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Introduction to Management (BM007-IMT)

Asia Pacific University

Table of Contents

1.0 Introduction............................................................................................................2
2.0 Mega Environment.................................................................................................3
2.1 International Element...........................................................................................3
2.2 Economic Element................................................................................................4
3.0 Task Environment..................................................................................................5
3.1 Customers and Clients..........................................................................................5
3.2 Competitors..........................................................................................................6
4.0 Conclusion...............................................................................................................7
References.....................................................................................................................8

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Introduction to Management (BM007-IMT)

Asia Pacific University

1.0 Introduction

The Walt Disney Company, commonly known as Disney, is a public listed


multinational mass media and international family entertainment enterprise based in
America. Disney was founded by Walt Disney and Roy O. Disney on October 16
1923. Disney runs its operations through five business segments, which are Media
Networks- the TV broadcast and distribution arm of Disney, Parks and Resorts, The
Walt Disney Studios- where Disney films are produced, Disney Consumer Productsthe business segment of Disney and Disney Interactive- produces online mobile and
console games. Disney is best known for the products of its film studio, the Walt
Disney Studios. It is the foundation on which Disney was built and is currently one of
the largest and best-known studios in Hollywood (Said, 2013). Disney is also
renowned for its theme parks- Disneyland and resorts throughout the world as it is
one of the worlds leading providers of family travel and leisure experiences.
(Disney, 2013).

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Introduction to Management (BM007-IMT)

Asia Pacific University

2.0 Mega Environment

Mega environment is part of the external environment which reflects the broad
conditions and trends in the societies within which an organization operates. Mega
environment includes technological, economic, legal-political, socio-cultural and
international elements. In the Walt Disney Company, the two mega environments that
will influence its business functions are International and Economic elements.

2.1 International Element

International element is the developments in countries outside the


organizations home country that have the potential to influence the organization. The
international environment includes the different political, economic, and cultural
institutions found in different nations, the international trade and investment
framework, and the international monetary system. (Hill, 2009, p. 420) This is the
reason why there is a great influence on Disneys success in the development outside
Disneys home country. Disney realized the huge benefits of expanding its business
abroad and utilizes a very international approach in its business functions. Disney has
theme parks and resorts in several countries such as France, Japan, Shanghai and
Hong Kong. Besides that, Disney channels are also available in many regions of the
world through Disneys Media Networks subsidiary. Many of Disneys films and
blockbusters produced via The Walt Disney Studios are also available for audiences
worldwide. Disney also regularly hold stage shows in many countries to increase its
brand awareness. In the latest Disney film- Frozen, Disney achieved a boost to its
worldwide recognition factor when Frozen became the highest-grossing animated
film of all time when it recently reached US$1.072 billion at the worldwide box
office. In early March, Frozen won two Oscars award for best animated feature and
best original song for Let It Go. (BBC News, 2014) Disneys presence is greatly felt
throughout the world and this is one of the main factors that contributes to the success
of Disney.

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Introduction to Management (BM007-IMT)

Asia Pacific University

2.2 Economic Element

Economic element is the system of producing, distributing and consuming


wealth. Again, this is affected by national considerations, because different countries
have different production systems- different types of economy. (Whitehead, 1994, p.
19) Since its creation, Disney has been a major contributor to the tourism industry in
Florida with its 4 theme parks and two water parks. Walt Disney World has had a
much larger impact on Florida than simply the property itself. Walt Disneys initial
purchase of land caused property values to skyrocket and extensive infrastructure to
be added. Governmental strategies allowed Disney provide incentives to state and
local governments through additional tax revenues and name recognition. Walt
Disney, being a capitalist market meaning all of its wealth generated are from means
of privately generated by individuals, either directly or through corporations. Disney
Resorts is Southern California is also contributing billions of dollars to the local
economy and millions of dollars in taxes. A study conducted in 2009 concluded that
the Resort generates $4.7 billion yearly for the Southern California economy.
(Disneyland Public Affairs, 2010) Figure 1 below shows the 2010s report on
percentage of increase in new guests. Disneyland in Anaheim, California remains at
the second with 16.97 million visitors in 2010, a 0.5% increase over 2009 when the
park attracted more than 15 million guests.

Figure 1 (Source: http://www.insidethemagic.net/2011/06/teareleases-2010-theme-park-attendance-numbers-potter-and-konggive-universal-huge-growth-but-disney-remains-on-top/)

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Introduction to Management (BM007-IMT)

Asia Pacific University

3.0 Task Environment

Task environment is an external environment of an organization which affects


its abilities to reach business goals. Any business or consumer with direct
involvement with an organization may be part of the task environment. It also
depends on the precise products and services that the organization decides to offer and
on the location where it chooses to conduct its business. Examples of task
environment sectors includes competitor, customer and client, supplier, labour and
government agencies.

3.1 Customers and Clients

Customer and Clients are individuals or organisations that purchase another


organisations products and services. They are important in the economy as both
produces and consumers of products and services. (Worthington & Britton, 2000, p.
120). Disney obtain their customers and clients through their business divisions
namely: Media Networks, Parks and resorts, Walt Disney Studios, Disney Consumer
Products and Disney Interactive. Although the core target customers of Disneys
theme parks are children, they do not have the purchasing power, but their parents do.
This is why Disney should also focus on the needs of the adults, their secondary
customer, in order to make sure each customer receives a positive experience so they
will visit once again. For example, if a parent test drives a new car and the kids are
bored and discontented, the parent will become preoccupied and less likely to make a
purchase before leaving. In the same way, Disney must implement strategies to please
everyone. Customers and clients are important to the survival of Disney as they are
Disneys source of income. Besides that, customers can contribute to Disneys success
by providing constructive feedbacks and also purchasing Disney merchandises in the
theme parks. Disney is upgrading and building more rides and implementing crowd
control mechanisms to reduce the queue of the rides to satisfy customers. Next, the
clients of the Disney Company are travel agents, film distributors, suppliers are many
other business entities. Disney must treat their clients with respect to ensure their
loyalty towards Disney so its long-term future can be guaranteed.

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Introduction to Management (BM007-IMT)

Asia Pacific University

3.2 Competitors

Competitors are organizations or entities which are rivals against one another.
The presence of one or more competitors can affect the prices of goods and services
as the companies attempt to gain a larger market share. There are many other
company which are rivals to Disney such as NBC Universal and Sony Pictures. NBC
Universal is the Disney. NBC Universal is another American mass media company
that provides similar products and services. Similar to Disney, NBC Universal also
owns television stations such as the NBC Universal Television and also a music
industry in the form of Universal Music Group, which is the largest music corporation
in the world. According to (Travel Towards, 2007), NBC Universal also built 6 theme
parks in different regions, known as Universal Studios, which are competing with
Disneylands. Besides that, Disney has another competitor through their Consumer
Products subsidiary in the form of Hasbro, a toy manufacturing company and one of
the largest toymaker in the world. Hasbro competes with Disney through their toys
manufacturing segment. In the corporate world, mergers, acquisitions, and alliances
could be formed among the harshest of competitors. (Wee, 2005, p. 127) For example,
Disney attempts to turn the tide against competitors by acquiring them so that Disney
itself can also gain profit from the acquired company. In 2009, Disney acquired
Marvel Entertainment, a comic book publisher and movie studio, a competitor to
Disney, now becoming one of Disneys biggest source of income and also Disney
managed to reach out to a wider audience base. Through this acquisition, Disney has
become more aggressive than its rivals about growth. (The New York Times,
2009)This shows how Disney manage to transform a competitor into a huge source of
income.

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Introduction to Management (BM007-IMT)

Asia Pacific University

4.0 Conclusion

The business environment is a diverse field as it covers a wide range of


factors. Like what is stated in Disneys mission statement: 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. (Jurevicius, 2013) Disney has indeed a portfolio of
brands through its many business segments to diversify itself to cater to different
segments of the business environment. This is to ensure that their profits are
maximized through its presence in various business segments. External business
environmental factors play a vital part in contributing to the success of an
organization. This is why organizations must be efficient and effective in making
good use the external environment to reap the benefits of it as it is beyond an
organizations control. If the external environments are put to good use, it will
contribute to the success of the organization. However, external environments can
also negatively influence the organization, this is why organizations must constantly
analyze the environment to prepare for any negative influences and take steps to
resolve it to their maximum benefit.

(1500 words)

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Introduction to Management (BM007-IMT)

Asia Pacific University

References

BBC News, 2014. Frozen becomes highest-grossing animation of all time.


[Online]
Available at: http://www.bbc.co.uk/newsbeat/268152155
[Accessed 2 April 2014].

Branson, R., 2012. Like A Virgin: Secrets They won't Teach you at Business
School. 1st ed. London, Great Britain: Virgin Books.

Brooks, I. & Weatherston, J., 2000. The Business Environment. 3rd ed.
Harlow, Essex: Person Education Limited.

Disney, 2013. Company Overview. [Online]


Available at: http://thewaltdisneycompany.com/about-disney/companyoverview
[Accessed 17 March 2014].

Disneyland Public Affairs, 2010. Disneyland Resort Generates $4.7 Billion


in Economic Impact. [Online]
Available at: http://publicaffairs.disneyland.com/disneyland-resort-generates4-7-billion-in-economic-impact/
[Accessed 2 April 2014].

Hill, C. W., 2009. The Strategy and Structure of International Business. In:
International Business. 7th ed. New York: McGraw Hill Irwin, p. 420.

Jurevicius, O., 2013. Mission statement of Walt Disney. [Online]


Available at: http://www.strategicmanagementinsight.com/missionstatements/walt-disney-mission-statement.html
[Accessed 3 April 2014].

Said, S., 2013. The 10 Biggest Hollywood Studios. [Online]


Available at: http://www.therichest.com/rich-list/the-biggest/the-10-biggesthollywood-studios/
[Accessed 19 March 2014].

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Introduction to Management (BM007-IMT)

Asia Pacific University

The New York Times, 2009. Disney Swoops Into Action, Buying Marvel for $4
Billion. [Online]
Available at:
http://www.nytimes.com/2009/09/01/business/media/01disney.html?_r=0
[Accessed 20 March 2014].

Travel Towards, 2007. Universal Studios Theme Parks Around the World.
[Online]
Available at: http://traveltowards.com/universal-studios-theme-parks-aroundthe-world/
[Accessed 2 April 2014].

Wee, C.-H., 2005. The Root of SWOT Analysis: Knowing Inside from
Outside. In: Sun Zi Bingfa: Selected Insights and Applications. Jurong,
Singapore: Prentice Hall, p. 127.

Whitehead, G., 1994. The Economic Environment of Business. In: Business


Studies. Jordan Hill, Oxford: Made Simple, p. 19.

Worthington, I. & Britton, C., 2000. People. In: The Business Environment.
3rd ed. Harlow, Essex: Pearson Education Limited, p. 120.

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