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Walt Disney Company

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makis antoniou

on 7 July 2013

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Transcript of Walt Disney Company

The Walt Disney Company
The Walt Disney Company, is an American diversified multinational mass media corporation headquartered in Walt Disney Studios in California. . It is the largest media conglomerate in the world in terms of revenue. Founded on October 16, 1923, by Walt and Roy Disney as the Disney Brothers Cartoon Studio.
(cc) photo by theaucitron on Flickr
Disneyland
Walt Disney World Resort
Magic Kingdom
Animal Kingdom
''
Disneyland Paris
Blizzard Beach
Typhoon Lagoon
Tokyo Resort
Walt e as filhas, Diane e Sharon.
Steamboat Willie is released at the Colony Theater in New York
HISTORY
1927
1928
1930
1934
1937
1940
1949
1955
1966
1971
1975
1984
1987
1991
1994
1995
1996
2003
2005
2009
2012
Release of the first cartoon "Oswald the Lucky Rabbit"
Mickey Mouse comic strip debuts
The first appearance of Donald Duck
Disney's first feature-length animated film:
"Snow White and the Seven Dwarfs"
The Disney Studio begins its move to California, from Los Angeles
Walt Disney Productions issues its first stock
Walt Disney Music Company is formed
Disneyland, the first Disney park, opened in Anaheim, California.
The first guests were Kristine Vess and her cousin Michael Schwartner, ages 5 and 7
Walt Disney
dies at age 66
Walt Disney World Resort opens with the Magic Kingdom
Walt Disney World Village, a large outdoor mall with specialty shops all built by Disney designers, which later became Disney Village Marketplace, opens
Michael Eisner and Frank Wells become chairman/CEO and president of Walt Disney Productions
The agreement to build Euro Disneyland, later renamed Disneyland Paris, was signed in France
The Walt Disney Company joins the Dow Jones
Disney Interactive, a division first intended to develop, market, and distribute cartridge games and CD-ROM software, is formed
Disney Online, a division of Disney Interactive created to develop The Walt Disney Company's online presence, is formed and The Disney Channel begins operation in the UK.
Shareholders approve the Disney merger with Capital Cities/ABC.
Disney sells the Anaheim Angels (baseball team)
Robert Iger becomes president and chief executive officer of The Walt Disney Company
Disney is first to license TV episodes, from ABC and Disney Channel series, for download on Apple’s iTunes Music Store
Marvel Entertainment joins the Disney family
Acquisition of Lucas film
Vision statement
Walt Disney does not have a vision statement due to its diversification. It is very difficult to find a clear vision statement to combine all of Walt Disney’s various activities
Mission statement
To be the world’s leading (5) producers and providers of entertainment (6) and information (8). Using our portfolio of brands to differentiate our content (7), services and consumer products (2), we seek to develop the most creative, innovative (4) and profitable entertainment experiences and related products in the world (3)
1. Customers
2. Products / Services
3. Markets
4. Technology
5. Concern for survival, growth and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees

From the “Mission Statement” two items are missing, Customers and Concern for employees.
Media Networks
The table presents the major firms which are under Walt Disney’s umbrella, divided in broadcasting and cable networks
Media Networks encompasses an array of broadcast, cable and radio businesses globally
Walt Disney’s 5 business segments
Parks and Resorts
Tracing its roots to 1952, Parks and Resorts has grown and includes Disney Cruise Line, Disney Vacation Club resorts, Adventures by Disney travel tours, and five resort locations encompassing 14 theme parks, including some owned or co-owned by independent entities
Let's see the most popular parks and resorts
Studio Entertainment
The Walt Disney Studios is the foundation on which Disney was built, and at its heart are world-renowned animated features and live-action motion pictures. The company distributes motion pictures under Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures, Disney Animation Studios, and Pixar labels.
Consumer Products
Disney merchandising began in 1929 when Walt Disney was approached by a businessman interested in placing Mickey Mouse on the cover of a children’s writing tablet. Since then, Disney Consumer Products and affiliates have grown to extend the Disney brand to merchandise ranging from apparel, toys, home decor, books and magazines to interactive games, foods and beverages, stationery, consumer electronics and fine art. Disney Publishing.
Interactive Media
Disney Interactive Media Group creates branded interactive entertainment and informational content across multiple platforms including online, mobile and video game consoles around the globe
Revenues by geographical area
Walt Disney’s segments compared by revenues and operating income for 2010-2011
Walt Disney Company, as it is mentioned before, operates in 5 different segments. Due to this fact, Disney has a wide variety of competitors either direct or merely. Walt Disney is part of the entertainment diversified industry, thus companies like Time Warner and News Corporation (which are also part of this industry) are direct competing with Disney. On the other hand, companies like Six Flags Inc. and Merlin (which operate only in parks and resorts industry) are merely competing with Disney
The competitors
Ratio analysis
Liquidity Ratios
Leverage Ratios
Profitability Ratios
EFE MATRIX
Emerging markets

Asian theme park attendance is forecast to grow from 249 million in 2009 to 290 million in 2014 and also theme park attendance in China will exceed that of the United States within 10 years.
New attractions’ benefits

In recent years, the researches showed that every time that something new introduced in theme parks, the number of visitors is increasing
Potential of digital 3-D technology

The growth in 3-D cinema screens in the last 5 years is explosive
Rapid Pace of Changing Media and Technology

The rate at which media and technology has changed in the last 15 years is unprecedented. Widespread availability of the Internet occurred from the late '90s, resulted in rapid technological advances in media. While that is wonderful news for the consumer, at the same time, it leaves companies struggling to stay on top of changes occurring at an almost daily basis.
High competition in media industry

The global media industry is $1 trillion business. This industry is dominated by conglomerates Walt Disney, Time Warner Inc. and News Corp
CPM
Strong reputation and brand name

Walt Disney through the last 8 decades has accomplished to gain a strong reputation and a powerful brand name. It’s consistence in innovation and the development of new quality products combined with the successful diversification strategies, have all contributed in building that enormous trade mark.
Walt Disney is the leader in theme parks

In terms of attendance Walt Disney is the global leader in theme parks with large difference from the second which is Merlin Entertainment. For 2011 Walt Disney had 121.4 million visitors while Merlin Entertainment had 46.4 million visitors.
IFE MATRIX
A Vast and Diverse Portfolio of characters

The Disney has an impressive collection of new adaptations of old classics such as Robin Hood, Peter Pan and Simba, the Company has created countless characters to star in their feature films.
Walt Disney Company’s huge portfolio is the single best strength of the entire organization.
Diversification

Disney has managed to diversify more than perhaps any other entertainment company in history. From films to theme parks to consumer products to TV, Disney has broken into nearly every entertainment segment. This constant desire for diversification and growth is what has allowed Disney to enjoy so much success so far.
Overdependence on the North American markets

Walt Disney has its operations across all the world. But, the company derives the majority of its revenues from North American markets, which does not truly reflect its global presence.
High and Increasing Cost of Operation

Unfortunately for the Disney Company, their industry is one with astronomical costs and expenses. Needless to say, it is quite expensive to produce film or build and maintain a theme park.
Moreover, the Operating expenses increased by 9% from 2010 to 2011 in Parks and Resorts segment.
SWOT Analysis
SO Strategies
Built New Parks and Resorts in emerging markets.
(S5, S6 - O2)

Introduce Star Wars Characters in Amusement Parks.(S3-O5)

WO Strategies
Invest in 3-D Technology. (W8-O8)

ST Strategies
Promotion of new games via Apple.(S9- T2)

WT Strategies
Research low budget entertainment options.
(W2- T4)
Due to the fact that the attendance in amusement parks will be increased in emerging markets like China’s in the future (exceed the US’ attendance within 10 years), Walt Disney can use its strong reputation and brand name in order to expand the revenues from parks and resorts at this markets by using also the strength of being the leader of this industry.
Due to the high reputation of Star Wars characters and in conjunction with the fact that new attractions increase the attendance in Parks, Disney can take this advantage and introduce them in amusement parks in order to increase its profit.
Although the revenues from Studio Entertainment segment decreased in 2011, Disney should continue invest in films by producing more 3-D movies because this kind of productions seem to have potential profit.
Disney Company can take advantage the collaboration with Apple to introduce new innovative products (games) through Apple’s platforms (Apple store), in order not to face the threat of not to cope with the rapid pace of changing in Media and Technology.
Due to the struggling global economy and in conjunction with the fact that Disney has high operation costs, Disney is advised to follow a strategy in developing lower budget entertainment options. The benefits of this strategy will be
a) the reduction of the high operating costs and
b) Cheaper tickets for this kind of products which means increase of attendance.
Space Matrix
Financial position (FP)
• ROE (6): Return on Equity of Walt Disney is bigger than the industry’s average and from the competitors.

• Gross margin (6): The rate of the gross margin of Walt Disney continuously is increasing.

• Debt/equity (7): Debt/equity of Walt Disney is greater than its competitors and from the industry average.
Competitive position (CP)

• Market share (-1) : Walt Disney is the biggest worldwide company in Entertainment diversified industry.
• Product quality (-1): Walt Disney has a legacy of top quality products and services.
• Product variety (-1): Walt Disney has a very large products and services variation due to the diversification.
Stability position (SP)
• Technologic changes (-4): Walt Disney is a pioneer in the development of hi-tech products.

• Competitive pressure (-7): High competitive environment especially with Time warner and News corp.

• Barriers to entry (-2): There are a lot of difficulties for a newcomer to enter in this industry.
Industry position (IP)
• Financial stability (6): After the 2009 general financial drop, Walt Disney managed to overcome quickly. Also Disney doesn’t depend on loans to finance its operations.

• Ease of entry into market (5): Walt Disney has already a worldwide presence and recognition.

• Extend leveraged (7): Walt Disney’s debt is very low, it’s the lowest of the industry so it is easy for this profitable company to handle it in the future
As a result from the Space Matrix analysis, Walt Disney is a financially strong firm that has achieved major competitive advantages in a growing and stable industry. More specifically the company’s position according to this Matrix is at the first quadrant and the deviation of the line is smaller than 45o. So Walt Disney should follow an aggressive strategy.
Grand Strategy Matrix
According to the grand strategy matrix the appropriate strategy for Walt Disney is to continued concentration on current markets (market penetration and market development) and products (product development).
Internal-External Matrix
The IE Matrix is based on two key dimensions: the IFE total weighted scores on the x-axis and the EFE total weighted scores on the y-axis
Three major regions
Grow and build
Hold and maintain
Harvest or divest
Epilogue
The prevailed strategy that Walt Disney should follow is to built New Parks and Resorts in emerging markets.
Due to the fact that the attendance in amusement parks will be increased in emerging markets like China’s in the future (exceed the US’ attendance within 10 years), Walt Disney can use its strong reputation and brand name in order to expand the revenues from parks and resorts at this markets, by using also the strength of being the leader of this industry. One other key factor for this strategy is the incredible customer services that Walt Disney provides in theme parks industry.
Another factor that can contribute to this strategy is the adaptation of the attitude of the countries that already host Walt Disney’s Parks and Resorts by the countries of the emerging markets; this will enable Walt Disney to have low taxes and bigger profits. In this strategy Disney can also reuse the past portfolio which includes many characters. Furthermore, this it will be a chance to Disney to growth the revenues outside from North America market.
Although parks have enormous cost of operations, Disney has the capability due to the strong financial position to overcome this weakness.
THANK YOU
FOR YOUR ATTENTION
Full transcript