Wd case study

A Strategic Business Analysis Presented by

Table of ContentsIntroduction 3 Company Background 3 Purpose of Strategic Management 3 Company Mission Statement 4 Objectives 4 Strategies 4Internal Audit 4 Strengths 4 Weaknesses 6 Internal Factor Evaluation (IFE) Matrix 7External Audit 7 Opportunities 7 Threats 8 External Factor Evaluation (EFE) Matrix 10Strategic Analysis 10 Strenghts-Weaknesses-Oppurtunities-Threats (SWOT) Matrix 10 Strategic Position and Action Evaluation (SPACE) Matrix 12 Grand Strategy Matrix 15 Internal-External (I-E) Matrix 15 Quantitative Strategic Planning Matrix (QSPM) 16Recommendations 19 Mission Statement 19 Short-term Goals 19 Long-term Goals 20 Implementation 20Sources 23 2

IntroductionCompany BackgroundWhen brothers Walt and Roy Disney moved to Los Angeles in 1923, they went there to sell their cartoonsand animated shorts. One could only dream that their name would one day be synonymous withentertainment worldwide. But then again, that is how The Walt Disney Company has made their fortunesover the last several decades: making “dreams” come true.The Disney brothers began creating countless cartoons (some successful and others not so much), and in1928, introduced Mickey Mouse to the world in the animated short, Steamboat Willie—widely describedas the first animated film to be synchronized with post-produced music. The Mickey Mouse charactergained enormous popularity, and Walt and Roy enjoyed incredible success thereafter with feature filmsboth related and unrelated to the Mickey Mouse character.The Walt Disney Company produced several of its animated classics throughout the 1940s such asPinocchio, Fantasia, Dumbo, and Bambi; and in 1955, Disneyland opened its doors as the Disneybrother’s first amusement park. In 1966, Walt Disney died leaving Roy as the new President, CEO, andChairman of the Board of The Walt Disney Company. Walt never had the opportunity to witness hisnamesake creation (Roy rebranded Disney World as Walt Disney World in honor of his late brother) asWalt Disney World opened five years later on October 1, 1971.Since that first day of October in ‘71, The Walt Disney Company has expanded exponentially. TheCompany owns media networks such as ABC, ESPN, the Disney Channels, SOAPnet, and A & E(television networks); ABC Radio and The Radio Disney Network (online and satellite radio station); andHyperion Books (literary publishing company). The Company has spread its parks across the world toParis, Hong Kong, and Tokyo and has taken to sea with four Disney ocean liners.The Walt Disney Company continues to grow with a major expansion to Walt Disney World currentlyunderway and several feature films currently in production in the Disney-Pixar Animation Studio (theresult of the Company’s 2006 acquisition of Pixar Animation Studios.) Though profits have beenstagnant for the last two fiscal years, the company’s revenue continues to increase.Purpose of Strategic ManagementStrategic management is a management function that consists of three distinct actions. They are (1)formulating, (2) implement, and (3) evaluate cross-functional decisions that enable an organization toachieve its objectives. Strategic management is vital for companies wishing to prosper in such a dynamicworld.With globalization at an all time high, the practice of strategic management among a company’s topexecutives (at the very least) is an absolute necessity. Considering that “communication is a key tosuccessful strategic management” and that the empowering of employees is “a great benefit of strategicmanagement,” it is recommended that strategic management is implemented at a company-wide level.Simply put: successful, polished, professional companies perform strategic planning. A large percentageof the companies that fail in America each year do not perform strategic planning. 3

Company Mission Statement“A mission statement defines in a paragraph…any entitys reason for existence. It embodies itsphilosophies, goals, ambitions and [morals]. Any entity that attempts to operate without a missionstatement runs the risk of wandering through the world without having the ability to verify that it is on itsintended course.” –www.missionstatements.com.The mission statement can also be defined as a company’s “statement of purpose.” The current missionstatement for the Walt Disney Company is: To be 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.ObjectivesThe objectives of a company are the same as a company’s goals. When setting goals, an organization isdetermining what results they expect to achieve in both the short-term and the long-term. What is the goalof this company? Of this division? What do we want to have accomplished within the next year? Withinthe next five years? Generically, the answers to these questions would be a compiled list of objectives ofwhich a company should strive to obtain.Given the current economic climate, setting objectives (or goal-setting) is difficult. As with everycompany, The Walt Disney Company should set goals for the company as a whole and along functionallines that pressure the company to greatness yet are obtainable. Measurability should be constantlyremembered in setting these objectives, and precise and unambiguous language should be used toeliminate all hints of confusion.The Walt Disney Company does not publish its corporate objectives.StrategiesStrategies are a company’s methods to reaching its established objectives. Just because a company mayhave a final destination in mind (an objective or goal) doesn’t mean that every path to that destination is agood one. After setting strategically sound objectives, it is imperative that strategically sound strategiesare generated to provide the means of transportation for said objectives.The courses of action on which an organization decides to embark affects all divisions and aspects of saidorganization. Strategies should be formulated and implemented only once all internal and external factorsare assessed. Only then can a strategy be deemed “safe” for a company for implementation.Internal AuditStrengthsAll companies have actions that they perform more than capably. All companies (at least all those thathave been around for a period of time) have past successes on which to build. A company’s “strengths” 4

are those such factors: the positive components of a company’s collective portfolio that have made thecompany better in one way or another.The strengths for The Walt Disney Company are detailed below.A Vast and Diverse PortfolioThe Disney brothers began drawing cartoons long before moving to Hollywood. The Missouri nativesspent the majority of their lives imagining characters to which to introduce to the world. Along with theDisney’s impressive collection of new adaptations of old classics such as Robin Hood, Sleeping Beauty,Peter Pan, and Alice In Wonderland; the Company has created countless characters to star in their featurefilms. Disney’s original characters include Mickey Mouse, Minnie Mouse, Donald Duck, Pluto, Chip &Dale, Simba, Buzz Lightyear, Belle, and Aladdin (to name only a very limited few.) The Walt DisneyCompany’s huge portfolio is the single best strength of the entire organization.DiversificationDisney has moved well beyond its cartoon-oriented roots. Though the company is still involved theproduction of original feature films and other related media (and though the media network division of theCompany is still the organization’s leading generator of revenue) the company has long since stoppedbeing your typical “animation studio” or “film production company.”In 1951, with the opening of Disney’s first theme park (Disneyland, in Anaheim, California) theCompany made a dramatic shift from a media-oriented company to the broader category of anentertainment-oriented company. In the midst of the rollercoaster’s and hot dog stands in sunnyCalifornia, the Company found also a unique market place for consumer products and a chance to entwineand implement the Organization’s already impressive portfolio of film characters into the parksattractions.The Walt Disney Company also began launching and purchasing media outlets for which theirproductions and promotions to air. Disney owns now several media broadcasting networks television aswell as several radio stations for terrestrial, satellite, and online hosts.Incredible Customer ServiceThe Walt Disney Company prides itself in many things and rightfully so. If you ask the average personwhat Disney is known for “Mickey Mouse” or “the castle” might quickly be their reply. Ask anybusiness professional, however, and one thing is certain to be heard time and time again. “Customerservice.”Disney demands nothing less than stellar customer service from their employees. If you have neverexperienced the “Disney Difference,” I urge you to travel to one of their many theme parks or retail storesworldwide. Their level of customer service takes those who know to look for it back. Former customerservice experts and teachers for Disney have written very successful books on the topic and theirexperiences from the “holy grail” of customer satisfaction.Acquisition of Pixar Animation StudiosIn 2006, The Walt Disney Company made an acquisition of Pixar Animation Studios. Until 2006, Pixarhad collaborated with Disney on multiple occasions to produce such award winning films such as ToyStory, Finding Nemo, and Monsters, Inc. Because of the partnership involved in these movies, however,Disney had limitations on the rights to use and reuse the characters contained within the films. TheCompany saw this as a negative. Too, seeing as Disney produces the majority of its films withoutcollaboration or partnership, the Disney-Pixar relationship was an enigma around which to carefullynavigate. 5

In addition, as Disney’s traditionally produced animated films (with pen and color artists) being left in theshadows in comparison to the progressively produced animated films (with CGI and digital artwork), itseemed like the best approach that could be taken in order to “catch up with the times.”WeaknessesWith the fact that all companies have actions that they perform more than capably, the fact also arises thatthere are some internal factors that are of a negative consequence. Even companies as successful as TheWalt Disney Company have attributes and characteristics that are not at all positive. A company’s“weaknesses” are those such factors: the negative components of a company’s collective portfolio thathave made the company worse in one way or another.The weaknesses for The Walt Disney Company are detailed below.The Constant Need of Successful Creative MaterialAny analyst should be quick in stating that Disney is wonderful at generating “successful creativematerial”–which they are. The weakness associated with this factor, however, is of great importance.The key words in this factor are “constant need.” Though The Walt Disney Company is possibly theworld’s greatest generator of successful creative material, the constant need to churn out successful filmafter successful film and wonderful attraction after wonderful attraction is daunting at the very least. Thefact that there could be a flop at the box office, or a ride that is negatively reviewed is terrifying for theCompany that prides itself in its perfection.High (and Increasing) Cost of OperationUnfortunately for the Disney Company, their industry is one with astronomical costs and expenses.Needless to say, it is quite expensive to produce or successful feature film or build a theme park. Withrecently diminishing profits and the economic recession, the company’s realization to the increasing costsof doing business has been mundane.This weakness is not to be confused with “high barriers for entry,” which might be viewed as anopportunity. That would be considered an external factor. From an internal point of view, however, thehigh (and increasing) costs to operate are doubtlessly a weakness for The Walt Disney Company.Lack of Developmental PropertyThe Walt Disney Company Parks and Resorts Division has expanded drastically over the last threedecades. With the first international park being established in Tokyo in 1983, the Paris, Hong Kong, andShanghai parks began to fall in place shortly after. At the Disney World Resort in Orlando, Florida, theCompany owns several square miles of land that will surely be apportioned for park editions in the long-term. Outside of the extra property in Florida, however, The Walt Disney Company has little acreageelsewhere. Future developments in California’s Disneyland Resort are very unlikely due to the rapid paceat which property was bought in the forties when the “new theme park project” hit the news, limitingDisney’s land around the resort. Lack of developmental property within a company that survives due toits innovation is a serious issue and a strong internal weakness of this organization.Lagging Consumer Products RevenueThe consumer products division of The Walt Disney Company is handedly the smallest division withinthe organization. While revenues continue to trend upward for the division, they do so at a slower rate tothe other Disney divisions, proportionally. Consumer products should be a division of the Company thatperforms, proportionately, as well as the other three divisions of the company. 6

If a consumer watches and really thoroughly enjoys Disney’s new studio release, Cars 2, than it is safe tosay that the viewer might also want a Cars 2 t-shirt or action figure. The same is true for the medianetworks or parks and resorts divisions: a consumer who has experienced the products of any division ofthe Organization should be prone to purchase consumer products related to such products. The fact thatthe increasing revenue of the consumer products division is doing so at a slower rate of the other divisionsshows a lack of marketing and promotion put on the division.Internal Factor Evaluation (IFE) MatrixThe Internal Factor Evaluation (IFE) Matrix is an Input State (State 1) strategic management tool that thathelps with the summarization and evaluation of the major strengths and weaknesses in the functionalareas of an organization. Internal factors (namely strengths and weaknesses) are compiled, given weightsas it relates their relative importance, and assigned a rating. The weighted scores [weight (x) rating] aretotaled to comprise a total weighted score for the IFE Matrix. The figures generated in the IFE Matrix areused in a multitude of other strategic management tools and matrices.The IFE Matrix for The Walt Disney Company is included below.External AuditOpportunitiesWith the internal factors detailed above, an organization has the ability (if not responsibility) to utilize itsstrengths and improve on its weaknesses. They are controllable factors–attributes than can be altered.With the external audit, we discuss factors that are not controllable and are focused outside the four wallsof a corporation.The first such component of the external audit are opportunities. Opportunities make up the one portionof the external factors to be detailed in this analysis. These opportunities are factors that provide a chancefor an organization to make positive changes. These factors can be governmental, environmental,economic, or legal (among other descriptors.)The opportunities for The Walt Disney Company are detailed below. 7

Increasing Impact in the Music IndustryDisney’s original shows that air on The Disney Channels are crammed full of child stars–children andyoung adults from ages 10-18. These child stars, however, are not handpicked just for their acting ability.The Walt Disney Company has, for some time, selected actors with the dual talents, namely singing anddancing.With the meteoric rise of television programs such as American Idol, and America’s Got Talent, TheDisney Company has made a point to hire actors with multifaceted abilities. As a result, Disney has seenhuge success with films such as High School Musical and Camp Rock; and stars such as MileyCyrus/Hannah Montana, The Jonas Brothers, and Selena Gomez. The idea that the music industry is ripeand ready for Disney to take an even larger plunge is the single best opportunity of the entireOrganization.Expansion into Untapped Geographical AreasOne of the weaknesses of The Walt Disney Company is the lack of developmental property, which isdiscussed in detail above. The idea of expanding into untapped geographical areas is a perfect cure forsuch weaknesses. Expanding into new and exciting areas of the world is a wonderful opportunity.Disney’s currently standing parks and resorts (in Florida, California, Tokyo, Paris, Hong Kong, andShanghai) are all located in areas of great population. The opportunity being discussed here is placingparks and resorts in new areas away from population mainstreams. Disney should look into plantingparks and attractions in worldwide tourist attractions. For example, the native population in Hawaii or theJamaica is not staggering by any means, but the tourist descends on these destinations like in droves. Theidea of planting a resort in this type of area would provide a great opportunity for the Company.Expand Radio OperationsThis opportunity can (and should) be looked at individually. It can also be coupled with the first listedopportunity, increasing impact in the music industry, so that this opportunity is somewhat of a “step #2”to “opportunity #1.” Disney currently owns and operates ABC Radio and Radio Disney, two radiostations that broadcast content via satellite, terrestrial, and online formats. With satellite and online radioexponentially increasing their popularity, now is a better time than any to utilize Disney’s entertainmentportfolio to make a larger impact across all of radio.Reuse of Past PortfolioA strength of The Walt Disney Company (was stated above) is its vast and diverse portfolio. Anopportunity of Disney’s, then, would be taking advantage of said portfolio. This option has been utilizedin the past, but a continued use of past characters would serve as a “cash cow” for the Company.Mickey Mouse celebrated his 83rd birthday this year, and is still being introduced to children worldwideeveryday in the form of Mickey Mouse Club House, a children’s television program on the Disney Juniorportion of The Disney Channels. Mickey isn’t the only Disney character worth revisiting, though. Thereare literally hundreds of characters that would garner their own programs, new feature films, or themepark attractions. This reuse of a wonderful portfolio would generate increased revenue with lesserexpenses associated with it.ThreatsThe second components of the external audit are threats–direct opposite of an organization’sopportunities. Just like organizations should take advantage of their opportunities, threats are also equallyadvantageous for a company if they are handled correctly. Threats make up the one portion of theexternal factors to be detailed in this analysis. These threats are factors that would otherwise be 8

considered a negative aspect of the business climate, but can also provide a chance for an organization tomake positive improvements by utilizing these very situations. Just like with opportunities, these factorscan be governmental, environmental, economic, or legal (among other descriptors.)The threats for The Walt Disney Company are detailed below.Struggling Global EconomyIt seems almost unnecessary to list the struggling economy as a major threat to any worldwideorganization. The slowly recovering economy has begun to feel like a permanent part of our businesslandscape. Naturally though, like an elephant in the room, it continually represents the largest factor inthe landscape. The economic climate too, when compiled with a company who is leisure-driven andproduces nonessential products, profits drag even more than normal, as is clearly evident by theCompany’s most recent income statement.The struggling global economy represents the largest threat to the entire Organization.Rapid Pace of Changing Media and TechnologyThe rate at which media and technology has changed in the last in the last 15 years is unprecedented.Since widespread availability of the Internet occurred in the late 1990s, media and technological advanceshave bred more media and technological advances. While that is wonderful news for the consumer, itleaves companies struggling to stay on top of changes occurring at an almost daily rate–so much so thatoften times technological departments have been bolstered just to keep organizations competitive on theonline.There is a positive side to this threat of ever changing media platforms, however. The company that stayson abreast of these quickly changing components of business is king. With new media platforms such asFacebook and Twitter, it seems that the company that best takes advantage of these forums is at theforefront of pop culture–right where an entertainment corporation would hope to be.Competition with Universal OrlandoWhen the Disney brothers parked a theme right in the middle of Florida swampland in 1971, they werethe only show in town. Orlando was not the town we know today. Walt and Roy selected Orlandosimply because it met many of their requirements: pretty, warm weather for the majority of the year,property in abundance, cheap per acre land costs. The Disney brothers bought over forty square milesand set to work building a second theme park to the original Disneyland in California.Walt Disney World anchored the Magic Kingdom Park in 1971 and EPCOT in 1982. Around this timeThe Walt Disney Company learned that Universal Studios planned to capitalize on the droves of touristDisney was bringing to central Florida by planting a rival park in Orlando as well centered on movies andfilm. Disney beat Universal to the punch and opened what is now Disney’s Hollywood Studios in 1989.The two companies have been in heated competition since that time with it culminating with Universalopening their Wizarding World of Harry Potter in 2010, an addition that Disney desperately wanted buildwithin their walls.The competition is one though that can be healthy for The Walt Disney Company if handled correctly,however. Universal Orlando’s two parks could not possibly supply enough content to guests wishing tostay a full week–the length of time Disney recommends to see their four Orlando theme parks. The twoparks owned and operated by Universal Orlando are just enough to lure additional guests to Florida butnot quite enough to keep guests on their property for much more than a few days.Unionized Work ForceHonest corporate executives would almost always give you the answer that unionized workforces are 9

something that (if they do not have one) are terrified of or (if they do have one) absolutely hate dealingwith. This factor is considered a threat not a weakness because it is, in fact, external in the sense thatDisney cannot control the workforce that they employ.Disney is considered by many employees, however, as a wonderful place to work and most are veryhappy with their employment. The financial stain on the company to suffice union organizers, however,is always a danger–one that is a definite threat to any corporation.External Factor Evaluation (EFE) MatrixThe External Factor Evaluation (EFE) Matrix is much like the IFE Matrix in that it is an Input State (State1) strategic management tool that that helps with the summarization and evaluation of the majoropportunities and threats in the functional areas of an organization. External factors (namelyopportunities and threats) are compiled, given weights as it relates their relative importance, and assigneda rating relative to an organization’s response to each factor. The weighted scores [weight (x) rating] aretotaled to comprise a total weighted score for the EFE Matrix. The figures generated in the EFE Matrixare used (in conjunction with the figures from the IFE Matrix) in a multitude of other strategicmanagement tools and matrices.The EFE Matrix for The Walt Disney Company is included below.Strategic AnalysisStrengths-Weaknesses-Opportunities-Threats (SWOT) MatrixThe Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis is a Matching Stage (Stage #2)strategic management tool that affords analysts the opportunity to match internal and external factors forstrategy development. The idea is that positive advances can be made by taking advantages of internalfactors and having proper responses to external ones. The SWOT Matrix matches Strengths andWeaknesses with Opportunities or Threats. Thus four possible types of strategies are possible: Strength-Opportunities Strategies (SO Strategies), Weaknesses-Opportunity Strategies (WO Strategies), Strength-Threats (ST Strategies), and lastly Weakness-Threats Strategies (WT Strategies).These generic strategies will be discussed later with the precise strategies developed for The Walt DisneyCompany. 10

The SWOT Matrix for The Walt Disney Company is included below.SO StrategiesSO Strategies are strategies that utilize an organization’s internal strengths to take of advantage ofexternal opportunities. Through the SWOT Matrix, three distinct SO Strategies have been developed byfor The Walt Disney Company.The first SO Strategy for The Walt Disney Company is the launching of musicians’ careers thatwere/are affiliated with past/current Disney programming. Disney’s vast and diverse portfolio oftelevision programs and films has been stocked with countless stars with great vocal talent. With theopportunity listed of increasing impact in the music industry, the two factors line up perfectly to make apush musically using current (or past) Disney stars.The second SO Strategy for The Walt Disney Company is using former Pixar characters and films asspringboards for new but related content. Using Disney’s portfolio and the opportunity of using newadaptations, sequels, and prequels of past material, the two factors gel easily to create a great newinitiative for both the production and parks/resorts divisions.The last SO Strategy for The Walt Disney Company is creating additional channels for satellite radiowith content-filled programming. The further diversification within the Company and the expansion ofradio operations (which is directly tied to furthering music activity) falls in line closely to the first SOStrategy developed for the Disney. The idea of having more stations on which to put their originalcontent performed by Disney stars under contract with the Company is an exceptional idea to boostDisney’s musical initiative.WO StrategiesWO Strategies are strategies that take advantage of external opportunities to improve an organization’sinternal weaknesses. Through the SWOT Matrix, two distinct SO Strategies have been developed by forThe Walt Disney Company.The first WO Strategy for The Walt Disney Company is to rerelease past classic films on DVD as neweditions or with new special features. This is a “cash cow” option for the company as profits slip andoperating costs increase. The rerelease of classic films with no editions or with new special features is acheap way to bolster revenues and make use of the Company’s wonderful past portfolio. 11

The second WO Strategy for The Walt Disney Company is to purchase and build parks in emerginggeographical areas rather than older, expensive areas. When looking to expand, The Walt DisneyCompany should look to new, emerging economies in which to plant and foster new parks and initiatives.Disney should consider emerging markets such as India, Brazil, and South Korea to cut costs and “beatthe crowds”, in a sense. Where emerging markets develop so does the population. If Disney can plantparks in these areas before the growth stabilizes, then they have made a sound financial decision.ST StrategiesST Strategies are strategies that utilize an organization’s internal strengths to reduce the impact ofexternal threats. Through the SWOT Matrix, two distinct SO Strategies have been developed by for TheWalt Disney Company.The first ST Strategy for The Walt Disney Company is to push cheaper entertainment options toconsumers rather than high priced options. Seeing as consumers are experiencing the poor economyjust like members of the business communities, offering cheaper-priced entertainment options would be asure way to include the struggling consumer in the consumption of entertainment products.The second ST Strategy for The Walt Disney Company is to boost quality of the parks and resorts notby bettering the product, but by serving the customer better than the competitor does. Resortsdon’t need an extra pool or five arcades rather than three to be more successful than their competition. Tobeat the competition, simply out serve them. Make customer happier by focusing on customer service.More often than not, the quality of a product can be raised drastically when coupled with incrediblecustomer service.WT StrategiesWT Strategies are defensive strategies that reduce internal weaknesses and avoid external threats.Through the SWOT Matrix, two distinct WT Strategies have been developed by for The Walt DisneyCompany.The first WT Strategy for The Walt Disney Company is to research and consider lower budgetentertainment options rather than pricier choices. Because of increasing costs of operation, Disneyneeds to consider less expensive options. Disney is known for their excellence, not their sheer size. Thatbeing said, the Company should consider building a water park in Chicago or a small amusement park inKansas City. The savings would be great for the company and it would open its doors to areas of thecountry that could access the parks without travelling, causing currently economically-struggling citizensto visit the parks in greater numbers than if the parks stayed hundreds of miles away in their sunnyFloridian and Californian homes.The second WT Strategy for The Walt Disney Company is to demand nothing less than exceptionalservice from employees. What is so advantageous about demanding exceptional service is that it costsno more than poor service. In a sense, it’s free. So long Disney is in the entertainment industry, theCompany will forever have customer-guest interactions. The question is why not make these interactionsas memorable as the rollercoasters guests have come to ride. Obviously (as evident from Strength #2),Disney has done a wonderful job at serving guests for many years, but no one is perfect. Customerservice–as good as it already is–could be made better, and just like Disney magic, you have increased thequality of your park with spending a dime.Strategic Position and Action Evaluation (SPACE) MatrixLike the SWOT Matrix, The Strategic Position and Action Evaluation (SPACE) Matrix is anotherMatching Stage (Stage #2) strategic management tool. The SPACE Matrix is a four-quadrant graphicalaxis that indicates whether an organization should pursue conservative, aggressive, defensive, or 12

competitive strategic strategies. The graph is charted based on the average scores of ratings given to fourtypes positions, namely, the Organizations Financial Position (FP), Stability Position (SP), CompetitivePosition (CP), and Industry Position (IP).Financial Position (FP)The financial position for The Walt Disney Company scored an averaged rating 3.5 out or a possible 7(with 7 being the best possible score and 1 being the worst possible score.) Its middle-of-the-road ratingcan mostly be attributed to the Company’s marginal increase in the current ratio from 2007 to 2008 and ameager 12% increase in gross revenues in the last three reported years. A company of Disney’s statureshould arguably have better financial ratios. The economy, no doubt, is a major reason the Company hasunderperformed financially over the last few years, but sufficient strategic planning should allow us tominimize such threats.Competitive Position (CP)The competitive position of The Walt Disney Company is nothing short of stellar. The Company scoredan average rating of -1.75 our of 7 (with -1 being the best possible score and -7 being the worst possiblescore.) The fact that Disney’s product life cycle has literally been around for almost a century is verysignificant in determining the Company’s competitive position. Couple with that the Organization’salmost cult-like fan base and the sheer size of the Company, and The Walt Disney Company has scoredan almost perfect score in the competitive position test.Stability Position (SP)The stability position for The Walt Disney Company, much like their financial position, is middle-of-the-road. The Company garnered a high score when focusing on the barriers to entry associated withpotential competitors, but generated a low rating when accessing the risk of such a high-risk industry.When the fact that fresh and successful content is needed regularly but is priced at industry rates, thestagnancy of the stability position rating is expected. In the end, The Walt Disney Company scored anaverage rating of -3.25 our of -7 (with -1 being the best possible score and -7 being the worst possiblescore.)Industry Position (IP)The industry position for The Walt Disney Company mirrors its competitive position in that it reflects ahigh score. The Company earned high scores for the reusing of its past portfolio and the fact that the easeof entry into the entertainment industry is difficult to say the least. When one considers the fact that theCompany’s leverage position has increased in the last year, a great score is both what is deserved andwhat was given. In the end, The Walt Disney Company scored an average rating of 5.25 out of 7 (with 7being the best possible score and 1 being the worst possible score.)The SPACE Matrix is included below. 13

This graph shows that The Walt Disney Company falls within the first quadrant of the SPACE MatrixGraph. This indicates that the Company should pursue aggressive profiles.Grand Strategy MatrixThe Grand Strategy Matrix is another Matching Stage (Stage #2) strategic management tool designed toassist analysts in developing alternative strategies. The Grand Strategy Matrix is position on a four-quadrant graph and is very simply illustrated. The y-axis of the graph represents market growth, withpositive y -figures representing rapid market growth and negative y- figures representing slow marketgrowth. Conversely, the x-axis represents competitive position, with positive x- figures representingstrong competitive position and negative x- figures representing weak competitive position.All companies will fall somewhere on the graph and, once placed, can make decisions based on therecommended strategies for the company.The Walt Disney Company falls within Quadrant I for simple reasons. The company is strong withintheir markets and growing stronger. Too, the competitive position of The Walt Disney Company isnothing short of stellar, as stated in the paragraphs detailing the SPACE Matrix. Because of Disney’s pastsuccess, current positions, and expectantly spectacular future, the Organization falls easily within the firstquadrant on the Grand Strategy Matrix.The Grand Strategy Matrix for The Walt Disney Company is included below.Internal-External (I-E) MatrixThe Internal-External (I-E) Matrix is somewhat of a continuation and combination on and of the IFE andEFE Matrices. The I-E Matrix pictures nine boxes that represented three quadrants. Quadrants I, II, andIV represent the “Grow and Build” section. Quadrants III, V, and VII represent the “Hold and Maintain” 15

section. Quadrants VI, VIII, and IX represent the “Harvest or Divest” section. The total weighted scorefrom the IFE Matrix is graphed on the x-axis of the I-E Matrix, and the total weighted score from the EFEMatrix is graphed on the y-axis of the I-E Matrix.The I-E Matrix for The Walt Disney Company is included below.The I-E Matrix generated The Walt Disney Company’s coordinates on the matrix as in Quadrant IV. Thismeans that Disney should look to “Grow and Build.” The generic strategies recommended for thissection include market penetration mark development, and product development. These generic strategiesagree with the strategies developed by using the SPACE and Grand Strategy Matrices.Quantitative Strategy Planning Matrix (QSPM)The Quantitative Strategy Planning Matrix (QSPM) is the only Decision Stage (Stage #3) to be used inthe analysis of The Walt Disney Company. The QSPM is a strategic management tool used to determinethe attractiveness of the strategies formulated for The Walt Disney Company in the Matching Stage(Stage #2) tools as they relate to the internal and external factors compiled in earlier matrices. The intentwith the QSPM is that not all derived strategies are feasible for The Walt Disney Company, as they aregeneric strategies that have not been evaluated against the Organizations specific internal and externalfactors.The QSPM for The Walt Disney Company is included below. 16

RecommendationsMission StatementThe current Mission Statement for The Walt Disney Company is listed below. To be 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.Though the Company’s current Mission Statement is adequate, there are a few components of the currentMission Statement that were neglected. Firstly, Disney makes no mention of their customers. Anorganization must never loose focus on their customer, seeing as without the customer business ceases. Inthe altered Mission Statement, we have made note of to whom The Walt Disney Company is selling theirproducts. The remaining neglected components of a sufficient Mission Statement are corporatephilosophy, concern for public image, and concern for employees. All of the neglected components of asuccessful Mission Statement were corrected.The new Mission Statement for The Walt Disney Company should read as follows: To produce and provide entertainment and information to all citizens of the world, regardless of ages. Using our portfolio 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, doing so responsibly as it relates to our stakeholders and our world.Short-Term GoalsShort-term goals are considered goals achievable within a year’s time. After completing and analyzingthe several strategic management tools and matrices contained within this analysis, the following short-term goals have been recommended for The Walt Disney Company:• Rerelease past Disney classics to DVD as special editions or with new special features. This goal isone that could without question be completed in a year’s time. Too, this goal is a “cash cow” of sorts forthe company–the products are already produced and completed so that a marketing push would be theonly serious movement by the company to get this cheap option underway and a success.• Boost customer service in the parks as a way of besting competition without increasing expenses.The great thing about exceptional service is that it is no more expensive than adequate service. Alreadyin place is a series of managers that supervise Disney employees who have direct contact with guests.This goal is as simple as developing a new standard for customer service and ensure that managersimplement them to perfection. If an employee, then, has a negative attitude toward a guest, either theemployee needs reprimanding because they know the customer service standards and are not living up tothem or they are his/her direct supervisor needs reprimanding because the new standards were notproperly explained. This new (and almost free) goal is a sure way to increase vacationing experienceswith all of the Company’s guests. 19

• More heavily market cheaper entertainment options rather than pricier choices. In times ofeconomic difficulty for all members of our global economy, a $5,000 weeklong Walt Disney WorldVacation might not be in the budget. Thus is the reasoning behind this short-term goal. The Walt DisneyCompany should aim marketing dollars at cheaper entertainment options rather than pricier ones with theidea of involving more individuals in the “revenue generating” process. Much like the “lowering taxesand closing loopholes” argument, the idea would bring more people out of the woodwork in which topurchase Disney products.Long-Term GoalsLong-term goals are goals considered unachievable within a year’s time. After completing and analyzingthe several strategic management tools and matrices contained within this analysis, the following long-term goals have been recommended for The Walt Disney Company:• Develop current Disney Channel actors into musicians with their multitalented abilities. In a timewhere the American Idol and America’s Got Talent television programs are at the forefront of pop culture,now is as good as time as any for The Walt Disney Company to develop their actors into music stars aswell. Disney has had success with this in the past, but an increased focus should be made on the goal todrive the Company into the music industry as a main player rather than just a novelty act.• Place increasing focus on radio channels and programming. As a follow up to the above listed long-term goal, The Walt Disney Company should look for every outlet on which to feature the music of theirnew music stars, and what better way to manage that than to own radio channels and control theprogramming on those channels. Much like Disney has done with The Disney Channels and ABC, theCompany does not worry about what station will air the shows that their studios have produced–theCompany owns their own channels on which to show their content.• Plant cheaper entertainment options in smaller markets and emerging economies. The WaltDisney Company is done a fantastic job of placing their parks and resorts where the masses are.California, Florida, Tokyo, Paris, Hong Kong, and Shanghai are all points on the global with higher thannormal populations. This long-term goal suggests that the Company look at smaller markets in which toplace cheaper entertainment options such a solitary water park, one amusement park, or a single resort. ADisney-quality water park in Indianapolis would surely draw considerable more people than if theconsumers living in that area had to fly to Anaheim for their summer vacation. Cheaper entertainmentoptions in emerging markets too (such as Brazil, India, and South Korea) should be examined too,especially as The Walt Disney Company currently has no footing whatsoever in South America.ImplementationThe corporate structure of The Walt Disney Company is comprised of four divisions, Disney ConsumerProducts, Studio Entertainment, Parks and Resorts, and Media Networks Broadcasting. Each divisionmust implement the new long- and short-term goals appropriately or the goals will be ineffective andunsuccessful. Careful attention should be paid to each division functionally as it moves to implement therecommended goals.Parks and ResortsThe Walt Disney Company Parks and Resorts division will contribute heavily in the implementation of 20

the recommended goals. Two of the recommended goals (one short-term goal and one long-term goal)deal almost exclusively with Disney’s parks and resorts. The short-term goal associated with the Parksand Resorts division is to boost customer service in the parks as a way of besting competition withoutincreasing expenses. The Parks and Resorts department must improve on their admittedly already stellarcustomer service. Nothing is perfect, however, and in this case; a little tweaking of corporate servicestandards and customer service expectations is all that would be necessary to bolster guests’ experienceswith just a little added dose of “Disney magic.”Secondly, the long-term goal associated with the Parks and Resorts departments is to plant cheaperentertainment options in smaller markets and emerging economies. As stated before, The WaltDisney Company has made tremendous use of populated areas. Their current parks sit in some of themost populated areas on the globe. This long-term initiative, however, abandons the strategy that hasworked so well for the Company in the past. This long-term goal recommends The Walt DisneyCompany plant smaller, less expensive parks in smaller markets and emerging economies. Building theseparks and resorts in less expensive areas saves money for the Company and opens Disney parks toindividuals who may never have had an opportunity to travel to one of the Organization’s major parks.Media Networks BroadcastingThe Walt Disney Company Media Networks Broadcasting division has a major role forward progressionand diversification of the Company. To place increasing focus on radio channels and programmingand to develop current Disney Channel actors into musicians with their multitalented abilities arethe two long-term goals directly associated with this division.The Media Networks Broadcasting division will be the division solely responsible for the expansion ofDisney’s radio initiative as well as the promotion of the new corporately backed musicians. The musicand radio content will require a home, and the Media Networks Broadcasting will provide the source ofthe Company’s new programming and music. If The Walt Disney Company is to make a successful pushto bolster their standings in the music and radio industry, the Media Networks Broadcasting division mustbe successful in getting the Company’s new content on the airwaves.Studio EntertainmentThe Walt Disney Company Studio Entertainment division, as always, has the monumental task ofcreating the content to be used by all other divisions. All other divisions of the Company rely on theStudio Entertainment division to supply something to be broadcasted, made into a thrill ride, or sold as aconsumer product. Without the Studio Entertainment division creating fresh and successful content, TheWalt Disney Company becomes immediately stagnant.With the recommended goals, the same is true once again. Much of the recommended courses of actionfor The Walt Disney Company presented in this analysis deal with the Company becoming a biggerplayer in the music industry. This cannot happen without the Studio Entertainment division producingquality music. To develop current Disney Channel actors into musicians with their multitalentedabilities is easier said than done. The division must take Disney’s brightest and best stars into the studioto create music that will be loved by their target markets. The Studio Entertainment department caneffectively make or break nearly the entirety of the recommended goals in this analysis. 21

Disney Consumer ProductsThe Walt Disney Company Consumer Products Division is the smallest division of the Company by far,both in terms of size and of revenue generated. The Disney Consumer Products Division has a seriousadvantage, however. This division is a cash cow for the company, effectively generating few costs butincurring somewhat sizeable revenues. The Studio Entertainment Division produced the new Toy Story 3movie; the Disney Consumer Products Division must only sale the finished product. The Parks andResorts Division is the division that spent millions to create “The Rockin’ Roller Coaster: StarringAerosmith;” The Disney Consumer Products Division must only sale the t-shirts depicting its image.The short-term goal associated with The Disney Consumer Products Division, to rerelease past Disneyclassics to DVD as special editions or with new special features, is one that can generated quite a bit ofrevenue with few expenses being incurred, especially considering that there are little-to-no productioncosts associated with the new releases. The division should bolster the Company’s financial standing byproviding these revenue generating, inexpensive actions. 22

SourcesDavid, F. (2010). Strategic management: concepts and cases.Boston: Prentice Hall.The walt disney company and affiliated companies - companyhistory. (n.d.). Retrieved fromhttp://corporate.disney.go.com/corporate/complete_history.html 23

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