Licensees and vendors are companies separate from The Walt Disney Company and they operate their businesses independently. Many of these entities are large, publicly traded companies in their own right. In general, Disney provides intellectual property, such as a character design and/or a brand, for a particular item of merchandise, such as a costume, and the licensee uses its expertise to apply it to merchandise and have it manufactured and distributed. Each licensee's and vendor's responsibilities include the selection of the factories they use, a key component of their business operations. We require that our licensees and vendors use factories that can comply with the labor standards set by our ILS program, centered on our Code of Conduct for Manufacturers.
Sphere of Influence
Like many organizations, we have the greatest influence on those business entities with which we work directly. What this means in the context of labor standards in the supply chain is that we have some influence with our licensees and vendors, and with the industry or multi-stakeholder initiatives in which we participate. But our influence at the factory level is a function, in part, of the number of parties in the “relationship chain" between Disney and the factory and the importance of Disney-branded business to the factory relative to other brands and buyers. And, in the case of licensing in particular, we are not selecting the factories or ordering, importing or selling the product made in that factory. As a result, our leverage varies significantly from relationship to relationship.
Scope of Licensing and Supply Chain
The data that follows and all such data throughout this report reflect information provided to and recorded by us at the close of our fiscal year 2008. Due to ever-changing business needs and relationships, this data changes regularly. The information is also approximate and is based on our best analysis of the data available.
Geographic Distribution of Business Relationships
The following charts describe the geographic distribution of licensees, vendors and factories across all regions over the course of the fiscal year. They do not reflect the geographic distribution at the end of the fiscal year.