The Walt Disney Company’s operations management deals with a diverse set of strategic goals and objectives corresponding to diverse business operations. The company operates in the media and entertainment industry and the travel, tourism, and hospitality industry, as well as markets for merchandise, such as Disney-branded books and clothes. The company’s 10 critical decisions of operations management are holistic in supporting high efficiency and productivity in this diversity of business operations. Business optimization strategies based on the competitive advantages, opportunities, and challenges discussed in the SWOT analysis of Walt Disney align with goals for efficiency and productivity in the company’s operations management decision-making processes.
Considering the impact of operations management on business capabilities and competitive advantages, effectiveness in the 10 critical decision areas addresses the competitive pressure described in the Five Forces analysis of Disney. The company’s competitors include the theme park operations of Six Flags, Cedar Fair, and Universal Studios; the entertainment businesses of Sony and Paramount; and the travel and tourism services of Royal Caribbean, Carnival, and Norwegian. Moreover, Disney’s streaming services (e.g., Disney+) compete with the video streaming services of Netflix, Amazon, Apple, YouTube (Google (Alphabet)), Microsoft, and Facebook (Meta). Disney’s operations managers’ decisions affect competencies against these competing firms.
Disney’s Operations Management: 10 Critical Decision Areas
1. Goods and Services. Disney’s strategic objective in this decision area is to ensure consistency in operations that satisfy the company’s standards for the whole organization. For instance, the design and specifications of movies must be consistent with the design and specifications of the company’s theme parks and resorts. The design of goods and services is based on the business purpose and goals represented in Walt Disney’s mission statement and vision statement. For example, the objectives of the company’s mission and vision determine operations management decisions focused on the entertainment quality of organizational outputs. The elements of Walt Disney’s marketing mix (4P) and corresponding marketing strategies work with the operations management specifications of goods and services developed and released for target customers around the world.
2. Quality Management. The critical decision in this area of Disney’s operations management focuses on the objective of consistent quality while considering cost limits and resource availability. Walt Disney’s competitive strategy and growth strategies influence the quality specifications, resource requirements, and corresponding operating costs for ensuring product uniqueness as a competitive advantage. The company’s operations managers maintain processes that satisfy these requirements while optimizing efficiencies and productivity.
3. Process and Capacity Design. Disney’s operations management aims for high efficiency and productivity in processes that satisfy the output requirements of the business. For example, the company’s cruise line operations require high efficiency, capacity, and productivity despite the physical space limitations of cruise ships. Also, at Disneyland and other parks and resorts, the company’s operations managers adjust processes and production capacity to match seasonal and occasional trends in market demand.
4. Location. Walt Disney’s strategy for this critical decision area of operations management considers market access and geographic proximity for theme parks, resorts, and travel and tourism services. For its production and distribution of content, like movies and music, the company’s strategy focuses on accessibility involving talent and related human resources. The departments and divisions of Walt Disney’s company structure (organizational structure) influence some strategic variables of this operations management area, like groups and teams for handling operational targets in regional markets.
5. Layout Design and Strategy. Disney’s strategic objective for this critical decision area is to optimize the movement of people, materials, and other resources and assets through layouts that facilitate efficient and productive processes in the business organization. For example, in operations management for Disney theme parks and cruise ships, backstage layout designs prevent disruptions in providing entertainment to guests.
6. Human Resources and Job Design. The critical decision in this area of operations management at Walt Disney focuses on continuously improving human resources to support the operational requirements of the company and its subsidiaries and divisions. For example, the company has training programs and performance appraisal systems to facilitate skill development and to improve job designs. Walt Disney’s company culture (business culture) promotes innovation and quality in workplace behaviors for organizational learning and employee satisfaction, in line with this area of operations management.
7. Supply Chain Management. Walt Disney’s strategies for this critical decision area of operations management aim for a streamlined and stable supply chain involving suppliers whose strategies align with the media and entertainment company’s strategies. The company’s material supply chain management supports the material needs of the operations of amusement parks, resorts, hotels, cruise ships, and media and entertainment production. Operations managers account for the various market and industry trends discussed in the PESTLE/PESTEL analysis of Disney to ensure that the supply chain remains cost effective, efficient, and stable to support the company’s operations in different online and regional markets.
8. Inventory. The strategic objective of Disney’s critical decision in this operations management area is to maintain adequate inventory while minimizing costs and addressing internal and external variables. For example, the company’s inventory control decisions continuously adjust inventory levels to ensure adequacy despite fluctuations in supply and material availability, and to match changes in market demand. Disney has business information systems for coordinating inventory management and the supply chain in all areas of the business.
9. Scheduling. The critical decision in this area aims for work and process schedules that adequately support Disney’s business needs. The company’s operations management involves information systems for automated scheduling for some business processes, like the schedules of maintenance checks of IT assets. However, many schedules for employees and processes involve human input. For example, schedules of some rides and shows at Disneyland involve manual setting after employees perform necessary safety checks.
10. Maintenance. Walt Disney aims for reliability of processes and resources, including human resources, in this critical decision area of operations management. For human resources, the company has HR development and training programs, as well as leadership programs to develop workers’ knowledge, skills, and abilities that match business needs in media, entertainment, travel, tourism, and hospitality operations. Effective maintenance of machinery and equipment, like the ones used at Disneyland and in movie production, ensures optimal efficiency at all times. This efficiency and the corresponding minimization of wasted resources facilitates Walt Disney’s CSR (ESG) and stakeholder management practices, especially programs for business sustainability and environmental conservation.
Productivity in Walt Disney’s Operations
Walt Disney’s operations managers have high productivity targets, although external influences may reduce actual productivity. For example, unfavorable weather conditions may reduce the productivity of theme parks and resorts. The following are some productivity metrics suited to the case of operations management at Disney:
- Number of tickets sold per day (theme park productivity)
- Number of guests accommodated per day (hotel productivity)
- Episodes filmed per month (film production/studio productivity)
References
- Brookey, R. A., Phillips, J., & Pollard, T. (2023). Reasserting the Disney Brand in the Streaming Era: A Critical Examination of Disney+. Taylor & Francis.
- Disney Careers – Benefits.
- Jahangir, J. (2023). Revisiting the principles of economics through Disney. Real-World Economics Review, 89.
- The Walt Disney Company – Form 10-K.
- The Walt Disney Company – Supply Chain.
- Tsarouhas, P. (2023). New Trends in Production and Operations Management. Applied Sciences, 13(16), 9071.