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Page 1: BSc (Honours) Tourism Managementcwstudent.vtc.edu.hk/LRC/e-dissertation_cw/pdf... · The author would like to thank Dr. Mok for her help in selecting the paper topic and for her patience,

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Faculty of Organisation and Management

BSc (Honours) Tourism Management

Title The Success Factors of Walt Disney Corporation: A Conceptual

Framework

Name Chan Hung Tak, Redness

Student No 91203292

Month Year April 2009

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Sheffield Hallam University

Faculty of Organisation and Management

Title The Success Factors of Walt Disney Corporation: A Conceptual

Framework

Name Chan Hung Tak, Redness

Student No 91203292

Month Year April 2009

Supervisor:

Dr. Connie Mok

In partial fulfilment of the requirements for the degree of Bachelor of Science in

Tourism Management.

Month Year April 2009

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Acknowledgments

The author would like to thank Dr. Mok for her help in selecting the paper topic

and for her patience, support and guidance in the writing of the proposal and

paper.

The author would also like to thank Nicodemus Lo, Lego Chan, Mayumi and

Yan Leung for their support and suggestions related to this paper.

A special thanks to Man Cheung and Ken for his help in improving “A

Conceptual Framework of the Success Factors of Walt Disney Corporation”.

Finally, the author would like to thanks his family for giving much supports for

author’s study.

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The Success Factors of Walt Disney Corporation: A Conceptual Framework.

March 2009, BSc (Honours) Tourism Management., Sheffield Hallam

University & Hong Kong Shape. Supervisor: Dr. Connie Mok

Abstract

This study has investigated the success factors of Walt Disney Corporation

which based on its corporation strategic management. This study aims to

review its strategic management development, identify the successful factors

of Walt Disney Corporation, conceptualize the strategic management practices

and processes and suggest ways to improve the performance of Walt Disney

Corporation.

This study is conducted by a qualitative research methodology with a

conceptual framework based on secondary data. The large number of journal

has been used to underpinning this study such as Journal of Travel Research,

Journal of International Economic Studies and so on.

The researcher has developed “A Conceptual Framework of the Success

Factors of Walt Disney Corporation” to identify the success factors of Walt

Disney Corporation which includes eight factors with five results. Eight

success factors include Disney’s Culture and philosophy, leadership

management, research and development, marketing, human resources, brand

management, quality management and internationalization and localization.

Five results consist of loyalty, Disney’s power, uniqueness, low operation cost

and financial status.

Finally, this study suggested that Walt Disney Corporation should stop the

frequently changing of top leader. Also, the company should produce, sell and

market their product or service to earn more profit rather than relied on

licensing, control the liquidity ratio well, decrease the overhead cost and

establish good partnership with local community and local privacy sector.

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Table of Contents Page

Title Page……………………………………………………………………. i

Declaration………………………………………………………………… ii

Acknowledgements………………………………………………………... iii

Abstract……………………………………………………………………… iv

Table of Contents…………………………………………………………... v-vii

List of Tables………………………………………………………………... viii

List of Figures………………………………………………………………. viii

CHAPTER ONE: INTRODUCTION

1.1 The focus of the study……………………………………………… 1-4

1.2 Aim and Objective………………………………………………….. 5

1.3 Background information of Walt Disney Corporation

1.3.1 The Short History of Walt Disney Corporation……………… 6-10

1.3.2 Mission Statement……………………………………………... 11

1.3.3 Mission………………………………………………………….. 11

1.3.4 Objective………………………………………………………... 12

1.3.5 Common Goal………………………………………………….. 12

1.3.6 Spirituality………………………………………………………. 12

1.3.7 Disney Traditions………………………………………………. 13

1.3.8 Core Value……………………………………………………... 13

1.3.9 Corporate Responsibility……………………………………… 13

1.4 Summary of Chapters……………………………………………… 14

CHAPTER TWO: LITERTURE REVIEW

2.1 Introduction………………………………………………………..... 15

2.2 The Core Competency of Walt Disney Corporation

2.2.1 Disney Culture………………………………………………..... 15-17

2.2.2 The philosophy of Walt Disney Corporation………………… 17-18

2.2.3 Brand Name……………………………………………………. 18-19

2.2.4 Loyalty Building………………………………………………… 19-20

2.2.5 The Disney Way……………………………………………….. 20

2.2.6 Disney’s Power………………………………………………… 20-21

2.2.7 Disney’s Uniqueness………………………………………...... 21

2.2.8 Transfer a vision……………………………………………….. 21

2.2.9 Legal and Legislative forces………………………………….. 22

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2.3 The Corporation Strategies of Walt Disney

2.3.1 Market Diversification and Product Diversification…………. 22-23

2.3.2 Brand Expansion………………………………………………. 24

2.3.3 Ownership Strategy……………………………………………. 24-25

2.3.4 Leadership Strategy…………………………………………… 25-26

2.3.5 Decentralization Strategy……………………………………... 26-27

2.3.6 Human Resources Strategy………………………………...... 27-28

2.3.7 Marketing Policy and Strategy……………………………….. 28-30

2.3.8 Theming Strategy……………………………………………… 31

2.3.9 Low cost strategy……………………………………………… 31

2.3.10 Internationalization Strategy………………………………… 32

2.4 Walt Disney Corporation’s Business Approaches

2.4.1 The Disney Approach to People Management……………... 32-36

2.4.2 The Disney Approach to Organizational Creativity and

Innovation………………………………………………………

36-37

2.4.3 The Disney Approach to Quality Service……………………. 37-38

2.4.4 The Disney Approach to Team Building……………………... 38-39

2.4.5 The Disney Approach to Financial Control........................... 39-40

CHAPTER THREE: METHODOLOGY

3.1 Introduction………………………………………………………..... 41

3.2 Secondary Research……………………………………………..... 41-45

3.3 Advantage…………………………………………………………… 45

3.4 Limitations…………………………………………………………… 46

CHAPTER FOUR: FINDINGS

4.1 Introduction and A Conceptual Framework………………………. 47

4.2 The Source of References………………………………………… 48

4.3 Culture and Philosophy……………………………………………. 49-50

4.4 Leadership Management………………………………………….. 50-51

4.5 Research and Development………………………………………. 51-53

4.6 Marketing……………………………………………………………. 53-57

4.7 Human Resources………………………………………………….. 57-59

4.8 Brand Management………………………………………………… 59-61

4.9 Quality Management of Product and Services…………………... 61-62

4.10 Internationalization and Localization……………………………. 62-63

A Loyalty…………………………………………………………………. 64

B Disney Power……………………………………………………….... 65

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C Uniqueness…………………………………………………………… 65

D Low Cost………………………………………………………………. 66

E Financial Status…………………………………………………….. 66-67

CHAPTER FIVE: CONCLUSIONS AND RECOMMENDATIONS

5.1 Conclusions…………………………………………………………. 68-69

5.2 Recommendations…………………………………………………. 70-71

References…………………………………………………………………... 72-77

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List of Tables

Table Page

1. Walt Disney Corporation Overview-2008………………………….. 1

2. Top 25 World Theme Parks-2007………………………………….. 2

3. Disney’s Important Dates…………………………………………… 6

4. Walt Disney’s Core Value…………………………………………… 13

5. The Source of Reference…………………………………………… 48

List of Figures

Figure Page

1. Financial Review in 2007……………………………………………… 39

2. A Conceptual Framework of the Success Factors of Walt Disney

Corporation……………………………………………………………..

47

3. Marketing Mix Structure……………………………………………….. 53

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CHAPTER ONE: INTRODUCTION

1.1 The focus of the study

Walt Disney Corporation is a top leader in theme park and resort industry,

studio entertainment, family entertainment, company branded consumer good

and service as well as media networks in the world (Executive Summary

Disney Company 2005). Nowadays, the company has different kinds of

multinational business with over 137,000 employees (The Walt Disney

Company 2008), a one year growth of 2.6 percentage and 189,000

shareholders in the world (The Walt Disney Company-a case study 1996).

Table 1: Walt Disney Corporation Overview-2008

Head Office The Walt Disney Company

500 South Buena Vista Street

Burbank

California 91521

USA

Phone 1 181 560 1000

Fax 1 181 560 1930

Web Address http://www.disney.com

Revenue/Turnover (USD Mn) 35,510.0

Financial Year End September

Employees 137,000

New York Stock Exchange Ticker DIS

Source: The Walt Disney Company (2008)

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Table 2: Top 25 World Theme Parks-2007

Rank Park and Location 2007 Attendance

1 Magic Kingdom 17,060,000

2 Disneyland 14,870,000

3 Tokyo Disneyland 13,906,000

4 Tokyo Disney Sea 12,413,000

5 Disneyland Paris 12,000,000

6 Epcot 10,930,000

7 Disney Hollywood Studios 9,510,000

8 Disney's Animal Kingdom 9,490,000

9 Universal Studios Japan 8,713,000

10 Everland 7,200,000

11 Universal Studios Orlando 6,200,000

12 SeaWorld Orlando 5,800,000

13 Disney's California Adventure 5,680,000

14 Blackpool Pleasure Beach 5,500,000

15 Islands of Adventure 5,430,000

16 Ocean Park Hong Kong 4,920,000

17 Hakkeijima Sea Paradise Yokohama 4,770,000

18 Universal Studios Hollywood 4,700,000

19 Busch Gardens Africa 4,400,000

20 SeaWorld California 4,260,000

21 Hong Kong Disneyland 4,150,000

22 Tivoli Gardens 4,110,000

23 Europe Park 4,000,000

24 Nagashima Spaland 3,910,000

25 Port Aventura 3,700,000

Source: http://www.ultimaterollercoaster.com (2007)

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O’Brien (1995) pointed that Walt Disney has dominated the theme park

industry over forty years and the leader position of theme park industry will not

possible be changed in the future. According to the statistic of The top 25

theme park companies 2007 (Table 2) indicated that Walt Disney Corporation

has captured large amount of visitors compared with other twenty theme park

company. Also, the company has shared for thirty percent of the total visitation

to the top fifty parks in the USA. Besides, Walt Disney Corporation has enjoyed

about seventy percent of repeat visitors because of the company’s success of

building the customer loyalty through by the high customer satisfaction in

terms of high quality of service and product (Allerton 1997).

Andrews (1987) described that corporate level strategy was determined by the

top management that helped them to decide company’s objectives, goals,

purposes; construct the principal policy and specify the extent of business as

well as plan all actions to achieve those goals. In addition, he believed that

corporate strategy could be applied to all enterprises in different industries.

Walt Disney Corporation had been practicing their own corporate strategies

and management much differently from the management of the other firms

operating the theme park industry (O’Brien 1995).

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It is no doubt that Walt Disney Corporation is one of the most influence

corporations in the world in terms of the corporate business expansion (Walt

Disney Company SWOT analysis 2008), financial performance (The Walt

Disney Company-a case study 1996), brand image (Francoeur 2004) and

management practice (Capodagli and Jackson 2000), they said that Walt

Disney Corporation is a master of both creativity and disciplined teamwork. It

stimulated the researcher interested in the following questions. What are the

success factors of Walt Disney Corporation? How did Walt Disney Corporation

formulate the corporate strategies and how did they deliver those strategies to

accomplish company objectives? All of these questions support the researcher

to explore the success factors of Walt Disney Corporation.

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1.2 Aim and Objective

The aim of this research was to investigate the success factors of Walt Disney

Corporation with its corporation strategic management. Overall, a number of

studies regard with the solid underlying structure of Walt Disney Corporation

was found out in various aspects. Missions, goals, objectives, spirituality and

tradition of Walt Disney Corporation were also reported. But the most striking

finding was that the Walt Disney Corporation’s success appears to have the

most important influence on strategic management practice as factors with

different successful factors-specific characteristics were handled through

different strategic management practices and processes. More specifically, this

study aims to achieve the following objectives:

1) To review the strategic management development of Walt Disney

Corporation;

2) To identify the successful factors of Walt Disney Corporation;

3) To conceptualize the strategic management practices and processes of Walt

Disney Corporation; and

4) To recommend ways to improve the performance of Walt Disney

Corporation.

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1.3 Background information of Walt Disney Corporation

1.3.1 A Short History of Walt Disney Corporation

Table 3: Disney’s Important Dates

12/05/1901 Birth of Walter Elias Disney

10/16/1923 Establishment of The Disney Brothers Studios in Hollywood,

California

11/18/1928 Release of Steamboat Willie

07/30/1932 Release of Snow White and the Seven Dwarfs (first full-length

animated feature)

07/19/1950 Release of Treasure Island, first completely live-action film

07/17/1955 Opening of Disneyland, Disneyland Resort

10/01/1971 Opening of Magic Kingdom, Walt Disney World Resort

10/01/1982 Opening of EPCOT, Walt Disney World Resort

04/05/1983 Opening of Tokyo Disneylend, Tokyo Disney Resort

09/23/1984 Michael Eisner and Frank Wells became Chairman and President

of Walt Disney Productions respectively

05/01/1989 Opening of Disney-MGM Studios, Walt Disney World Resort

04/12/1992 Opening of Disneyland Paris, Disneyland Resort Paris

04/22/1998 Opening of Disney’s Animal Kingdom, Walt Disney World Resort

02/08/2001 Opening of Disney’s California Adventure, Disneyland Resort

09/04/2001 Opening of Tokyo DisneySea, Tokyo Disney Resort

03/16/2002 Opening of Walt Disney Studios Park, Disneyland Resort Paris

09/12/2005 Opening of Hong Kong Disneyland, Hong Kong Disneyland Resort

Source: The Disney University (no date)

Before introducing the history of Walt Disney Corporation, the researcher

would like to remind the key point as following. “I only hope that we never lose

sight of one thing that it was all started by a mouse” (Walt Disney no date).

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The researcher reported the entire history of Walt Disney Corporation based

on (Smith & Clark 1999), (Company History no date). It was all started from the

birth of Walter Elias Disney that the first hundred years of Disney had begun. In

1923, Walt Disney had found someone interested in animation and arrived to

California in July. He had pursued the idea of selling his series of Alice

Comedies to distributor. On October 16, 1923, Walt was signed the contract

with Miss Winkler and this day has become the date of the formal beginning of

The Walt Disney company. Also, Walt Disney established the Disney Brother

Studios in that year.

In 1928, Walt Disney faced the problem about negotiating a contract with the

Oswalds’s distributor and he has continued the Oswald cartoons. However, the

distributor had the copyright of Oswald cartoons so Walt Disney had lost the

control of Oswald which stimulating Walt Disney move to other cartoon series.

Mickey Mouse was "born” in 1928, he originally designed by Ub Iwerks and

named the mouse as Mortimer, but Disney’s wife Lilly suggested changing the

name to Mickey. On 18th November, 1928, the first film with synchronized

sound “Steamboat Willie” was premiered. After that, Mickey Mouse

immediately made a hit around the world. Also, Walt Disney launched an entire

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Mickey Mouse series. The first colour cartoon Silly Symphony, Flowers and

Trees was showed on 30th June, 1932. The innovative full length animated

feature was first premiered “Snow White and the Seven Dwarfs” which was

released to significant praise and worldwide success.

From 1950 to 1955, Walt Disney Company made three key achievements;

Disney studio's first completed and launched into the production of live action

features in 1950. Also, the company launched the Disneyland anthology series

in the first television mini series in 1954. Finally, Walt Disney designed to build

a theme park that should be a place where parents and children could have a

fun and happy together. Therefore, Walt Disney started to plan and

construction Disneyland first located in Anaheim, California. Disneyland

opened for its first guests on 17th July, 1955. Regarding the first theme park’s

success, Walt Disney felt that Disneyland cannot accommodate his further

dreams so he started to plan another theme park in Florida. Unfortunately, Walt

Disney died 15th December, 1966. After the six years efforts, Walt Disney

World and resort was opened on 1st October, 1971.

In 1982, Experimental Prototype Community of Tomorrow (EPCOT) was

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opened in the Disney World. In 1983, Walt Disney Company attempts to

expand their business that initiated the Disney Channel and established

touchstone Television to produce network TV shows and Disney Sunday

Movie. The successful examples of two Disney theme parks in the United

States stimulated Walt Disney Company to expand its theme business to other

oversea region. As the result, the first Disney theme outside the United States

was the Tokyo Disneyland, Tokyo Disney Resort, which opened on 15th April,

1983.

In 1989, Metro–Goldwyn–Mayer (MGM) Studios, Walt Disney World Resort

was opened in Disney World. In addition, Disneyland Park, Disneyland Resort

Paris was opened on 12th April, 1992 which was the second oversea Disney

theme park. In 1995, Walt Disney Company has partnership with Pixar

Animation which coordinated to produce the first computer-animated film “Toy

Story”. In 1996, Walt Disney Company intended to expend its media business,

therefore, the company acquisition of Capital ABC and ownership position in

the cable networks A&E, Lifetime, History Channel and the powerhouse sports

network, ESPN.

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In 1998, Walt Disney Company entered into new business as cruise line

business with two cruises Disney Magic and Disney Wonder. In addition,

Disney’s Animal Kingdom was opened in Walt Disney World Resort on 22nd

April, 1998. In 2001, Disney’s California Adventure was opened in Disneyland

Resort and Tokyo DisneySea was also opened in Tokyo Disney Resort.

Besides, Walt Disney Studios Park was opened in Disneyland Resort Paris in

2002. The third oversea Disney theme park was located in Hong Kong that

opened on 11th September, 2005. In January 2006, Walt Disney Company was

acquisition of creative powerhouse Pixar Animation.

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1.3.2 Mission statement

“At the Walt Disney Company we are committed to a standard of excellence in

every aspect of our business and in every corner of the world, ethical and

responsible conduct in all of our operations respect for the rights of all

individuals and respect for the environment. The Walt Disney Company,

together with its subsidiaries, is a diversified worldwide entertainment

company with operations in four business segments: Media Networks, Parks

and Resorts, Studio Entertainment and Consumer Products (Company History

no date). In 2007, the company’s strategic priorities are “strengthening the

financial results, growing the value of out brands, enhancing the ability to meet

critical challenges and building a soild foundation for future growth.” (Annual

Report 2007).

1.3.3 Mission

“The Walt Disney Company is committed to balance environmental

stewardship with our corporate goals throughout the world.” (Mission and

History no datea). Disney Magic (2004) found that the mission of Walt Disney

Corporation as “To make people happy”.

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1.3.4 Objective

“The Walt Disney Company's objective is to be one of the world's leading

producers and providers of entertainment and information, using its portfolio of

brands to differentiate its content, services and consumer products. The

company's primary financial goals are to maximize earnings and cash flow,

and to allocate capital profitability toward growth initiatives that will drive

long-term shareholder value.” (Mission and History no date).

1.3.5 Common Goal

The common goal was “We create happiness by providing the finest in

entertainment for people of all ages everywhere.” (The Disney University no

date). Also, Mission and History (no date) stated that the company’s financial

goals are to “maximize earnings and cash flow, and to allocate capital

profitability toward growth initiatives that will drive long-term shareholder value”

1.3.6 Spirituality

“You can dream, create, design and build the mist wonderful place in the world

but it requires people to make the dream a reality.” (Walt Disney no date).

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xxi

1.3.7 Disney Traditions

“The handing down of customs and beliefs from one generation to another

generation.” (The Disney University no date).

1.3.8 Core Value

Collins and Porras (1996, p1) stated that “Disney’s core values of imagination

and wholesomeness stem from the founder’s belief that these should be

nurtured for their own sake”.

Table 4: Walt Disney’s Core Value

No Cynicism

Nurturing and promulgation of “Wholesome American values”

Creativity, dream, and imagination

Fanatical attention to consistency and detail

Preservation and control of the Disney magic

Source: Harvard Business Review (1996, p5)

1.3.9 Corporate Responsibility

“The Walt Disney Company believed that good corporate citizenship is good

for Disney’s Guests, for its employees and its business.” (Annual Report, 2007,

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xxii

p54)

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xxiii

1.4 Summary of chapters

Chapter one has introduced the topic of this paper and background information

of Walt Disney Corporation was described. Also, the aims and objectives of the

study were reported with limitations of this research.

Chapter two has focused on the academic literature in relation to the

corporation’s strategic management of Walt Disney Corporate.

Chapter three was described the type of research method on this research.

Chapter four has reported the result which formulated by researched data.

Also, this chapter has introduced the theoretical model of the corporation’s

strategic management practices of Walt Disney Corporate.

Chapter five was concluded the study and gave some recommendation to Walt

Disney Corporate to improve the performance on corporation level.

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CHAPTER TWO: LITERTURE REVIEW

2.1 Introduction

This chapter finished based on those relative academic literatures and theories

of Walt Disney Corporation’s management. Formica and Olsen (1998) noted

that the Walt Disney became the top of the entertainment company in the

industry which result from their unique and superior management practices

compared with other firm in the industry. Therefore, this chapter will be mainly

focusing on understand what factors are contributing to the Walt Disney

Corporation’s success.

2.2 The Core Competency of Walt Disney Corporation

2.2.1 Disney Culture

Disney Culture has created a unique and health internal environment which

formed by a rich heritage, tradition, quality standard and value. In other word,

Disney culture is much contributed to the company’s heritage and tradition also

is enhancing and ensuring the service and product quality standards of Walt

Disney (Executive Summary Disney Company 2005). In addition, Disney

culture is contributing to the work atmosphere which enhances the perception

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of all cast members in their workplace and let them feel they are parts of the

company rather than just employees (Hebert 2007).

In addition, Glanville, Kirkbright and Tamasco (2002) defined that one of the

function of Disney culture has be guided the cast member to perform their jobs.

Robbins (1993) and Bryman (1995) noted that Walt Disney has their strongly

owned culture at both the managerial and operational level.

Besides, Glanville et al., (2002) explored that the core culture of Walt Disney

has been combined creating happy, dream, fun-loving and family-oriented.

The Disney language is part of the Disney culture which demonstrated in the

Disney’s own words such as all customers is called guest, employee is called

cast member, all of the place where hold the show or provide ride within theme

park area is called attraction, cast in role is used in stead of employee’s job

and the workplace is named onstage (Robbins 1993). Also, A Cultural

Assessment of the Walt Disney Company (2008) showed that culture is the

key factor contributed to the company’s success. Finally, Croce (2004) stated

that Walt Disney is the first corporation that had strong concern on corporation

culture.

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Executive Summary Disney Company (2005) described that so-called

performance excellence as known as the part of Disney’s culture which has

contributed to the company’s success. It regard with Walt Disney corporation is

willing to take the responsibility towards its clients, its employees, its suppliers,

its shareholder and other businesses.

2.2.2 The philosophy of Walt Disney Corporation

There has much debate about this issue (Allerton 1997, Bryman 1995,

Capodagli and Jackson 1999 and Glanville et al 2002).

The Walt Disney’s philosophy was formed by Mr. Walt who had a great dream

and he encouraged all Disney’s employees to remove the boundary of

imaginations. Walt Disney Corporation’s philosophy has also assisted the

company to develop theories to stand the firm on your beliefs and principles,

enhance manager’s managerial skills, maximize all resources, empower and

support employee to build up their creativity, reinforce the internal strengths,

set up customer oriented, reward your employees and build long-term

relationships with key suppliers and partners and dare to take calculated risks.

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Besides, Disney World Orlando Blog (2008) noted that Disney’s philosophy is

one of the factors that built his empire and its philosophy is admired and

emulated around the world as it much contributing to the business benefits in

any world-wide industry.

Bashar (no date) pointed that Walt Disney Corporation has established the

four-pillared concept as Dream, Believe, Dare and do which is the main

component of Disney’ philosophy. Also, Disney’ philosophy has much

influenced on trained and empowered its employee, management innovation

and creativity and the company’s behavior.

2.2.3 Brand Name

Francoeur (2004) described that “a brilliant image con strengthen an

organization‘s credibility, increase its sales and help the organization bounce

back from attacks” One of the Walt Disney Corporation main strength and the

key successful factor is their brand name. The Walt Disney Company-a case

study (1996) showed that Disney has clear developed an extraordinarily strong

and well known brand name and the company’s band name has powerfully

distinguished itself with in the industry.

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The Walt Disney Company (2008) pointed out that Walt Disney is the most

powerful brand within several other brands such as ESPN in the entertainment

business in the world. Also, the company has easily gained the consumer

acceptance of new product and more success to enter new business based on

their strong brand name.

Maanen (1991) stated that Walt Disney Corporation has paid much effort on

trained to project images of helpfulness, sincerity and caring. Gershon (2000)

pointed that Walt Disney Corporation has a great advantage of its brand name

and it able to influence in the entertainment induetry.

2.2.4 Loyalty Building

Loyalty is the best partners that contribute to the company’s success and Walt

Disney Corporation was recognized that the traits of loyalty are the foundation

of on going success. Also, the company has examined the excellent customer

service which is the success factors to create loyalty at the company which

included profit chain, external customer satisfaction, internal customer

satisfaction and business practices (Discover the magic of customer service

2007). Therefore, the company has developed customer loyalty by delivering

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superior value and created a long-term relationship with every single customer

which contributed to the company’s success (Disney institute 2008). Also, the

company has explored a techniques and strategy to retain customers for life

and identify strategies for alignment to deliver their service more effectively. At

the result, the company was gained greater external customer loyalty, internal

customer loyalty and make sure delivering quality every time (The Disney

Institute difference no date).

2.2.5 The Disney Way

Capodagli and Jackson (2000) described that the Disney Way has consisted of

Dream, Believe, Dare and Do. Disney Way as a tool which helped the Walt

Disney Corporation to build a structured approach to evaluating customer

services, developing systematic processes of problem solving and conflict

solving in all unexpected ways, opening the mind of all cast member by

encouraging cast member’s creativity, accepting team rethink ideas and

increasing awareness.

2.2.6 Disney’s Power

Walt Disney Corporation has quite strong bargaining power of suppliers

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because the company is highly differentiating their service and product in the

entertainment industry. In addition, the company has a strong force on many of

the suppliers so the company has created a dependency relationship in the

industry and decrease the input price by ordering large volumes of unique

products from their specific suppliers (The Walt Disney Company-a case study

1996).

2.2.7 Disney’s Uniqueness

Capodagli and Jackson (1999) has found the uniqueness of Disney depended

on their variety of intangibles and capability, success in created wide audience,

established nine-step project management, concerning long-term vision with

short-term actions in emergency situation. In addition, the company’s values,

norms and philosophy which supports the company’s uniqueness.

2.2.8 Transfer a vision

Capodagli and Jackson (1999) explored that Walt Disney Corporation has

created the positive transform dream style between the cast member and their

leader within the organization which facilitate the company effective transform

the company vision to other. As the result, the Disney’s leader is willing to and

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desiring to share the Disney’s vision to their subordinates and help them to

identify and understand the company vision.

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2.2.9 Legal and Legislative forces

Although the legal and legislative forces are identified as negative external

factors to a company, in the Disney case, the legal and legislative forces are

one of their success factors because the company has established positive

relationship with the government. For example, the French government has

contributed over USD 1.2 billion in the Euro Disneyworld project (The Walt

Disney Company-a case study 1996).

2.3 The Corporate Strategies of Walt Disney

2.3.1 Market Diversification and Product Diversification

Executive Summary Disney Company (2005), Smith and Clark (1999) and The

Walt Disney Company-a case study (1996) showed that the Walt Disney

Corporation has adopted the market diversification strategy and product

diversification strategy to expand its business, gain the competitive advantage

in the entertainment industry, enjoy economies scale in production and

became market leader. In order to well practice market diversification strategy,

the corporation has covered a wide array of products and service to tape into

different market in the industry.

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Regarding the example of market diversification, Disney’s theme park is

attracted from twenty to thirty million visitors every year and over half million

copies of the videocassette “Pinocchio” was sold out within two months.

Concerning the example of product diversification, the Walt Disney company

has provided the film product since 1937 the company premiered “Snow White

and the Seven Dwarfs”, provided the entertainment activities and services in

the theme park area when the company opened the Disney Resort in Anaheim

in 1955 and provided the cruise product by launch of the Disney Magic and the

Disney Wonder in 1998. According to the Walt Disney Company fact book

(2004) noted that the Disney’s products has spread through by licensing to

merchandising which vary from toys, books, films, foods, clothes, stationary

and TV games to personal gifts. In addition, product diversification has created

an umbrella effect by increase in the product and service mix as well as

minimized the risk that when one product line fails the other product line will

able to cover up for its losses. The Walt Disney Company (2008) stated that

Walt Disney Corporation has continued expended their product portfolio and

the breadth and depth of product portfolio were contributed to the company’

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success.

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2.3.2 Brand Expansion

Apart from market diversification, the Walt Disney Corporation has also

adopted the related diversification strategy to growth and expands their

business. Also, the company has effectively diversified its operation from USA

to Japan, Europe and Hong Kong. The Walt Disney Corporation is

continuously merging with or acquiring firms in different, but related to the

entertainment industry. For example, the Disney Corporation was acquired the

Capital Cities/ABC in 1996 and acquired Pixar Animation in 2006 (Executive

Summary Disney Company 2005, Smith and Clark 1999 and The Walt Disney

Company-a case study 1996).

2.3.3 Ownership Strategy

According to the Jones and Robinett (1995), Walt Disney Corporation was

successfully adopted the ownership strategy that the firm is building more

attractions in the world in order to continuously increase their ownership and

their force in the industry. For example, developed the MGM Tour, opened

Disney’s Animal Kingdom at Walt Disney World in 1998, opened the Hong

Kong Disneyland in 2005 and starterd plan the new theme park in Shanghai in

2008.The Walt Disney Corporation’s take on public culture: character right

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(2005) found that “Disney has been battling over its rights to the characters in

its cartoons”. In order to protect and maintain the right of its characters that the

company has paid much effort to extension of the character’s copyright.

2.3.4 Leadership Strategy

Leadership is a key success factor of Walt Disney Corporation, refer to the

Leadership excellence (2005) found that the company has adopted the

proactive approach to control and keep all Disney’s employee on a right way to

improvement. In addition, the Disney’s leader from top manager to functional

manager are encouraging all cast member initiative to and get involved in

practicing Disney’s values and sharing practical ways to implement

corporation’s performance.

The Disney Institute Difference (no date) stated that leadership excellence

explores strategy was developed by Walt Disney Corporation for improving

team result. This strategy has enhanced the corporation’s leadership. “The

role of leadership here is servant leadership, it requires leaders to remove

obstacles in a way that enables frontline contributors to be service heroes.”

Refer to the leadership practice of Walt Disney that the company has created

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xxxvii

the Ten Commandments which including know your audience, wear your

guest’s shoes, organize the flow of people and ideas, create a come to me,

communicate with visual literacy, avoid overload, tell one story at a time, avoid

contradiction, for every ounce of treatment, provide a ton of fun and keep it up

(Mickey’s Ten Commandments and how they apply to leadership 2008).

Assessment of the Walt Disney Company (2008) pointed that Walt Disney

Corporation has brilliant leaders who maintain the visions alive and the

company’s leadership that effective motivates their cast members who

contribute to the company’s success.

According to the Walt Disney Company SWOT analysis (2008), the leadership

of Bob Iger is a key person of the company success continuously who dose not

influenced conglomerate by using hugely management forces instead of

putting much trust in his associates and creating an incredibly positive

workplace.

2.3.5 Decentralization Strategy

Decentralization referring to the top managements that are willing to and

possible transfer their power of decision making, assignment of accountability

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xxxviii

and responsibility for results to individuals or units at all levels within the

organization and give up the centers power of headquarters (Decentralization

2008). Refer to the Walt Disney Company-a case study (1996), it defined the

corporate level strategy of Walt Disney is based on decentralization and

informal management approach which is other success factor because it can

stimulate new ideas, boost group creativity and enhance team work result from

the relatively low hierarchy.

Moreover, one of the success factors of Walt Disney Corporation is a

frontforce ideas and concept which accomplished by frequently refreshing its

top management with new executives as different managers from other

industry such as entertainment business and financial business who could

bring their new ideas and concept and applied it in the Disney Company.

2.3.6 Human Resources Strategy

Walt Disney Corporation has completely show the Disney’s magic as all of the

employee were realized they are part of the company and they are the key

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xxxix

person to demonstrate the Disney’s magic through by their personal

commitment on the company’s mission. Besides, Disney company emphasis

on and provide the feel welcome and comfortable working place (Executive

Summary Disney Company 2005).

In order to provide a perfect show every day and make a professional

impression, all employees must follow the Disney look which is a very strict

guideline and rules. The policy is focusing on the personal appearance when

cast member going on-stage which consisting of many rules such as tattoos is

not allow on the descry area, certain hairstyles and cast members must wear

the particular uniform and appropriate undergarments at all time. Also, when

recruiting new employee that Walt Disney Corporation has concern the cultural

fit rather than race, religion, age, gender and any other job-unrelated reason, it

is one of the success reasons that the firm is attracting many potential people

who apply to the Disney’s job (Executive Summary Disney Company 2005).

2.3.7 Marketing Policy and Strategy

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xl

Executive Summary Disney Company (2005) found that one of the important

success factors of Walt Disney Corporation is their marketing policy and

strategy. Disney has adopted the same marketing mix and strategy for both

physical goods and services which including product, price, promotion and

place. Also, effective applied the marketing strategy that enhancing the

confidence of Disney company to offer their product and service to oversea

market.

Regarding the product strategy, Walt Disney Corporation is offering wide

range of products and services with an exceptionally high quality which

exceeding their gust’s expectation. For example, Walt Disney Corporation

guarantees to offer a magical experience that the guest will never forget.

Concerning about the pricing strategy, as Walt Disney Corporation has quality

leader positioned in the entertainment business world-wide so it allowed the

company to charge a premium price for their product and service. Also, the

company is not adopted the price cutting strategy to offer discounts in entrance

ticket, merchandise even food and beverage during the low-season. Disney

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Company has adopted the high price method to set their prices which

deliberately charge more than competitors and use product differentiation and

emphasizing such factors as quality (Baker 2008). According to the Walt

Disney Company-a case study (1996) found that the price of many of Disney

product lines has been placed on the ceiling in order to compete with the new

competitors.

Regarding the promotion strategy, as Walt Disney Corporation has their own

media channel such as ESPN and Disney Channel, it also has abundant

budgets on advertisement. Therefore, the company has effectively promoted

their products and services. For example, the company has created strong

advertising appeal for families to visit Disney theme parks and purchase

Disney’s products (Gershon 2000).

Finally, the place strategy has focused on the Disney’s theme park, all

Disney’s theme park has high level of accessibility that all theme parks can be

accessed by public transportation such as Disneyland Resort Line, private

shuttles and taxis. Also, the company has increased its marketplace and

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created international brand recognition (The Walt Disney Company-a case

study 1996).

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2.3.8 Theming Strategy

Executive Summary Disney Company (2005) stated that Walt Disney

Corporation was created their own theme and new atmosphere based on the

unique experience which allowed guest to escape the normal life and lives in

dream. Also, Walt Disney is enjoying the advantages of the theme strategy

which creating an initial perception of quality, creating the unique experience to

capture certain market segments, gaining the effect word-of-mouth and noise,

letting people easily to recognize and encouraging customers from both their

park visitors and product consumer as those repeated customers are playing a

major role in successful entertainment industry (John 2004).

2.3.9 Low cost strategy

Refer to the Walt Disney Company-a case study (1996), stated that the Walt

Disney Corporation has effective and fully experience in using resources in

their business which allowed the company to apply low cost strategy and gain

its advantages such as minimized financial risked within the organization,

effective in cost control, maintain product quality goods and services.

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2.3.10 Internationalization Strategy

Brannen (2004) stated that Walt Disney Corporation has fully experience in

internationalization present some curious paradoxes, in the host country

context and institutional. As the company has understood foreignness was an

asset, their experience has been helping them to transfer complex assets

aboard in current situation and the success in Tokyo was stimuli further

internationalization of Disney. Also, Walt Disney Corporation has successfully

adopted the growth strategy. Based on the success of pervious theme park,

the company will continue to develop their property such build new attractions,

new resort hotels and other sort of tourist destinations.

2.4 Walt Disney Corporation’s Business Approaches

2.4.1 The Disney Approach to People Management

Walt Disney Corporation has successfully applied the people management in

order to maintain the Disney’s unique service culture which inspires employee

pride and ownership. In addition, people management was improved the level

of internal communication, let the company select the right employee and help

the company to train them well (The Disney Institute difference no date).

Disney institute (2008) pointed out that Walt Disney Corporation has a leader

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of people management in term of the company’s culture, employee selection

skill and management, training system, communication style and recognize the

workforce. Also, the company recognized the effective people management is

supporting the company’s success.

Waterman and Peters (1982) described Disney has established the employing

two-part system including screening the cultural fit and training of employees

to deliver seamless service which strong formed the company’s success.

Concerning the recruitment aspect, Oberle (1995) viewed that Walt Disney

Corporation has always recruit the right person at the right job who are fits the

company’s vision, culture and acquired relative knowledge and experience.

When recruiting new employee that the company is only concern characters of

the candidates such as creativity, innovation, positive work attitude,

self-confidence, willing to take risks and bilingual in its overseas parks

(Glanville et al. 2002).

Regarding the Training and Development part, Bashar (no date) pointed that

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Walt Disney Corporation has paid much efforts on training their employees to

be professional, polite, clean and customer oriented. Furthermore, in order to

sustains the Disney’s magical, satisfying image so the company has focused

on the cast member’s training at the very beginning for helping them to view

their work.

Capodagli and Jackson (1999) showed that Walt Disney Corporation believed

providing training is a company’s responsibility and they knew employee’s

capability is a one of the success factor on their business. The company is

encouraging education at all levels and provides different training to all

departments within the organization such as product knowledge training in

order to let cast members to clear understand the company’s culture, vision

and tradition as well as enhance the motivation of cast member. In order to

educate the Disney’s employees so the Disney University was created number

of ideals and methods to the employees (Disney Magic 2004). Almost all

training has hold by Disney University and there are four major objective of

training as follows:

1. To acclimate new cast members to the foundation of the company’s

culture

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2. To perpetuate the language and sybols, heritage and traditions, quality

standards, values and traits and behaviors of Disney.

3. To create a sense of excitement about working at the working place

and;

4. To introduce new cast member to the core safety regulations.

For the empowerment issue, Although Walt Disney Corporation has a high

level of hierarchy, it is one of the international corporations willing to empower

its employees to perform their job and deal with some non significant problem

(Capodagli and Jackson 1999).

Concern with the communication dimension, Executive Summary Disney

Company (2005) stated that upward communication strategy is one of the

Disney’s Success factor. In order to measure the satisfaction of their guest,

make the business more efficient and to improve the surrounding that Walt

Disney Corporation has paid much attention on recognition for suggestions,

high effort on the job and encourages its employee to participate in local

activities. Furthermore, the company knew that the participation of the cast

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xlviii

member is the key success factor on their business. Therefore, the company

has established the Disney Communication principles which including

everyone has valuable information to share, individuals need to know how their

work contributes to the organization’s goal and communication methods and

messages must meet the need of the cast member (Hebert 2007).

Finally, Capodagli and Jackson (1999) stated that Walt Disney Corporation

believed each employee played a significant role so the company is willing to

appreciate the great performance of cast member in order to maintain them

within the organization and contribute to the further improvement. In order to

achieve it that the company has established number of recognition programs,

recognition rewards, performance appraisals and monetary bonuses.

2.4.2 The Disney Approach to Organizational Creativity and Innovation

Disney institute (2008) discovered that team creativity is a critical success

factor of Walt Disney Corporation and innovative thinking by their employees

has been critical to the company’s success. The company has effectively

maximized creative output and put the new ideas into implementation by their

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experience.

Disney institute (2008) found that innovation factor was contributed the

Disney’s success which base on the company has ability to create, manage

good environment for innovating and support employee development.

Furthermore, Walt Disney Corporation was established the creative process

and encouraging everyone provides any new ideas on the product and service

without pressure and threat. For example, the company has hold a semiannual

crazy-invention contest and home room meeting for brainstorming. Also,

Shortsleeve (2004) said that Walt Disney Corporation is the leader of

technological development in fashioning reality from fantasy. For example, the

company has produced the first full-length computer animated film “Toy Story”.

2.4.3 The Disney approach to Quality Service

Disney institute (2008) stated Walt Disney Corporation has long-standing

reputation for incredible service and friendly employees. In addition, the

company knew the positive interaction between customer and employees is

directly influencing customer satisfaction. Therefore, the company has

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established the Disney model to improve the organization’s quality service and

exceed customer’s expectation.

The Disney Institute difference (no date) defined that Walt Disney Corporation

has created a consistent world-class service culture based on the company

understood the psychographics and demographics of their customer’s need

and want. Also, the company has exceed the expectation of their guest by

providing a sound service infrastructure and service standards. Watermen and

Peters (1982) showed that the company has capability to create the “happiest

place on earth” based on Disney’s ability to provide safe, clean, orderly and

friendly environment.

Boje (2005) found that Walt Disney has ability in storytelling which is a very

successful story manufacturing and story commodification business in the

world. In order to improve and maintain its competitive, the company is doing

the “Disney Work” which routinely documents its own story.

2.4.4 The Disney Approach to Team Building

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Walt Disney Corporation has successfully created the team building which

collected employees who work in the same place and share the common

purpose to achieve the organization’s goal based on the employee’s overall

unified efforts (Richardson 1992). Capodagli and Jackson (1999) found that

Walt Disney Corporation has regularly invited employees from all levels to hold

the meeting and all managers from all levels has formed a team with their

subordinates to identify the company’s vision and teach them to achieve it

which fostered the team development of the organization.

Disney institute (2008) showed that it is a vital part of Walt Disney

Corporation’s success for them to know teamworks and the company has

many experiences to develop high performing teams.

4.4.5 The Disney Approach to Financial Control

Figure 1: Financial Review in 2007

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Source: Annual Report (2007)

Walt Disney Corporation has used three primary financial metrics to control

and measure the financial performance which including earnings per share,

return on invested capital and after-tax cash flow. In the figure 1 by Annual

report (2007, p1) it is showed that the company has increased the earning per

share from continuing operations before the cumulative effect of accounting

changes from $0.59 millions USD in 2003 to $2.24 millions USD in 2007.

Besides, the after-tax cash flow has been improve form $1,727 millions USD in

2003 to $3,832 millions USD in 2007.

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CHAPTER THREE: METHODOLOGY

3.1) Introduction

This chapter aims to describe the qualitative research method that was used in

this study. This study was conducted by a qualitative research methodology

with conceptual framework based on secondary data. As there was difficulties

to set the questions and asked about the success factors of Walt Disney

Corporation by other research method so the case study research methods

has been used. A qualitative research has the features including flexible,

subjective, and speculative and grounded (Silverman 1999). Finally, the

limitation of this study has been elaborated.

3.2) Secondary Research

Existing primary data was collected by someone else or for a purpose other

than the current one (Girolami no date). The chosen data were based on

data’s availability, relevantly, reliability and validity. The researcher has

reviewed those relevant documents and literatures to obtain a valuable view

points on Walt Disney Corporation and its management practices. Most of the

secondary data were colleted by the following sources:

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Journals:

International Journal of Contemporary Hospitality Management

Economics Research Associates

Journal of Travel Research

Journal of Vacation Marketing

Journal of International Economic Studies

UWL-Journal of Undergraduate Research

Academy of Management Review

Journal of Intellectual Capital

Journal of Consumer Research

Managing Service Quality

CEMS Business Review

The Editorial Board of The Sociological Review

Management Decision

International Marketing Review

The Lion and the Unicorn

Harvard Business Review

The Journal of Media Economics

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Book:

Disney and his worlds

The Disney Way-harnessing the management secrets of Disney in

your company

The Disney Touch: how a daring management team revived an

entertainment empire

The Concept of Corporation Strategy

The Disney Way fieldbook-how to implement Walt Disney’s vision of

‘Dream, Believe, Dare, Do’ in your own company

Disney The First 100 Years

Organizational behavior

Magazines:

Primavera Magazine

Websites:

www.emeraldinsight.com

Corporate.disney.go.com

www.geocities.com

www.free-termpapers.com

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www.disneyinstitute.com

Northgravesonthehill.blogspot.com

www.echeat.com

www.everything2.com

www.gwu.edu

Academic.emporia.edu

www.creativityphilly.com

www.theleadershiphub.com

www.cheathouse.com

www.themedattraction.com

www.dwtickets.com

www.pfdf.org

Databases:

Emerald Databases

EBSCO Host Research Databases

Science Direct Databases

University of Hong Kong Libraries

Hosei University

Echeat

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Datamonitor

Google Scholar

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Annual Reports:

The Walt Disney fact book 2004

Attraction Attendance Report 2007

Internal Documents:

Disney Institute Training Forum

Hong Kong Disneyland “Employee Policy Guideline”

Attire for Disney Training

Disney Traditions

3.3) Advantages

The major advantage of the analysis of secondary data was that it has very

rich insight for the research focus. Also, it allowed multiple resources of

information which contain large number of valuable information. The

researcher was easily to find relevant information from different sources such

as electronic databases and international journals. Furthermore, the qualitative

research method was more efficient, effective, reliable and valid than the

quantitative research method in term of the cost, time and personal bias.

Finally, the qualitative research method has assisted us to identify further

research needs.

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3.4) Limitation

Although carefully done, this research still has a few limitations. First, with the

large size of information of the Walt Disney Corporation, the research tended

to be narrow in focusing on the corporation level and the business level, rather,

it focused more on the functional level. However, the researcher found that it is

the best to focus more on different levels of business in order to reach more

concrete conclusions. Second, the research and discussion are somewhat

biased as were filtered through huge number of reference which may not

completed conceptualized. Finally, the available research may be inaccurate,

inappropriate, incorrect or biased. Besides, as there is huge number of

information found from various sources that the researcher was spent much

time to scan and select the relevant information.

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CHAPTER FOUR: FINDINGS

4.1 Introduction and A Conceptual Framework

Walt Disney Corporation’s success has stimulated the researcher to find out

and study what are the secrets of Walt Disney. This chapter has focused on

the management level and business level of Walt Disney. The following model

provides a framework of reference for discussing the issue. This model

comprises eight success factors of Walt Disney that were reported in the

literature review. The literature reviews of each success factors is listed below

Figure 2: A Conceptual Framework of the Success Factors of Walt Disney

Corporation

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4.2 The Source of References

Table 5: The Source of References

4.1 Culture and Philosophy

Hebert (2007)

Glanville, Kirkbight and

Tamasco (2002)

Robbins (1993)

Bryman (1995)

Rubis (1998)

Croce (2004)

Allerton (1997)

Bashar (no Date)

4.2 Leadership Management

Leadership excellence

(2005)

The Disney Institute

difference (no date)

Mickey’s Ten

Commandments (2008)

Assessment of the Walt

Disney Company (2008)

Walt Disney Company

SWOT analysis (2008)

Decentralization (2008)

Walt Disney Company- a

case study (1996)

Richardson (1992)

Capodagli and Jackson

(1999)

4.3 Research and

Development

Smith and Clark

(1999)

Excutive summy

Disney company

(2005)

Walt Disney

Company- a case

study (1996)

Walt Disney

Company fact book

(2004)

Disney Institute

(2008)

Bashar (no date)

Shortsleeve (2004)

Wong and Cheung

(1999)

4.4 Marketing

Excutive summy Disney

company (2005)

Walt Disney Company- a

case study (1996)

Jagels (2006)

4.7 Quality Management of

Product and Service

Disney Institute (2008)

The Disney Institute

difference (no date)

Peters and Watterman

(1982)

Boje (2005)

4.5 Human Resources

Excutive summy Disney

company (2005)

The Disney Institute

difference (no date)

Disney Institute (2008)

Peters and Watterman

(1982)

Oberla (1995)

Glanville et al (2002)

Bashar (no date)

Capodagli and Jackson

(1999)

Disney Magic (2004)

Hebert (no date)

4.6 Brand Management

Francoeur (2004)

Walt Disney

Company- a case

study (1996)

The Walt Disney

company (2008)

Maanen (1991)

Gershon (2002)

Smith and Clark

(1999)

4.8 Internationalization

and Localization

Brannen (2004)

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4.3 Culture and Philosophy

The first component was Disney’s culture and philosophy. Culture was one of

the core competencies of Walt Disney Corporation. Culture is a foundation of

company’s success; it has very close relationship between Disney’s heritage

and tradition. The researcher found that Disney has their owned corporation

culture which gained the corporate advantages in terms of the quality standard

of services and products, atmosphere in workplaces and the performance of

cast member. Furthermore, Walt Disney Corporation has established their own

words which made it be distinguishable from its competitors. For example,

employees were called cast members and customer was named guest. Finally,

Disney’s culture has not only influenced itself, but also influenced other

companies. For example, Disney Institute has established the culture transfer

course which assists other companies in developing their corporation culture

based on Disney’s style.

Philosophy was another factor contributed to the Walt Disney Corporation’s

success. Mr. Walt was the one who started to develop Disney’s philosophy.

The Disney’s philosophy was divided into four concepts called “four-pillared,”

which including Dream, Believe, Dare and Do. On the top management side,

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Disney’s philosophy has more influences through their entire corporation, it

assists top manager to set the corporate goals and plans, organizing and

coordinating their business units, exploring internal resources, managing

power, forming leadership and motivation style, shaping teamwork, helping to

communicate with all stakeholders and making the right decision. On the other

hand, Disney’s philosophy has been eliminating boundary of imaginations,

supporting creativity and encouraging all employees to join the discussion and

gain the superior innovation.

4.4 Leadership Management

Walt Disney Corporation believed that the high level of leadership

effectiveness is vital because it directly influences the corporation’s

performance. Therefore, the corporation has used the proactive strategy and

developed the leadership excellence explores strategy as their major

leadership strategy. For the proactive leadership strategy, it identified the

potential problems and threats about the employees. The other goal of this

strategy is to monitor and manage employees to ensure them of being on the

right way. According to the leadership excellence explores strategy, it helped

leader to eliminate any obstacles and enhance the frontline staff’s service

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quality.

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In addition, decentralization strategy has been used by Disney in order to

decrease the central power of headquarter and delegate oriented. In other

words, all employees from top management to frontline staff are viewed as

important individuals who are possible to get into the decision making process

and express their views. It decreased the level of corporate boundary and

minimized the bureaucrat. The advantage of this strategy includes stimulating

new ideas, boosting employee’s creativity and enhancing team work spirit.

Also, teamwork spirit has been successfully built. The company has let all of

the employees to know who those important people in the group within the

corporation are. The company has paid many efforts to develop the team spirit

that the regular meeting has been hold to gather employee’s suggestion and

identify the company’s vision as well as emphasize the importance of the team

work to them. After that, the employee has fostered their team work spirit and

they would be respected by the company.

4.5 Research and Development

Creativity and innovation are at the base of everything Walt Disney

Corporation does. Furthermore, the company is using technology to enhance

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its high-quality products or services, contents and experiences as well as

deliver them to more people and more places. The company has a big source

of that great creative energy that the company is able to develop the new

products or services that have not been provided by its competitors within the

marketplace. For example, Walt Disney has produced the first

computer-animated film “Toy Story in 1995. In order to encourage new ideas,

the company is providing the positive creative environment to all employees

with hazard free. Furthermore, Disney’s culture, philosophy and leadership

style are contributed through Disney’s innovation and creativity. Besides, Walt

Disney Corporation has established the innovation process with series

activities in sequence which including goal settings, observations,

investigations, brainstorming, analyzing, meeting and decision making. For

example, the company has regularly held a semiannual crazy-invention

contest and home room meeting to gather the new ideas and the market trend.

Walt Disney Corporation has successfully adopted the product diversification.

For example, the company has provided the film products since1937 started

with Snow White and the Seven Dwarfs”, provided theme park entertainment

in 1955, provided the cruise product in 1998 and so on. The range of the

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products or services has been distributing widely from entertainment services

to personal gifts. In the past, however, this strategic management decision was

the first-mover action. As the result, the company has been enjoying the

market competitive advantages, economic scale and became a market leader

in the entertainment industry.

4.6 Marketing

Figure 3: Marketing Mix Structure

Source: Google Search Engine

Marketing has much to do with the Walt Disney Corporation’s success as

highly effective marketing engine; it helped them to increase revenue while

affording numerous efficiencies. The company has used the marketing mix for

their products and services. For the products, the company adopted the

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traditional marketing mix which including the four Ps: promotion, product, place

(distribution) and price. For the service, the company has expanded marketing

mix that consists of above four “P” with other three Ps: process, people and

physical evidence. Walt Disney Corporation has performed well in marketing,

the company has clearly identified the market text and made the marketing

plans to satisfy customer’s need and want as well as overcome the market

change based on the four Ps or seven Ps above.

Concerning the product dimension, the company is offering a wide range of

products and services to satisfy the different market segments. For example,

Disney Channel for children, TV game for teenager, theme park entertainment

for family and cruise product for up market customer.

Regarding the price aspect, Walt Disney Corporation has applied the premium

pricing strategy for their products and services as the company is a leader of

the entertainment industry. The advantages of this pricing strategy are:

distinguishing their products and services from its competitors, expanding the

profit, emphasizing the product quality and prevent the potential competitors

enter into the market.

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For the promotion strategy, Walt Disney Corporation has effectively used their

owned media channel to promote their products and services. The advantages

of this strategy are ensuring the promotion activities match the target market

and cost effective.

Regarding the place strategy, Walt Disney Corporation has effectively

distributed their products and services to their target customers. For example,

all of the Disney’s theme parks are located on the high level of accessible

areas. Also, almost all products and services can be purchases or booked

online so that the Disney’s distribution channel can be so effective.

For the other three Ps that Walt Disney Corporation has trained and

experienced personnel who play a part in service delivery within Disney style.

The cast member appearance has been very strict by Disney look, and the

company has provided many guidelines and trainings for their employees to

improve their work attitudes and behaviors because the company knew that it

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must influence the customer’s perceptions of the service.

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Regard with the physical evidence aspect, the company understood the

importance of environment in which the service is delivered and where the firm

and customer interact, and any tangible components that facilitate

performance or communication of the services. Given example of the theme

park, each sub-land has particular building, decoration and features which

stands for the theme of sub-land.

Finally, the company has established the actual procedures, mechanisms, and

flow of activities by which the service is delivered and the operating systems.

This process should give customer evidence on which to judge the service. For

example, all of the merchandise needs to follow Disney way for every single

settlement transaction.

Apart from the seven Ps, the company has applied the market diversification

strategy to develop its business and expand product-line as well as strengthen

their market position. The company has successfully got into different product

markets and service markets. For the product markets, the company has

entered the film industry in 1928 and TV industry in 1954. For the service

markets, the company has got into the theme park industry in 1995 and cruise

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industry in 1998. The advantage of this strategy is to expand the investment

and minimize the risk of investment. Also, this strategy should help the

company to find other potential markets.

4.7 Human resources

Walt Disney Corporation has good reputation on the people management as

the company has recognized that excellent people management is contributing

to their success. Therefore, the company has paid much resource on the

employee recruitment, training and development and communication.

In regard to the employee recruitment, the company has established their

owned employee selection criteria when they are recruiting new employees;

the cultural fit is mainly concerned and the other characters of the candidates

are also considered, such as funny, attitude and so on, rather than the

employee’s work experience and academe level. The advantage of this

strategy is to attract more potential candidates than suing the traditional

recruitment criteria and may enhance the possible of right employee

recruitment.

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For the employee’s training and development, the company believed that

training is the major ways to strengthen employee’s capability which towards

the company’s success. In order to train their employees to be professional,

polite, customer oriented and Disney oriented, the company has provided

many training programs and courses from employee’s first working day.

Those training are related to the Disney’s culture, Disney language and

symbols, heritage, tradition and safety as well as work task. For example, the

entire new employee needs to finish the traditional Disney courses which

conducted by Disney University and completed at least three days on job

training and pass the Disney knowledge test.

Concerning the internal communication, the company has adopted the upward

communication strategy because they believed that employee has more

understanding of customer’s need and wants as well as the demand changes.

Therefore, the company is encouraging entire employees, especially lower

level of employee, to give any suggestion about the customer, company and

work place. Also, the company has established the Disney Communication

principles to support the upward communication which focused on information

sharing, understanding Disney’s goal and transferring messages to employee.

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In order to maintain the capable employee within the company, the company

believed that empowerment and delegates the work is one of the methods to

maintain excellent employee and enhance the working morale. Also, the

company has established the recognition and reward programs which

appreciating the cast member who has excellent performance.

Finally, in order to provide a perfect show in the theme park, the entire

employees need to follow the Disney’s look which is a very strict rule about the

cast member appearance. For example, the entire cast member is on stage

that a tattoo is prohibited on the descry area and they must wear the particular

costume.

4.8 Brand Management

Walt Disney Corporation has a strong brand name worldwide which developed

by its superior quality, superior innovation, superior efficiency and superior

responsiveness to customers of service and product which distinguished from

its competitor. The company has positioned higher level of services and

product innovation position in the entertainment industry through some

forefront activities such as the company’s partnership with Pixar Animation to

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produce the first computer film “toy Story” in 1995. Regard with the quality

aspect, the company has established their owned model to main and improve

the quality of service or product in term of employee training and behavior,

identify the customer’s need and want and sound monitoring system.

Concerning superior efficiency, the company has high level of efficiency in term

of the materials management, R&D Strategy and infrastructure.

Finally, the company is a leader of entertainment industry as the company

done a better job than competitor of identifying and satisfying its customer’

needs. Also, the company has paid much attention on the customers’ response

of the goods to be delivered or service to be performed. For example, the

cruise trip demand is increasing significantly in the last decade so the

company has provided the cruise product by Disney Magic and Disney

Wonder in 1998. At the result, the consumer’s confidence in the service and

product can be maximized and the acceptance of the new service and product

can be enhanced by strengthening Disney brand name. Finally, the company

has gained the large scale of economies, higher visibility about the products or

services and being prestige in the home country by the company was success

developed the brand name.

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Walt Disney Corporation has its strong brand name and commitment to global

growth in order to gain advantage. Therefore, the company has desired to

expand their business and focused on creating greater cross-company

integration which improve company’s efficiencies and aligning international

business efforts behind sustainable and meet the long-term growth. Therefore,

the company adopted the market diversification strategy to expand their

business from USA to Japan, Europe and Hong Kong. For example, the

company has acquired the Capital Cities/ABC in 1996.

In order to protect the Disney brand, the company has made an application for

their character’s pattern and the brand logo such as Mickey, Minnie and so on.

This action can avoid other company to encroach on Disney’s copyright and

pattern.

4.9 Quality Management of the Service and Product

Walt Disney Corporation has established the Disney model to provide the

consistent world-class service because the company believed that employee’s

positive attitude, friendly behavior and capability are contributed to success

interaction between customers and employees. Therefore, the company has

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paid many efforts on the employee’s improvement and development. In

addition, the Disney’s entire product line has been passed the particular

consumer product tests such as ISO 9001 in order to comply with all law of

product manufacture.

Apart from the employee side, the company has paid many efforts to create the

sound environment and happiest place on the earth in term of safety,

cleanness, orderlies, dreams and friendliness. Also, the company has

successful story manufactured and story commodification business based on

the theme strategy. The company has successfully adopted the theme strategy

based on their unique experience and innovation skills. The advantages of the

theme strategy are that it allowed company to develop the superior quality

perception, attract different market segments, gain the positive word-of-mouth,

encourage repeat customer and build customer loyalty. Finally, the company is

continuing develop the new way to showcase its consumer product with

Disney’s characters and stories through quality product that appeal to a wide

range of consumers.

4.10 Internationalization and Localization

Walt Disney Corporation has adopted the internationalization strategy and

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localization strategy. The company has fully experienced in transferring

complex assets abroad and standardizes the services and products. In regard

to the internationalization strategy, the company has successfully applied this

strategy in Tokyo Disneyland Resort which developed based on the

Disneyland Resort and Walt Disney World Resort in term of the theme park

structure, building style, attraction, environment, product and service. Disney’s

success in Tokyo was the catalyst for further internationalization.

Concerning the localization, although the Walt Disney Corporation has

succeeded in Tokyo, failure in Euro Disney Park as the company has

insufficient knowledge of the European culture, buying behavior and

overestimation of the number of visitors that the company is facing the

significant problem. Paris Disneyland Park is a good example of

internationalization with localization. In the opening time of Paris Disneyland

Park, it is not allowed to drink wine in the theme park area, this rule can not

been accepted by French because drinking wine is French’s culture and habit.

After that, the number of visitors has much below the expectation so the

company has identified the culture distance or gap and made some

modification such as drinking wine in Paris Disneyland is allowed. At the result,

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Paris Disneyland Park has success contributed profits to Walt Disney

Corporation.

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A. Loyalty

The first result when Walt Disney has completely done the above eight

components is loyalty. Loyalty can be divided into two parts with both customer

loyalty and employee loyalty. For the customer loyalty that is built by the

company’s providing sustainable customer satisfaction. The company has

successfully built the customer loyalty. One of the advantages of customer

loyalty build is to increase repeated customer which significant contributed to

the company’s profit.

Concerning the employee loyalty, the company has identified and provided the

motivator’s factors and hygiene factors to build employee loyalty. Motivator’s

factors including achievement, recognition, work itself, responsibility,

advancement and growth. Hygiene factors are consists of supervision,

company policy, working conditions, salary, status, security and relationship

with supervisor, peers and subordinates. The advantage of employee loyalty is

decreasing the rate of employee turnover and enhancing service quality.

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B. Disney Power

The second result is Disney’s Power, Walt Disney Corporation is operating in a

highly differentiated and unique industry with high switching costs.

Furthermore, the company has the higher position in the entertainment

industry based on the size of the corporation, corporation’s strategy, core

competency and business approaches. In addition, the company has created a

dependency relationship in the industry by ordering larger volumes of unique

product from unique suppliers. Therefore, the company’s bargaining power of

suppliers is quite strong.

C. Uniqueness

Walt Disney Corporation is unique in the entertainment industry. Disney’s

uniqueness is developed by their intangibles resources and capability which

including management style, innovation skill, great brand name, positive

reputation, company’s culture and philosophy and success to find out the

market trend. Above all factors are enhancing the attractive of their product

and service. Apart from the intangible resources, the company has abundance

of tangible resources which contributed to Disney’s uniqueness such as theme

park’s structure and sound cash flow. Disney’s uniqueness is that the company

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has ability to leverage success across to their different business unit.

D. Low Cost

Walt Disney Corporation is able to use their resources both tangible and

intangible. Therefore, the company has successfully applied the low cost

strategy which refer to the company has distinctive competency to decrease

the cost of manufacturing achieved by effective human resource used, lager

volume of sales and research and development practice. The advantage of low

cost strategy is that the company can earn more profit than its competitors by

lower cost of manufacturing.

D. Financial Status

Profitability statistic indicated how effectively Walt Disney Corporation is being

managed. Walt Disney Corporation has sound financial status which

continuous increased the revenue from 2003 to 2007 that the total revenue

has been increased from $23,480 million USD to $35,510 million USD or

increased 5 percent, $1.8 billion USD. Furthermore, in 2007 the net income

has significantly increased 39 percent compared with 2006 that the net income

increased from $3,374 USD to $4,687 USD. Besides, the company’s Diluted

earning per share has increased 37 percent to $2.25 million USD (Annual

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Report 2007). Regard with the operating margin that the company has raised

by approximately 10 percentage points in 2007.

In addition, the company has strong return on invested capital which the ratio

is 10.18 (Annual Report 2007). Also, the company has continued to strengthen

their cash flow that it generated $3.8 billion in free cash flow in 2007. The

sound cash flow indicated the company has high level of financial flexibility

(Annual Report 2007).

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Chapter Five: Conclusions and Recommendations

5.1 Conclusions

This is no question that the Walt Disney Corporation was the top leader in the

entertainment industry which operating different business in the world such as

theme park and resort business unit, film business unit, toy manufacture

business unit, media channel and cruise business unit.

According to the information provided in this paper which has been extensive

research conducted on the Walt Disney Corporation. However, the previous

research has not been systematically conceptualized and some aspects need

to be further studied. In addition, this study’s objective has found out the

success factors of Walt Disney Corporation and conceptualized it.

Analyzing and synthesizing Walt Disney Corporation’s success factors was

much complex as there is extensive information in different aspects about this

study. Therefore, the researcher spent one month to collect and analyze the

relevant information. At the result, the researcher has developed the

Success Factors of Walt Disney Corporation model which includes eight

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components with five results. For the eight components of Disney’s Secret

model is including Culture and Philosophy, Leadership Management,

Research and Development, Marketing, Human Resources, Brand

Management, Quality Management of Product and Services and

Internationalization and Localization. Regard with the five results of Disney’s

Secret model consists of Loyalty both external customer and internal customer,

Disney Power on the industry, Disney’s Uniqueness, low cost structure and

sound Financial Status.

Future research should investigate the external environment, whether or not

this is viewed as positive information. The external environment can affect the

Walt Disney Corporation’s management practice and its business.

In the end, there is limited research for the strategic corporation management.

Strategic business managements is a broad theory, there are still many

existing theories surrounding it. Previous studies stated that Walt Disney

Corporation has good practice in both corporation level and business level

management, but little is mentioned with regard to its specific practice in

operation. Apart from this limitation, the remaining linked with this research

was discussed in the methodology chapter.

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5.2 Recommendations

First, the researcher focused on the organizational changes that the frequent

changes of corporate officer should be stopped. Although, the new leader

should bring the new ideas or concepts to the company from out side, the

new ideas or concepts may affect Disney’s culture, philosophy and tradition.

In addition, frequent changing of top leader may decrease the effective of

communication, morale and teamwork spirit. Therefore, the company should

maintain the stability of the top management environment.

Second, the researcher suggested that Walt Disney Corporation should

reduce the dependence on licensing. Although, the company has good

market diversification, there is much dependence on licensing which should

decrease the scale of economic and profit. Therefore, the company should

produce; sell and marketing their product or service to earn more profit rather

than relied on licensing.

Third, the company should control the liquidity ratio well because the liquidity

ratio appears to be a bit too low for the corporation. Therefore, the researcher

suggested that the company should increase their current asset requirement

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xc

and strictly control their liabilities.

Besides, Walt Disney Corporation should decrease the overhead cost, given

example of theme park that the company has over 111,000 employees work

in the theme park area. The company has high level of fixed assets by a large

number of workforces. Therefore, it is suggested that the company should

rely more on the seasonal workforces because theme park industry is facing

the high level of seasonality problem. In order to overcome the seasonality

problem that the company should develop specific program or activities in the

theme park during the low season. For example, the company has

established the “Star VIP program” that during that period the company

should select specific theme park visitor such as disable person who will

received the star service and special arrangement.

Finally, although the Euro Disneyland is a good example of localization

practice, the company has not completely done in Hong Kong Disneyland. For

example, Hong Kong Disneyland was opened in 2005, in that period the

company has not good communication with the local travel agency. As the

result, there is little number of tickets sold by travel agency. Therefore, it is

suggested that the company should establish the partnership with local

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xci

community and local private sector as well we deep consideration of the local

culture in their operations.

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