The Walt Disney Company is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media.
Disney Company was founded in 1923, first known as The Disney Brothers Studio
In year 1928 first cartoon of Disney’s Mickey Mouse was launched.
1955 was one of the most successful years for Disney as they launch Disney land that became one of the best places where people can see different cartoon characters.
The main three competitors of Disney are time Warner, CBS and the fox entertainment group.
In year 1983 Disney opens their first international theme park in Japan
Currently Disney has resorts in five country’s including Japan, Hong Kong and 2 resorts in U.S.A. Moreover they are looking forward to open a new resort in china.
http://thewaltdisneycompany.com/about-disney
http://thewaltdisneycompany.com/about-disney/disney-history
Walt Disney’s Business Portfolio
Walt Disney Company
Interactive Media
Consumer Products
Studio Entertainment
Media Networks
Parks and Resorts
LO 1.1Explain the strategic terminology in relation to Disney highlights the mission, vision objectives goals and core competencies of company
Mission statement is the statement that summarized the aims and the values of the company, organization or individual.
Disney’s Mission
“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.”
“Be one of the world’s leading producers and providers of entertainment”
As the first line of mission statement of Disney represents that they have a clear strategy or clear goal that they want achieve in the future. Moreover this goal is to be world best entertainment provider to all the regions of the world. It clearly shows that the key market of the Disney world is entertainment providers.
“Using our portfolio of brands to differentiate our content, services and consumer products”
To reach the world best entertainment provider they are seeking to use all the resources and services attracts by their stakeholders and will be benefit to stakeholders in various ways.
“We seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world.”
Disney main strategy is to develop the best creative and innovative products in the entertainment industry. Disney also looking to come up with unique products which are better than their competitors and along with this they will be going to make large market share in the future by using their experiences.
As go through the mission of Walt Disney, it tells or represent that the product or the service Disney are providing to customers are entertainment and information, within professional way to satisfy the customers. Also Disney strategies are come up with new innovative and creative products that can lead them to be the world best entertainment company.
(http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Walt-Disney-Mission-Statement.htm)
Vision
“To Make People Happy”
This basically means that Disney’s is always looking to satisfy and make happy their customers and stakeholder’s by providing better product and services.
Disney’s Objectives
The Walt Disney Company’s objective is to be one of the world’s leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services and consumer products.
(http://thewaltdisneycompany.com/investors)
Disney’s Goals
To maximize earnings and cash flow and to allocate capital toward growth initiatives that will drive long-term shareholder value.
Act and create in an ethical manner and consider the consequences of our decisions on people and the planet
Champion the happiness and well-being of kids and families in our endeavors
Inspire kids and families to make a lasting, positive change in the world
(http://thewaltdisneycompany.com/citizenship/goals)
SMART Objectives
E:Picssmart.jpg
Figure 2
As we goes through the objectives of Disney it shows that company is
Specific
Goals
Disney’s goal is to achieve exceptional performance by embedding citizenship into all of daily decisions and actions, guided by three core principles:
Act and create in an ethical manner and consider the consequences of our decisions on people and the planet
Champion the happiness and well-being of kids and families in our endeavors
Inspire kids and families to make a lasting, positive change in the world
(http://thewaltdisneycompany.com/citizenship/goals)
Core Competencies
Disney brand name is very strong and popular brand name among all the customers, because of the rich history of company and the product that they provide to consumers. Disney world is widely recognized as one of the most visited entertainment place and very attracted place as compare to their Competitors. Disney products are recognized as differentiate product compare to competitors. Disney world is the place where suitable for every age group and for family. It is reported that in a year millions of customers visited to Disney Walt and Disney parks. According to annual report and other financial report it shows that Disney invests billions of dollars to make Disney world and resorts all over the world. While this resort has been highly popular among customers hence, this is the professional’s skills and techniques that used by Disney. This had help Disney in various way to get in to emerging market and to get market share.
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1.2) Review the issues involved in planning strategic direction for Disney under the current business conditions
As after go through the current business condition in Walt Disney it founds that the Disney’s brand name has been fading through the years. This is much challenged situation for the company. Fading their brand name may possibly harm them in the existing market. As the view of strategic consultant the Disney current plan is in declining stage. There is lot of reasons behind this. Such as company is unable to reach their goals and target in the current strategy. Moreover Company is not able to meet their sales and target for the year.
(1.3) Explain the different planning techniques they would adopt under given circumstance
Ansoff matrix is known as the planning strategy that used
Ansoff Matrix
Market Penetration = Market penetration is defined as the growing of sales in existing market. As goes through Walt Disney company we all knows that Disney’s 3D animation and park’s & resorts has been very famous and high growth in the current market . There are many things that Disney can adopt the product in the current market as they can do more advertisements their resorts and their 3D animation movies as well as they can promote their product in the world wide more than now. Hence, in this process capital market development will be low. There is not any risk at all in market penetration.
Market Development = As Disney can adopt a plan to take their products and services to Srilanka. This can be a good starting point them to get a market in south Asia, as there is none of Disney’s store in south Asia. Disney can apply this segment according the geographical and demographical of srilanka. Many people believe that there is a certain risk which is involving in the market development as, there are possible chances of failing the segment or they can export their product s to srilanka. But according the past experience of Disney it clearly shows that the company has been very successfully opening stores in overseas. Company need to invest high amount for market development as when they are moving to new country they need to find locations. There is significant risk involved in market penetration compare to market penetration.
Product Development = product development is known as the development of new product to existing market with different characteristics. Disney can come up with new product which can lead the market share as well as can get the new customers. Since, Disney is a entertainment company they can come up with new product as Disney underwater parks which would be very differentiate from their resorts and parks. To launch this underwater park to Consumers Company need to ensure that they gave a unique brand name for this product and use the effective technologies. Cost is higher than the market penetration in product development.
Diversification = is knows as company move or plan to go for new product to new market. The best alternative could be company to go for an education service. Company can come up with a small Montessori classes for small kids. This can be very useful for the kids. This is unrelated diversification, because this is not related to company’s product or current market. Overall this is very high risk involving in diversification.
B.C.G Matrix
http://www.tomspencer.com.au/wp-content/uploads/2008/06/BCG-growth-matrix.jpg
Figure 3
Stars (= High Growth, High Market Share)
Media Networks of Walt Disney are coming under stars. There is high growth of media network all over the world and they are having high growth market share in the existing market. According to the recent survey conducted by Forbes Magazine shows that the media network of Disney has been generated more cash than other products that they were selling. This also basically shows that Walt Disney is in the growth stage and they are still absorbing.
Cash Cow (Low Growth, High Market Share)
Disney’s park, Resorts, studio entertainment & Consumer products and are cash cow. These products make high amount of cash and investment should be needed to low. These parks studio entertainment & consumer products are in low growth and high market share.
Dogs (low growth, low market share)
Disney’s interactive media is coming under dogs, as interactive media is not making profit
Threats of SubstitutesPorter 5 forces
Threats of new entrants
Competitive Rival vary Among the Industry
Bargaining Power of buyer
Bargaining Power of suppliers
Figure 4
Threats of new entrants
There are very few competitors who are competing with Disney in the existing market, and dream works are direct compete ting with Disney. Time Warner and Cumulus Media have super huge power in the market. After launching Disney TV to the market company has captured large amount of market share as per compare to past two years.
Threats of substitutes
Whenever new products enter to market there are possibility chances that customer shift to new products or they substitute the products. At this point there are threats for the company that buyers may switched to dream works or Pixar. But still there are majority for company’s product like animation market.
Bargaining power of suppliers
Suppliers are the people who were always willing to supply raw materials to firms. Suppliers are the people who are willing to supply raw materials and other products to the firm or company. The items that Walt Disney buy from suppliers have highly impact on organization profitability. The bargaining power of supplier is high when there are many less sellers and more buyers in the industry.
Bargaining Power of buyers
One of the most important thing companies needs to ensure that they make very good relation with consumers always. It’s important that whenever Disney introduce new product or services to market it encourage customers about new product. To reduce the bargaining power Disney can use internet to promote products and they can show the different prices in market and compare with those prices.
(LO 2.1,2.2) Carry out an organizational audit and environmental audit for Disney using appropriate analytical tools
POLITICAL
When the company decided to move in to other country organization need to ensure that they were following to rules and regulations that has been implemented by government. Hence, they need to study the government rules of foreign country.
When a Multinational company like Disney owned a huge acre of land in a country like U.S.A they should pay multimillion amount of land value tax. Regarding this if the land value tax change in some circumstance there are possible chances of land value tax could be higher or lower. Most of the time this is unpredictable.
Economical
A decline in economic activity in the United States and other regions of the world in which where Disney do business can adversely affect demand for any of their businesses, thus reducing Disney’s revenue and earnings. The most recent decline in economic conditions Reduced spending at parks and resorts, purchase of and prices for advertising on o broadcast and cable networks and owned stations, performance of our home entertainment releases, and purchases of Company-branded consumer products, and similar impacts can be expected should such conditions recurring.
Economy Crisis has been one of the good examples of economical. Natural disaster has been one of the things that took place like hurricane sandy which has big impact of U.S.A economy.
Social
Social factors like changing of population have been one of the challenging factors that faced to all the company. These factors also influence in organization in different ways. Countries like china have faced this over recent years.
Technological
Technology is one of the most important in modern world. Technology affects lot of way to company or new product. Disney also can use new technologies to promote their products through market. They can use emails and launch a website for this product. Through this they can communicate their employees and keep in touch with them. Launching new machineries will help them to make their work easy.
Disney’s new technologies such as convergence of computing, communication and entertainment devices which has increased broad band internet speed in last year’s.
Environmental
Environment factors include weather and climate change. Climate changes’ occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. These happen most of the time when they are going to launch new branch or store in another country.
Legal
Legal Policies that protect the competitors to copy the product and help from negative activities. Because of this company can keep the brand image in the market.
Imposition by foreign countries of trade restrictions, currency exchange controls or motion picture or television content requirements or quotas.
S.W.O.T Analysis of Walt Disney
Opportunities
Strength Internal External
Positive
Weakness
Threats
Negative
Strength
Disney has been recognizing as one of the most recognizable entertainment in the world.
Disney is one of the best companies that advertise their product among the consumers and they have also a wide and unique portfolio.
Disney is one of the major universal licenser of character-based merchandise and producer of children’s film-related products based on retail sales.
Having a unique and differentiate brand name that is widely recognized by customers. As well as highly qualified and skills staff’s.
Weakness
As go through last 3 years of Disney consumers and studio entertainment it shows that it’s been in declining their revenue.
Reports show that the company’s laborers who were working in factories face lot of problem due to the poor working conditions, which obviously effect organization. Due to this condition there were certain incidents happen in the factory.
Opportunities
Disney has expanded their business to different parts of the world by opening new store room and new parks.
Opportunity to renovate attractions in Park and Resorts Division due to increase in profit
Disney has got on highest opportunity for invest in building theme parks to satisfy the increase in guest spending theme park attendance and hotel occupancy.
Few competitors who were compete ting with Disney.
Threats
There is a high increment of labor in all over the world now days. Because of this company need to bear their expenses as they are having high amount of employees.
There are lot of new competitors are entering market and trying to capturing the market Share.
(LO 2.3) Explain the significance of Disney’s Stakeholder’s on the strategy Direction
Stake Holders are group of people who is interest in business or industry. They are categorized into internal and external stakeholders.
Figure …………5
Figure ……………….. 6
Understanding and managing stakeholders is one of the most or important of every organization. As move on to stakeholders of Walt Disney:
Customers: Customers has been referred as king of business. They are the always in line with company and with their products. Customers will be always looking for quality product with cheap price. Customers are highly interested in the new products and new services of Disney. They always go through the latest news about Disney through magazines and Walt Disney website. Furthermore to get more information about prices of product and company’s growth rate , they go through annual report.
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Government: in every country government play major role in every business. As government implemented rules and regulations. At this point government is very much highly interested stakeholder of Disney. Government will be always observing that company is following rules. As well as company also will ensure that they pay the tax on time. There are many cases in country that companies were not able to pay tax on time, because of this government fined company’s.
Suppliers: in every firm supplier play one of the main role. Suppliers are interested to get the information about firm day by day. Suppliers will get to know how much they provide to the firm and in future what are the changes needed to be done in supplying process as well it helps them to understand their operation as they will get to knows how much money they are making in the company. Hence, it will be helpful them to knows clearly about demand of their products. Hence, this can be helpful firm in decision making process.
Employees: – they are also very highly interested stakeholder in the organization. Employees are interested to know when does their payment slip will receive or any increment. More over they will always need to ensure the annual leave and other procedures in the organization.
Shareholders:- are highly interested in the growth and success of the company. They will be observing about company closely. They are also highly interested in company’s sales.
Owners-are the people who own the company. Owner has the responsibility to look after the operations that happen in organization.
Keep Satisfied
Shareholders
Manage Closely
Employees
Government
Stakeholder Map
High
Monitor (Minimum Effort)
Suppliers
Keep Informed
ManagersPower
Low
(LO 3.1)Analyze possible alternative strategies that Disney can adopt to grow the business
Balance Score Card
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School)
Financial Perspective
Internal Process Perspective
Customers Perspective
Vision & Strategy
Learning and Growth Perspective
(http://www.ap-institute.com/Balanced%20Scorecard.html)
Learning &Growth Perspective Example: Grow Human Capital
Improve Information Capital
Build Organizational Capital
Internal Process Perspective Example: Manage Operational
Manage Customers
Manage Innovations
Customer’s Perspective Example: Satisfy Customer needs
Gain Market Share
Improve brand’s Name
Financial Perspective Examples: Earn High Profits
Long- Term Shareholder Value
In the above table shows how Walt Disney can improve their strategy by adopting balance score card and in each perspective shows that the objectives which company can achieves. Balance Score card is very popular strategic plan use all over the world. This strategy helps company for better information and improved knowledge.
Competitive Strategy
Cost Leadership
In the existing market Disney is high cost provider. Disney can come up with low cost leadership provider in the industry. The sources of cost advantages are diverse and the structure of the company. Company also can go for overseas and provide low cost. For this company also can find the best ways that they can use sources of cost advantages.
Differentiation
Since Disney is widely recognized and unique brand among the customers and worldwide, company can get lot of opportunities to be more differentiate in the future. Moreover using this factor company also can cover the cost.
3 Focuses
Company is able to go for new segment.
(LO 3.2) Select Appropriate Future Strategy based on alternative that you identified
After analyzing both strategies it founds that in the view of strategic consultant that Balance cost card would be the best strategy that Disney can adopt. The main reason for choosing balance score card is that it’s very easy to adopt and it consists of lot of information as well as it’s a one of the famous and growth strategies in the modern world. For example when we look at big companies had been in line with balance cost approaches. Moreover this approach highlighted the one of the most important key points that companies can improve internally and externally. Hence, this also helps organization to deals with customers in professional way. If Disney adopt balance score card approaches they can make a higher profit and can have a bright future in entertainment industry.
Task 02 (Compare role and responsibility of each functional divisions on supporting the given strategy
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