Jericca d pearson Alexa van Bergen



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Jericca D Pearson

Alexa van Bergen

Case Analysis:

Walt-Disney

3/31/15

Walt-Disney Case Analysis



  1. What is Walt-Disney Company’s corporate strategy?

Walt-Disney’s corporate strategy is to create high family focused content. They want to have better innovation of technology to make their entertainment experience more memorable than others. Lastly, they want to expand more internationally.


The strength of the family brand industry is not just to be animation based but to incorporate other things like media network, theme parks and resorts, studio entertainment, consumer products, and interactive media. This allows Disney to be more diverse. This is not just a children named brand, it’s for the whole family, and even adults since they own ESPN.
By purchasing and owning ESPN it has changed the way people watch their source of entertainment. You can now watch your services on your phone, computers, and tablets through the internet. Not only can you do this for ESPN you can do it for the Disney channel as well.
Disney created and chose to expand its markets by adding Pixar in 2006 and Marvel in 2009. Not only did they expand in through motion picture internationally, but they did so by hotels and resorts, theme parks, cruise liners, television stations, music publishing, and even books directed toward children. Other than United States they have targeted China and Russia, and is available in 100 plus countries.
Disney strategy is to improve their core animation business with new skills and characters. By broadening their target groups through other stations like ESPN, they continue to be diverse and use that as one of their levels of strategy. This has proven to be most successful strategy and continues to be a factor in both current and new markets.


  1. What is your assessment of the long-term attractiveness of the industries represented in the Walt Disney Company’s business portfolio?

Disney has a decently high long-term attractiveness business portfolio. Because Disney is so diverse, they have attractiveness in multiple industries such as media networks, theme parks and resorts, studio entertainment, consumer products, and interactive media. Every one of Disney’s industries create quite a bit of revenue. The one that brings in the most income is their media network. They own a lot of channels such as the Disney channel, Lifetime, History, and all of the ESPN channels. Media is not the only one that is com-mon.


As we all know, Disney is well known for its amazing theme parks and resorts. These items are in place and will never go away. I met people from Manchester, England who were leaving to head toward Disney World. Its impact on other countries creates a desire for all consumers worldwide. Because this a stationary business, this will never go away. It makes too much revenue on a constant basis.
The consumer market relies on the production and success of the other markets. With the healthy growth of movie entertainment, television shows, and theme parks, this allows Disney to produce products that represent each of these three items.
The biggest threat in all of Disney’s industries is their interactive media. Interactive media is their gaming, and online video animations. They are making the least amount of money in that part of the industry. They have suffered losses each year between fiscal year 2009-2011. This has gone up a little bit do to the production of Marvel.
The ranking would consist as (1) Media Network, (2) parks and Resorts, (3) consumer Products, (4) Studio Entertainment, and lastly (5) Interactive Media. Each of these show a continuation of the business in the long-term industry.


  1. What is your assessment of the competitive strength of Walt Disney Company’s different business units?

Competitive strengths of Disney is its different business units compared to other companies in its market. The strengths involve: strong product portfolio (said above), brand reputation, experience in achievements, and diversification in the business. Disney has continually advanced over competitors by targeting their weaknesses and making them their strengths. By using their corporate strategy, having a technological advance over the industry has created separation. Most of their motion picture characters allows their consumer products to increase their sales. Because of the even their interactive media helps create fans because of the video games, themes, and plots. Because Walt Disney holds the majority of the popularity, this creates differentiation and allows Disney to be one of the strongest competitors in its industry.


Like the question above the ranking is the same, (1) Media Network, (2) parks and Resorts, (3) Consumer Products, (4) Studio Entertainment, and lastly (5) Interactive Media. Obviously the top two produce the most income and revenue for Walt-Disney.


  1. What does a 9-cell industry attractiveness/ business strength matrix displaying Walt Disney Company’s business units look like?

A 9-cell industry attractiveness business strength matrix shows which of Disney’s business units should have priority.
Our 9-cell industry matrix is a three by three grid that explains the strength and attractiveness that positions each business by its diversified company. Each bubble is scaled to the percentage of revenues the business generates relative to total corporate activeness scores. The best prospects for good overall performances involve concentrating corporate resources on business units having the greatest competitive strength and industry attractiveness. The left top of the grid shows the high priority for resource allocations (blue), the medium priority for resources allocation (yellow), and the low priority for resource allocation (pink).
In the Walt-Disney 9-cell index below shows that Media is the top performer and the weakest performer is interactive media. Each of the three items in the blue show that they are the most attractive and strongest competitor in the industry. This is where they should invest all their focus and continue to allot all their time on. On the other hand, interactive media should receive the lowest amount of priority, maybe even get rid of it all together.

Industry Attractiveness





8.55 7.40

6.85

6.75 2.85



8.55 High 7.40

6.50











6.45

Medium











3.50 Low













Strong

Average

Weak







Competitive Strength / Market Position




Studio Entertainment Parks and Resorts


Media Network Interactive Media

Customer Products




  1. Does Walt Disney’s portfolio exhibit good strategic fit? What value chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see?

They are really seem to be a good fit strategically for Disney. We believe that because of Interactive Media being such a loss that it is a good thought process but not very successful. There could be good that comes out Interactive Media if they continue to figure out the competitors and the strategy in that industry. Another one they seem to be doing about average in is Consumer Products. If it wasn’t for the Media Network and parks and resorts they probably would be able to have those products.


Because Disney has such an influence in television media, they are able to advertise all about their parks, studios, movies, and any other entertainment. The success of Disney in each of the 5 industries will continue to build on their strengths. The leverage that Disney has in branding is at an all-time high. This is where they are extremely successful. Costs have dimensioned mostly because it has started so long ago. They continue to generate returns in each element. Most of their costs came from the development of their characters. Again going back to their strategy about technology they are gaining in that department. Walt-Disney are behind in the status quo, but as long as they continue to break down the barriers and continue to catch up, they will most likely take over their competitors.


  1. What is your assessment of Walt Disney Company’s financial and operating performance in fiscal years 2010-2011? What is your assessment of the relative contribution of the Disney SBUs to the financial strength of Disney, based on the 2011 fiscal year financial data?

Compared to 2010, 2011 did quite a bit better. Walt-Disney increased its net income by 1 million and working capital increased by 400 thousand. The company even lowered their debt-to-equity. Overall the company did pretty well compared to the previous year. The biggest positive is they decreased their inventory turnover.


The media is the most important strategic strategy for parks and resorts. It is a huge contributor to the overall income for that industry. If you continue to look at the financials separating the industry the biggest problem of the SBU for Disney is interactive media. The other one increase the SBU slightly in 2011 compared to 2010.


  1. What actions do you recommend that Walt Disney Company’s management take to improve the company and increase shareholder value? Your recommended actions must be supported with a convincing, analysis-based argument.

Walt Disney needs to look at buying some of the competitors and look to expand by purchasing properties that could potentially benefit and create future expansion. They could use these properties and make mini versions of Disney World and Disney Land in other areas, to compete with places like six flags. This would help if they did some of this internationally. If they take this globally they can use these areas and create a tax standard where they can continue to pay those countries and increase revenue.

They also could remove the interactive media segment in their plan. This is where they are losing profit and have created a loss. This would eliminate that and could benefit the other four industries by focusing more on them. It’s hurting the BSU and you can see in the 9-cell industry comparison that it is the weakest.

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