A Project/Paper first presented in 2010 to examine Strategic Change in Business and Featuring The Walt Disney Company and Its Success through Strategic Change Management. All in the Spirit of Say's Law…"If you build it they will come". (Jean-Baptiste Say)

2. Executive Summary: Going Below the
Waterline for Strategic Change
This project is to better understand The Walt Disney Company’s business model of
perpetual organizational change and its great success. Disney, is one of the largest media and
entertainment conglomerates in the world. Founded on October 16, 1923 by brothers Walt
Disney and Roy Disney as the Disney Brothers Cartoon Studio, the company initially began its
quest for success through positive organizational change by reincorporating
as Walt Disney Productions in 1929. Walt Disney Productions established
itself as a leader in the in the American animation industry before
diversifying into live-action film production, television, and travel.
Taking on its current name in 1986, The Walt Disney Company expanded
its existing operations and also started divisions focused upon theatre,
radio, publishing, and online media. The Disney organization is

3. best known for the products of its film studio, the Walt
Disney Motion Pictures Group, today one of the largest and
best-known studios in Hollywood. Disney also owns and
operates the ABC broadcast television network; cable television
networks such as Disney Channel, ESPN, and ABC Family; publishing,
merchandising, and theatre divisions; and owns and licenses 11 theme parks around the world.
After the death of Walt Disney on December 15, 1966 there was great necessity for organizational
change and the business need to identify his successor. Eventually, Roy Disney became Chairmen
CEO and President of the Company.
During the past 15 years The Disney Company understanding trends and the need to
change or move forward toward the use of 3-D technologies adjusted management structure and
hired Robert A. Iger and made him President and CEO. On January 23, 2006, it was announced that
Disney would purchases Pixar in an all-stock transaction worth $7.4 billion. The deal was finalized

4. on May 5, and made CEO Steve Jobs Disney's largest individual shareholder at 7% and a Director
of the company.
During 2009, according to The Themed Entertainment Association, Walt Disney theme
parks dominate theme park attendance accounting for more than 65 million customers. Seeing
further need to grow and innovate through organizational change. The Disney Company acquired
Marvel Entertainment, Inc., in 2009 for $4.24 billion and Marvel has been a limited liability
company (LLC) ever since.
Understanding patterns and industry changes in the hospitality business, in October
2007, Disney announced plans to build a resort at Ko Olina Resort & Marina in Kapolei, Hawaii,
featuring both a hotel and Disney Vacation Club timeshare units. Scheduled to open in 2011, the
800-unit property will join the other resorts not associated with a theme park, such as Disney's
Hilton Head Island Resort in South Carolina.

5. In the future The Walt Disney Company has projects planned in Asian and European
venues, both Hong Kong Disneyland Resort and Disneyland
Paris have room for future expansion. Additionally, in
November 2009, Disney received approval from the
Chinese government to build a Disneyland resort in the
Pudong district of Shanghai. The resort is expected
to open in 2014. In all cases of The Disney Company’s
practice of change for sake of positive growth has led
to organizational success. The acceleration of current and future employee acceptance of
expansion or development of new property or products is paramount. Disney’s
communication of the coming of future growth or corporate expansion aids in accelerating
employee acceptance of change.

6. Project Propose:
The purpose of this project is to better understand The Walt Disney Company’s
business model of perpetual organizational change and its
great success. Disney, is one of the largest
media and entertainment conglomerates in
the world. Walt Disney Productions established itself
as a leader in the American animation industry before diversifying taking on its current name The
Walt Disney Company expanded its existing operations and also started divisions focused upon
theatre, radio, publishing, and online media. In addition, it has created new divisions of the company
in order to market more mature content than it typically associates with its flagship family-oriented
brands.

7. Organization:
The Disney organization is best known for the products of its film studio, the Walt
Disney Motion Pictures Group, today as one of the largest and best-known studios in Hollywood.
Disney also owns and operates the ABC broadcast television network; cable television networks
such as Disney Channel, ESPN, and ABC Family; publishing, merchandising, and theatre
divisions; and owns and licenses 11 theme parks around the world. The company has been a
component of the Dow Jones Industrial Average since May 6, 1991. An early and well-known
cartoon creation of the company, Mickey Mouse, is the official mascot of The Walt Disney
Company.

8. Disney 2009 Internal
Management Structure:
Key People
Robert Iger
(President & CEO)
John E. Pepper, Jr.
(Chairman)
Steve Jobs
(Shareholder & Board Member)
Anne Sweeney
(President, Disney-ABC Television
Group; Co-Chair, Disney Media
Networks)

9. Summarized Business Needs
and Functional Requirements:
After the death of Walt Disney on December 15, 1966 there
was great business need to identify his successor. Eventually,
Roy Disney became Chairmen CEO and President of the
Company. One of his first acts was to rename Disney World as
"Walt Disney World," in honor of his brother and his vision.
On July 8, 2005, Walt Disney's nephew, Roy E. Disney out of
need and functional requirements returned to The Walt Disney Company as a consultant and with
the new title of Non Voting Director, Emeritus. Walt Disney Parks and Resorts celebrated the 50th
Anniversary of Disneyland Park on July 17, and opened Hong Kong Disneyland on September 12. Walt
Disney Feature Animation released Chicken Little, the company's first film using 3-D animation. The
Disney Company understanding trends and the need to change or move forward toward the use of

10. 3-D technologies adjusted management structure and hired Robert A. Iger replacing Michael D.
Eisner as CEO. Mr. Eisner also waived contractual rights and perks which included use of a corporate
jet and an office at the Burbank studio. Miramax co-founders Bob Weinstein and Harvy Weinstein
also departed the company to form their own studio. Aware that Disney's relationship with Pixar was
wearing thin, President and CEO Robert Iger began
negotiations with leadership of Pixar Animation Studios,
Steve Jobs and Ed Catmull, regarding possible merger. On
January 23, 2006, it was announced that Disney would purchase
Pixar in an all-stock transaction worth $7.4 billion. The deal was
finalized on May 5, and made CEO Steve Jobs Disney's largest individual
shareholder at 7% and a Director of the company.

11. Process Model:
This portion of the project will examine the theme park industry in effort to measure
the impact of The Walt Disney Company on its business model. The project is being done so
future entrepreneurs will have a better understanding of this venture and its organization.
Amusement park and theme park are terms for a group of rides and other entertainment
attractions assembled for the purpose of entertaining a large
group of people. An amusement park is more
elaborate than a simple city park or playground,
usually providing attractions meant to cater
to children, teenagers, and adults.

12. A theme park is differentiated from an amusement park by its various 'lands' (sections)
devoted to telling a particular story. These lands are characterized by the idea that the immersive
environment they create contains architecture, landscaping, stores, rides, and even food that
support a specific theme. Visual intrusion from other 'lands', or from outside the park, are
considered undesirable. Non-theme amusement park rides will usually have little in terms of
theme or additional design elements. Also, a single themed attraction by itself
does not qualify an amusement park as a theme park. It takes a
multiplicity of elements in a common area to define a 'land', and
numerous lands to constitute a theme park. The original theme
park, and archetype of the designation is Disneyland in Anaheim,
California.

13. Performing Groups and
Responsibilities:
There are many performing groups within the theme park
industry. Management is responsible overall decision making and there
Are many key internal groups that generate revenue. The Hospitality
Group is a primary producer of revenue through the sale of food
and drink to their patrons. Food is routinely sold through food
booths, push carts and indoor restaurants. The offerings vary as
widely as the parks themselves, and range from common fast food
items, like hamburgers, hot dogs, cotton candy, candy apples, donuts
and local street foods up to full-service gourmet dishes. Amusement
parks with exotic themes may include specialty items or
delicacies related to the park's theme.

14. The Bottom-line:
An industry’s bottom-line or revenues generated are very important to would be
entrepreneurs interested in getting involved or creating a new business or business model. The
improved global economy and the ongoing modernization and development of theme parks and
amusement parks drove the market to $26.8 billion in sales in 2009 at a 4.5% compound annual
growth rate. According to The Themed Entertainment Association, Walt Disney
theme parks dominate theme park attendance.

15. *Disney's California Adventure: 6.1 million +9.5%
*SeaWorld Orlando: 5.8 million -6.8%
*Universal Studios Florida: 5.4 million -12.0%
*Islands of Adventure: 4.5 million -13.8%
*Universal Studios Hollywood: 4.3 million -6.0%
*SeaWorld San Diego: 4.2 million -12.6%
*Busch Gardens Tampa: 4.1 million -12.3%
By attendance records these are the Top 10 United States
theme parks for 2009:
*Walt Disney World's Magic Kingdom: 17.2 million
*Disneyland: 15.9 million +8.0%
*Epcot: 11.0 million +0.5%

16. Hindrances in Strategic Change:
This area of the project will examine Marvel Entertainment Limited Liability
Company (LLC) and recent organizational strategic change and past hindrances
to change. Marvel’s management teams once felt that a merger or acquisition
of Marvel Entertainment would harm product quality and consumer satisfaction
due to lack of understanding industry and history. Never the less, on
December 31, 2009, The Disney Company acquired Marvel Entertainment, Inc.
for $4.24 billion and it has been a limited liability company (LLC), since then.
Disney has stated that their acquisition of the company will not affect Marvel's
products, neither will the nature of any Marvel characters be transformed.
Disney originally announced the acquisition deal on August 31, 2009, with
Marvel shareholders to receive $30 and about 0.745 Disney shares for each
share of Marvel they own. The acquisition of Marvel was finalized hours after the shareholder voted, giving Disney
full ownership of Marvel Entertainment.

17. Pros and Cons of Strategic Change:
Pros: In 1989 Ronald Perelman's MacAndrews & Forbes Holdings group of companies bought the Marvel
Entertainment Group, the parent company of Marvel Comics, from New World
Entertainment for 82.5 million. "It is a mini-Disney in terms of intellectual property," said
Perelman. "Disney's got much more highly recognized characters and softer characters, whereas
our characters are termed action heroes. But at Marvel we are now in the business of the
creation and marketing of characters."
Boosted by a massive merchandising effort, an increase in Marvel comic
prices, and an overall boom in the comic book industry, Marvel's profits peaked.
Perelman later added the baseball card and basketball card companies Fleer Corporation and SkyBox International,
Italian sticker manufacturer Panini Group, and comic book publishers Welsh Publishing and Malibu Comics to
Marvel's holdings for a combined total of $700 million. Investors around the world recognized his efforts and
generated $80 million for Perelman when he issued Marvel‘s initial public offering. He later added a significant
stake in Toy Biz to Marvel's holdings.

18. Cons: Marvel's attempt to distribute its products directly led to a decrease in sales and aggravated
the losses which Marvel suffered when the comic book bubble[
popped, the 1994 Major League
Baseball strike massacred the profits of the Fleer division,[
and Panini was hobbled by poor
showings at the box office by Disney (Licensing Disney characters provided a major
source of revenue for Panini, so when the movies performed poorly Panini performed
poorly).[
A major bondholder, Carl Icahn, fought to take control of the company from
Perelman. Both men failed as Toy Biz owners Ike Perlmutter and Avi Arad snatched Marvel
from Perelman and Icahn in order to protect their own financial interests. Estimates of his
profit on the deal vary widely. Chuck Rozanski estimates that Perelman made $200–400 million
off Marvel; Forbes thinks he made nothing; and the judge in the Marvel bankruptcy trial estimated
he made $280 million plus various tax advantages.
In December 2003, Marvel Entertainment acquired Cover Concepts from Hearst Communications, Inc.
On March 15, 2007, Stan Lee Media filed a lawsuit against Marvel Entertainment for $5 billion, claiming that the
company is co-owner of the characters that Lee created for Marvel. Additional, a lawsuit over the Ghost Rider
Character ownership was filed On March 30, 2007 by Gary Friedrich and Gary Friedrich Enterprises, Inc.

19. The Organization and
Analyzing Patterns:
From the very beginning in 1923, brothers Walt and Roy Disney analyzed
their industry, surroundings, market and patterns, and changed the name and goals
of Disney Brothers Cartoon Studio and reincorporated as Walt Disney Productions in
1929. Walt Disney Productions established itself as a leader in the American
animation industry before diversifying. Taking on its current name in 1986,
The Walt Disney Company expanded its existing operations and also started divisions
focused upon theatre, radio, publishing, and online media. In addition, it has created
new divisions of the company in order to market more mature content than it
typically associates with its flagship family-oriented brands. While Walt Disney
Productions continued to release family-friendly films such as Escape to Witch
Mountain (1975)and Freaky Friday (1976), the films did not fare as well at
the box office.

20. The animation studio, saw success with Robin Hood (1973), The Rescuers
(1977), and The Fox and the Hound (1981). Disney Productions continuing to analyze
patterns and inspired by the popularity of Star Wars, produced the science-fiction
adventure The Black Hole in 1979. The Black Hole was one of the first Disney releases
to carry a PG rating, the first being Take Down, also released in 1979. The releases of
these and other PG-rated Disney films such as Tron (1982) led Disney CEO Ron Miller
to create Touchstone Pictures as a brand for Disney to release more adult-oriented
material. In 1984 Touchstone released the comedy Splash, which was a box
office success.
Additionally, Disney returned to television in the 1970s with syndicated programming such as the anthology
series The Mouse Factory and a brief revival of the Mickey Mouse Club. In 1980, after seeing a consumer pattern for
purchasing video content, Disney launched Walt Disney Home Video to take advantage of the newly-emerging
videocassette market. On April 18, 1983, The Disney Channel debuted as a subscription-level channel on cable systems
nationwide, featuring its large library of classic films and TV series, along with original programming and family-friendly
third-party offerings.

21. Owning Patterns and Beliefs: Do
they Help or Limit?
In the 1980’s despite the success of analyzing trends and patterns, and hitting home runs
with the Disney Channel and its new theme park creations, Walt Disney Productions was financially
vulnerable. Its film library was valuable, but offered few current successes, and its leadership team
was unable to keep up with other studios, particularly the works of Don Bluth, who left Disney in
1979.
In 1984, financier Saul Steinberg launched a hostile takeover attempt for Walt Disney Productions,
with the intent of selling off its various assets, but Disney successfully fought off the bid with the help
of friendly investors, and Sid Bass and Roy Disney's son Roy Edward Disney
brought in Michael Eisner and Jeffrey Katzenberg from Paramount Pictures and
Frank Wells from Warner Brothers Pictures to head up the company.

22. Today, after nearly a century of following and owning patterns and beliefs both internally and
externally The Walt Disney Company operates as four primary divisions: The Walt Disney Studios or
Studio Entertainment, which includes the company's film, recording label, and theatrical divisions; Parks
and Resorts, featuring the company's theme parks, cruise line, and
other travel-related assets; Disney Consumer Products, which
produces toys, clothing, and other merchandising based upon
Disney-owned properties, and Media Networks, which includes
the company's television and Internet operations.

23. Future Projects and Accelerating
Employee Acceptance of Change:
With an eye on tomorrow The Walt Disney Company has projects planned in Asian and
European venues, both Hong Kong Disneyland Resort and Disneyland Paris
have room for future expansion. In July 2009 the Company was rumored to
have been approached by the executives of Dubailand to build a theme park
in their mega-resort, and in November 2009, Disney received approval from
the Chinese government to build a Disneyland resort in the Pudong district
of Shanghai. The resort is expected to open in 2014. In all cases the
acceleration of current and future employee acceptance of
expansion or development of new property is paramount. In great
part advanced official communication of the coming of future
growth or corporate expansion aids in accelerating employee acceptance of change.

24. Mindset Shift and Accelerating Strategic
Change:
Past Chinese mindset has been changed through enhanced
Communications techniques and exhibited understanding of cultural
differences. Accelerating the acceptance of leaders and the local
community to open their doors to positively accept the Hong Kong
Disneyland expansion project. Rita Lau, the Secretary for Commerce
and Economic Development for Hong Kong, announced that the
expansion of Hong Kong Disneyland had been approved by the
Executive Council on June 30, 2009, and also approved by the
Legislative Council of Hong Kong on July 10, 2009. The park will
receive three new lands; Grizzly Trail, Mystic Point and Toy Story Land. Construction began in late 2009 and
will take 5 years to complete. The park will feature a total of seven themed lands after the completion of all
the new additions.

25. Implementing Strategic Change:
Disney has made no announcements as of 2009 regarding plans for another American theme park but CEO Robert
Iger frequently has cited international expansion as one of the company's three strategic priorities. The only site that is
extremely short on land is Disneyland Resort in California. Although the company has acquired enough real estate to build a
potential third theme park on a former strawberry farm near the existing resort, Robert Iger has stated that the company's
focus in Anaheim is to improve its second park, Disney's California Adventure, before building a third.
The strawberry fields were purchased in 2004 for $99.9 million with a requirement to harvest through the rest the
season. The remainder of the original Disneyland parking lot, southeast of Disney's California Adventure, was designated as a
future growth space for the park. Since the park's opening in 2001, three small projects have been built into that space (A Bug's
Land, The Twilight Zone Tower of Terror, and a backstage warehouse) while a third, much larger project known as Cars Land is
currently being built. Also, in October 2007, Disney announced plans to build a resort at Ko Olina Resort & Marina in Kapolei,
Hawaii, featuring both a hotel and Disney Vacation Club timeshare units. Scheduled to open in 2011, the 800-unit property will
join the other resorts not associated with a theme park, such as Disney's Hilton Head Island Resort in South Carolina.

26. Conclusion:
Organizations like The Walt Disney Company experience, change due to growth, discovery of new
technologies, and even the death of a founder. These firms have
come to understand that change can be both good and bad and
accepting of both with an eye on the ultimate goal for success
can be rewarding. Companies that seek to innovate and lead
their industries also lead and manage change from within with
great success. Companies like Disney that collect and analyze
diagnostic information and conduct ongoing intervention with
precision remain leaders in their industries. According to Delta
Market Research Incorporated, Disney Theme Parks have just announced a strategic rate increase, attempting to
ward off brand cheapening and to increase revenues. Organizations like Marvel Entertainment LLC have found that
the business environment can sometimes force organizations to restructure and to become more

27. open to change. Past hindrances can give way to progress and the survival
of a brand via reengineering and acquisition of convenience and profitability are
inevitable, and organizations that understand and analyze patterns and acting on
management beliefs based on trends in the marketplace have been a helpful
formula for success.
Firms like The Walt Disney Company change so much and so
efficiently via the processes of merger and acquisition often finds the need for
assisting members by clarifying roles and aiding in employee development.
Globally these firms are faced with expansion and growth and positioning
themselves to strategically to benefit. These companies understand the importance
of communications and that recognizing and respecting local cultural differences serve to accelerate the acceptance of
change internally and externally. Organizations like Disney understand that growth in the future is a complex issue that
impacts diverse stakeholders. By 2009, The Walt Disney Company had more than 150, 000 employees in its organization
worldwide, annual revenues of more than $36 Billion and $63 Billion in total assets. Disney has proven that a perpetual
organizational change business model can be successful, and an organization can be a fearless innovator going below the
waterline for strategic change and making the art of change pay off.

28. References:
•Disney.com
•www.marvel.com
•www.wikipedia.org
•www.ask.com
•www.hollywoodreporter.com •PricewaterhouseCoopers' "Global Entertainment
and Media Outlook: 2005-2009."
•The Themed Entertainment Association
•Delta Market Research Incorporated