1. T HE W ALT D ISNEY C OMPANY : 1984-1990 By: Team Baldwin Sarah Hsiao, Jaehee Lee, Al Li, Amanda Sorrentino and Meg Burke 1

2. A GENDA 1. Purpose Non-economic Economic 2. Scope and Emphasis 3. Resources and Competencies 4. Organization and Tradition 2

3. N ON E CONOMIC P URPOSE OF D ISNEY To build the Disney brand while preserving the corporate value To diminish concerns of faded Disney’s culture and enhance internal cohesion “Managing creativity” To improve coordination among business units To attract consumers by expanding into new business, regions, and audiences 3

4. E CONOMIC P URPOSES OF D ISNEY To maximize shareholder wealth Set annual revenue growth target Return on stockholder equity >20% To steady financial performance Disney Channel: Create demand Movie division: cost down by producing moderate budget films To maximize theme park profitability 4

5. S COPE AND E MPHASIS : S YNERGY E FFECTS Horizontal: rebuild and revitalization Disney Channel and The Disney Sunday Movie Touchstone and Walt Disney: budgeted with strong scripts High investment in animation movie: CAPS system Vertical: cross-marketing, coordination Wide range licensing products Important yearly events: Management coordination Disney Stores and Disney Press: toys and books for children Direct mails and catalog marketing 5

6. S COPE AND E MPHASIS : S YNERGY E FFECTS Geographical: expansion of theme park Euro Disney project New attractions and sections: increase ticket price Expand and update theme park in Orlando: hotel capacity 6

7. R ESOURCE AND C OMPETENCES 1984- 1990: TV & A NIMATION Management Strategy: Commitment to Quality Newly launched Disney Channel 1986 Disney Sunday Movie ABC Golden Girls Sitcom Siskel & Ebert at the Movies Live with Regis & Kathie Lee Sold syndication to independent TV stations Increased turnaround animation New movie every 12-18 months, not years Merchandise potential 7

8. R ESOURCE AND C OMPETENCES 1984- 1990: M OVIES Management Strategy: Revitalization & Growth 1984 – box office share 4 percent Lowest among major studios Down and Out in Beverly Hills 27 of 33 movies profitable after Down and Out 1988 – box office share 19 percent Leader in movies Changes led to transformation: Budgets below industry average Multi-year talent contracts Minimized inappropriate content 8

9. R ESOURCE AND C OMPETENCES 1984- 1990: T HEME P ARKS Management Strategy: Maximize Profitability 1986: Captain EO attraction 1989: Disney-MGM Studios Theme Park opens Pleasure Island nightlife complex opens Attendance-building strategies  rapid revenue & profit growth Disney Development Company Hotel expansion Convention center 9

10. R ESOURCE AND C OMPETENCES 1984- 1990: N EW B USINESS Management Strategy: Coordination 1987-corporate marketing function -marketing calendar -monthly meetings -library committee -in-house media buying group 1987: Disney Stores launched 1989: Hollywood Record label formed 1990: First international Disney store opens in London Disney Press established Mickey’s Kitchens opens 10

11. O RGANIZATION AND T RADITION : C ORNERSTONE OF THE T URNAROUND IN 1984 ~1990 Past Successes: Achieving the vision of “Creating Universal Timeless Family Entertainment” by building innovative entertainment resources– External (Brand) + Internal (Heritage) Past Failures: Financial, Lack of new ideas and Coordination– almost sold off as separate assets Success + Failure + Bass’s $365 million rescue fund = Subtle shift between the Ends and the Means : New operational controls in place 11

12. O RGANIZATION AND T RADITION : A VAILABLE R ESOURCES & C OORDINATION Disney Portfolio TV/RadioStudiosAnimation Motion Pictures TouchstoneMusic Theme Park & Resorts California & Florida EPCOTJapan Consumer Products LicensingPublishingRetail Corporate Finance Marketing Library Committee Media Buying Corporate Events dept. Development Company 12 Human Capital -Eisner -Roy Disney -Wells -Katzenberg -Imagineers + Brand +

13. Thank you 13