The business strategy that is used by The Walt Disney Company, which is the parent company of Epcot, is differentiation.
The famous slogan “where dreams come true” has been instilled in most people at a very young age and depicts their business strategy of differentiation.
Disney is a leader in the family entertainment and media enterprise. They focus on four business segments, media networks, parks and resorts, studio entertainment and consumer products. They apply the differentiation strategy for a specific age group, usually from toddlers to teens because they provide entertainment through parks, movies, and songs (“Company Overview”). Therefore, one can argue that the ‘Focus’ strategy is also applied in combination with differentiation.
The Future World focuses on imagination and technology remembering the past and taking a glimpse into the future. The World Showcase section brings a miniature version of the world together with each country’s unique differences and as a guest you are able to embrace the different cultures all at the Epcot Park. No other park offers this unique experience (“Epcot Overview”).
Epcot Center was the second out of four Florida based theme parks built by Disney and divided by two sections that were named (a) World Showcase to educate guests on international culture and Future World which educates guests on technological advancements and innovations that are future focused.
Force 1. Epcot’s Buying Power is low because for one thing according to Wikpedia.com “In 2009, Epcot hosted approximately 11 million guests, ranking it the third most visited theme park in the United States, and sixth most visited in the world.” http://en.wikipedia.org/wiki/Epcot_Center. Some of the reasons for this are because there are no other theme parks that strictly focus on culture, technology, and innovation and in the same time provide such a wondrous and educational yet enjoyable learning experience as well as Epcot. Also, every night, Epcot presents a magnificent and unforgettable show on the water. “Witness a thrilling nighttime kaleidoscope as the sky erupts with over 1,100 pyrotechnic bursts and the extraordinary Earth Globe floats across the lagoon, revealing wonders of the seven continents on its curved LED screens — the first ever of their kind. Revel in rousing original music as lasers turn the very sky into a work of art.”
· World Showcase Since Epcot is 300 acres larger than the Magic Kingdom, the park is divided in two sections called World Showcase and Future World. World Showcase examines the international culture of people in other countries. People can actually pretend they are in another country due to the well thought out themes that display what culture is like in each country and in the same token also provide diverse attractions to give you a little taste of each Country and get your imagination going. “World Showcase is a collective of Pavilions that wrap around the World Showcase Lagoon. Inside the Pavilions, find shops, attractions and restaurants that represent the culture and cuisine of these 11 countries” http://disneyworld.disney.go.com/parks/epcot/attractions/
· Future World The other side of the park is known as Future World where it educates guests on innovative aspects and technologically advanced applications that are based from the beginning of time to the present and throughout the future. As an example, Spaceship Earth is the main attraction. It is basically an attraction that looks like a giant, round silver ball that resembles the earth and is located in the beginning of the park after you enter. The ingenious reasons behind this attraction are for visitors to pretend they are taking a tour of the history of the world through different time periods while traveling around theearth through space. http://disneyworld.disney.go.com/parks/epcot/attractions/spaceship-earth/
Incentives that Disney offers to visit their theme parks
· Disney’s Park Hopper Passes and Other Tickets can be purchased on the Web or inside the Park- “Magic Your Way Base Tickets give each member of your travel party entry to one Theme Park a day each day of your ticket. And now the longer you play, the less you pay per day! The average price per day for a 7-day Magic Your Way Base Ticket is less than half the price of the same single-day ticket. It's like saving over 50%.” http://disneyworld.disney.go.com/parks/epcot/ Since Universal only provides park passes to 2 theme parks and their incentive right now is pointed toward purchasing tickets (on-line only) for savings, Disney would have a greater value because of how much more they are offering. i.e. The Park Hopper Pass listed above. http://www.universalorlando.com/Tickets/tickets_2.aspx?ComponentId=11423&SourcePageId=7805%23page=Tickets_tickets-2.html&expID=13-5805&contentID=13-11423&seq=2
· Credit Cards – Both Theme Parks offer Loyalty programs. Disney was first in offering Visa Credit Card incentives http://disneyworld.disney.go.com/faq/visa/
· Discount Tickets & Passes for Florida Residents – Florida residents receive great deals when visiting Disney theme parks. “Walt Disney World Resort offers its neighbors special prices on tickets. Take advantage of significant savings on single-day advance purchase and multi-day Theme Park tickets, Water Park tickets and passes” http://disneyworld.disney.go.com/florida-residents/
Force 2.
Both Apple and Microsoft have trademarks and patents that cannot be duplicated which makes them the ideal technologically innovative suppliers to Disneys’ on-line products and services.
These two examples completely differentiate to what the other offers and therefore, the power the supplier has over Disney is HIGH since there are few brand named competitors besides Apple and Microsoft that can supply these unique offers and therefore, have the ability to INCREASE their prices to Disney. "Ideally, your organization would like to be a supplier organization in a market in which there are few substitutes for the products and services you offer." (Haag, p. 18). Buyer power will still remain low due to the differentiations of the two conglomerates above and the unique ways they offer the consumer to download items or play games.
Epcot’s Supplier Power of Employees would be reduced –
The power would be REDUCED if Disney changes its approach and does not use strict hiring methods and diversity. "Our team of dedicated supplier diversity professionals engages in several activities to ensure that the diversity we find in our communities is reflected in our supply base:" http://corporate.disney.go.com/corporate/diversity/supplier_diversity_tools.html.
Disney’s supplier power over their employees is HIGH because they have a very large work force and frequently change hands in top-management. "However, it would be increased if Disney's corporate level strategy is based on a horizontal and decentralized and informal management approach. Ideas are born from within the departments and are worked-up throughout the relatively low hierarchy, where the final decisions are made. The management focuses on group creativity and in team-work. For instance, the most creative employees usually met every Sunday in the purpose of coming-up with new ideas and new business concepts/strategies. The Sunday meetings are referred to as "Gong Shows", where all participants have to come-up with a unique idea. As seen in this example, a large emphasis is placed on employee participation, especially on the most talented employees. Furthermore, the company is frequently refreshing its top management with new executives. "Top-flight" managers from the entertainment and the financial business bring with them new ideas and concepts which can be applied in the Disney Company. There is however a significant increase in expense attached to luring the very best to join the company. This increase in expense is directly related to special perk-packages, higher bonuses and escalated salaries that are offered to the top-executives." http://reocities.com/TimesSquare/1848/disney.html.
Force 3. The Threat of Substitute Products are Low in the Five Forces Model is high when there are many alternatives to a product or service, and low when there are few alternatives from which to choose" (Haag, p. 18). Substitute products would be low for both Disney and Microsoft, but high for consumers downloading and purchasing Apple i-tunes and other applications that are associated with it.
Switching Costs – "are costs that make customers reluctant to switch to another product or service supplier." (Haag, p. 18) As an example in a non-monetary sense, with respect to The Disney Corporation, their switching costs would be LOW due to the differentiation of services both Apple and Microsoft provide. In retrospect to consumer switching costs between Microsoft and Disney, they would also remain low because there is no added on bonus such as the history of how many X-Box games you purchased if you decide to purchase the X-Box 360or download it to your computer, for example. However, if you (the consumer) choose to switch to another internet company to download music, you may be reluctant to switch due to Apple’s collaborative filtering, which basically means that i-tunes developed a unique profile that supplies the history of everything you had purchased and downloaded, so if you switch, you would have to start all over again because the new company will not have a profile or your past purchases and because of this, the Threat of Subsitute Products and Services are reduced to the consumer. Apple "has reduced the threat of substitute products and services, in a market in which there are many substitutes, by tailoring offerings to you, by creating a "cost" to you to switch to another online retailer." (Haag, p. 19)
Force 4. Threat of New Entrants are high "in the Five Forces Model is high when it is easy for new competitors to enter a market, and low when there are significant entry barriers to entering a market. Entry Barrier is a product or service feature that customers have come to expect from organizations in a particular industry and that must be offered by an entering organization to compete and survive." (Haag, p. 19)
1-Entry to Barrier Example 1- Apple i-tunes would be an example of a barrier to entry in relation to Disney because they offer the consumer many choices. Apple not only offers their unique style of touch screen features to their i-pod, i-pad and i-phone, they make it easy for the consumer to be entertained at the same time with Disney related features of many kinds. "The Disney App is everything you love and expect from Disney in one FREE custom application. At the touch of a finger -- find all your favorite Disney characters, play custom games, watch video, and listen to music. You can also get the latest news on all things Disney, buy movie tickets, and customize the App with exclusive character themes." http://itunes.apple.com/us/app/disney/id331622823?mt=8
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiw3E95omvv5epqqs_csEFGZ1JtxTkQvkmvbRicy1h7ThDW6c6fP9oD5kjwjN9RYjEH5SDezif9i9Yu1v_-jyizJyo2JsU8x9kRaBzAiUqW8QsTrI39uS118k7bqnUUGd5JFDGJDQZQGVk/s1600-h/itoons.jpg
2-Entry to Barrier Example 2 – Disney has their own entry to barrier in relation to their Disney World Resorts with the Disney Podcast which can download mobile applications to Apple i-phones. The application will give you exclusive information that only relates to the Disney World Resort you are located in at the present time, such as making dinner reservations to any Disney restaurant, GPS directions to Disney Theme Parks which also include directions as your walking around in Theme Parks and/or shopping in other locations without having to refer to a map.
http://disneyparks.disney.go.com/blog/2009/10/mobile-magic-first-disney-parks-mobile-app-details-screen-shots-unveiled/
3-"eTicket™ is simply the most advanced, most detailed, and most powerful Disney Park guide available! With nearly 3000 Points of Interest covering all of the Disneyland and Walt Disney World parks, resorts, and venues, eTicket has the information you need to plan and enjoy your visit right at your fingertips. eTicket is a downloadable application available in the iTunes App Store and requires the free upgraded iPhone 3.1+ software, GPS, and 3G or WIFI." Disney Guilty Party, a family-friendly mystery game for the Wiihttp://www.wdwinfo.com/eticketapp/
Force 5. Rivalry among existing competitors is somewhat at a medium because if you were to compare once again to Universal they are basically equal to some of the incentives they offer.Credit Cards – Both Theme Parks offer Loyalty programs. Disney was first in offering Visa Credit Card incentives
· Credit Cards – Both Theme Parks offer Loyalty programs. Disney was first in offering Visa Credit Card incentives
Walt Disney Imagineering is the master planning, creative development, design, engineering, production, project management, and research and development arm of The Walt Disney Company and its affiliates.
Since Epcot is owned by the Disney Corporation, the aspects of how they do business with other entities in order to link their products and services are followed in the same manner as their parent company.
The Disney Corporation uses an abundance of E-Commerce models. A few examples resemble how a business sells products and services to customers who are primarily other businesses. Specifically, one example would be on how advertisers can utilize Disney’s services to promote their businesses on any of the Disney web sites for a fee. Advertisers would want to do this because of the branded name of Disney and Consumer to Business (B2C)
http://corporate.disney.go.com/corporate/business.html
E-Commerce occurs when a business sells products and/or services to customers who are primarily individuals. If a consumer wants to purchase something related to Epcot, they would most likely be connected to any of Disney’s on-line stores like thedisneystore.com which is their newly created website http://www.disneystore.com/. Disney’s sells its products to people that purchase items from any of their websites.
The parent company of Epcot, the Walt Disney Company uses product, place, promotion and pricing as part of their marketing mix as well as maintaining a website and the use of online ads for their Business to Consumer segment.
When consumers search for Disney on Goggle or Yahoo, they will receive the Disney site toward the top of the list because they pay a fee to ensure their link appears as close to the top as possible. The parent company of Epcot, also allows banner ads to appear on their website, as shown above with the Office 2010. Customer’s interested in booking a vacation can experience one stop shopping from the link below which allows customers to make their accommodations right on line. http://disneyparks.disney.go.com/disneyparks/en_US/index?name=Vacation-Discounts-And-Special-Offers
In 2008 the company used a viral marketing promotion called “What Will You Celebrate?” was basically a chain letter that linked the recipient to a Disney webpage and once the page opened a video clip showed a reporter covering the theme park and the recipient’s name was digitally plastered all over the park dedicated to celebrating that person. The clever technique provided a special advertising message to the potential customer, because as we know most everyone enjoys seeing their name.
http://blogs.orlandosentinel.com/business_tourism_aviation/2008/12/disney-worlds-c.html
In 2009, Disney set up an e-commerce Web site called Disneystore.com which included additional merchandise that was not available on line in the past. It was created to complement customer’s “Disney experience”. It allowed customers the ability to purchase products outside their theme parks via the online service. Another clever marketing campaign.
http://www.dmnews.com/disney-launches-new-e-commerce-site/article/137019/
The Company traditional marketing mix also included additional components of people, process and presentation. The company has always set out to “make dreams come true”. They have several products and services that they offer at a reasonable price for those people interested in planning a vacation which will include visiting their Epcot Theme Park. The company originally targeted young children but soon realized that they would profit by targeting the parents of these children as well. The Epcot theme park offers a unique experience for any customer interested in the technology and cultural venue offered. Promotions are offered and discounts are available throughout the year. Part of their promotion is all the merchandise they are able to sell based on their Disney characters and movies. Disney’s reputation for their high level of service is successful in part by the addition of people, process and presentation they add to their marketing mix, which is filtered down to all of their affiliates, including Epcot.
http://www.plu.edu/~lessarde/doc/disney-paper.doc
Disney's Epcot: Payment Methods
Epcot has several systems to collect their payment. The parent company of Disney offers flexibility and has offered a flexible interest free payment plan for booking through their website. It actually allows you to deposit money toward your vacation for as long as you would like but the only requirement is that the vacation must be paid in full with 45 days of the actual start of the trip. Disney also offers a Disney Visa credit card with zero % interest for the first six months. The credit card allows you to earn reward points for everyday purchases in their stores and at their theme parks to name a few.
The company has a secure site and accepts all forms of payment including debit card or smart cards. You can also choose to use a PayPal account which will transfer your money directly to Disney through the Internet by transferring your funds. Disney will also accept electronic checks directly from your account to settle a bill. Disney allows you to book your entire vacation online and pay on the electronic method that is most convenient for you.
http://disneyvacationspecials.com/disney-world-payment-plans-offer-flexibility
“Disney Seeks to Take Its ‘Phineas and Ferb’ Cartoon Hit to Next Level”
http://www.nytimes.com/2010/06/22/business/media/22ferb.html?_r=1&ref=disney_walt_company
The article titled “Disney Seeks to Take Its ‘Phineas and Ferb’ Cartoon Hit to Next Level” was written by Brooks Barnes on June 21, 2010. This article introduces two new characters and what Disney hopes to accomplish with them is simple: top-line initiative or revenue enhancement just as they did with Epcot.
Disney has always tried to instill morals in stories, movies, and songs; in any of their projects, like they did with Epcot, or skits, there is a moral to guide children and people of all ages in the ‘right’ direction. Disney calls this differentiation:
“We have the ability to identify properties and emerging trends that are capturing the attention of kids — what’s the hottest license, what’s coming up — and ‘Phineas and Ferb’ is definitely one,” said Lisa Harnisch.
They believe through Phineas and Ferb that they can expect to gain the profits they need for the coming quarter and year while also entertaining people around the country with a story “about two stepbrothers and their pet platypus,” (Barnes). Epcot entertains in the same way by taking children through tours of several different countries including Norway, Italy, Germany, China, Japan, Morocco, United Kingdom, Canada, and France (all taken from the Epcot map above). They do this to teach children about the different cultures that makes the U.S. diversified. All in all, like the cartoons, they will teach children about ethics and food in different cultures.
They are trying to introduce the 2 characters in every way possible from having “Costumed characters…introduced at Disneyland, where posters advertising the show also adorn ticket kiosks… [having] the program’s first major merchandising line [that] will be introduced by mass retailers — Wal-Mart, Kmart, Kohl’s, J. C. Penney, Target —…a monthly magazine will arrive soon. In addition, Kraft has licensed Phineas Flynn and Ferb Fletcher to adorn its Macaroni and Cheese line (arriving in grocery aisles in 2011),” (Barnes). Disney is thinking of everything to get kids to adore these new characters and accept them as the SpongeBob replacement.
They wanted to treat children like adults rather than like babies. They “fought very hard early on not to dumb anything down,” said by one of two creators, Dan Povenmire (Barnes) but their song is catchy and is of pure entertainment. The same can be applied to Disney's Epcot attractions. They show children the different wonders of the world and the modern outlook that they would never imagine to be possible. Children brains have been said to resemble sponges; therefore, the time to learn is now while they are young.
“Getting a song into a child’s head is often the key to immortality — think about the theme music for ‘The Flintstones’”.
Besides being catchy, the song is a way “…for content to spread virally on the Web, particularly among college students,” (Barnes).
‘“I honestly was starting to lose hope about cartoons because all of the new ones seem to be mean-spirited or raunchy,” said Kirstie Barlow, a 19-year-old college student. ‘This show is funny because it’s witty. I don’t feel like my brain cells are dying when I’m watching it,’” (Barnes).
Works Cited
“A Brief History of Disney World’s Epcot Center.” Articlesbase. Creative Commons License. 11 July 2010
Barnes, Brooks. “Disney Seeks to Take Its ‘Phineas and Ferb’ to Next Level.” New York Times
21 June 2010: B1 +
“Company Overview.” The Walt Disney Company. The Walt Disney Company. 11 July2010
“Corporate Responsibility.” The Walt Disney Company. The Walt Disney Company. 10July 2010 <>.
“Culture.” The Walt Disney Company. The Walt Disney Company. 11 July 2010
“Disney’s Approach to Leadership Excellence.” Disney Institute. Disney.Com. 11 July2010
“Epcot Overview.” AllEars.Net. 11 July 2010
“Privacy Policy.” Epcot Electric. Fortis Utility. 12 July 2012
“Walt Disney Imagineering.” The Walt Disney Company. The Walt Disney Company. 11 July 2010 < http://corporate.disney.go.com/careers/who_imagineering.html>.
“Walt Disney Imagineering WDI.” Disney Professional Them Parks &Resorts Professional Internships. The Walt Disney Company. 11 July 2010
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