Homework help > Q1: What did Eisner do to rejuvenate Disney? Speci... > Published by: WaJesus 1 year ago
By: WaJesus
Subject: Business Management

Q1: What did Eisner do to rejuvenate Disney? Specifically, how did he increase net income in his first four years? (We focus on the period from 1984 to 1988) ...[Show More]

1 year ago

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Eisner inherited Disney`s philosophy “to create universal timeless family entertainment”. He focused on a balanced approach to manage creativity with well-defined strategic and financial objectives. Specifically, the following actions were taken by Eisner to increase revenue growth and return on equity in the first four years (See Exhibit 1 for the net income of Disney from 1984 to 1988):

Reform on business strategies: • Revitalize TV and movies: Having realized that network shows are a good complement to its TV channel, Eisner increased the production of network shows, which helped create more attractions and demand. Eisner also increased revenue and profit from the movie production. In particular, Eisner pushed the brand boundary to include more varieties of films, maximized the value by discovering under-valued talents and good scripts, invested digitization systems, and expanded its animation staff to accelerate movie production from every 4-5 years to every 12-18 months.

Maximize theme park profitability: To maximize profit, Disney continued to invest in the theme parks with new attractions and hotels, examples include the opening of Euro Disney world in France. Eisner also adopted attendance-building strategies including national TV ads, media promotion events, etc. to generate rapid revenue and profit growth. Disney attracted conferences attendance, extended theme park hours and lifted maximum attendance allowed. Disney also increased the theme park ticket price, but comparable to the value it offered.

• Expansion into new business: In other divisions like the consumer products division, Disney stores were lunched which included a good variety of products for children and adults based on its animation and films, it also started to push into other areas such as book publication, magazines and music. The revenue in this area increased 120% from 1983 to 1988. Reform on corporate management: • Starting with leadership, Eisner hired several talented and trust-worthy colleagues from Paramount. But most importantly, he moved Roy E. Disney back as vice chairman. This smoothed people’s concerns about conserving Walt Disney values, and then he reiterated the corporate value and emphasized on creativity. He inculcated the history and culture of Disney in a three-day training program at Disney’s corporate university when attendees would dress as Disney characters to develop pride in the Disney tradition.

• Eisner undertook a list of actions to promote business division coordination and increase group synergy. The actions include employing negotiated internal transfer prices among different divisions, establishing a corporate marketing function, and coordinating joint corporate events. This synergy not only saved money but made Disney brand and products stronger at introduction to the market. 

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