Disney - Business Description & Problem
A weak domestic economy, competition in the amusement park realm, potential amusement park attendees lacking patience when it comes to inconveniences, fewer international travelers and mounting operations costs leave Walt Disney World in a precarious business situation. To stay competitive in this difficult landscape, Disney needs to find new ways to show each visitor value in its brand and commitment to his or her vacation experience, without breaking the bank. One way Disney hopes to accomplish this is by integrating technology into the overall customer experience.
Many people recognize the famous characters, voices and the hilarious children's cartoons that began in late 1928 from The Walt Disney Company. Their iconic brand has made Walt Disney Co. an "international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media" (Walt Disney Company). Their goal is to provide families with wholesome entertainment and memories that will last a lifetime in which many make the pilgrimage to their top-of-the-industry theme parks and resorts. They also maintain multiple other businesses that include collectible toys and memorabilia, television networks and who could forget their films such as the recent "Saving Mr. Banks." With theme parks and resorts in countries like Japan, Paris, and the United States of America, Disney has to ensure the customer satisfaction of millions on a daily basis and in 2003, CIO Roger Berry, was placed at the helm to "restore the luster of its aging brand, increase efficiencies and boost attendance" (CIOinsight, 2003).
Walt Disney World is losing sales. Disney's theme parks are experiencing lower attendance figures and in turn, lower revenues. At the same time costs for insurance, healthcare and pension plans for employees is on the rise. The ticket prices have also risen 20% since 1998. These ticket prices are one of the main reasons, among others, for lower sales figures. In an effort to turn things around for Walt Disney World, Roger Berry wants to bring in fresh technology to the park. Disney wants to restore its aging brand by increasing efficiencies, boosting attendance, and increasing the bottom line revenue. By bringing in new technology, Berry hopes to create a more personalized environment and improve the overall customer experience.
The Analysis& Lessons Learned
Walt Disney is operating in a service industry where communication with the customer is very important and keeping customers happy is even more important. This is a kind of industry where "word of mouth" really improves popularity to the service provider. To provide better services to the customer, Disney took help of Customer Relationship Management (CRM).
To gain a strategic advantage and in an attempt to serve the customers in a better way information technology can support their ideal CRM. They will implement an array of new technology, for example, "Pal Mickey" that puts to use GPS, smart sensors, wireless technology and mobile devices. (Time to Invest, 2004).
The problem to be solved in Disney's case goes beyond providing the means to justify current leisure spending in a weak, post-recession economy. Their use of a CRM model and subsequent expansion of the use of technology must get customers to increase their spending on leisure. The success will greatly depend on whether the customers see the benefits the way Disney thinks they will.
A key lesson for Disney is that they must focus on the customer part of CRM. A quick search on the Internet for news sources on keyword "Disney" provides a long list of articles, mostly complaining about their high prices. Some blog sites have began to take issue with Disney's prices in innovative ways. For example, one popular fashion travel site lists French Castles that families can rent for less than a stay at Disney (Elle Decor, 2014). Another site praises Disney's improvements, but still cautions that the increase in prices will continue to be a major challenge for Disney moving forward (Harry, 2014). In Disney's current strategy, in order for the Disney to solve their sales problem, customers must agree to pay increased prices. Time will tell if this strategy of increasing value for increased prices will be successful.