What is walt disney company's corporate strategy

Walt Disney Company Case Study And Strategic Plan

Read the Walt Disney Company case, and from the perspective of an executive with the firm, prepare a strategic plan to grow the business over the next three years. Your strategic plan must be future-oriented and include the following:

A critique of the company’s mission statement based on the article ‘Mission Statements (Links to an external site.)Links to an external site.’
"The mission of The Walt Disney Company is to be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world."
One- to two-sentence vision statement for the company.
An assessment of the targeting and segmentation strategy of the company within its five major segments.
An evaluation of the external environment (industry, market, and the general environment), and the internal situation (core competencies, brand reputation and loyalty, and customer-value proposition) of the company.
A SWOT analysis detailing on the strengths, weaknesses, opportunities, and threats that may affect the organization. Choose three or four areas from your SWOT analysis and explain why the areas you have chosen are essential to your strategic plan.
An assessment of the implications of digital TV and internet-based business models on the strategies of the company.
An evaluation of the factors determined Disney’s international diversification strategies. Use the analytical framework proposed for the study of global media conglomerates (fig 9.4.- page 198 of the textbook).
The final paper / strategic plan:

Must be 12 to 15 double-spaced pages in length (not including title and references pages) and formatted according to APA style.
Must use at least five scholarly sources in addition to the course text. Remember to incorporate information that you have learned from this course as well as your personal experience.
Due no later than Saturday, March 30 midnight ET.

Walt Disney case study Submitted to: Mr.Farrukh Idrees Submitted by: Ali Husnaen & Muhammad Waqas

Table of Contents

Introduction

3

Company Background

3

Brands of Walt Disney

4

Company Mission Statement

5

Objectives

5

Strategies

5

Internal Audit

4

Strengths

4

Weaknesses

6

Internal Factor Evaluation (IFE) Matrix

7

External Audit

7

Opportunities

7

Threats

8

External Factor Evaluation (EFE) Matrix

10

Strategic Analysis

10

Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

10

Strategic Position and Action Evaluation (SPACE) Matrix

12

Grand Strategy Matrix

15

Recommendations

19

Sources

23

Introduction:

Walt Disney Company is a diversified international company with operations in four business segments: Media Networks, Parks and Resorts, Studio Entertainment and Consumer Products. They employ over 150,000 people in over 40 countries and had revenues of approximately $40.89 billion in 2011

Walter Elias

Walter Elias "Walt" Disney (December 5, 1901 – December 15, 1966) was an American film producer, director, screenwriter, voice actor, animator, entrepreneur, entertainer, international icon and philanthropist, well known for his influence in the field of entertainment during the 20th century.

C:\Documents and Settings\Administrator\Desktop\New Folder\walt vision\Walt Disney - Wikipedia, the free encyclopedia_files\220px-Walt_disney_portrait.jpg

“I do not like to repeat successes; I like to go on to other things.”

“Walt Disney”

He was co-founder of Walt Disney Productions, which later became one of the best-known motion picture producers in the world. The corporation is now known as The Walt Disney Company and had annual revenue of approximately US$40.89 billion in the 2011

Disney itself was a great film producer and a popular showman and also an innovator in cartoons and theme park design. He and his staff created some of the world's most famous fictional characters including Mickey Mouse, for whom Disney himself provided his voice.

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Walt Disney brands and portfolios

Disney media networks Disney parks and resorts Disney studios

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Company Mission Statement

The mission statement is defined as a company’s “statement of purpose.” The current mission statement for the Walt Disney Company is:

“To be the world’s leading producers and providers of amusement and information. Using our portfolio of brands to differentiate our content, services and consumer products, we track for to develop the most creative, innovative and profitable entertainment experiences and related products in the world.”

Vision

Walt Disney strives to be the world’s most famous entertainment company by creating an amazing experience for individual of all ages.

Objectives

Objectives are the goals which an organization wants to achieve in future. Objectives can be both long term and short term. Organizations design their objectives according to economic and competitive climate.

They design their compensation programs to achieve the following objectives in the context of the Company’s large and complex business:

· Support the Company’s business strategy and business plan by clearly communicating what is expected of executives with respect to goals and results and by rewarding achievement;

· Attract, motivate, and retain executives with superior talent; and

· Align incentive compensation with performance measures that are directly related to the Company’s financial goals and creation of shareholder value.

The Walt Disney Company mostly does not publish its corporate objectives.

Strategies

Strategies are the tools through which company attain its objectives. We can also say strategies are the path to achieve objectives.

Strategy is the course of action on which an organization decides to get on affects all divisions and aspects of said organization. Strategies should be formulated and implemented only once all internal and external factors are assessed. Only then can a strategy be deemed “safe” for a company for implementation. So Walt Disney will make its strategies after assessing its internal and external factors.

Disney Goal

At Disney, we believe being a good corporate citizen is the right thing to do: for our consumers and guests, our employees, and our businesses. It makes our company a desirable place to work, reinforces the attractiveness of our brands and entertainment, and strengthens our bonds with families.

Our goal is to achieve exceptional performance by embedding citizenship into all of our daily decisions and actions, guided by three core principles.

Core Principles

Act

Act and create in an ethical manner and consider the consequences of our decisions on people and the planet

Champion

Champion the happiness and well-being of kids and families in our endeavors

Inspire

Inspire kids and families to make a lasting, positive change in the world

Disney competitors:

These are some major competitors of Walt Disney

· News Corporation,

· Viacom

· NBC Universal

· Times Warner

Competitive Profile Matrix (CPM)

Before designing any strategy it is necessary to see the strategies and performance of our competitors. We evaluate the competitive position of our competitors and than make the strategies for the future. So this is the competitive profile matrix which will show the position of our competitors with respect to us like News and Time Warner.

Corporations

Walt Disney

Time Warner

News

Critical success factors

Weight

Rating

Score

Rating

Score

Rating

Score

Advertising

0.4

2

0.20

4

0.8

3

0.6

Product Quality

0.3

3

0.10

3

0.3

4

0.4

Price Competitiveness

0.1

2

0.05

3

0.45

2

0.1

Management

0.3

3

0.1

4

0.4

3

0.3

Financial Position

0.4

4

0.10

3

0.3

4

0.4

Customer Loyalty

0.45

3

0.15

2

0.3

3

0.45

Global Expansion

0.6

3

0.20

4

0.8

3

0.6

Market Share

0.1

2

0.2

3

0.3

3

0.3

2.75

1

3.65

3.15

External audit:

Opportunities:

· Economic conditions prevailing in USA reflect moderate position.

· Walt Disney is practically ready to internalize the social shift.

· Walt Disney is implementing all the related laws regarding entertainment industry.

· Opportunity to renovate attractions in Park and Resorts Division due to increase in profit

· Growth from cable and satellite operators creating even more possibilities for Disney to make money with their network

· Prospect to build more theme park and resorts worldwide

· Openings in other areas of the travel business

· Opportunity to invest in building theme parks to satisfy the increase in guest spending, theme park attendance, and hotel occupancy

· Target new costumers group

· USA is maintaining favorable strategic directions towards entertainment industry.

· Walt Disney is proactive in both sensing & implementing the new technology.

· International components for Walt Disney actually seem favorable. Therefore new markets should be searched and taken into consideration in foreign developed countries like Malaysia, Singapore, and Thailand etc.

Threats:

· 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.

0.09

3

0.27

· The theme park and resorts business experiences fluctuations from the seasonal Nature of vacation travel and local entertainment excursions.

0.08

4

0.32

Total

1

2.93

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

SWOT analysis:

Strengths

Weaknesses

· Worldwide known brand.

· Offers their customers high quality products and services.

· Is strongly present in several branches of the entertainment industry.

· Costs of operation are high.

· Company's name is still highly associated with a specific target audience - children.

· Creative and innovative ideas are required to bring and retain customers.

Opportunities

Threats

· Room to develop the market in emergent countries.

· Expansion into different segments

· Develop more attractions for theme parks.

· Strong competitors in the entertainment industry

· High competition on finding and affording the most creative human resources.

· Lack of protection of Intellectual property in many non-developed countries.

Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis is a strategic management tool that affords analysts the opportunity to match internal and external factors for strategy development. The idea is that positive advances can be made by taking advantages of internal factors and having proper responses to external ones. The SWOT Matrix matches Strengths and Weaknesses with Opportunities or Threats. Thus four possible types of strategies are possible: Strength-Opportunities Strategies (SO Strategies), Weaknesses-Opportunity Strategies (WO Strategies), Strength-Threats (ST Strategies), and lastly Weakness-Threats Strategies (WT Strategies).

The SWOT Matrix for The Walt Disney Company is included below.

· STRENGTHS

1. One of the most familiar an amusement company in the world.

2. Innovative entertainment business.

3. Strong Media Networks and Broadcasting division.

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

5. Strong advertising.

· WEAKNESSES

1. Studio Entertainment and Disney Consumer Products divisions have been experiencing declining revenue for the last 3 years.

2. Disney as a narrow target market.

3. Disney as such a diversify product range that it can reduce efficiency and lead to a lack of strategic focus.

4. Walt Disney’s Park and Resorts are not easily accessible which leads people to associate Disney World with a costly trip.

· OPPORTUNITIES

1. Opportunity to build & renovate attractions in Park and Resorts division to increase in profit.

2. Growth from cable and satellite operators creating even more potential for Disney to make money with their network.

3. Target new costumers group.

4. Prospect to build more theme park and resorts worldwide.

5. Openings in other areas of the travel business.

6. Opportunity to invest in building theme parks to satisfy the increase in guest spending, theme park attendance, and hotel occupancy.

· SO-STRATEGIES

1. The park & resorts division is experiencing profit. Therefore the money could be used to innovate some attraction. (O1, S1, S2)

2. Sell Disney products at more places at not only Disney stores. Especially with Disney’s with highly recognized characters by children.(02, S2, S3, S4)

3. Build more accessible resorts internationally since there is an increase in guest spending, theme park attendance and hotel occupancy. (O4, O5, O6, S1, S2)

4. Better advertise of other parks of Walt Disney world such as EPCOT resort, in order to break the reputation that Disney is only a magic kingdom and appeals to children. (S5, O3).

· WO- STRATEGIES

1. Create block buster motion picture movies with the 3D option, which is the new trend in movie theaters. (W1, O3)

2. Design parks and resorts with a new modern strategy, which will find a better balance between ages.(W2, O3, W3)

3. Build parks and resorts in worldwide to be more accessible and allow people to enjoy a one day experience rather than a week long trip.(W4, O4, O6)

· THREATS

1. Lasting economic recession leading to slow growth rate.

2. 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.

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

4. Online streaming makes Disney vulnerable to piracy and violation of its intellectual property.

· ST- STRATEGIES

1. Offer lower fees for entrance into theme parks and discounts on onsite hotel prices. (T2, T1, S1)

2. Have a movie rental website with high definition and high speed movies for low prices. (T3, T4, S3)

· WT-STRATEGIES

1. Build an indoor park and resort on the north east side United States in order to be more accessible and to prevent closure with unpredictability of weather.(W4, T1)

Strategic Position and Action Evaluation (SPACE) Matrix

This is also a strategy making tool. The SPACE Matrix is a four-quadrant graphical axis and it indicates whether an organization should follow conservative, aggressive, defensive, or competitive strategic strategies. The graph is charted based on the average scores of ratings given to four type’s positions like:

· Organizations Financial Position (FP)

· Stability Position (SP),

· Competitive Position (CP),

· Industry Position (IP).

Financial Position (FP)

The financial position for The Walt Disney Company scored an averaged rating 3.5 out or a possible 7 (with 7 being the best possible score and 1 being the worst possible score.) this tells marginal increase in the current ratio from 2007 to 2008 and a meager 12% increase in gross revenues in the last three reported years. Due to downfall in economy ratio is below but in future there are chances for Walt Disney to be in better position.

Competitive Position (CP)

The competitive position of The Walt Disney Company is nothing short of stellar. The Company scored an average rating of -1.75 out of 7 (with -1 being the best possible score and -7 being the worst possible score.) The fact that Disney’s product life cycle has literally been around for almost a century is very significant in determining the Company’s competitive position. Couple with that the Organization’s almost cult-like fan base and the sheer size of the Company and The Walt Disney Company has scored an almost perfect score in the competitive position test.

Stability Position (SP)

Stability position is like their financial position. Company has good score in high barriers but it’s less in market risk. It’s the fact that they need fresh content and great innovation to be stable in the market. So company scored an average rating of -3.25 out of -7 (with -1 being the best possible score and -7 being the worst possible score.)

Industry Position (IP)

Walt Disney has high score in their industry position. In reusing their past portfolio they have high score. The company leverage position also has been increased in last few years. So The Walt Disney Company scored an average rating of 5.25 out of 7 (with 7 being the best possible score and 1 being the worst possible score.)

SPACE Matrix

Grand Strategy Matrix

For development of alternative strategies analysts use grand strategy as a tool. The Grand Strategy Matrix is shown in four-quadrant graph. The y-axis of the graph represents market growth, with positive y -figures representing rapid market growth and negative y- figures representing slow market growth. In opposition, the x-axis represents competitive position, with positive x- figures representing strong competitive position and negative x- figures representing weak competitive position.

All companies will fall somewhere on the graph and, once positioned, they can make decisions based on the suggested strategies for the company.

The Walt Disney Company falls within Quadrant I because company is strong within their markets and growing stronger. The competitive position of the company is strong. Because of past success, current positions, and expectantly spectacular future, the company falls within the first quadrant on the Grand Strategy Matrix.

The Grand Strategy Matrix for The Walt Disney Company is included below

Boston consulting group (BCG) matrix:

This is the matrix which tells us about the different products and portfolios of organization. Which one is stronger and which is not. According to my research and observation I will keep these brands in following quadrants.

Stars:

I will put media networks and broadcasting in stars because they have good growth and high profits in it. In one of the exhibits provided its shown that in year 2006 income is $3610000000 but in year 2007 it increases to $4284000000 and market share is also high, i.e. Walt Disney owns number of diversified media channels.

Question mark:

I have observed in previous few years that market share of studio entertainment has become low. So I will put it in the question mark. There is no surety about it yet that it will increase in next years or not.

Cash cow:

I will put parks and resorts in cash cow because they have no growth in it but still its giving 25% of its profits that’s why they have less focus on it. There profits has been decreased because in 2006 & 7 it was more.

Pets/Dogs:

Finally, in my opinion, Consumer Products of Walt Disney are pets/dogs because the growth in this business unit is low and also the market share is low. Also, recently Walt Disney sold off its stores under a franchising agreement.

BCG.png

Recommendation:

After seeing all matrix and past strategies of the Walt Disney I will recommend these strategies to Walt Disney in order to make more profits and increasing market share.

· As the owner of Walt Disney said we are not going to stop. I will recommend Walt Disney to increase their product line. Through this they can increase there market share. By increasing their market share economies downfall will not effect badly on the profits of organization.

· Through modern technology people can use easily their product illegally. So Walt Disney has to be more focused on security for their product. They should be in front of technology.

· I will also recommend for market development. For example they are earning more profits from USA than any other country. So why not from other countries they should focus on that aspect.

· They should do customers need analysis before lunching a new product. Culture is very important thing so they should make product according to culture and life styles people in different market segments.

· Strong distribution channel is necessary to keep customers loyal with you. So I will recommend Walt Disney to make their own stores in different countries to be close to the customers.

Sources:

Plagiarism report:

Www. plagiarism-detect .com

Date: 14.1.2013

Words: 2717

Plagiarized sources: 9

Plagiarized: 2%

http://www.slideshare.net/azierahrashid/walt-disney-ppt

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1. renovate attractions in Park and Resorts Division due to increase

2. the increase in guest spending, theme park attendance, and hotel

3. and Resorts Divisions’ success is unpredictable because of exchange rate fluctuations

4. travel industry trends; amount of available leisure time; oil and transportation prices

5. by seasonal consumer purchasing behavior and by the timing and performance

http://pages.stern.nyu.edu/~adamodar/pdfiles/acf2E/disneyannual.htm

plagiarised from source: 1%

1. travel industry trends; amount of available leisure time; oil and transportation prices

2. by seasonal consumer purchasing behavior and by the timing and performance

http://www.sec.gov/Archives/edgar/data/1001039/000089843001503823/d10k.txt

plagiarised from source: 1%

1. travel industry trends; amount of available leisure time; oil and transportation prices

2. by seasonal consumer purchasing behavior and by the timing and performance

http://www.sec.gov/Archives/edgar/data/1001039/000119312511321340/d232174d10k.htm

plagiarised from source: 1%

1. travel industry trends; amount of available leisure time; oil and transportation prices

2. by seasonal consumer purchasing behavior and by the timing and performance

http://thewaltdisneycompany.com/sites/default/files/reports/q4-fy12-form-10k.pdf

plagiarised from source: >1%

1. travel industry trends; amount of available leisure time; oil and transportation prices

http://seekingalpha.com/symbol/dis/description

plagiarised from source: >1%

1. travel industry trends; amount of available leisure time; oil and transportation prices

http://corporate.disney.go.com/media/investors/new_segmentation_DIMG_090204.pdf

plagiarised from source: >1%