Harvard Business School case study

1. DISNEY
CONSUMER
PRODUCTS
- A Harvard Business
School Case study

2. Disney
Consumer
Products
Conclusion
History
Current
Situation
Solution
Analysis

4. History of Disney

5. Evolution of theWalt Disney Company
2006 – Comprised of 4 major business segments: Media Networks, Parks and
resorts, Studio Entertainment and Disney Consumer Products (DCP)
1996 – Acquired ABC television network as well as 10 television
stations, 21 radio stations, 7 newspapers & several cable networks
By 1971 – Amusement parks at California & Anaheim;
Theme park at Florida featuring hotels, shopping malls etc.
1954 – First television program started which remained
on air for 29 years despite 6 time name changes
By 1942 – Release of films like Snow white,
Pinocchio, Fantasia, Dumbo and Bambi

6. Business Segments
DCP –
Licensed
Walt Disney
characters,
Published
books,
video and
software
products
Media and
Networks –
10 TV
Stations,
72 Radio
Stations and
Internet
holdings
Parks and
Resorts –
10 theme
parks, 35
Disney club
resorts and
2 luxury
cruise ships
Studio Ent
-ertainment
Production
of animated
and live
action films

7. Current Situation
Problem faced…
and

8. Disney Consumer Products
Disney has licensed its products as
merchandise to be sold at the retail outlets in
various categories like :
• Hard lines (food, electronics and stationary)
• Soft lines (apparel, footwear and accessories)
• BuenaVista games
• Home and infant
• Toys
• Publishing

9. Disney Consumer Products – it’s Merchandises
In 1996, Disney has signed an exclusive 10 year,
$ two-billion deal with McDonald’s which gave
the fast food giant to provision to feature
Disney Characters in promotions and to offer
Disney toys with children meals.

10. Current Situation
Disney was being
held as the main
reason for the rising
obesity epidemic

11. • There was a heavy
pressure building from
the side of parents,
activists and the
government to control
the quality of their
offerings/serving.
• Disney has licensed
many products like
chicken, toys, candy, ice
cream, juices etc…
However most of them
were sweets and treats

12. Problem Analysis
At present, Disney has to reconsider the quality and the standards in terms
of nutritional value of the food products they have been licensing
It needs earn the trust of govt., activists and mainly parents by introducing new products
which meet the USDA(United Nations Department of Agriculture) Dietary guidelines
While doing all these, it should ensure that the products will be able to
appeal children because they have significant role in influencing the purchases

13. Current Challenge
Can DCP change the notion
among public through shifting from
sugary diet to more nutritious
meal by producing it’s “Magic”.
CAN IT SUSTAIN ?

14. Market Analysis…

15. Observations…
• People perceived Disney
products with high quality,
trustworthy and familiar to
line of food and beverages
• They associated the word
Disney to “Magic”

16. Observations…
• Children influence the purchase
decisions
• Peer pressure and the
advertisements will influence
children’s preferences

17. Needs and Wants of people
• Fat controlled, high quality, taste
and more nutritious
• Fun elements, different shapes,
magic and more fun

18. What did they do ???
June 2006, Disney Consumer Products (DCP) has decided to change
the nutritional content of their product and introduce new healthy
foods for children under the slogan – “Better For you”
• They established Disney Nutritional Guidelines
• Changed their licensing model to 3 licensing and distribution models

19. DCP - Nutritional Guidelines
Nutrition Control –
• Controlled level of added sugars
• Contain no carbs and hydrogenated fats
• Promote fiber and calcium
• Minimize the activities of additives
• Prefer to use whole food that are intrinsically dense
in nutrients
This can be achieved through –
• Reformulating some products
• Shrinking portions for others
• Phasing out some others

20. DCP’s Three licensing models
Traditional Licensing
model
Sourcing
(Designed and create
products by Disney
but manufactured
and marketed by
licensee)
DirectTo Retail
(DTR)
(partnering directly
with the retailers)

21. Only 41% of the Disney branded products were meeting the Nutritional guidelines after Audit

22. Product Development Decisions

24. Products that already had broad appeal such as milk or
peanut butter need to be made “more healthier”

26. Products that already are healthy, make them more “fun”
Ex: Whole wheat pasta can be moulded into character shapes

28. Products with attractive packaging to inspire product
sampling. Ex: making bottles, in the shape of characters

29. DCP has began licensing it’s characters to imagination farm, a
national fresh produce firm since March, 2006

31. STRENGTH
Brand Recognition
Creative process
Strong diversification
Cooperativeness
Responsiveness
OPPORTUNITY
Mother’s positive
perception about
brand
Disney’s character
popularity
THREAT
Competitors
Differentiation from
natural produce
products
Pricing competition
WEAKNESS
Large R&D costs
High risk factor
Doesn’t have own
manufacturing for
DCP

32. STRENGTH Indicators

33. STRENGTH Indicators

34. Why did Disney partner with Kroger instead of Walmart
Disney was looking for a firm having 10-20 % market share. Kroger had 12% (highest) market
share and more number of national outlets.

35. Competitors

37. Solution
Collaborate healthy foods with Disney programs
Promotion through Kinder Garten
New Characters
Healthy food campaigns for parents

38. Collaborate healthy foods with Disney programs
• Disney films show healthy foods
consumed by Disney’s characters
to affect the children who watch
the film to also consume health
foods
• Tell children who watch Disney’s
programs the disadvantages if they
consume non-healthy food

39. Healthy food campaigns for parents
• Parents must also tell children about
advantages of healthy foods and give the
children healthy food on right proportion
• Parents must understand the importance
and advantages if their children consume
healthy food
• Tell the parents that Disney already has
the products that meet the healthy food
standards

40. Disney could create new character that has the advantage of healthy
foods on their adventure. Children like adventure and healthy foods
could be a big part of their adventure. Like this…
New Characters

41. Promotion through Kinder Garten
• Create children’s habit to eat healthy food
since kindergarten
• Children must understand the advantage of
healthy foods and the amount of food they
must consume

43. Not easy for Disney to change the market taste, because it
would take long time to replace the old habit with new ones
There must be coordination between Disney and its
stakeholder to achieve the objectives that Disney wants

45. Presented by Smaran Raj Bachu (IIT Madras)
as a part of marketing management internship
under the guidance of Prof. Sameer Mathur,
IIM Lucknow.