Marketing Expenses, Perceptual Map, and Organizational Chart Analysis

Answer

Marketing Expenses, Perceptual Map, and Organizational Chart Analysis

            A useful practice in strategic management is the ability to create reports that will be beneficial to decision makers in the organization. In the pages that follow, there will be three different reports presented that may help The Walt Disney Company (Disney) in their short and long-term strategies. Brand positioning is critical in a competitive market. Evaluating marketing expenses as compared to rivals as well as reviewing a Perceptual map will aid Disney in its brand positioning. Finally, evaluating the existing organizational chart while also looking to match employee talent and improve the chain of command structure would be a productive process for Disney.

Part 1: Marketing Expenses versus Rival Firms

            Below is a schedule showing the line items where advertising, marketing and promotion expenses are included in Disney as well as two of its competitors. Detail for the change in expense from fiscal year-end 2020 as compared to fiscal year-end 2019 is also included in the analysis. The exact amount of advertising, marketing and promotion is unknown for both Disney and ViacomCBS, however, detail is provided for what occurred within that category and was obtained from the individual company

Annual Reports (The Walt Disney Company, n. d; Comcast Corporation, n. d.; ViacomCBS, Inc., n. d.).

Disney’s exact advertising, marketing and promotion are not explicitly known, but the shareholders report shows selling, general, administrative, and other expenses, which is what is used for the purposes of this report; this segment totals $12,369M  (Walt Disney Company, n.d.). Even though there is not an exact comparison to Disney’s competition, Comcast and Viacom, Disney appears to almost double Comcast’s allocation and over doubles Viacom’s expenditures in an equitable category. As mentioned above, in 2020 Disney’s expenses in this category increased by 7%, because of the consolidation of TFCF and Hulu as well as increased spending on Disney+ (Walt Disney Company, n.d.). Disney is a very large media company, and therefore has large amounts of money to spend on these types of ventures. Additionally, Disney focuses a lot of their effort on releasing new movies and TV shows frequently, which require large advertising, marketing and promotional costs.

The strategy that Disney needs to continue to focus on is the continued emphasis on virtual media, meaning Disney+, Hulu, and ESPN+. Based on the numbers shown above concerning Disney’s increase in spending, it is noted that it can be largely attributed to the company’s online streaming platforms. Hence, Disney is already implementing the aforementioned strategy. Since Disney is already implementing the strategies that are being suggested, it can be recommended that the company continues on the same path in terms of allocating advertising, marketing and promotional funds to these streaming platforms. That being said, the overall increase in marketing costs needs to be distributed to other areas of the company, as well. The most likely segment would be the parks, experiences and products division, as this sector of the company is the least profitable at the moment. The closure of some Disney stores in shopping malls around the country might be a good place to start.

Part 2: Perceptual Map

According to Disney’s Perceptual Map, it is evident that the company falls within the section that offers high cost products which also trigger high levels of customer satisfaction. It is evident that Comcast offers the best price since it also results in the best customer satisfaction levels in the industry. Disney is the third in the industry, showing that it has competitive advantage over many others such as Apple TV and YouTube.

            Considering Disney’s location in the matrix, it is clear that it is positioned at an ideal place. Since customer satisfaction level is high despite the high prices, it is clear that the company is able to generate a lot of revenue (Malhotra & Bhattacharyya, 2019). Customers will not have a problem paying a slightly high price since they know that the company will offer them sufficient value in their subscription (Vernanda & Sari, 2020). However, in the presence of the two competitors Sony and Comcast, they will definitely prefer either one of these to Disney.

            Hence, it is recommended that the company should slightly reduce its price so that it is in line with that of Comcast. In addition, more effort should be invested in the identification of customer needs (Shahid, 2019). This step will allow the company to introduce necessary changes that will promote customer satisfaction. It will position Disney as the industry leader, right before Sony and Comcast.

Part 3: Diagramming Existing and Proposed Organizational Chart

The following description provides an existing and improved organizational chart for Disney. Information for the existing executive titles was found on the company website under executive leadership. This only represents a portion of an actual and proposed organizational chart for Disney.

Disney Existing Organizational Chart

Disney Proposed Organizational Chart

            Structure plays an important role in initiating effective strategies. The proposed organizational chart above illustrates how creating change in a company’s structure it can be better equipped to enact strategy. The Walt Disney Company’s existing organizational chart shows the tiered graph of leadership and current executive titles. The proposed change is focused on creating more clarity in The Walt Disney Company’s theme park divisions. This divisional focus creates functional activities that are performed both centrally and in each separate division (David, et al., 2020).

            The proposed organizational chart presents a change in theme park executive titles, by having a Chief Operating Officer of the Disney Parks Division report to the Disney Parks chairperson. Under the Chief Operating Officer in this proposed change, geographic distinctions are made clearer by having a president of each international park and a separate North American president, with two vice-presidents serving over the Florida and California parks. This structure can help create a clear strategy in building both domestic and international Disney Park divisions.

            The only associated cost with this new structure would be adding a Chief Operating Officer of Disney Parks. This change would aid in providing more organizational structure in executive titles that better reflect the company’s continued goals in growing their theme parks. Implementing this change would create fresh perspectives and hold presidents over theme parks more accountable than the previous structure implemented by the company.