{"id":1457,"date":"2015-12-05T22:04:36","date_gmt":"2015-12-06T03:04:36","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/disney-enabling-the-most-magical-place-on-earth\/"},"modified":"2015-12-05T22:17:36","modified_gmt":"2015-12-06T03:17:36","slug":"disney-enabling-the-most-magical-place-on-earth","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/disney-enabling-the-most-magical-place-on-earth\/","title":{"rendered":"Disney: Enabling the Most Magical Place on Earth"},"content":{"rendered":"

Overview\"mickey\"<\/a><\/strong><\/p>\n

The Walt Disney Company has set a precedent for theme parks. Though just one piece of its overall business model, Disney\u2019s parks generated approximately $11.4B in revenue in 2013 and yielded profits of $2.2B. [1] The company\u2019s business and operating models for its theme parks are in alignment, creating a unique customer experience which enables its success.<\/p>\n

Business Model<\/strong><\/p>\n

Disney\u2019s parks and resorts have a fairly straight forward business model. The costs of running a park are extremely high. Not only is there a sizeable upfront investment, but labor alone cost approximately $800M yearly at one of Disney\u2019s mid-sized parks. [2] Luckily, Disney has found a number of ways to generate revenue to cover these expenses. The bulk are covered by simple ticket sales. Additionally, while customers are in the park, Disney is able to charge a high premium on food and merchandise since there are few or no alternatives available. Disney also provides hotels and resorts to encourage customers to stay within its sphere of influence even longer. The key to this model is volume. Disney\u2019s theme parks attract more than double any of its competitors at over 132 million guests per year. [2]<\/p>\n

\"walt-disney-world-news1\"<\/a><\/p>\n

Operating Model<\/strong><\/p>\n

The operating model of Disney\u2019s parks and resorts is really where it sets itself apart from any of its competitors. Everything Disney does is intended to enhance the customer experience. This creates better value for the customer while providing Disney with more opportunities to capture fiscal value. Disney goes above and beyond and invests in many parts of the park that may not, at first, be obvious to the customer. It\u2019s reasonable to assume people attend parks for rides, attractions and other obvious draws. Part of Disney\u2019s truly unique operating model however, is to create an immersive experience that makes the customer feel like they are in a whole new world. From the layout of the park to the education of employees, everything works to capture more value from the customer and ensure they have the best possible experience.\"Magic-Kingdom-Tunnel-Map\"<\/p>\n

Disney World was designed to create the perfect customer experience. Beneath the parks is an elaborate series of tunnels that allow employees to move undetected. [3] A map of this system can be seen to the right. This helps to keep the illusion of the park alive. For example if an employee is dressed as a character who is only supposed to be in a specific location of the park, they would use the tunnels so that customers do not see them outside their designated location. The tunnels also allow maintenance and facilities staff to move undetected throughout the park as they perform their day to day tasks. From there, staff education is vital to creating a meaningful experience. To remind the staff of their role within the park they are even referred to as Cast Members. [4] This always serves as a reminder that they are playing a part within the theme park and are there to entertain and serve the customer. The staff is trained in a number of different areas. Two of the more unique things they are taught is a gentle and friendly way to gesture so as not to come across aggressive by pointing and how to uniformly sign the names of famous Disney characters if they are tasked with dressing up and entertaining children for the day. [4]<\/p>\n

Conclusion<\/strong><\/p>\n

Disney goes to great lengths to ensure the best possible experience for its parks and resorts customers. They go far beyond the bare necessities to create something the people have clearly shown they are willing to pay for. By aligning its business model so well with its operating model Disney is able to capture immense value while simultaneously providing consumers with a magical value proposition.<\/p>\n

 <\/p>\n

Sources<\/strong><\/p>\n

[1] The Walt Disney Company Fiscal Year 2014 Annual Financial Report and Shareholder Letter – https:\/\/cdn.thewaltdisneycompany.com\/sites\/default\/files\/reports\/10k-wrap-2014_1.pdf<\/a><\/p>\n

[2] The Secrets Behind Disney\u2019s $2.2 Billion Theme Park Profits – http:\/\/www.forbes.com\/sites\/csylt\/2014\/07\/14\/the-secrets-behind-disneys-2-2-billion-theme-park-profits\/<\/a><\/p>\n

[3] 13 Things You Never Knew About Walt Disney World – http:\/\/www.businessinsider.com\/walt-disney-world-secrets-2013-5?op=1<\/a><\/p>\n

[4] Interview with former Disney Cast Member, Anthony Forlini<\/p>\n","protected":false},"excerpt":{"rendered":"

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