Use the work you completed for Parts, I, II, and III with your CLC group to inform your analysis for this assignment. Write a 500-750-word summary of how the reports for Parts I, II, and III of the CL

CLC-MARKETING EXPENSES, PERCEPTUAL MAP & ORGANIZATIONAL 14

CLC-Marketing Expenses, Perceptual Map, and Organization Chart Analysis

July 6, 2022

CLC-Marketing Expenses, Perceptual Map, and Organization Chart Analysis

Part I- Marketing Expenses versus Rival Firms:

When it comes to marketing or advertising expenditures, it is essential to consider the competition and how they spend their money. For example, if a company outspends its competitors, it may be necessary to increase marketing or advertising expenditures to stay competitive. It is also crucial to consider the overall market and how much money is spent on marketing and advertising. If the market is saturated with marketing and advertising, it may be necessary to spend more money to stand out from the crowd. As the leading entertainment company in the world, Disney Company has always been a big spender on marketing and advertising. Below is a comparative data table for Disney, Universal, and Discovery (Warner Bros).

Analysis of Marketing Expenses:

In 2021, Disney's marketing expenses totaled 5.5 billion dollars (Statista, 2021). Their main competitors, Universal and Discovery, spent $1.5 billion and $1.2 billion respectively on advertising in 2021 (Universal Music, 2022). In terms of the specific company of Disney, they are currently facing stiff competition from Universal and Discovery. For 2022, Disney will likely need to increase its marketing or advertising expenditures to stay ahead of the competition (SEC, 2022). Additionally, given the overall market saturation of marketing and advertising, Disney will likely need to spend more money to ensure that its marketing and advertising campaigns are effective.

When analyzing the firm valuation table, it indicates that Disney has been spending a significant amount more on advertising and marketing expenses than Discovery and Universal. This is likely since Disney has a much more extensive portfolio of products and brands to promote than Universal or Discovery. Disney also has a much higher profile than competitors, likely allowing it to command higher prices for its advertising (SEC, 2022). As we advance, Disney will likely continue to outspend its competitors on marketing. This is not necessarily bad, as Disney has proven that it can generate a return on its investment in marketing. 

To keep up with the competition, Disney needs to continue to increase its marketing and advertising expenditures. One way they could do this is by increasing their digital marketing efforts. With more and more people spending time online, Disney needs to ensure they are reaching potential customers where they are spending their time. This could include increasing their social media presence, developing targeted online ads, and investing in SEO for their website. Another way Disney could stay ahead of the competition is by continuing to create unique and innovative content. This has always been one of their strengths and has helped them stand out in the marketplace. To continue producing high-quality content, Disney needs to invest in their talent and ensure they have the resources they need to succeed. However, given the current economic conditions, it may be difficult for Disney to continue to increase its spending at the same rate. As a result, Disney may need to focus on more efficient ways to spend its marketing and advertising budget to stay ahead of the competition.

Part II- Perceptual Map:

A perceptual map is a product-positioning strategy that allows a company to compare itself from competitors (David et al., 2020). A perceptual map provides a better understanding of competitive advantages and disadvantages along with rival companies (David et al., 2020). The Walt Disney Company has two main business segments, the Disney Media and Entertainment Distribution (DMED) and Disney Parks, Experiences and Products (DPEP).  Part of the DMED segment is Disney’s streaming services which include Disney+, ESPN, and the majority of Hulu. Disney has heavy competition with its streaming services from companies such as Netflix, Amazon Prime, and HBO Max.  For the hopes of long-term growth and providing high-quality entertainment a perceptual map was conducted on Disney’s streaming services along with its main competitors. Below is a perceptual map of Disney’s streaming services’ positions among its competitors.

Summary of Perceptual Map:

The perceptual map shows Disney’s main competitors in relation to pricing and quality of service. Disney’s main competitor is Netflix, even though Disney+ and Hulu are cheaper and have many of the same features than Netflix (Myers, 2022). Netflix has a wider variety of content than Hulu and Disney+, but Disney+ offers more exclusive content. At the end of 2021, Disney’s total streaming services grew 60% with a total of 179 million subscribers (The Walt Disney Company, 2021). Disney is close to its top rival, Netflix who currently has an estimated 222.64 million subscribers (Statista, 2022). Therefore, the debate is ultimately which company offers the best value of streaming services but at the best price.

During development of the perceptual map, steps four and five are utilized to influence a company’s strategy choices and help them “reposition their brands offering to shift consumer’s perception of the brand to provide a competitive advantage over rival brands’” (David et al., 2020 p. 500).  Step four determined whether Disney’s streaming services are in the most ideal position relative to its competitors. According to the perceptual map, Netflix has a higher perceived value than Disney+, ESPN, and Hulu even though they have higher prices. The placement of Disney’s streaming services on the perceptual map can influence Disney by suggesting areas to focus on to improve the value of their streaming services offered. This could include strategies such as creating a bundle of Disney+, Hulu, and ESPN for an affordable price. For step five, Disney needs to reposition their brands to have a stronger competitive advantage over Netflix. Since customers don’t necessarily view a cheaper streaming service as having a higher value, Disney can reposition their brands to offer more with a higher potential price to gain more of the market share and be more competitive than Netflix.

Part III- Diagramming Existing and Proposed Organizational Chart:

An organizational structure is very important to the success of a company. Currently, Disney has a cooperative multidivisional (M-Form) organizational structure. Disney has two primary business segments the DMED and the DPEP divisions. Below is a list of Disney’s current executives in their leadership team.

Executive Titles for the Walt Disney Company:

1. Susan Arnold Executive Chairman & Chairman of the Board

2. Bob Chapek Chief Executive Officer, CEO

3. Dana Walden, Chairman General Entertainment Content

4. Alan Bergman, Chairman, Disney Studios Content

5. Rebecca Campbell, Chairman of International Content and Operations

6. Josh D’Amaro, Chairman of Disney Parks, Experiences, & Products (DPEP)

7. Kareem Daniel, Chairman of Disney’s Media Entertainment Distribution (DMED)

8. James Pitaro, Chairman ESPN and Sports Content

9. Jeremy Doig, Chief Technology Officer (CTO)

10. Tom Staggs, Senior Executive Vice President, and CFO

11. Carols Gomez, Senior Vice President and Treasurer

12. Paul Richardson SEVP & Chief Human Resource office (CHRO)

13. Jennifer Cohen, EVP Social Responsibility

14. Latondra Newton, SVP Chief Diversity Officer

15. Nancy Lee, SVP & Chief of Staff to the Executive Chairman

16. Diane Jurgens, EVP of Enterprises Technology and Chief information officer

17. Ronald Iden, SVP & Chief Security Officer

18. Horacio Gutierrez, SEVP & General Counsel & Secretary

19. Kristina Schake, Senior EVP, and Chief Communications Officer (CCO)

20. Susan Skyes, Senior Manager in HR, (The Walt Disney Company, 2021).

The cooperative M-form corporate structure has constrained diversification (Williams, 2019)

Proposed Organizational Chart:

For the new and revised organizational chart, there will not be one person who holds the title of both the chairman of the board and CEO of Disney. Also, the title chairman will be eliminated and in replacement will be titled chairperson (David et al., 2020). Below the CEO, there will be a chief operating officer (COO) and then each division’s chairperson will report to the COO (David et al., 2020). Many companies in today’s market are getting rid of the COO position, but with the complexity and wide-ranging amount of industries that Disney spans, it is important they have a COO (David et al., 2020). On the same level as the COO will be the CHRM, CTO, CMO, CFO, CSO and CDO. The presidents of the international divisions will report to the Chairperson of International Content and Operations. It is important that there is a position that monitors international markets and their continuity to the Disney global brand. The President of the US and Canada will report directly to the Chairperson of DPEP due to the importance and size of the domestic Disney Parks.

Below are the revised executive titles for the new and revised organizational chart:

Executive Titles: 

1. Chairperson of the Board

2. CEO

3. COO

4. CHRMO

5. CTO

6. CMO

7. CFO

8. CSO

9. CDO

10. Chairperson of DPEP

11. Chairperson of DMED 

12. Chairperson of Disney’s Studios Content 

13. Chairperson of International Content and Operations 

14. Chairperson of ESPN and Sports Content 

15. President of United States and Canada

16. President of Europe

17. President of Asia Pacific

18. President of Latin America and Other Regions

Disney recently condensed their business structure from four SBU’s into two extremely large ones, DMED and DPEP. In the new organizational chart, there is SBU organizational structure included due to the importance and size of Disney’s two SBU’s. SBU structure “groups similar divisions together into units and delegates authority and responsibility for each unit to a senior executive who then reports directly to the CEO” (David et al., 2020 p. 469). The difference in the revised organizational structure is that the chairpersons of the two SBU’s, DMED and DPEP, as well as three other chairpersons of content report to the COO rather than the CEO. The revised organizational structure also gets rid of the various Vice President positions with the intention of lowering management costs by removing and unnecessary layer of management and delegating the responsibilities to the Chief Officers.

References:

David, F., David, F., & David, M. (2019). Strategic management concepts and cases: A competitive advantage approach (17th ed.). New York, NY: Pearson Education.

Myers, B. (2022, May 17). Netflix vs. Disney+: Which is the better deal? Retrieved June 29, 2022, from http:// www.fool.com/the-ascent/personal-finance/articles/netflix-vs-disney-which-is-the-better-deal/

The Walt Disney Company. (2021, November 10). The Walt Disney Company Reports fourth quarter and full year earnings for fiscal 2021. Retrieved July 5, 2022, from https://thewaltdisneycompany.com/the-walt-disney-company-reports-fourth-quarter-and-full-year-earnings-for-fiscal-2021/

The Walt Disney Company (n.d.). Executive Leadership. Retrieved June 30, 2022, from, https://thewaltdisneycompany.com/about/

SEC. (2022). The Walt Disney Company. Retrieved Jul 3, 2022, from https:// www.sec.gov/Archives/edgar/data/0001744489/000174448922000057/dis-20220209.htm

SEC. (2022). Time Warner INC. Form 10-K. Retrieved July 3, 2022, from https://www.sec.gov/archives/edgar/data/1105705/00119312518053619/d504160d10k.htm

Statista. (Netflix subscribers count worldwide 2011-2022. Retrieved June 30, 2022, from https://www.statista.com/statistics/250934/quarterly-number-of-netflix-streaming-subscribersworldwide/#:~:text=Netflix%20subscribers%20count%20worldwide%202011%2D2022&text=Netflix%20had%20approximately%20221.64%20million,the%20first%20quarter%20of%202022.

Universal Music. (2022). Reports. Retrieved July 3, 2022, from https://investors.universalmusic.com/reports/

Universal. (2021). Annual Reports. Retrieved July 5, 2022, from https:// https://investor.universalcorp.com/financials/annual-reports/default.aspx

Williams, A. (2019, February 28). Walt Disney company organizational structure for synergistic diversification. Paramore. Retrieved July 5, 2022, from https:// panmore.com/walt-disney-company-organizational-structure-synergistic-diversification#:~:text=The%20Walt%20Disney%20Company%20has,cooperative%20M-form%20corporate%20structure.