Week 15 - Case Study Analysis Presentation

Running Header: Week 10 Research Project 1

Running Header: Week 10 Research Project 8

Week 10 Writing Assignment (Case Study Part 2)

Brian Cooke

Wilmington University

BBM 402 – Strategic Management

03/22/2020

Strategic Analysis of the Company

1. Describe the company’s internal environment.

One of the internal factors is a reliable and famous brand that Disney has. The decent brand gives the company popularity amongst Disney's customers. This brand ensures customers are satisfied across all levels of operations. The developing portfolio of natural products is another internal factor that gives Disney an edge in the market. For instance, the variety of merchandise and movies as well as entertainment parks that keeps growing with time. The growing portfolio contributes to the company’s popularity while at the same time, aggregating the revenues. Additionally, the structure of the organization ensures equally beneficial cooperation in all business segments. The synergistic collaboration ascertains the long-term growth of Disney Company despite aggressive competition.

2. List all of the company’s external factors.

The external factors refer to the opportunities and threats that Disney Company may encounter in its external environment (Carillo, Crumley, Thieringer, & Harrison, 2012). The possibilities for Disney Company include government support of its activities, the entertainment industry, and limited barriers of entry. The competent leaders in various departments set goals and provide vision and encourage their teams to have accountability and participation—much of the opportunities present in the field experiences, training, and support from Disney owners. The main external factor that is of concern to the management includes technological innovation, expansion of markets, and growth of different industries under Disney Corporation. The legal aspects of international investment are some of the threats that Disney Corporation faces. Other risks include politics, oversaturated markets, and stiff competition.

3. How does the company differentiate itself from its competitors?

Analysis of financial ratios of the company has been a useful indicator for measuring success. The financial ratios are compared with those of competitors in the industry and also allow the shareholders and investors to assess the sustainability and economic health of Disney Company. The main competitors include 21st Century Fox and Time Warner. The five key areas of comparison that rewards excellent analysis of finances for a company include profitability, market value, long-term solvency, short-term solvency, and asset management (Sandlin & Garlen, 2017).

4. How does the company differentiate itself from its competitors?

The high capital investment has enabled Walt Disney Company to create a unique brand that makes its products and services accessible in the market, allowing them to make more sales. The large studios and theme parks producers are rare in the global market. They can create high-quality content such as animations, movies, and entertainment creations. The capital required to sustain a high presence like Walt Disney is very demanding, and not many companies can afford it. Market segregation creates brand availability in different sectors of the economy. The cost structure established by Disney prevents the excellent framework for differentiation strategy and economics of scale. The mission and vision of Disney Company are convincing to the customers. Disney is also an indisputable leader in the amusement park operations.

Additionally, the company’s television networks have three of the outstanding channels in the USA in terms of audience size. The three TV networks include ABC, Disney Channel, and ESPN. The segregation strategy is a strength that has given the company a long-term success because having revenue sources from segregated industries reduces the risks.

5. Identify which generic business strategies your company is employing. Do they align with its vision and mission?

Walt Disney Company has taken various strategies in different business segments. The business operates in different entertainment aspects that include: TV channels, amusement parks, movies, consumer products, and many others. The various divisions under Disney’s entertainment industry include Walt Disney Studios, Disney Media Network, Disney Resorts, Interactive Media, and Disney Consumer Products. Although their operations are different, they are all united and well-based on the mission statement of Disney Company which is, to be among the global leaders in providing and producing information and entertainment (Iger, 2015). Additionally, Disney Company uses its portfolio of brands to give uniqueness to their consumer products, content, and services to develop one of the most innovative, profitable, and creative entertainment experiences and other products in the category. These words are carefully chosen and summed up to produce the vision statement of Disney as the global leaders of entertainment. The vision of the Disney Company is to carry out business operations to realize its mission statement. Thus, the generic business strategies followed by Disney all align with its mission and vision.

6. Where is your company in the industry’s life cycle?

The entertainment and movie industry cycle of life can be categorized in terms of the general industry, and terms of the animated film industry. These two categories have been the focus of large mergers in the past two decades. The high sales of movies and animations have contributed significantly to the fast growth of Disney Corporation. The growth of the industry is, however, expected to slow down because of the increasing competition and the fact that the healthy growth trend is not generating high revenues like before. On the other hand, the animation industry is currently signified by accumulating the number of new entrants resulting from the aggregation of 3D animations. The animation industry is, however, increased attractiveness because of rising technological know-how and new technological advances. The consumers have been more attracted to the animations produced by Disney Corporation, giving the company a competitive advantage.

7. Does your company have a cost-leadership position in this business? If so, identify which cost drivers it uses effectively to hold this position.

Disney Company uses the differentiation strategy that keeps them in a cost-leadership position. The company tries to reduce expenses and sustain high levels of content delivery, especially in the entertainment industry. Differentiation is what differs from the company from other competitors. Operating a successful amusement park is expensive, but it takes content to attract visitors and ensure that what they paid for is worthwhile. Content differentiation, such as the unique Mickey Mouse and other attractive franchises are rarely found in other entertainment companies. The company also differentiates its services, and the employees are highly trained in the “Disney style.” Differentiation is also evident in the expertise, which makes, and will continue to make Disney successful in both local and regional markets. Increasing sales and economies of scale allow the company to sustain cost-leadership.

8. What is your company’s approach to the market? Does it segment the market?

Among the main strengths of Disney Company is its market segmentation strategy. At first, the company launched a movie studio that led to several years of success. Later on, the company joined the amusement park market, starting Walt Disney World. In the aftermath, the company opened the Disney Channel under the Television industry. The organization was able to expand its operations using diversified industries like the sub-television extent and amusement parks. For instance, the television and cinema industries are non-related, but they are related to particular levels because the cinema industry supplements the television programs. The corporation also operates on a small scale in the other two sectors, consumer products, and one Digital Industry. The digital industry encompasses websites and video games enterprises. Disney Consumer products consist of stories and character merchandise. The corporation aggregated phenomenally in every sector by creating and acquiring strategic markets under one organization. In the industry of movie production, the digital studio is among the top six in Hollywood.

9. Is your company vertically integrated? Explain.

Disney Company is vertically integrated because it expands its enterprises into diversified steps following a similar production path (do Patrocínio, de Almeida Souza, Santos & Martins, 2018). Using vertical integration, the distribution and supply operations are done by the company itself, which helps it to reduce the operation cost and increase revenues. Disney Parks and Resorts has a lot of products and services created by the company itself. For example, the animations film like the Lion King animations. In the movies section, the creators produce ideas and take them to the movie and television studios for production. The merchandise, such as interactive media and consumer products, is a segment that is vertically integrated.

10. Explain your company’s global strategy.

Walt Disney Company has established itself in the international markets. The company uses an outsourcing strategy. Because of being able to produce at a lower cost, it creates higher revenues in the global markets. It has stores in foreign nations such as Spain, Italy, and the United Kingdom. External licensing allows the company to sell products outside the USA. The Disney brand is well-recognized internationally, which makes it easier for them to reach customers in foreign countries. The media networks, travel, parks give the company a superior advantage of marketing its products (Voigt, Buliga & Michl, 2017). Walt Disney owns stores and parks in Europe, North America, Middle East, Latin America, and Asia. The selection of locations is based on population size and consumers' purchasing power. Because of many other competitors internationally, Disney possesses patents and specific trademarks that make them unique. Market segregation also enables corporately accessible globally.

References

Carillo, C., Crumley, J., Thieringer, K., & Harrison, J. S. (2012). The Walt Disney Company: A Corporate Strategy Analysis. Case Study. University of Richmond: Robins School of Business, 1-29.

Do Patrocínio, R. F., de Almeida Souza, J. L., Santos, C. T. O., & Martins, K. S. (2018). The vision of the Disney World: an experience marketing study at The Walt Disney Company. Archives of Business Research, 6(9).

Iger, R. A. (2015). The Walt Disney Company Fiscal Year 2015 Annual Financial Report and Shareholder Letter. Anaheim, CA: The Walt Disney Company. Accessed May 30, 2017.

Sandlin, J. A., & Garlen, J. C. (2017). Magic everywhere: Mapping the Disney curriculum. Review of Education, Pedagogy, and Cultural Studies, 39(2), 190-219.

Voigt, K. I., Buliga, O., & Michl, K. (2017). Making People Happy: The Case of the Walt Disney Company. In Business Model Pioneers (pp. 113-126). Springer, Cham.