed Disney Vacation Club and Cruise Line.
Studio Entertainment: Walt Disney remains renowned for creating immortal animated characters.
The core of the company is creative content. It is one of the most creative organisations in the
world. To cope up with ever growing and changing technology it acquired Pixel studio the
makers of famous animated films like Toy Story and Finding Nemo in the year 2006. It was
bought Marvel Entertainment, which is the maker of world famous superhero comics like
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Spiderman Hulk etc and Lucasfilm, which produced the Star Wars an epic movie till date in the
year 2009 and 2012 respectively.
Consumer Products: The consumer products, which the Walt Disney sold in both online and in
stores like children’s book and magazine and learning stuff, gave the company an opportunity to
get even close to its audience.
Interactive Media: Walt Disney changed its marketing strategy with due time. Using the platform
of social media using the smart phone and online virtual games, it has reached a new height of
popularity today.
2. What are the pros and cons for Disney of operating television and cable
network?
Answer: Organisations like Disney falls under the category of the media industry which
produces feature films programmes on television. Thus having their own television and cable
network gives them a tremendous advantage.It is the backbone of the Walt Disney. Having their
own network saves them a huge amount of investment which on the run gives the company a
vast line of profit. As the basic cable connection is relatively very simple and just by using
coaxial cable it
Can be connected to the server.but the problem arises when the service needs to be upgraded
which can cost quite a penny to the organisation. The cable service comes with the contract.
Today there are many services available to the customer which offers the customer good service
at a reasonable price. But the problem is the charge of the cable services can suddenly increase
which causes the organisation problem to some extent. Although stable but a problem in the
overall system can cause some noticeable damage (Watts, 2013, p.21)
3. In 2009, Disney announced it acquired marvel entertainment a comic book
and action hero company for $4 billion. How will you evaluate the value
creating a potential of this decision?
Marvel Entertainment has produced superheroes like Spiderman the Hulk, X-men while the
Disney have produced characters like Mickey and Minnie mouse, Donald and Daisy duck. These
two are giants of the animation world. They have also produced many feature movies as well.
The difference between these two organisations was while Marvel produced some hardcore
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action sci-fi animations and films Disney produced some timid mild and mostly funny characters
for its viewers because it despised violence. Therefore, when Disney bought Marvel universe at a
price of eye-watering $4 billion dollars many of the action-loving fans of Marvel raised their
eyebrows because of they though they are now going to be derived from the actions of Marvel.
This purchase termed as one of the sensational studio transformation deal in recent times. Disney
blew away the fear, which taunted the action-loving fans of Marvel, that it the deal might put a
halt the immortal character like Iron man Hulk. The deal even after seven long years looks very
tight and promising to all the fans (Thompson et al. 2013, p.33).
In the year of 2015, the profit margin rose to the staggering figure of 22% and generated a
revenue of mind-blowing $8 billion at the box office. The comic fans have given good marks to
Disney and this looks quite promising for the future this deal as these fans are very hard to
please. According to Michael Morris who happens to be an analyst working in UBS states that
though Marvel is committed to other competitors of Disney like Fox, Sony Disney still can build
a well-established name. To elaborate Michael states that Marvel has Marvel has retained
consumer rights for spider man, which gives the Disney to exploit it. In addition, the Marvel
generates 25% of its revenue from consumer products which Disney using its marketing network
and distribution caught hold within the first year when the deal was stuck. When Disney acquired
Marvel it helped them to with a great set of opportunity to get advanced with their strategy for
the better business. By merging Disney with Marvel, a unique portfolio was created which
provided colossal opportunities to be created to establish a long-term growth. An open question
was asked that will Disney still be able to continue its reign of success merging with Marvel or
not has given by the time with some blockbuster movies it has produced till date (Peters et al.
2016, p.100)
4. What are the key challenges Disney’s senior manager face in running such
a diverse business?
The management does face some serious problem running the organisation. Running a diverse
business like Disney is no cakewalk. Among countless problems, some of them are listed below.
In every organisation, there are people who are afraid to embrace the change of the economic
climate. These people are a serious problem of an organisation because without the cooperation
of employees within the company the business cannot run smoothly. The negative approach of
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the employees hampers the growth of the organisation largely. This negative approach and fear
of diversity can only be replaced with proper workshops and communication among the
employee.
The second problem of a large diverse organisation is that it is filled with a wide variety of
people of different cultural background ethnicity. This can lead to a situation where
communication gap among them, which leads, further the problem of misunderstanding and
chaos. The management should take necessary steps to enhance the communication among the
employees (Schilke, 2014, p.193)
The sole biggest problem of a diverse organisation is disorientation. The role of the management
is to carry out an approach, which is systematic, and organised. When the management does not
effectively discuss the diversity plan with their employees, the management must promote
meetings regarding the diversity plan with their staff as much as possible to give the employees a
proper vision about the goal of the organisation.
When there is a problem, there is a solution and the solution to counter the problems in an
organisation is as follows;
The management must be fair with its employees. They should treat with fairness ignoring their
religion caste or gender. A transparent workplace enhances the performance of an employee to a
huge extent and thus the productivity of the company will be increased.
The employees must focus on themselves. Their behaviour and attitude should be soothing to
their other co-workers. In an organisation like Disney, the employees come from different ethnic
cultural and religious background. The employees must be aware of it, this is gesture of respect
and is highly approved (Mannheim, 2016, p.18)
Management should encourage their employees to have an informal manner of approach to their
employees. This would lighten up the environment in the office.
It is up to the management to show that are ready to embrace the diversity of culture in a diverse
organisation like that of Disney.
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Reference List
Kantola, J.I., Barath, T., Nazir, S. and Andre, T. eds., (2016). Advances in Human Factors,
Business Management, Training and Education: Proceedings of the AHFE 2016 International
Conference on Human Factors, Business Management and Society, July 27-31, 2016, Walt
Disney World®, Florida, USA (Vol. 498). Berlin: Springer.
Mannheim, S., (2016). Walt Disney and the quest for community. London: Routledge.
Peters, J., Beck, J., Lande, J., Pan, Z., Cardel, M., Ayoob, K. and Hill, J.O., (2016). Using
healthy defaults in Walt Disney World restaurants to improve nutritional choices. Journal of the
Association for Consumer Research, 1(1), pp.92-103.
Schilke, O., (2014). On the contingent value of dynamic capabilities for competitive advantage:
The nonlinear moderating effect of environmental dynamism. Strategic Management Journal,
35(2), pp.179-203.
Thompson, A., Peteraf, M., Gamble, J., Strickland III, A.J. and Jain, A.K., (2013). Crafting &
Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases. McGraw-
Hill Education.
Watts, S., (2013). The magic kingdom: Walt Disney and the American way of life. University of
Missouri Press.
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