Disney Business Plan

Disney Business Plan

MGT/449 Quality Management and Productivity

Overview

After close examination of current cost, long wait in lines, safety for guest and employees, guest relations, and employee recruitment and retention the factors which influenced the level of planning needed to accomplish this growth within Disney will not only reveal Disney's effective business practices and tactics but will also highlight the strengths and weaknesses of this monolithic organization. Disney's outlook on planning, centers on their commitment to family entertainment, customer satisfaction, quality, diversification of markets, innovation, management reorganization and corporate restructuring when necessary. The customer has continued to possess the primary power in determining what is acceptable in terms of product and their influence carries great weight in Disney’s model of planning a winning strategy.

In our efforts to improve the overall Disneyland experience we decided to try and focus on solving the problems of high cost, long lines, and park employees and customer safety. As a group, we came up with several possible solutions to deal with these problems. We were successful in improving overall park safety; however, we could not come up with a solid solution to lower cost, and improve the wait time for the attractions.

Rising Cost Issue

One of the biggest challenges facing the entertainment leader is the continuous rising cost to the company which is passed on to the consumer. Therefore, Disney’s pricing strategy becomes one of major importance to its long-range plan. In order for Disney to maintain and attract a solid customer base they must find new ways to cut costs and pass the savings on to the consumer. Strict safety codes and regulations govern the availability and release of existing and new rides at the Disney Parks and non conformity can result in a shut down of park features. Also, currently extremely high gas prices have a negative impact on park attendance as well. Weaknesses ultimately translate to loss of revenue that is reflected in Disney’s overall profit margin. So the Disney organization must find creative ways of minimizing the negative effects of these weaknesses. One great way of minimizing cost was when Disney began to close for business on Monday and Tuesdays during the off season and rival Knott’s Berry Farm would be closed on Wednesday and Thursday for business this was an ingenious way to keep cost down for both parks but yet still have a place for visitors to go to seven days a week. A more beneficial solution to Disney would be to have the Disney Park open on the day that Disney Adventure is closed and vice a versa. This not only keeps the Disney guest busy while the park is closed for operation and maintenance. It also brings money to the Disney Park instead of giving Disney profit to the competing parks. This also keeps the guest satisfied with doing what they planned on which was visit Disneyland not Knots Berry Farm or another neighboring park.

Rising Cost Implementation Plan

Disney’s pricing strategy becomes one of major importance to its long-range plan. In order for Disney to maintain and attract a solid customer base they must find new ways to cut costs and pass the savings on to the consumer. The solutions to cut down cost by closing down one park for a day and have all Disney guests visit the other park or parks has been implemented. This will allow time for maintenance to be done on all park rides, concession stands and novelty shops to be restocked. It will also help cut down on the daily expense that it cost to run the park for the day. As well as give the employees a day to come in to the park for a meeting on updated dated training on safety or any other issues.

Another cost concern that was being considered was regarding children 10 years and older pay adult prices. Adult pricing should not begin unless you are 18 and older. Isn’t that the globally accepted age for doing anything else adult related? So why not transfer that to ticket prices? Disney could recoup from the increased volume of patrons who take advantage of this lowered pricing.

Another method for Disneyland to reduce cost for the average visitor is by offering patrons more package deals. Disneyland can already offer these types of deals, but if they really were concerned about the high cost they can be more flexible with these deals. They can team with major airlines and hotel to lower the overall cost of these deals. Also, they can partner with bus or train lines like Greyhound and Amtrak for those who aren’t planning on driving. In this case, they would save money by not having to pay for the high cost of fuel.

Disney may also want to try offering a price package based on the income of some families who are not able to afford a vacation as much as others. There are a lot of organizations that offer subsidized pricing for families. If Disney were to use this method maybe some of those families who want to go but cannot afford to go will get the opportunity to visit the greatest place on earth as they say.

In addition Disneyland can also reduce costs and help the community by offering discounts to visitors who donate to a local Disney charity. Disney would offer substantial ticketed discounts to visitors who bring something to the park with them to donate to a local charity (i.e. canned food, gently used clothing, cash donation). In addition, Disney could offer cost savings to visitors who purchase annual passes to the park. In turn for these annual ticketed cost savings the park would generate more revenue by having returning guests. Increased revenues for Disneyland could be seen in areas such as food, hotel and merchandise purchases.

Rising Cost Results

While Disneyland will continue to offer group discounts, coupons, and other ways for families to save when visiting the park, we could not reduce the average ticket prices to the general public. In order for Disneyland to remain profitable, the ticket prices need to remain at their current prices. In addition, Disneyland already offers several different deals thru airlines so that isn’t really a possibility. Ticket sales are increased $3.00 every year (see chart below). After further research it became apparent that when ticket sales increased the number of Disney guest grew instead of declining.

One-Day, One-Park,