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The Walt Disney Company Essay Sample

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Introduction of TOPIC

The Walt Disney Company has its headquarters in California and is a highly diversified entertainment company which operates in four business segments. These segments pertain to the media & networks, the parks and resorts, studio based entertainment as well as consumer products. The following sections highlight the SWOT analysis, Corporate Strategy and Business Strategy based evaluation of the company. 

SWOT Analysis & Evaluation

The strengths of the company pertain to the broad product portfolio that the company has well established in its four business segments pertaining to consumer products, media and networks, studio entertainment as well as the parks and resorts managed by the company. Other strengths of the company include the strong cable and satellite networks the company has both for local as well as international broadcasting/. This provides the company with the power in the industry while simultaneously driving revenues for the company. Simultaneously the company also a significantly powerful brand invested in Walt Disney which is ranked 8th in the top 10 brands of the world. The weaknesses of the company pertain to the weak performance of the company in the studio entertainment business segments, the Hong Kong Disneyland Resort which is a sizeable investment that yet has to depict streaming revenue flows and the backdating stock options at the Pixar Animation Studios

The threats that are faced by the Walt Disney company pertain to the intense competition that the company is facing the industry in which the company operates as its broadcasting segment battles against video castes, CDs, cable and satellite television as well as DVDs. Moreover the companies with which Walt Disney is competing with relate to industry giants like CBS and Fox which are fathomable competition in the broadcasting industry.

Additionally the company is also facing string competition in the resorts and parks segments by the local amusement parks in the US. Other threats that are faced by the company include piracy of programming which is uncontrollable due to the technological advances taking place and the regulatory risks the company faces for presenting its broadcasting focused towards children in the local as well as the non US markets. The opportunities that are present to the company pertain to establishing new attractions in its resorts and amusement parks, while building on the expansion plans of the cruise business that were highlighted in February 2007. Aside from this the company can also seek to internationalize its operations, by entering the international markets. Currently 25 percent of the revenues for the company come form outside US and Canada, however the company still has the opportunity to extensively expand its operations in Latin America, Europe and Asia

On the whole the Walt Disney Company is in a very string position in the industry as it has significant presence in the amusement parks, broadcasting and development of studio based projects. The company however is facing extensive competition form other large entertainment businesses like Warner Brothers, CBS and Fox that have a similar structure as well as significant presence in the market as well. However the reach of the Walt Disney in Europe and Asia enables the company to expand its operations and projects to the international market in a much more ready manner. This is supported by the string brand name and position of the company in

the industry and its performance in the resort and park based segment as well as the success of its

PIXAR based studio projects.

Corporate Level Strategy Analysis

The mission statement of the Walt Disney Company is ‘To Make People Happy’. The values of the company as set forward by them include no cynicism, focusing on wholesome American values and promoting them, the element of creativity, dreams and imagination being utilized, the fanatical attention given to consistency and detail as well as controlling the element of the Disney ‘Magic’. The corporate website of the company provides that “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. The company’s primary financial goals are to maximize earnings and cash flow, and to allocate capital profitability toward growth initiatives that will drive long-term shareholder value.” (‘Investor Relations’, ‘The Walt Disney Company’)

The Walt Disney Company has been employing diversification strategies in the past couple of decades in its businesses which have led the company into being a successful entertainment giant in the various industries it operates in. The company uses the element of business synergy in all of its diversified business segments which leads to integrated development of the business segments while contributing to the objective of the company relating to maximizing earnings and cash flows for the company. However the corporate strategy of the company can be strengthened by increasing capital investment in the various business segments of the company particular to the expansion of the business segments into the international market. The Asian, Indian and the European regions provide a mass market for the company which can be targeted by the company for its different business segments. One such venture by the company pertains to the Disney Land Park in Hong Kong, which is strategically placed for the regional market in Asia, however the management of the venture needs to be localized and improved in order to turn the current weakness of the company into a strength which can derive business for the company in the region.

Business Level Strategy Analysis

As mentioned earlier the Walt Disney Company has four specific business segments which pertain to the Walt Disney Studios, the Parks and Resorts, the Media Networks and the Disney Consumer Products. While the four segments are synergized in such a manner by the company to contribute to the mission statement of the company and provide for the objective of the company pertaining to maximizing revenues and long term shareholder value while being of the target entertainment provider, the four segments have specific strategies of their own which are derived form the global corporate strategy of the company. The Walt Disney Studios comprise of many different companies of which the most famous are Touchstone Pictures, Miramax Films as well as PIXAR. The main strategy of this business segment has been to generate high revenues while increasing market share for itself in the industry. The business segment has been actively participating in regionalized international ventures and studio based projects which can contribute to internationalizing the operations of the company in the long run.

The Parks and Resorts business segment of the Walt Disney Company is one of the most famous and renowned product offering of the company. The strategy of this segment is to provide customized and regionalized channels of entertainment to customers while launching new lines of business as well. The Disney Land theme parks and amusement parks established by the company in the US, Japan, France as well as Hong Kong drive significant revenue for the company while internationalizing the Walt Disney Company and brand name. The vacation club and Cruise Line businesses are newly formed extensions of the Parks and Resorts business segments.

The Disney consumer products segment is one of the oldest business segments for the company which focusing on marketing the brand name of the Walt Disney Company and its associative products and brands. The business segment has the strategy of the segment is to maintain and manage the retail business of the company while using innovative technology to develop new channels to reach out to the customers of the company. The Media Networks business segment of the company is another extensive segment which focuses on marketing the Walt Disney brand while providing entertainment through satellite and cable network based channels. The strategy of this segment has been to provide high quality and relevant programming to the viewers while catering to their specific needs and requirements, all in order to increase the revenues generated by the company. This specific business segment has undergone significant diversification form children based entrainment and provides a wide range of programming channels and networks including Disney, ESPN, ABC, SOAPNet as well as WDIG

References

(2007), Walt Disney Company SWOT Analysis, Datamonitor Reports, p1, 9p http://web.ebscohost.com/bsi/detail?vid=1&hid=14&sid=ec33e0a2-617c-4b76-91a6-cb6ba857c270%40sessionmgr7

Company Overview, The Walt Disney Company Official Corporate Website, retrieved May 6, 2008 from http://corporate.disney.go.com/corporate/overview.html

Investor Relations, The Walt Disney Company Official Corporate Website, retrieved May 6, 2008 from http://corporate.disney.go.com/investors/index.html

Kirkman, C., (2001), Strategy Analysis of the Walt Disney Company, Yale School of Management, retrieved May 6, 2008 from http://faculty.haas.berkeley.edu/meghan/299/Case_analysis_Disney2.pdf

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