Disney Report Essay

1. Revise Disney Vision and Mission Statement“The mission of 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.”ComponentsOrganizationMarketCustomerTechnologyProduct/ServicePhilosophySelf conceptWalt DisneyYesNoNoYesNoYesComponentsConcern for survival, growth, profitabilityConcern for public imageConcern for employeesYesNoNoProposed mission statement:“The mission of Walt Disney Company is to be one of the world’s leading producers and providers of entertainment and information in the world by fostering innovation and leveraging new technologies.

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. Our philosophy is to stay competitive and continue growth worldwide to maintain our brand recognition and competitive edge.We are global organization that strives to satisfy our customers by adapting our services and products to their needs. Our employees are the foundation of our company, driving force as they provide quality experience/products to our customers. Walt Disney is socially responsible company as we believe in honesty, loyalty and ethical standards. We take responsibility for our actions and we always strive to implement business practices that will have a positive impact on the environment, consumers, employees and our stakeholders.”2.

We Will Write a Custom Essay about Disney Report Essay
For You For Only $13.90/page!


order now

Develop a SWOT analyses. Why has Disney been successful for so long?Strengths:WeightRatingWeighted score1.Long-lasting / well-known, recognized brand0.140.42.Wide portfolio0.1540.

63.Diversification0.1540.64.Quality product/ experience0.130.35.Product distribution: partnership with Apple0.

0520.16.Ability to adapt to changes: deliver products and services that match changing consumer preferences across countries 0.120.2Weaknesses:WeightRatingWeighted score1.High cost of operation0.110.12.

Company’s Studio Entertainment segment and Consumer Products segment have experienced declining revenues in the last three years 0.120.23.High pressure in terms of creativity and innovation to bring and hold customers.0.1520.

3Totals1.002.8Opportunities:WeightRatingWeighted score1.International expansion into Asia, North America and South Americaas the company’s revenues and income are growing in all regions of the world0.1520.32.

Leveraging of new technologies0.220.43.

New attractions, innovations to attract customers0.130.3Threats:WeightRatingWeighted score1.Strong competitors at national, global and regional levels, therefore ability to maintain leader position within the industry becomes harder 0.1530.

452.Internet – consumer preferences are shifting to more-on-demand movies and shows0.1520.33.Growing risk of copyright infringements and unauthorized sharing of movies 0.120.24.Due to the economic state consumer disposable income is limited for entertainment expenses.

0.1520.3Totals1.002.25The OrganisationStrengthsWeaknesses1. Long-lasting / well-known brand2.Wide portfolio3.

Diversification4. Ability to adapt to changes5.Broad target audience6. Quality product / experience.1. High cost of operation2. Declining revenues in two segments3.

High pressure in terms of creativity and innovation.OpportunitiesSO StrategyWO Strategy1. International expansion2. Leveraging of new technologies3. New attractions, innovationsPeople preferences are shifted – Internet usage has increased, therefore, company should think how to sell/promote its business through websites. Company should expand into emerging markets – developing countries in order to cut cost of operation. ThreatsST StrategyWT Strategy1. Strong competitors2.

Internet usage3. Growing risk of copyright infringements4.Unstable economic situationCompany should have a website where the customers could rent a movies and cartoons (also old ones) for prices based on the economic situation in the world. Company should use Internet to sell consumer products as the revenues in this segment have decreased. I suppose that Disney has been successful for so long because this company all the time strives to be appealing to its target audience. Disney does not stay the same – through diversification itdifferentiates its business practises in order to satisfy ever-changing consumer needs.

Moreover, despite of strong competition it knows how with the right strategies maintain leader position in the industry. 3. Develop a BCG/ADL Matrix and McKinsey Matrix based on information in the case.

Has Disney diversified too far in recent years? Explain the strategic implications and recommendations of your matrixes. 3.1 McKinsey MatrixPoint is in the “Development” line, V quadrant which means that Walt Disney market is category “Hold and maintain”.

Basing on results of analyses before, we can decide which strategy Walt Disney should use: Integrative strategy and intensive strategy and probably also diversified strategy. Integrative strategy: Used in growth of a business. There is forward integration which means that the business is growing and taking over relationships. Backward integration is the business taking over parts of the business that were previously provided by outside vendors. Horizontal integration means that a business is looking to compete with its competitors in their market. Intensive strategy, Diversified strategy: to get better situation using intensive strategy we can make new market penetration, enlargement, and product development to increase market share.

Using diversified strategy we can make new business section and implement new ideas. 3.2 BCG MatrixBCG matrix help to analyze their business units which are classified into four categories – stars, cash cows, dogs and question marks – based on combinations of market growth and market share. In this section are analyzed four Walt Disney Company’s business segments – Media Networks/Broadcasting, Parks and Resorts, Studio Entertainment and Consumer Products. See illustration below how they are divided into BCG Matrix model’s categories and description about each of them.

BCG Matrix illustration of Walt Disney Business SegmentsStars – Media Networks / BroadcastingMedia Networks / broadcasting is a unit with a high market share in fast – growing industry and is leader in the business. Media network’s and broadcasting revenues are the highest from all business segments and stillare increasing each year. The media networks division generated the highest profit of any Disney segment during the second quarter of 2007. Media Networks/ broadcasting are generating a huge amount of money – total revenue of cable networks and broadcasting in 2007 is $15,046 (in millions) which is 43% of all Disney revenues.

Disney owns a lot of television networks and this increase in segment is because of the growth from cable and satellite operators, which are derived from fees charged on a per-subscriber basis, contractual rate increase and higher adverting rates at ESPN. The increase in broadcasting revenue was due to growth at the ABC Television Network and increased sales of Touchstone Television series. Two major TV networks (ABC and ESPN) also have deal with cable operator to offer shows on demand. Cash cows – Parks and ResortsDisney parks and resorts revenues are second highest by segments – $10,626 (in million) and revenues are increasing each year. Parks and resorts make 29% from Disney revenue. This segment is beating profit easily, because of the high demand and occupancy (87% in 2006). Disney will change concept of parks from masses to more concentrated perspective; in this case Disney will reduce demand with purpose to avoid cannibalization of existing parks. Disney revenues at its Park and resort division increased 10% in 2006 to $9,9 billion due to increase of $647 million and $255 million at its domestic and international resorts, respectively.

Higher guest spending was due to a higher average daily hotel room rate, higher average ticket prices and greater merchandise spending are both resorts. Question Marks – Studio EntertainmentStudio Entertainment has high demand but low returns due to low market share. Disney revenues from this segment are 22%, $7,491 (in million). Disney revenues from this segment decreased by 1%, or $58 million, to $7,5 billion primarily due to lower worldwide home entertainment. Operating income from this segment increased $522 million to $729 million.

Studio Entertainment are growing rapidly and consuming a lot of money and “asking” for investments but it is not generate money back because of low market share and the result is huge net cash consumption.Dogs – Consumer ProductsConsumer Products have a low market share and low market growth, this segment is not generating revenue, only 6% from all Disney revenue, it is $2,347 (in million). In 2006 Disney sold 365 of its stores to the Children’s Place under a franchising agreement.

4. What new countries should Disney expand into? Why? Does it make sense for Disney to be expanded internationally? I believe that Walt Disney should expand into developing countries such as India and Mexico. These are emerging markets and the company will reduce its costs as the workforce, labour and land is cheaper there. Also, in these countries family values are very important and people are very collective oriented, therefore, they would love to spend time together, for example, in Disneyland Park.

However, company should take into account that in these countries purchasing power is lower, therefore, prices should be different than, for example, in Europe. I believe that Walt Disney should go globally in order to reduce its costs and to maintain its brand recognition and obtain/retain competitive edge.5. Identify candidates which you feel Walt Disney should try to obtain. Does it need to forward or/and backward integrate into new activities? Or does it need to horizontally integrate? I think that good candidates which Walt Disney should try to obtain are: •CBS Corporation and News Corporation – they are great competitors in the Media Network segment. If Walt Disney would merge with these corporations they would gain greater control over television, magazines and other segments. •Ocean Park –Walt Disney has also Disney`s Hong Kong Disneyland situated in Hong Kong.

Unfortunately, they are not doing well because they have poor understanding of local market and the ark is too small for Chinese population. However, Ocean Park is local entertainment resort and it fully understands what people want. Therefore, it would be beneficial deal for Walt Disney to obtain Ocean Park. •Warner Brothers – Warner Brothers is leading competitor to Walt Disney in Studio Entertainment and Consumer Products segments.Generally, good business strategy for Walt Disney in implementing new activities is applying forward integration.

It would ensure that company has a tighter rein over the supply chain where the activity takes place. Forwardintegration will increase control over distributors and retailers. However, new activities can also be horizontally integrated. It will allow different firms which are in the same stage of production share resources at the same level. It would increase market power and reduction in the costs associated with international trade by operating in foreign markets.6. Recommend an improved organizational structure from the chart provided in the case.

Could Disney be more effectively structured? Ways to Structure a Business:•By function: arranging the business according to what each section or department does •By product or activity: organising according to the different products made •By area: geographical or regional structure•By customer: where different customer groups have different needs •By process: where products have to go through stages as they madeFinancial point of view:•Revenues and operating income by segment it presents that although the revenue was increasing but income was decreasing. •Most of its expenditure is spent in capital expenditure especially in Theme Parks and Resorts. •In covering the wage rate issue, there is a possibility for the company to provide the bonus for the employee who be able to achieve a great performance instead of increasing the wage. •The company has to make a budgeting on its fixed cost in his financial statement and it became the responsibility for the company to fulfil to its employee which is it can be replaced to something better such as make it as variable cost as mentioned before.Organizational point of view:•Motivating and Rewarding can be implemented to reduce the effects. As mentioned before, instead of increasing the wage rate, it is better for the company to award the bonus for the employee achievements.

•The Maslow’s Need Hierarchy can be a consideration. If the company implemented the bonus program instead of increasing wage rate at once the company will fulfil a few level in Maslow’s hierarchy such as Physiological, Esteem andSelf-actualization.What should Disney maintain?•Managing diversity to create organizational changes that enable all people to perform up to their maximum potential. Disney have to focusing on manage the diversity of the cast, because the cast (employees) is an assets of Disney business to reach a goals and expand the business into global market. •Make effective work.

To make employees satisfaction and continued willingness to contribute will be better for make effective team works in Disney. •Effective motivation through the goals.From, Abraham Maslow (1943) need hierarchy theory can be applied on Disney cast.For its future success, Disney should also:•Think of their patient as customers•Realize their patient expectations and respond with quality of service •Invest more in staff•Improve feedback•Finally promote more its real magic philosophy: ‘People treat people the same way they’re treated’.