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· The entertainment is experiencing social shift whereby members of the society are seeking out value, more relaxation activities and have become knowledgeable also.

· Entertainment industry is subject to various legislations which a pass at reasonable rapidity.

· The formal policies of USA are not based on objective analysis and judgment.

· Technologies advancement shift is quite significant resulting in impact on entertainment industry.

· Lasting economic recession leading to slow growth rate

· High unemployment rate

· Park and Resorts Divisions’ success is unpredictable because of exchange rate fluctuations; travel industry trends; amount of available leisure time; oil and transportation prices; and weather patterns and seasonality.

· Changes in technology leads customers to stream online instead of buying DVD.

· Online streaming makes Disney defenseless to piracy and violation of its intellectual property.

· Retail distribution business are influenced by seasonal consumer purchasing behavior and by the timing and performance of animated theatrical release

· Increase in labor cost which will have a noticed impact in Walt-Disney expenses due to their large amount of employee.

External Factor Evaluation (EFE) Matrix:

External factor evaluation matrix is a tool for summarization and evaluation of the major opportunities and threats in the functional areas of an organization. In this we write opportunities and threats according to their importance and then rate them by different numbers according to their value in case of that organization. After assigning weights and rating we multiply them and find out weighted average score. Then we use these scores for making strategies.

Rating is given on 1-4, where rating (1) indicates major weaknesses (2) indicates miner weaknesses (3) indicates miner strengths and (4) indicates major strengths

EFE Matrix of Walt Disney

Key External Weighted Factors Score

Weight

Rating

Opportunities

· Spend 1.1bil in 2008-20011 to revitalize the Disney California Adventure in Anaheim,California.

0.06

4

0.24

· Disney and Citadel announced an agreement to merge with ABC radio business.

0.09

3

0.27

· Disney opened Grand Floridian Beach and Carribean Beach Resorts that include three new gated attractions.

0.06

2

0.12

· Parks and Resorts division increased 10% in 2006 to 9.9 billion. Due to domestic and internationals resorts.

0.09

3

0.27

· Buena Vista Games has reached a sales growth to an increase of 14%.

0.07

3

0.21

· Disney’s 50th anniversary celebration at its parks and resorts increased attendance and hotel occupancy.

0.07

4

0.28

Threats

· Time Warner is a major rival to Disney Company

0.10

4

0.40

· This industry is dominated by conglomerates Walt Disney, Time Warner Inc., New York Times, News Corp., and CBS Corporation.

0.08

2

0.16

· Disney also compete with satellite providers such as Direct TV

0.06

2

0.12

· Disney competes with other advertising media such as Newspapers, Billboards, Internet and magazine.

0.08

3

0.24

· Disney’s theme park and resorts really depends on travel trends Seasons and also the security to travel

0.08

3

0.24

· Competitors are consolidating and spending aggressively

0.08

3

0.24

Total

2.79

1

Internal audit:

Strengths:

· Company has good relationship with the suppliers.

· Company is also maintaining healthy relationship with collective bargaining agent (CBR).

· Its One of the most recognizable entertainment company in the world

· They have Strong advertising

· Wide and unique portfolio of the company

· Innovative entertainment business

· Strong customer service

· Strong Media Networks and Broadcasting division

· Disney owns a variety of companies, which allows them to generate more profits from different industry such as Media Networks and Broadcasting, Park and Resorts, Studio Entertainment and Disney Consumer Products

· Disney is the largest worldwide licensor of character-based merchandise and producer of children’s film-related products based on retail sales

· Walt Disney is financially strong.

· The operational system is inclusive of procedures, processes & operations management reflects the element of that the company is meeting the desired standards.

· Walt Disney is capable of producing new Products and Services in a short span of time.

Weaknesses:

· Walt Disney needs more rigorous analysis in understanding the consumer behavior.

· Walt Disney needs improvement in tracking the changes in cultural values.

· Walt Disney also does need strategic improvement in conducting the segmentation and applying the more soft techniques namely psychographic and lifestyle.

· The mission of the company strategic directions and long term objectives needs improvement.

· H.R needs improvement. Training and development programs should be done and hiring and selection criteria should also be taken into account of rectification.

· Marketing management needs improvement.

Internal Factor Evaluation (IFE) Matrix

Internal factor evaluation matrix is a tool for summarization and evaluation of the major strengths and weaknesses in the functional areas of an organization. In this we write the internal factors our strengths and weaknesses according to their importance and then rate them by different numbers according to their value in case of that organization. After assigning weights and rating we multiply them and find out weighted average score. Then we use these scores for making strategies.

IFE Matrix of Walt Disney

Key Internal Weighted factors

Weight

Rating

Score

Strengths

· Disney owns ABC Television Network

0.08

2

0.16

· Disney’s net revenue climbed 5.2% to 35.5 billion

0.10

4

0.4

· Walt Disney company operates using a strategic business unit(SBU)

0.08

4

0.32

· Disney WABC-TV ranked as the 1st in television market ranking In Ney York.

0.10

3

0.3

· Disney unveiled Disney Xtreme Digital which competes against Myspace.

0.09

2

0.18

· 6. Parks and Resorts division increased 10% in 2006 to 9.9 billion. Due to domestic and internationals resorts.

0.10

3

0.3

Weaknesses

· Disney revenues from Studio Entertainment and Consumer product segment decreased by 1%

0.08

2

0.16

· Hong Kong Disneyland has been struggling because the company Might have to persuade lenders to refinance the debt.

0.08

3

0.24

· Disney has lost the competitiveness on consumers products to Nickelodeon as they had launch SpongeBob and it’s a hit.

0.12

4

0.28

· Disney has smaller industry segments in the broadcasting industry as news corp. operates in eight industry segments.