Disney Case Analysis

Case Analysis

Walt Disney Productions, June 1984

3/14/2011

MBA 8110-001

Tom Pavlo

Table of Contents

Introduction 2

Statement of the Problem 4

Case Analysis 5

Conclusion 14

Works Cited 15

Introduction

The name “Disney” represents far more than a business, a brand, or a man. It exemplifies the classic American ideals of rags-to-riches business leadership. The mere mention of the term Disney elicits positive reactions from young and old, its impact and influence of the business and brand far greater than the man himself could ever have imagined when he first laid pen to paper.

Despite Disney’s place in the minds of consumers, Disney Productions Inc. is a publicly traded corporation and, as such, must strive for the enhancement of shareholder wealth. If the company does not live up to the high standards of its owners, the popularity and influence of the Disney brand, which has grown so substantially since its inception in 1923, is rendered meaningless. The events in June of 1984 represent a key moment in Disney’s history, when the actions of Disney Productions, Inc. and its leaders would affect the future of the Disney brand for years.

Ron Miller often found himself torn between two interests. On one hand, he was the acting President and CEO of Disney Productions Inc. and had an obligation to maximize his shareholders’ wealth. On the other, he was Walt Disney’s son-in-law who was seen as someone who would represent his father-in-law’s artistic and corporate vision. Despite Disney Productions Inc. celebrating its 55th year anniversary of Steamboat Willie, the first cartoon with sound, the business was struggling. In April 1983, shares were trading at $84.38. In November of that year, a 17% drop in quarterly earnings resulted in a share price of $47.50. Moreover, reports from Goldman Sachs declared that Disney had “not been a growth vehicle...