Actionable insights straight to your inbox

Equities logo

The Best Laid Plans of Mice and Men — Part II

In this entry of the series, we look at three spectacular successes.
Michael McTague, Ph.D., Executive Vice President, Able Global Partners in New York, serves clients in a variety of industries that seek capital for expansion, acquisition, consolidation or re-financing.
Michael McTague, Ph.D., Executive Vice President, Able Global Partners in New York, serves clients in a variety of industries that seek capital for expansion, acquisition, consolidation or re-financing.

Image source: The Walt Disney Company

June 2022 — Myth Buster

Part 2 of this series turns the tables on Part 1, which looked at failures to plan effectively. In this entry, we highlight three spectacular successes. Over the years, the Myth Buster has covered many companies and industries. While we have discussed leisure, The Walt Disney Company ( DIS ) has not gotten much attention. Disney lies on the opposite end of the planning spectrum from the Afghanistan exit, the Edsel and the collapse of the cell phone industry.

Starting with painstakingly accurate cartoons and the creation of Mickey Mouse, the company has grown into an amazing conglomerate of all kinds of profitable leisure activities. If you consider Disney a star in the broad “leisure” industry, consider what leisure normally means: summer vacations at the beach, campgrounds, swimming, travel to a vacation spot, fishing and related businesses. Disney — even more so than Carnival ( CCL ), Norwegian Cruise Line ( NCLH ), JetBlue ( JBLU ), Sun Express, Air Transat (Toronto: TRZ) and a host of massive hotel chains — operates a giant year-round leisure/fun business with great care and profit. That alone puts the company in a special category. While fishing boat captains and kiddie ride operators are sleeping late in the winter, Disney staff are rolling out new promotions and operating safe, covered (no rain or snow inside!) and enjoyable rides.

Disney’s “theme” parks tower above all competitors in the beauty and appeal of their rides, the overall management and Disney’s ability to give people a great time including good meals, gifts, live entertainment and other attractions. If asked about competitors, investors cite Six Flags ( SIX ) and Busch Gardens ( SEAS ). If you travel around the US during the summer, there are also plenty of small, local mobile children’s rides. Boardwalks have cotton candy and a few offerings. Coney Island has hot dogs and a big roller coaster. Atlantic City used to have gambling.

None of these leisure competitors comes close to Disney in detail of the “rides” and scope of attractions for the entire family. Cruise ships do not have Pirates of the Caribbean, Dumbo or It’s a Small World. Also, Disney has been smart enough to pack its parks with numerous roller coasters, each with a different and intriguing theme. Disney’s roller coasters appeal to all members of the family not just future Navy Seals. Instead of one ride and a Ferris Wheel, Disney offers one ride after another, each with its own character.

Survey Says…

OK, so much for the praise. Smart investors remain wary of surveys about business. A recent survey was published about “happiness” in various countries. Afghanistan came in last on the survey. No surprise. Venezuela, however, ranked # 105 in the survey conducted by Sustainable Development Solutions Network. This put Venezuela ahead of India, which is hard to believe. Similarly, a few surveys show other theme parks and rides outranking Disney. This is also hard to believe. Space Mountain, for example, has been rated as the best ride at Disney World in one survey, taking more than 10% of the total vote.

According to TripSavvy, Disney attractions also excel in other parts of the world, such as Journey to the Center of the Earth at Tokyo DisneySea and Pirates of the Caribbean in Shanghai Disneyland. There is always a sliver of people who think Coney Island or Atlantic City deserve reconsideration as great theme park/vacation locations. Any smart traveler — from the vacationer who has never heard the term “theme park” to an editor from TripSavvy — knows that Disney’s theme parks have no real competition. Generally speaking, surveys confirm this.

Best Laid Plans Often Work Out Very Well

This series looks at planning. The thinking and detail that went into “It’s a Small World” or “Pirates of the Caribbean” are way beyond a simple wooden roller coaster or ferris wheel that keeps stopping to pick up or let people off. At the beach, people go on a ferris wheel to enjoy themselves, but they only see it once per year. That differs significantly from taking a family of five to Disneyland or Disney World for the experience of a lifetime.

The Birth of the iPhone

The iPhone also deserves a comment in a piece on planning because it was so carefully thought out. It took the benefits of a mobile phone — remember them? — and the Internet and rolled them into one smaller, lighter package with texting, camera and, more recently, video recording. This was a huge breakthrough, and it did not happen by accident. Planning included the idea of combining disparate technologies along with the effort to actually put them together in a user friendly manner. A ten pound iPhone would not have gone over as well as the actual product. An iPhone with limited or very expensive Internet service would have stalled at the starting gate. Apple’s ( AAPL ) wealth bulge was enormous and led the tech giant to begin paying dividends after decades of avoiding

The Manhattan Project, which brought about the atomic bomb, also scores as an example of superb planning under great pressure. In addition to producing a powerful bomb before the Germans did, the Manhattan Project found a way to keep separate, parallel parts of the overall project going simultaneously rather than using traditional linear planning, which would have delayed later aspects of finishing the bomb until earlier steps had been achieved. The Manhattan Project achieved its purpose and improved the whole process of planning.

This second entry in the series shows that the myth does not always apply. Of course, Burns did not say best laid plans always go astray. Sometimes, they work out very well. The final entry will wrap up this series onplanning or the lack of it.


Michael McTague, Ph.D. is Executive Vice President at Able Global Partners in New York, a private equity


Equities News Contributor: Michael McTague, Ph.D.

Source: Equities News

A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.