Disney Assignment
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Assignment1.pptxCompetitive Analysis Report
Strategic Management
MOVIES DISNEY
The Industry Analysis Checklist
Identify your Industry:
SIC: MOVIES & ENTERTAINTMENT 7812
NAICS: ARTS, ENTERTAINTMENT & RECREATION
Name: The Walt Disney Company
Industry Description
Operators in this industry produce and distribute motion pictures and videos. This industry excludes third-party distributors and disc manufacturers and products produced for TV, such as TV shows and made-for-TV movies.
3. Supply Chain
Identify 2 Second Tier and 2 First Tier Supplier (include industry reports)
1st Tier Suppliers:
Video Postproduction Services in the US
Performers & Creative Artists in the US
2nd Tier Suppliers:
Camera & Film Wholesaling in the US
Electronic Part & Equipment Wholesaling in the US
Identify 2 Second Tier and 2 First Tier Buyers
1st Tier Buyers:
Movie Theaters in the US
Movie & Video Distribution in the US
2nd Tier Buyers:
Television Broadcasting in the US
Cable Networks in the US
4. Identify all External Drivers, briefly describe each and provide current data
4. Identify all External Drivers, briefly describe each and provide current data (CONTINUATION)
Demand from movie theaters
Although domestic theaters represent a minority of industry revenue, studios remain reliant on box office sales to recoup their investments in production and promotion, as well as to attract subsequent licensing deals. Box office sales have grown sluggishly in recent years and movie theater growth has increasingly come from ancillary concessions. Demand from movie theaters is expected to rise only slightly in 2020, presenting a potential opportunity for the industry.
Per capita disposable income
Per capita disposal income determines consumers' propensity for spending on movie tickets. When incomes are higher, consumer will also be more likely to purchase or rent industry productions for home entertainment. Per capita disposal income is expected to decrease in 2020.
Total advertising expenditure
In recent years, film producers have begun to subsidize production costs through the sale of in-movie product placement. In addition, high-profile films often attract co-branding deals with marketers outside the industry. Total advertising expenditure is expected to decrease in 2020, posing a potential threat for the industry.
Trade-weighted index
The industry has become increasingly reliant on foreign distribution, and therefore more vulnerable to currency effects. When the value of the dollar rises, as measured by the trade-weighted index (TWI), the real value of revenue generated abroad declines. The TWI is expected to increase in 2020.
5. Identify Key Statistics (performance measures) with current data
5. Identify Key Statistics (performance measures) with current data (CONTINUATION)
6. Products & Services and Market Segments Percentages
6. Name Products and Services and market segments percentages (CONTINUATION)
Action and adventure
Over the five years to 2020, major motion picture production has generally consolidated within a few select genres that studios have determined to be the most likely to generate significant returns on investment.
Drama
Dramas are mostly dialogue-driven depictions of human stories and are therefore not bogged down by excessive special effects costs.
Thriller and suspense
Thriller and suspense movies, which touch on themes of insecurity or uncertainty, have increased in popularity over the past five years.
Comedy
Fewer comedy movies have been released over the past five years compared with previous years.
Other
Other genres include musical and documentary films, among others.
7. Name Top Competitors and Market Segment
Top Competitors:
AT&T Inc.
ViacomCBS
NBCUniversal Media LLC
Market Segment:
Movie & Video Production / MEDIA Conglomerate
8. Identify the Industry Cycle Stage and provide brief explanation
The Life Cycle Stage of this Industry is MATURE
The industry is growing in line with the overall US economy
The number of industry enterprises is growing moderately
Market share has consolidated among a handful of major studios
The Industry remains a stable component of the national economy. The IVA (Industry Value Added) is forecast to grow at a rate of 5.7% by 2025. The industry's products are well-defined, the number of industry enterprises is expected to increase at an annualized rate of 3.3% to 7,646 companies over the 10 years to 2025. Important to mention that six major companies are projected to consistently control more than four-fifth of industry revenue.
9. Provide a brief Industry Outlook (be sure to update for Covid global impacts)
The Industry revenue is anticipated to accelerate over the five years to 2025, rising at an annualized rate of 6.2% to an estimated $42.5 billion mainly due to strong growth in foreign distribution. The main threat comes from Digital Operators that have begun to enter film production (Amazon, Netflix), along with a sluggish box office and anticipated declines in physical copy sales.
The industry is expected to be adversely affected by the COVID-19 (coronavirus) pandemic in 2020. All industry metrics are expected to decrease. Some companies will not be able to survive the conditions of halted production and delayed releases in the industry in 2020. Therefore, corporate profit is expected to decrease 25.1% in 2020. The economy is expected to show signs of recovery in 2021 after the pandemic. The industry is also expected to start to rely more on technology while people are social distancing. As social distancing protocols loosen, and movie theaters reopen, the industry is expected to thrive.
10. Describe the Operating Conditions – Identify each category and provide a short summary
10. Describe the Operating Conditions – Identify each category and provide a short summary (CONTINUATION)
Capital Intensity:
A moderate level of capital intensity is seen among the Movie and Video production industry. One of the major reasons for this is the huge costs involved in the process that includes the gear, shooting equipment, locations, and software for professional editing. To overcome these costs these equipment are usually rented by the movie producers which brings down the cost by a huge margin and makes it easily accessible.
The industry still relies on highly skilled workers and artists in all facets of the production process, and talented employees are vital to plan, shoot, edit and distribute projects.
10. Describe the Operating Conditions – Identify each category and provide a short summary (CONTINUATION)
Technology and Systems
Both, the rate of new innovation and the concentration, are in line with the average across all industries.
Major market segments for industry operators are relatively diversified. The spread of market segments suggests that there are limited entry points other than those already served my incumbent operators.
The Movie and Video Production industry has been only somewhat affected by technological disruption.
The level of technology change is High. New technology is rapidly transforming the Movie and Video Production industry.
10. Describe the Operating Conditions – Identify each category and provide a short summary (CONTINUATION)
Revenue Volatility
The level of volatility is Medium.
The Movie and Video Production industry operates with a low degree of revenue volatility.
Film viewing, particularly at theaters, is a highly discretionary expenditure and is therefore influenced by consumer incomes and spending patterns. As a result, the industry's performance is affected by broader economic changes.
At the individual studio level, the industry has a very high level of volatility. Even if the overall industry grows steadily during a given period, major studios will simultaneously experience wild swings in industry-relevant revenue.
10. Describe the Operating Conditions – Identify each category and provide a short summary (CONTINUATION)
Regulation and Policy
The level of regulation is Medium and is Increasing.
Screen actors, directors, cinematographers and the Movie and Video Production industry's movie production employees are heavily unionized.
Firstly, union membership requires additional bureaucracy, which translates into added expenses for fulfilling union requirements, limiting daily workloads, extending project deadlines and filling in the necessary paperwork to confirm that production was completed in Movie & Video Production in the US 51211a July 2020 44 IBISWorld.com accordance with the requirements of all involved unions.
Unions set higher minimum wages than federal regulations mandate for production employees. Negotiations between unions can also become extremely costly; the threat of a potential strike may lead to across-the-board increases in wages or, in the event of a stalemate during negotiations, costly legal fees.
Another way that this industry conducts self-regulation is through age-specific movie ratings.
The Motion Picture Association of America (MPAA) conducts the ratings.
Ratings are an inexpensive way for the industry to help parents monitor the content that their children watch and decrease the potential costs of lawsuits. Ratings also help broadcasters abide by Federal Communications Commission regulations.
10. Describe the Operating Conditions – Identify each category and provide a short summary (CONTINUATION)
Industry Assistance
The level of industry assistance is High and is Decreasing.
The US government and various state government bodies often pass tax provisions to encourage domestic movie and video production.
Tax write-offs may be included to reduce tax payments on production expenditure or permit some flexibility in various revenue accounting methods.
In recent years, the code has widely expanded to provide substantial write-offs, grants, tax rebates and sales tax exemptions for independent producers of films that are shot either on a low budget or in a designated location.
A high degree of government programs benefiting movie producers, the industry is also heavily unionized.
The Motion Picture Association of America Movie & Video Production in the US 51211a July 2020 45 IBISWorld.com (MPAA) represents all six major Hollywood studios and is one of the most powerful lobby groups in the country.
The MPAA has historically served to issue film content guidelines and administer its MPAA film rating system, but in recent years it has become an increasingly vocal advocate for strengthening the US government's antipiracy laws.
11. Identify the Company Your Team chooses to Analyze Legal Company Name, official company website
Legal Name: AT&T Inc.
It is an American conglomerate company that is Delaware registered and has it’s headquarter situated at Whitacre Tower in Downtown Dallas, Texas.
It is actually the parent company of Warner Media which is a mass media conglomerate. This is what that makes it the largest company in the media and entertainment sector in terms of earnings.
Official Website:
AT&T® - Official Site www.att.com/
Warner Media www.warnermedia.com
