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Disney Case Study

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Brett Ball

on 4 November 2014

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Transcript of Disney Case Study

Domestic and International Cable Networks
ABC Television Network
238 Affiliated Stations in US
Television Production
2011 Expansion, acquired UTV in India
US Domestic Television Stations
8 Domestic TV Stations
Radio Disney
34 Radio Stations
Disney Owns 31
Significant Challenge-
Competition for Viewers to Earn Advertising Dollars
High Competition
Developed Apps to Compete for Internet Viewers
Presented By:
Brett Ball
Andrea Novoa
Kaleb Schwab
Brianne Smail

Disney Case Study
Porter's Five Forces
SWOT Analysis
Venture into Animation Began 1919
1920-1923 A Bumpy Road
Walt Disney Animation Work for Pesman Art Studio
Left to form Iwerks-Disney Commercial Artists in 1920(short-lived)
Went to Kansas City Company for short local animations till 1922
Founded Laugh-O-Grams, went bankrupt in 1923
Retained a film from Laugh-O-Grams
History
Advantage
Brand Name and Image
Mission
"The mission of The 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."
Vision
"To make people happy."
Competitive Advantage, Mission, and Vision
What is The Walt Disney Company's strategy?
Strategy
Step 1: Evaluating Industry Attractiveness
Step 2: Evaluating Business-Unit Competitive Strength
Step 3: Determining the Competitive Value of Strategic Fit in Multibusiness Companies
Step 4: Evaluating Resource Fit
Step 5: Ranking Business Units and Setting a Priority for Resource Allocation
Step 6: Crafting New Strategic Moves to Improve the Overall Corporate Performance.
Evaluating the Strategy of a Diversified Company
Business Model
Steve jobs was on their board of directors since 2006
New princess in 2018 Moana
Opening a Frozen attraction in 2016
The voice of Lilo, from Lilo and Stitch, is Daveigh Chase - the same girl who haunts our dreams as Samara Morgan in The Ring.
The weirdest things ever found? There have been lost and found reports of a glass eye, a potty trainer, and a prosthetic leg. All three of which were eventually claimed!
Fun Facts
Building Shareholder Value - Applied to Disney's Purchase of Marvel
Key Points of Presentation
Earned Contract from Universal
Successful Animations:
Alice Comedies
Oswald the Lucky Rabbit
Disney Bros. Studio Terminated 1927
Universal Poaches Animators
1928 Mickey Mouse created with Walt Disney Studios
1929 Mickey Mouse Club
1954 Construction began on Disneyland in Anaheim, California
Opened for business in 1955
1963 Location acquired for Walt Disney World in Orlando, Florida
1966 Walt Disney passed away
Roy Disney new CEO, Walt's Brother
October 1971 Walt Disney World Opened
December 1971 Roy Disney Passed Away
Donn Tatum New CEO
Tatum Planned and Esmond Walker Opened:
EPCOT in Orlando
Tokyo Disneyland
Walker Launched The Disney Channel
Michael Eisner CEO 1984
Acquisitions
Removed in 2004-Resigned in 2005
CEO 2005-Present
Robert "Bob" Iger
2006 Pixar bought for $7.4 Billion
2006 Oswald Comes Home
2007 Construction Began on Two New Disney Cruise Ships
2011 and 2012 Put into Service
2009 Marvel Acquired
April 2011 Shanghai Disney Breaks Ground
August 2011 Disney Resort & Spa Opens in Hawaii
October 2012 Lucasfilm Acquired $4 Billion
2014 Maker Studios Acquired $500 Million

Walt Disney World Resort in Orlando, Florida
Disneyland Resort in California
Aulani Disney Resort & Spa in Hawaii
Disney Vacation Club
Disney Cruise Line
Partially Owned Parks & Resorts
Disneyland Paris-51% Interest
Hong Kong Disneyland Resort-47% Interest
Shanghai Disney Resort-43% Interest
Disney Tokyo Resort-No Ownership Interest
Licensed Operation
Received Royalties
Owned & Operated by Oriental Land Company
Produce:
Live-Action and Animated Movies
Pay-Per View and Home Entertainment
Musical Recordings
Disney on Ice
Disney Live!
Produced and Distributed Under:
Walt Disney Pictures
Pixar
Marvel
Distributed Under Touchstone Pictures
Trends:
One Pixar Film Per Year
One Disney Film Per Year
Two Marvel Films Per Year
Consumer Products
Disney Store Retail Chain
208 stores in North America
103 stores in Europe
46 stores in Japan
Business specializing in merchandise licensing
Children's Book and Magazine Publishing:
Comic books
Children's books
Magazines
Apps for children
Interactive Media
Video Games for:
Handheld devices
Game consoles
Smartphones
Developed games and content for:
Disney.com
Parks and Resorts Websites
Studio Entertainment Websites
2010 acquired Playdom Inc.
Diversify gaming efforts
Low-Cost Provider
Focused Low-Cost
Focused Differentiation
Broad Differentiation
Best-Cost Provider
Broad Differentiation Strategy
Offer unique product or service attributes that a wide range of buyers find appealing and worth paying for.
Few rivals are following similar differentiation approach
Striving for innovation and technological advances
Constant movement to keep their differentiation
Creating superior product features, design, and performance
Technological changes is fast-paced and competition revolves around rapidly evolving product features
Three Tests of a Winning Strategy
How well does the strategy fit the company's situation?
Is the strategy helping the company achieve a sustainable competitive advantage?
Is the strategy producing good company performance?
Success
Substitute Products
- Low Threat
Disney Parks and Resorts culture can't be replicated
Buyer Bargaining Power
- Low Threat
Low Price sensitivity, establish brand
Supplier Bargaining Power
- Low Threat
Backward Integration
Potential New Entrants
- Low Threat
High entry cost, high customer loyalty
Rivalry Among Competing Sellers
*
Individual Markets - High Threat
Disney as a whole - Low Threat
The industry attractiveness test
Is the industry offering an opportunity greater than or equal to the company's present business?
The cost-of-entry test
Are the costs to enter too high to prevent good profitability?
The better-off-test
Does the new business help existing businesses perform better than they would if they were operating independently?
Parks and Resorts
Studio Entertainment
Media Networks
Evaluating Industry Attractiveness
Media Networks
Parks and Resorts
Studio Entertainment
Consumer Products
Interactive Media
1. Market size and projected growth rate
2. Intensity of competition
3. Emerging opportunities and threats
4. Presence of cross-industry strategic fit

Evaluating Business-Unit Competitive Strength
1. Relative market share
2. Costs relative to competitors' costs
3. Ability to benefit from strategic fit with sibling businesses
4. Ability to match or beat rivals on key product attributes
Facets of Crafting an Overall Corporate Diversification Strategy:
Related vs. Unrelated Diversification Paths
1. Picking new industries to enter and deciding on the means of entry.
2. Pursuing opportunities to leverage cross-business value chain relationships into competitive advantage.
3. Establishing investment priorities and steering corporate resources into the most attractive business units.
4. Initiating actions to boost the combined performance of the corporation's collection of businesses.
Related:
possess competitively valuable cross-businesses value chain and resource matchups
Enhance shareholder value by capturing cross-business strategic fits
Transfer skills and capabilities from one business to another
When Disney bought Marvel they shared iconic characters such as Spider man , iron man and others with other businesses like theme parks, retail stores, etc.
Share facilities or resources to reduce costs
Leverage use of common brand name
Combine resources to create new strengths and capabilities
Pitfalls of Unrelated Diversification
Two important negatives that undercut the pluses
1.Very demanding managerial requirements
Stay abreast of what's happening in each industry and each subsidiary
Pick business-unit heads having the requisite combination of managerial skills and know-how to drive gains in performance
Tell the difference between those strategic proposals of business-unit managers that are prudent and those that are risky and unlikely to succeed
Know what to do if a business unit stumbles and its results suddenly head downhill
2.Limited Competitive Advantage Potential
offers limited potential for competitive advantage beyond what each individual business can generate on its own

Unrelated:
have dissimilar value chains and resource requirements, with no competitively important cross-business value chain relationships
Spread risks across completely different businesses
Build Shareholder value by doing a superior job of choosing businesses to diversify into and of managing the whole collection of businesses in the company's portfolio.
1923-1927: Taste of Success
The Building of an Empire
Related vs. Unrelated Diversification Paths
5. Resource requirements
6. Seasonal and cyclical factors
7. Social, political, regulatory, and environmental factors
8. Industry profitability
9. Industry uncertainty and business risk
5. Number and caliber of strategic alliances and collaborative partnerships
6. Brand image and reputation
7. Competitively valuable capabilities
8. Profitability relative to competitors
History of The Walt Disney Company
Business Model
SWOT Analysis
Strategy
Porter's Five Forces
Chapter 8 Concepts
Fun Facts!
Name One Strength, Weakness, Opportunity, and Threat of The Walt Disney Company?
Who was Walt Disney's first animation?
Did anyone notice what we hid in our presentation that Disney hides in all of their Pixar animated movies?
Discussion Questions
Questions or Comments?
Thank you!
Contact Info:
Brett Ball
bball08@lakers.mercyhurst.edu
Andrea Novoa
anovoa41@lakers.mercyhurst.edu
Kaleb Schwab
kschwa04@lakers.mercyhurst.edu
Brianne Smail
bsmail08@lakers.mercyhurst.edu
Sources
http://robins.richmond.edu/documents/cases/WaltDisney.pdf

http://www.strategicmanagementinsight.com/swot-analyses/walt-disney-swot-analysis.html

http://www.mirror.co.uk/lifestyle/family/90-years-walt-disney-company-2459598

http://www.britannica.com/EBchecked/topic/165722/Disney-Company

http://simondixie.hubpages.com/hub/Walt-Disney-Companys-Mission-Statement-and-Vision-A-formula-for-success
Chapter 8
Full transcript