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View Full Version : Don't underestimate the importance of profit



Morrigoon
09-24-2003, 04:06 PM
I've read a lot of threads/posts/etc on these boards where people lament Disney's focus on profit, then go on to say that Disney should focus on its customers instead.

I feel this weakens the argument, but I understand it's based on a mistake in phrasing. By "focusing on profit" I assume most of you are referring to using cutbacks to increase profits. But this is not the sole meaning of focusing on profit.

What we should be saying, IMHO, is that Disney should increase profits BY giving its customers what they want, and thus increasing earnings, rather than trying to squeeze every red cent out of this year's earnings, and in the process, alienating customers and negatively affecting future earnings.

When you make suggestions for ways Disneyland could improve, remember that EVERYTHING must bring with it some element of improving profits, either through increased efficiencies (lowering costs) or by increasing earnings (getting more people to buy/visit/etc). Disney isn't a charity, nor should we expect it to be, but they could certainly find better ways to coax more money from our wallets, and make us happy to give it to them.

I think this is the major shortsightedness in the Eisner administration - no one high up has shown the vision it takes to do it properly, at least not in many years.

Back in the 80's, the Disney name stood for QUALITY. Yeah, you paid through the nose, but you felt guaranteed to get your money's worth, so you paid gladly. Now, Disney no longer has that reputation, and overpriced goods are suspect at best. If I'm shelling out $25 for a doombuggy model, it should not be 2" high and made of plastic (and we all know how well THOSE have been selling :rolleyes:) So many of the princess dresses bear little resemblance to the animated princesses, and don't even get me started on the dolls, or the fact that they keep selling Sleeping Beauty in pink instead of blue! In the 80's, I knew that if I went to Disneyland, every wall would be freshly painted, every lightbulb on Main Street would work (or only one or two on the entire street would have gone out during the evening). In the late 90's we used to start betting pools (or at least discuss starting them) on how many weeks it would take them to replace a certain bulb or (gasp) set of bulbs that had been burnt out long enough for us to wonder about their replacement (what was it, 3 weeks?) The Disney name no longer represents the quality I had come to associate it with. Why? Because instead of building bigger and better, and making me want to buy more, they focused on getting more from me for what I was already getting. This is not the way to guarantee future business.

Eisner can blame the economy all he wants, but the economics at fault are his, not the nation's.

Cadaverous Pallor
09-24-2003, 04:47 PM
Yup.

MonorailMan
09-24-2003, 06:36 PM
True words, Morrigoon. :)

Rallymonkey23
09-24-2003, 07:01 PM
*Stands up and applauds*

So very true.

merlinjones
09-24-2003, 08:30 PM
Excellent post.

Historically, the Disney Company has always prospered in periods when they took financial risk to provide unique entertainment beyond expectations - - and against the warnings of sounder financial minds. And they have always languished when concerned only with predictable low risk product.

We are in a downward spiral that creates profits only on paper, canibalizing historic assets and goodwill for what the textbooks, apparatchiks and surveys say is common wisdom. Only true vision and a golden gut to provide everything the name suggests will put the company back on the road to real profits and bounty beyond measure, just as it has in the past. Sadly, it seems Eisner and Staggs no longer have the balls to go for the brass ring or the eyes to spot it.

Profit and art are not mutually exclusive. Neither are business and ethics.

But we all know those who resist the lessons of history will be doomed to repeat it. Hello, 1984!

Freerider127
09-24-2003, 08:42 PM
Well said, like you say Eisner can blame the economy but its not the nations fault.

Nephythys
09-25-2003, 05:21 AM
Originally posted by Freerider127
Well said, like you say Eisner can blame the economy but its not the nations fault.

I did my part- I traveled in October 2001. I still got on that plan and went to DL for a week no matter what happened on 9/11- I refused to give into the fear and I gave my money into the Disney coffers and I had a GREAT time. It was my children's first trip there and they loved it so much they had tears in their eyes when we left.

It is defininately not the Nations fault- we keep on going- and we keep spending, and the economy is not as bad as some people like to think.

merlinjones
09-25-2003, 07:19 AM
>>It is defininately not the Nations fault- we keep on going- and we keep spending, and the economy is not as bad as some people like to think.<<

That's funny - - I know scads of professionals unable to find decent work - - many of whom used to work at Disney.;)

Nephythys
09-25-2003, 07:36 AM
Originally posted by merlinjones
>>It is defininately not the Nations fault- we keep on going- and we keep spending, and the economy is not as bad as some people like to think.<<

That's funny - - I know scads of professionals unable to find decent work - - many of whom used to work at Disney.;)

I seem to be your favorite person to be disagreeable with- whatever-

Jobless claims are only one part of the economic picture- and I choose to look at more than one indicator thank you-

I work in finance, I am not some hayseed idiot who doesn't know a stock from a bond- and while I know there are people out of work, I also see that people are still spending-

Keep your doom and gloom-

merlinjones
09-25-2003, 08:04 AM
>>I work in finance, I am not some hayseed idiot who doesn't know a stock from a bond- and while I know there are people out of work, I also see that people are still spending-<<

Just as I suspected. A sharp pencil.

Let's hear it for the "hayseed idiots" who speak and feel from the heart, see the truth and don't follow the Order of the Market - - they are the real Disneylanders.

"Disneyland is your land" - - Walt Disney

Nephythys
09-25-2003, 08:24 AM
Originally posted by merlinjones
>>I work in finance, I am not some hayseed idiot who doesn't know a stock from a bond- and while I know there are people out of work, I also see that people are still spending-<<

Just as I suspected. A sharp pencil.

Let's hear it for the "hayseed idiots" who speak and feel from the heart, see the truth and don't follow the Order of the Market - - they are the real Disneylanders.

"Disneyland is your land" - - Walt Disney

Stop putting words in my mouth- you're not very good at it-

I am not an idiot but I happen to work in the field of which I was speaking- I also am a very down to earth person who has no illusions of grandeur- what the hell is a sharp pencil?

I do NOT follow the order of the market, and I am ticked off that you imply that I am not a real Disneylander- can you be more pompous?

Given that you know nothing about me, frankly you can shove it- because your opinion of me is skewed and rude on top of it-

I live in the country- hell, I live on a dirt road- I have nothing against anyone- except at the moment, you!

SacTown Chronic
09-25-2003, 08:31 AM
Am I the only one sensing chemistry beneath the animosity bubbling at the surface?;)

SacTown Chronic
09-25-2003, 08:36 AM
As for the topic at hand.........

Disney, please make a profit off me. I am looking for any excuse to give you my money. Just throw me a bone here. If I am already paying a lot for nothing I'll gladly pay a little more for something. Invest some money on e-tickets and maintenance and I'll reimburse you. You are so close to losing my vacation money next summer. I don't want that. My family doesn't want that. Again, just give me any excuse to come to your resort. Right now you have nothing to entice me with. GET BUSY!

Nephythys
09-25-2003, 08:51 AM
Originally posted by SacTown Chronic
Am I the only one sensing chemistry beneath the animosity bubbling at the surface?;)


OH MY LOL-:D :D

Don't you know that chemistry can be dangerous to your health?:p

dshimel
09-25-2003, 10:36 AM
I think the key difference is short-term vs. long-term thinking. The markets was intended to be about investing. Give a company your money for a decade or two and see what they can do with it. Unfortunatly, it today's economy that lacks other attractive investment oppertunities, the stock market is about trading. Not what the company can do with the money in a decade, but what they can make next quarter's financial statement look like.

Investments have to result in improved financials in a year, not 5 years. Budget cuts and milking the fans have replaced art and originality.

merlinjones
09-25-2003, 12:21 PM
The actual product must drive the train, not the marketing and spin.

Tigertail777
09-25-2003, 03:02 PM
Merlin, I know you mean well but really you are almost outright attacking someone you dont really know... not all people who work in a particular type of job are of the same mold. I Normally really love yer posts, but dont attack people for the sake of the legacy. I think Walt also beleived there was a little good in everyone... why else would we get movies like Pollyanna?

Please DO continue in your crusade of helping the parks bring back the magic, I fully back you on that, but dont use people who are not public figures as shields. It just aint cool.

All of that said, I think one of the major problems with Disney parks is they just have too much red tape and paperwork... something is really wrong when you basically have to sign forms in triplicate to several departments just to get a lightbulb changed. A work order should be ONE easy form, to ONE department, and the buck should stop right there. Plus there should be less outsourced projects.. they should keep their own staff and do their own work, there are many more benefts to doing this than outsourcing not the least of which it promotes harmony within the company. my 2 cents for now.:D

Pat-n-Eil
09-26-2003, 11:00 AM
When you make suggestions for ways Disneyland could improve, remember that EVERYTHING must bring with it some element of improving profits, either through increased efficiencies (lowering costs) or by increasing earnings (getting more people to buy/visit/etc). Disney isn't a charity, nor should we expect it to be, but they could certainly find better ways to coax more money from our wallets, and make us happy to give it to them.

This is a great point. I agree 100% with the sentiment. I would probably phrase this more as a value argument. The company I work for offers us a "good idea award" program where we can submit an idea that benefits the company and if the committee feels it has merit, they implement the idea and I would a 1 time check for up to 10% of the (annual) savings up to $3,500. It is a very generous program.

So how do I prove the company would profit? By giving clear and compelling evidence of actual savings. It is much harder to prove that a suggestion for an improvement in some area of customer service would have a tangible monetary benefit. I'm not saying it wouldn't, but it is much harder to prove it.

We are a utility, and we started staying open for a period on Saturdays. We thought this would be of benefit to our customers. So we advertised it with every billing and it turned out that so few customers were utilizing the service that the hours we scheduled people to work were much less productive than working M-F shifts. So we cancelled the program.

This doesn't mean some people didn't see the benefit, but not enough to make it worth our while. Unfortunately, this might put a damper on other customer service oriented ideas and more emphasis on cutbacks and ways to get more for less. It is the modern corporate credo.

I know I'm being long winded here, but I think the original quote is very astute, but there probably comes a point where you've already taken out all of the service you can.. and it no longer becomes a profit point but one of basic services that need to be in place. We all *think* that a better park with better CM coverage and better attractions would be more profitable. But that is a tough sell without trying it out to see.. and it might take awhile to see the results.. but if Eisner is in cost-cutting mode, we'll probably be more disappointed before we get hopeful.