Disney
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PHASE 2
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PHASE 2
Phase 2
Walt Disney Current Strategy
The company’s current strategy meant to ensure that it remains competitive focuses on three pillars. These pillars are storytelling excellence, innovation, and a relentless focus on the audience (Dubois, 2022). The first pillar of storytelling excellence is what made Disney famous because worldwide, the company tells stories through movies, theme parks, and all other forms of media it associates itself with; hence, the chief executive officer, Bob Chapek plans to organize monthly meetings with the firm's creative leadership team to find a method in which stories can be integrated into new forms and new opportunities realized (Dubois, 2022). The company's pillar of innovation will focus on the entire company using the latest technology to build and execute new ideas. Chapek’s vision is that as technology evolves, the company will focus on becoming an innovator in storytelling by using the metaverse as the new canvas that the firm’s creative directors use with their teams (Dubois, 2022). The third pillar aims at ensuring that all the company’s strategies are focused on providing a better experience for the clients. Some of the components of this strategy include the streaming and theatrical strategy; the other part of this plan includes Disney’s cruise ships and theme parks. Through this pillar, the company plans to ensure that it creates a method through which it evolves with its consumers and places them at the core of every decision it makes. Comment by Andrew Gold: What's the strategy? Please be sure to note the strategy of the company (strategies are listed in the text in tables 5.3 and 5.5 in the text. The categories are integration strategies, intensive strategies, defensive strategies, and the Porter generic strategies. Discussed this process in depth in the second live session and made a couple posts about this as well. This entire phase is about these strategies and they need to be discussed. In this part, you discuss what strategy or strategies the company is currently pursuing. Comment by Andrew Gold: Improper usage...created a run-on sentence Comment by Andrew Gold: Not going to edit grammar on this paper. Made a lot of grammar comments on phase 1. There are quite a few issues sporadically in this paper.
SWOT Matrix Disney Comment by Andrew Gold: If a table breaks across pages ,please be sure to repeat the headers at the top of the following pages (in this case, repeat the Strengths and Weaknesses on the next page so the reader knows what each column represents). Comment by Andrew Gold: Those will change on the second page. You can also reduce this to single spacing so it fits on a single page. Comment by Andrew Gold: As per the instructions and as noted in my comments on phase 1, all matrices should be placed in the appendix and not in the body of your paper. Comment by Andrew Gold: Please introduce the matrix. As discussed in the live sessions and note in the class, introduce each matrix, then insert it, then discuss it.
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Strength (S) 1. Has market experience and presence. 2. Owns renowned theme parks that attract tourists worldwide. 3. Has a diverse investment portfolio. 4. Owns many media outlets worldwide.
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Weaknesses (W) 1. Limited diversification 2. Limited innovation 3. Overdependence on media outlets and theme parks as main sources of revenue. 4. High employee turnover.
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Opportunities(O) 1. 1. Growth of streaming services in emerging markets 2. 2. Better technologies are being used by producers from different countries to produce top-tier content. 3. 3. Lack of theme parks as developed as Disney’s in developing markets |
SO Strategies 1. 1. The company has market experience and presence. 2. 2. As a result, it has the potential to become the streaming service of choice in developing countries. 3. 3. Use Disney characters to create smartphone games 4. 5. 4. Acquire local content of high quality for streaming on its platforms 6. 5. Create an international management team 7. The company has a diverse investment portfolio and the expertise to run a theme park. 6. Promote environmental problems in conjunction with World Wildlife Fund |
WO Strategies 1. 1. The company can improve membership rates in new areas by purchasing local content. 2. 2. Digitalization of operations to save expenses and optimize 3 .Consider consumer items as a means of expanding into India
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Threats (T) 1. 1. Increase in competition 2. 2. Solid opposition 3. 3. Constant demand for technical innovation 4. 4.A downturn in the economy 5. 5. Alteration of Consumption Patterns |
ST Strategies 1.Create a competitive advantage over its competitors 2. Conduct online polls monthly for consumer research 3. Members of the Disney Fan Club should get discounts |
WT Strategies 1. Old Disney movies should be reworked and shown in theaters 2. Increase innovation that can aid in decreasing piracy threats
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Overall Analysis of Internal Capabilities and Implications for the Strategic Decisions Comment by Andrew Gold: This should be just discussing the SWOT matrix here. The overall implications from the internal / external analysis came at the end of phase 1. This is a discussion of the SWOT matrix and where you should be translating the SO/ST/WO/WT actions back to strategies. Comment by Andrew Gold: No cites in this section. Translate actions you came up with back to the strategies noted in tables 5.3 and 5.5 in the text. Are those new suggested strategies for the company or are they consistent with what the company already does?
According to the SWOT matrix and the IFE matrix Disney has the ability to become the most preferred streaming platform in the world. The IFE states that the company’s score is at an average level meaning that it can compete fairly. Similarly, the financial ratios indicate that the company is competing fairly meaning that the company has enough resources to remain competitive without fear of bankruptcy. The SWOT matrix also offers solutions such as expanding to other countries through buying rights to locally produced content in these countries and curating theme parks in emerging economies. These strategies will lead to better growth and profitability at Disney because the company will take advantage of its strengths and opportunities. Comment by Andrew Gold: IFE doesn't state...it implies Comment by Andrew Gold: What's the strategy here? Comment by Andrew Gold: Again, what's the strategy here? Comment by Andrew Gold: You discussed actions...please discuss strategies as noted above. Add more depth here to your discussion. Discuss more of the SO/ST/WO/WT actions.
BCG matrix with strategic implications for the Disney Company Comment by Andrew Gold: Not the Disney Company. Either just Disney or the full legal name. Comment by Andrew Gold: A long discussion of the matrix, but no calculations here. Matrix is discussed on pages 169-172 of the text and went over it in the second live session. There are two parts here…the table showing your calculations and the graphical matrix with the circles (which must have pie slices). It is done by division and each division is plotted into a quadrant. Each quadrant will suggest certain strategies for the division (strategies explained/discussed in tables 5.3 and 5.5 in the text). Are those new suggested strategies for the company or are they consistent with what the company already does? Are they consistent with the results of the SWOT/SPACE matrices or do they suggest different directions?
The BCG matrix is a mechanism that companies utilize to assist them in gaining a better understanding of the place that their goods or services occupy within the market. It divides goods and services into the following four categories: stars, cash cows, question marks, and dogs. Products or services with high market share and strong growth potential are considered stars in the industry (Tonelli & Cristoni, 2018). Cash cows are products or services with a significant market share with little room for expansion. Products or services with substantial growth opportunities, but a low penetration of the marketplace is referred to as question marks. Products or services with an expected market share and poor growth potential are called dogs.
For The Walt Disney Company, one of the potential benefits of using the BCG matrix is that it can help them concentrate their efforts on their "stars," which are products or services with a significant market share and a considerable number of market prospects. In conjunction with this, businesses should concentrate their efforts on the products or administrations they provide with a significant market share, but a little possibility for development. These are known as cash cows. And finally, they should concentrate their efforts on the areas of their company that still have unsolved questions (Menz & Prescott, 2021). These aspects of their company involve products or services with a little market share, and room for development.
Preparing the BCG matrix for this corporation has its primary purpose. The comparative market share situation and the rate of industry increase held by each department compared to the other departments that comprise the organization. The BCG matrix has strategic significance in that it may always seem to highlight initiatives consistent with the institution's ability to execute and the company's market opportunities (Shakespeare, 2019); this is one of how the matrix can be employed. Additionally, in the context of Disney, the Walt Disney Company is a highly diverse firm that competes in various countries, regions, and companies within each location; this is true both globally and domestically. Because of this diversity, they may be able to extend their sphere of influence into new geographical areas while still preserving the key competencies that have brought them success in the past.
A model of the link between an organization's internal resources, capabilities, and surroundings can remain constructed with the help of the BCG Matrix. It is a theoretical method utilized for both the planning of strategic actions and the assessment of performance. The Walt Disney Company will face the following strategic consequences because of this: 1) The operational costs need to remain at a minimum; 2) the money saved gets used in chances for expansion; 3) the company activity needs to remain diversified by entering new markets, and 4) appropriate funding is required to maintain the activities currently in place. 5) Stress, the significance of ensuring that your strategy and vision are aligned. Comment by Andrew Gold: Where do these ideas come from? How are they implied from the BCG matrix? The BCG matrix suggests strategies for each division based on its quadrant placement (which is calculated, not guessed). Not sure where you came up with these based on the BCG….they don't logically flow from a BCG matrix. No cites here either. These are very generic actions and not really about the BCG matrix.
The BCG Matrix is a leadership technique for assessing the essential company strategies so a firm can stay designed using that analysis. The matrix helps create precise measures before implementing any business strategy based on the concept that each business plan influences another. In the case of Disney, this entails taking a step back to comprehend better how they were running their business and re-evaluating their core beliefs by fostering an atmosphere that promotes individual innovation and collaborative problem-solving among employees (Menz & Prescott, 2021). Disney's success can be ascribed to deeply ingrained principles since the company is dedicated to developing a longer-term vision for innovation and creativity. These values are as follows: Inspiring individuals to create, encouraging them to do good things, and rewarding them for making life better for others are great ways to improve society.
The Walt Disney Company has developed a program with the BCG model that emphasizes the economic performance of value for shareholders, corporate reputation, and creative endeavors (Stephens & Martin, 2019). The plan stands formulated to have a favorable position not only with employees but also with the shareholders. Because of the project, the business will be able to compete successfully in both the home and the foreign market while preserving its brand image. Walt Disney Firm is in a solid position to reduce risk while continuing to build its company since they have a strong foundation built on its primary business. Additionally, they can capitalize on productivity improvements of their organizations and implement cost-cutting measures across all their channels. Advertisements, franchising, and theme parks can lower their overall cost framework and provide them with an internationally competitive market as a diverse business. Comment by Andrew Gold: The idea is not to take someone else's BCG matrix, but go through the process of developing one yourself. Comment by Andrew Gold: Please refer to the company properly.
The BCG matrix and its potential strategic repercussions for the Walt Disney Company are the subjects of this article, which serves as an investigation of the matrix. The corporation has been through a challenging transition period, and it is handling the implementation of its corporate framework acceptably (Czinkota & Shams, 2021). Additionally, Disney is moving toward rebuilding itself as an omni-channel store; yet the company predicts fewer obstacles than it will face. Based on the findings of this analysis, it appears that the company's current approach is doing an excellent job of increasing the brand's value, and the company does not need to alter its initial plan. Instead of trying to market all its trademarks at once, it would be more advantageous for Disney to focus on promoting the businesses that have shown to be the most successful. Comment by Andrew Gold: What article? You need to develop your own BCG matrix, not just copy one from someone else.
If Disney were to perform a strategic analysis of the BCG matrix, it would result in a business plan that is not only straightforward but also very successful and appropriate to the organization. A strategy based on a balanced scorecard model (BSC) will demonstrate adequate information needed and offer management guidance to attain those accomplishments (Dobni & Sand, 2018). The BSC technique starts with a piece of knowledge about the importance of the client. It aims to develop an administrative environment to measure and enhance customer attention while increasing communication. Comment by Andrew Gold: How is this related to the BCG matrix?
This conversation is most acceptable, assuming exterior contractors get recruited to establish the corporation's strategy. However, it can potentially spread internally because many staff members are already comfortable with the basics of BSC due to educational programs based by the Human resources department within their different organizations. Further assessment of this kind of corporate strategy procedure will help recognize the areas in which new types of products or services would significantly reduce a unique selling proposition with customers and the client's value creation. Encourage changes in how demonstrated a positive relationship change and find ways to better use activities already in place for efficiency optimization. Comment by Andrew Gold: According to who? Why does Disney need outside contractors to help it establish its strategy?
The Walt Disney Company has a history of investing in other firms, particularly those operating in the cultural, the media, and sports industries. Despite this, the corporation has not given these assets the same level of priority as the company's core business by not merging assets into a strategic fit. In this scenario, Disney could profit from developing an overarching strategy, such as the BCG Matrix, by assisting in directing its technological, marketing, and brand strategies (Czinkota & Shams, 2021). When managers use this framework, they can construct a cost-effective and long-term plan, resulting in enhanced profitability and position in the market. Comment by Andrew Gold: The BCG matrix is not a strategy...it's a tool that's used to help a company develop a strategy. Comment by Andrew Gold: Not listed in the reference list.
The BCG model stands depicted in the form of a four-square matrix with four quadrants that include the position in the financial markets, strategic sources of money, stages of growth and maturity for consumer demand, and internal capabilities, which is part of the framework for growth capital (Stephens & Martin, 2019). The Walt Disney Company has struggled in all four quadrants, except for the strategic sources of finance, although none of the other areas have been successful. Until now, most of the company's revenue has come from selling many entertainment products it manufactures and distributes. It will need to find new ways to generate profits to maintain its dominant position in the media markets worldwide. Comment by Andrew Gold: This is not how to complete a proper BCG matrix. Comment by Andrew Gold: It's not a model
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The Walt Disney Company Actual and Projected Financial Statement (in millions) Comment by Andrew Gold: Missing a section header here. This should be in the appendix...all matrices and tables are to be placed in the appendix per the instructions and my comments on phase 1. Not sure why you have financials here. This is not part of phase 2. This is just kind of here...no header, not introduction, no discussion. |
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DISNEY |
Actual Year 2021 |
Projected 2022 |
Projected 2023 |
Projected 2024 |
Assumed % |
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Sales |
67,418 |
74,834 |
83,066 |
92,203 |
11.00% |
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Cost of Goods Sold |
45,131 |
50,095 |
55,606 |
61,723 |
66.94% |
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Gross Margin |
22,287 |
24,739 |
27,460 |
30,480 |
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Selling & Administrative |
13,517 |
15,004 |
16,654 |
18,486 |
20.05% |
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Other Operating |
5,111 |
5,673 |
6,297 |
6,990 |
7.58% |
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EBIT |
3,659 |
4,061 |
4,508 |
5,004 |
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Interest |
1,406 |
1,561 |
1,732 |
1,923 |
2.09% |
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Other Income |
308 |
342 |
379 |
421 |
0.46% |
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EBT |
2,561 |
2,843 |
3,155 |
3,503 |
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Taxes |
25 |
28 |
31 |
34 |
0.04% |
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Net Income |
2,536 |
2,815 |
3,125 |
3,468 |
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Dividends per Share |
- |
- |
- |
- |
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Retained Earnings |
40,429 |
44,876 |
49,813 |
55,292 |
11% |
IE Matrix Comment by Andrew Gold: Can't read the matrix...too small. Please place in an appendix and provide a proper introduction here...what's the matrix designed to tell us?
As stated, IFE’s score is on the x-axis and EFE is on the y-axis. As it shows, the IFE is at 1 to 1.99 as in weak position that average score – 2 to 2.99 and that highest/strongest – 3 to 4. In this Matrix, the firm could apply the market penetration, developments on products/services along with productivities. In addition, the firm could include backward integration, horizontal integration, and forwards integrations. (Cockerell & Disney Institute, 2008). Comment by Andrew Gold: Spelling errors here ,but this is the first mention of actual strategies in the entire paper. Not "developments on products/services" but product development is the actual strategy I think you are referring to. Comment by Andrew Gold: Need a much more in-depth discussion here.
IE Matrix, (Present5, n.d).
Possible strategic alternatives
While Disney produces many films, they need to add differentiation between shows and movies. This differentiation can be done by creating more curated films that target a more specific audience and pricing them accordingly. While this might entail more work for Disney up front, it will be highly beneficial in the long run. The first reason is that targeting more specific age groups can focus solely on what the audience wants to see. Doing this makes them stay competitive against leading companies such as Nickelodeon, Fox, and Warner Media. Comment by Andrew Gold: This needs to flow from your analysis earlier in this paper. Where do these ideas come from? SWOT Matrix analysis? Tie your suggested strategies back to the results of the matrices up front.
When pricing these films, they can base it on factors such as the age groups it targets, how much money was put into producing the films, where they will air them, etc. This is vital considering the significant increase in movie piracy. Just within the first quarter of 2022 “movie-piracy sites increased 42.5%” (Clark, 2022). While movie piracy has always been an issue, even prior to the pandemic, it has only aided in demand for it by consumers. Two of the main factors are “55% said they are more interested in watching movies at home, 50% said it’s too expensive to see movies in theaters, and 32% said they aren’t interested in movies playing” (Dellatto, 2022). Comment by Andrew Gold: Not sure what you mean or why you are talking about pricing here. This should be a discussion of overall strategies that the company should pursue. Pricing is standard for theatrical releases...theaters have set ticket prices. Not really a relevant discussion here.
So, it can be seen more variety and options for viewing films needs to be taken more seriously. This is the perfect opportunity for Disney to get ahead on and begin new alternative methods of viewing their productions while also entering into new genres of products. Consumers are wanting to have more affordable options while also having convenience. Additionally, this allows Disney to earn back profits that they may have lost due to this issue while also taking back control and increasing their market shares. Comment by Andrew Gold: Why? Again, this should flow from your earlier analysis. What strategy is this? Please avoid phrases like "it can be seen" and instead explain your rationale here. It's not obvious to the reader and needs explained. Comment by Andrew Gold: What can the company do here that it is not already doing? It has theatrical releases, television channels, streaming services, provide content to other streaming services, etc. What are the remaining alternative methods of viewing? Again, what's the strategy here?
Recommendation of Changes within Disney
Disney is a well-established company that has mastered how they function as a unit. They have an extremely well-functional structure utilizing the decentralized cooperative multidivisional organizational structure; this fits them perfectly, considering they are located globally, and they need this breakdown of authority between all of their locations. In correlation to this, they have a robust culture with well-defined values and processes that work well and shouldn’t be altered. Comment by Andrew Gold: Cite? How is it a perfect it? Elaborate a bit more on the strengths of the multidivisional structure as it applies to Disney.
So, when it comes to making recommendations of changes for the company it would have to be in rewards and technology. When looking currently at Disney’s reward system it only can be utilized by those individuals who hold a Disney credit card. Those who do have a credit card can “earn 1% on all card purchases” and the “premier cardmembers can earn an extra 1% at gas stations, grocery stores, restaurants, and most Disney locations” (Disney, 2022). This leaves out many individuals who are unable to obtain a credit card or who choose not to have one for their own personal reasons. They should offer a higher percentage for those who do have their credit card to 1.5% or 2%. Then Disney should offer a reward card for annual pass holders because even though they might not have the credit card they have already proven their loyalty to the company. So they should have access to earning back money towards their trips to the parks and their stores. Comment by Andrew Gold: This is confusing. Why are you discussing credit card rewards here? This is more a continuation of the strategy discussion above. What you are suggesting here is an action that really belongs up in the SWOT matrix. The changes here should be focused on any necessary changes to the culture / structure in order to facilitate the suggested strategies you discussed earlier.
Another recommendation is to increase their technology in terms of piracy. While Disney has gone above and beyond with technology within the parks. According to Storks (2021), Disney has MagicBands, facial recognition, security changes, MagicMobile and more that all revolve around the updates and implementation of technology. With all the money that it takes to produce their productions, they should find ways to better secure them without having to fear them being pirated. When this occurs, they are losing out on thousands of dollars while someone else is making a profit off of it. This should be considered a major concern for them. Comment by Andrew Gold: Again, this is more an action that goes up in the SWOT matrix.
References
Clark, Travis. (2022, May 20). Data shows that movie piracy is up from 2021, but hasn’t hurt Hollywood’s biggest box-office hits this year. Retrieved from https://www.businessinsider.com/how-movie-piracy-is-impacting-releases-this-year- 2022-5
Cockerell, L., & Disney Institute. (2008). Creating magic: 10 commonsense leadership strategies from a life at Disney.
David, F. (2014). Strategic management concepts (custom ed.). Pearson-Prentice Hall Custom: Upper Saddle River, N.J
Dellatto, Marisa. (2022, May 5). Covid isn’t why Americans aren’t going to the movies, study suggests. Retrieved from https://www.forbes.com/sites/marisadellatto/2022/05/05/covid- isnt-why-americans-arent-going-to-the-movies-study-suggests/?sh=1b01379b5180
Disney. (2022). How to redeem Disney rewards dollars. Retrieved from https://disneyrewards.com/how-to-redeem/
Dubois, M. (2022, January 14). Disney CEO Bob Chapek's approach To 2022 and beyond includes three pillars that will guide the company. Forbes. https://www.forbes.com
History. (2019, July 22). Walt Disney Company is founded. HISTORY. https://www.history.com/this-day-in-history/walt-disney-company-founded
IFE Analysis. (2018, April 10). IFE analysis. Think Insights. https://thinkinsights.net/strategy/ife-analysis
Google finance. (n.d.). Walt Disney Co (DIS) stock price & news - Google finance. Google. https://www.google.com/finance/quote/DIS:NYSE?hl=en&window=MAX&comparison
Macrotrends. (n.d.). Disney debt to equity ratio 2006-2021. https://www.macrotrends.net
Morningstar. (2022). The Walt Disney Co (DIS) financials - XNYS | Morningstar. Morningstar |. https://www.morningstar.com/stocks/xnys/dis/financials
Present5. (n.d.). Walt Disney. Retrieved from https://present5.com/strategic-management-final- case- study-andrea-baril-ashley/
Storks, Lydia. (2021, April 27). You’ll be seeing a lot of new technology on your next trip to Disney world. Retrieved from https://allears.net/2021/04/27/youll-be-seeing-a-lot-of-new-technology-on-your-next-trip-to-disney-world/
Wilkins, G. (2022, May 4). 6 basic financial ratios and what they reveal. Investopedia. https://www.investopedia.com