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Case Study: Disney’s Diversification Strategy

The story of Disney is that of a company founded in 1923 by the Disney brothers, Walt and Roy. In the beginning, the company was referred to as the Disney Brothers Cartoon Studio and later incorporated as Walt Disney Productions in 1929. Walt Disney Productions made its mark for many years in the animation industry before venturing into television and live-action film production. Something else also happened before Walt had the breakthrough with Mickey Mouse. Before Mickey, there was Oswald, the Lucky Rabbit. But because he didn’t own the copyright, Walt lost the rights to Oswald, a bitter lesson that was to shape his company positively in the future. That experience thought him very early the value of intellectual property and Disney has used that knowledge to tighten controls over its properties as well as build defense against entrants and competing incumbents. The characters at Disney are well protected and the brand created out of them are so strong that they deter competitors from ever trying to imitate.

Disney World, a family books lodging months in advance at a hotel inside the park. It does so because it knows that the hotel has the best location, is highly demanded, and will provide good hospitality. Being lodged inside the park, the family eats at Disney-owned restaurants and perhaps buys Disney merchandise. All the while the family willing pays prices that are higher than would be charged by comparable hotels, restaurants, and theme parks. It does so happily because it considers the experience a good value.

But wait, there’s more. Consider what makes Disney World the world’s number one destination resort in the first place. It is fueled by the positive experience generated by other Disney productions – most likely the lovable characters of the Disney family. While in the park, children clamor to meet the Disney characters scattered throughout the park. This memorable and emotional experience further fuels demand for home videos, books, television broadcasts, or retail purchases. And the kids (and often parents) can’t wait for the next trip to Disney World, completing the cycle. This complex but carefully orchestrated web of complementary businesses is the ‘Magic of Disney’. It’s what drives major advertisers such as Delta Airlines and Coca-Cola to pay for the right to feature Disney World in their own promotions.

Disney and Diversification

Disney’s diversification didn’t start today. In 1928, its first cartoon was released. One year later, it licensed a pencil tablet, then the Mickey Mouse Club (MMC) was formed as a vehicle for selling Disney’s products under one roof. Within a short time, the membership of the club grew to 1million members. In 1949, the company diversified into music was was even said to have produced training and educational films during the war. Diversification produces synergy. Diversification strengthens the existing business and the entire new business created. Diversification can be related or unrelated. It is related if the activities of the businesses complement those of the firm’s present business in a way that increases or adds to the competitive advantage . In order words, related diversification leads to strategic fit which itself creates opportunities. Opportunities to;

Transfer technological know-how (that are competitively valuable) from one business to another.
Lower cost by combining the performance of common value chain activities
Leverage or exploit use of a well known brand
Get valuable resource strength and capabilities across business

But if the businesses being diversified into have no competitive and valuable value chain that fits with the the value chain of the present business(es), then the diversification is said to be unrelated as there is no strategic fit.

Walt Disney understood the interrelation of new industries to each other right from the beginning, something that continues to be the source of competitive advantage to the company till today. Encapsulated in the ‘Magic of Disney’, the story goes thus.

Family take a trip to Disney, book into a hotel (owned by Disney) inside the park. While in the park, the family eats at Disney-owned restaurants, buy Disney merchandise. It doesn’t matter that they are paying higher for accommodation and meals compared to other hotels. Children meet the Disney characters everywhere in the park which leaves a long lasting emotional experience. The children and their parents end up buying videos, books, TV broadcast which they take home with them. All of these make them look forward to another visit to the Disney and the circle continues. The integration of these complementary businesses is the ‘Magic of Disney’.

Ever since, Disney has expanded its operations to cover theatre, radio, publishing, online media etc. Until the early 1980’s Disney focused on the family creating entertainment for the home and the family. As a result, they were clearly differentiated in the market from their competitors. All of that was to change around 1984 when Michael Eisner took over as CEO. Like Walt Disney, Eisner was an innovative and intuitive leader and his era marked a turning point for the company that was hemorrhaging for cash and that soon became the target of takeover by several companies.

Eisner’s goal was to evolve a company that would grow by 20% a year. To achieve this, Eisner followed these three principles which include keeping its cost down so it doesn’t erode its profit, operate the core business in a profitable manner and find new businesses that could integrate with Disney and guarantee an annual growth rate of 20% for the company. To achieve a 20% growth rate, the business had to diversify, exploring synergies in new industries, and overseas expansion. Overseas expansion is inevitable when the local domestic market has reached a near saturation point. Some of the early businesses Eisner was to add to Disney’s portfolio include the Disney Store, Euro Disneyland and the purchase of KHJ-TV, Disney’s first broadcasting outlet. Also, the company established a major television presence and increased the number of films released from 2 in 1984 to 15-18 yearly.

Disney’s expansion and diversification efforts was driven purely by the need to attain an economy of scope that will give it the desired market dominance as well as the economies of scale to bring down its cost of business. It pursued this strategy throughout the 90′ using a combination of diversification into areas that were a natural extension of their current business as well as such other areas where they had less synergy but obviously had found potential opportunities. Both of these led to the birth of Disney Cruises, Pleasure Island and the incorporation of theme park management into its business model .

Is the diversification strategy working for Disney? The simple answer is that the numbers are there as proof. Since the coming of Eisner, revenues grew from $1.6 billion in 1984 to $2.9billion in 1987 largely as the result of the pursuit of diversification as a strategy for growth. One of Eisner’s greatest achievement was how he placed creativity as Disney’s most valuable asset and supported this as a leader to get the best out of his core innovation team

Despite the huge successes recorded, it was questionable whether the diversification into some market or acquisition strategies pursued with some companies such as ABC actually enhanced the shareholders’ value . The presumption is that when two companies who are leaders in slightly different fields combine, both would be better off by the synergy created between two of them. But Disney and ABC are both leaders in providing entertainment and both with extensive networks in creativity and production. When firms cannot leverage on their strengths following an alliance, then they stand the risk of diluting their brand to a point where they will not be able to make the profits necessary to return good value to their shareholders.

Today Disney has grown beyond the traditional amusement parks, movies, television shows, clubs, or books business. Its stable of businesses include Disney Cruise Line, Resort Properties, Radio Broadcasting, Musical Recordings and sale of animation art, Anaheim Mighty Ducks NHL franchise, Interactive software and internet site, etc. Whether these businesses are related or unrelate to Disney’s core business is not an issue as long as it produces synergy that strengthens Disney’s position in the market and creates value for its shareholders . Throughout its history, Disney has, with minor exceptions, shown the true value to shareholders created by synergies from thoughtful diversification. The company’s corporate strategy identifies the fact that while Disney may have some ‘magical’ products (its core products), its strength is not in the products themselves, but instead in the way in which they interrelate and complement each other.

Disney’s diversification efforts further increased the ‘Magic of Disney’. Television advertised the movies, which advertised the hard-goods and which advertised the television shows. So instead of paying to advertise Disney’s products, people were charged to be exposed to advertisement.

When you consider its portfolio of businesses, it will be right to say that Disney has pursued a combination of related and unrelated diversification. Take for instance Resort properties. That’s real estate. But Disney has used this to to make its customer live out the Disney experience right on Disney’s properties as opposed to going to a third party environment to watch Disney Movies or lodged in a different hotel and visiting Disney park.

Walt Disney Company strategy of diversification has helped grow its business in overseas market. Between 1988 and 1996 revenues grew from $3.4 billion to over $12 billion with the most growth coming from films and its consumer products. Not all overseas expansion were successful. For example, the Euro Disney had a lot of challenges and could not live up to expectations as a result of several cultural issues faced by the company .

Disney is now active in the hotel and resort businesses, the Vacation Club business (a natural extension of the hotel business), the cruise business and sports etc.

For a company that relies heavily on its strong culture, Disney must manage its growth and acquisitions carefully without loosing sight of the single most important factor that has brought the company where it is – the strong synergies and symbiotic relationship between its various businesses.

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The Walt Disney Company: A Corporate Strategy Analysis

Carlos Carillo Jeremy Crumley Kendree Thieringer Jeffrey S. Harrison , University of Richmond

Walt Disney is a completely integrated media powerhouse. Films provide material for theme parks and resorts, consumer products, and even a cruise ship. Network and cable broadcasting is also a part of the integrated Disney package. None of Disney’s competitors are as successfully integrated. Still, in spite of a long record of success, Disney is facing more competition on many fronts and, like other media and entertainment companies, must continue to adapt to a changing technological and social environment.

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Carillo, Carlos, Jeremy Crumley, Kendree Thieringer, and Jeffrey S. Harrison. The Walt Disney Company: A Corporate Strategy Analysis . Case Study. University of Richmond: Robins School of Business, 2012.

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Strategic Management Walt Disney Case Study

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Strategic Report, 3000 words

In this assessment, students should critically analyse the construct of strategic leadership with The Walt Disney company from January 2015 to February 2020 (pre-Covid 19). Students need to determine whether the strategic decisions and actions at the time was the best approach to ensure Disney's ongoing (and future) success.

The Walt Disney Company (MH0070).
Reawakening the Magic: Bob Iger and the Walt Disney Company (717483)
Case Flash Forward: Walt Disney Company (6060)
Students are required to make reference to at least eight (8) academic journals.
The word limit is 3000 words maximum, excluding the reference list. Everything else must be included – figures and tables within the 3000-word limit (there is no +/- 10% applied to this assessment).
External Environment Analysis*
Internal Environment Analysis*
Stakeholder Analysis*
SWOT Analysis*
Strategic Leadership Analysis*
Recommendations*
Executive Summary*, Introduction* and Conclusion*
Communications Quality
Structure and format
References*, research range and quality

Further, two more cases have been provided for supporting insight:

All cases can be used for the basis of analysis and insight. It is also expected that students will research beyond the cases and access other industry/public sources.

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•Students are required to incorporate theories/concepts/ and illustrative examples wherever necessary.

•It is important that the assignment reflects a student's own understanding of relevant literature. An effective integration of these materials to the discussion is vital.

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•The report must be succinct, well-structured and well-argued. The clarity of expression and the consistent use of references must be maintained throughout. Proper use of grammar and spelling should be adhered to, so it does not distract readers.

•You are welcome to use figures and tables in your report, their relevance must be explained in your discussion.

•Referencing and other structural issues must be maintained carefully. Submissions with incomplete or incorrect referencing will be penalised. Referencing should follow APA format, preferably 6 th edition. 10 marks deducted if missing either in-text references (citations) or the reference list. 20 marks deducted if missing both in-text references (citations) and the reference list.

Proper and consistent use and citation of references (APA style).

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What frameworks (for example, Porters 5 forces + Complements and Co-Opetition) can you use as the basis for analysis of industry and strategic groups? What key insights can you offer from this analysis?

(Hint: Be careful not to spend too much time/word count here, view from a strategic leadership perspective)

What frameworks (for example, VRIO) can you use as the basis for analysis? What key insights can you offer from this analysis?

(Be careful not to spend too much time/word count here, view from a strategic leadership perspective)

What frameworks (for example, stakeholder impact analysis) can you use for the basis for analysis? What key insights can you offer from this analysis?

Based on the above, what will be the implications from your SWOT analysis? In terms of priorities, what is important to focus on? What key insights came from this analysis?

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What would you recommend for the organisation’s strategic leadership approach based on previous analysis?

(Hint: Recommendations should be stated clearly and succinctly and the rationale for each recommendation should link back to the relevant analysis. While a relatively short section, it is an important section)

Does the Executive summary communicate key findings of the report appropriately? Does the introduction set up the aim of the report, provide insight into the basis of the case and enough background for the reader to understand the purpose of the report overall in an appropriate manner? Does the conclusion reiterate key points from the report and bring the report to a close appropriately?

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Have you communicated the analysis and recommendations clearly and succinctly? Has the document been proof-read for grammar and expression? Does it make sense and the reader is able to understand what you are communicating?

Is the structure logical and makes sense for the reader to follow? Does it include a title page (with name and ID)/ Contents? Have all the relevant sections been included. Does the report make sense as one document from title page to reference list.? Does it read as one report, not a set of sections? Do the sections flow from each other well? Has it been saved as a PDF?

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Attached. 1 Strategic Management: Walt Disney Case Study Author Affiliation Course Instructor Due Date 2 EXECUTIVE SUMMARY The management strategy a firm uses determines the overall performance of the firm. The advantage of strategic management is the ability to analyze both the external and interna environments of a firms and use the resultant information to make decisions that will enable the firm to take advantage of the opportunities that exist. All this is done without jeopardizing productivity. However, a company can only adopt the best strategy if it employs the best analytic tools which analyze the environment comprehensively thereby making it easier for the management to assess opportunities and threats that exist. The report herein will analyze Walt Disney and factors affecting its growth. Introduction Walt Disney is one of the most popular companies in the entertainment industry across the world. It has been in existence for about a century. Currently, it is headquartered in Burbank United States. The company has divided its business operations in three categories; a production studio that produces movies and animations, theme parks popularly knowns as Disney land where characters are displayed and stores where all Disney merchandise are sold (Georgens, 2018). The report herein provides an analysis of Disney`s both external and internal environment and contrast the recent strategies taken by the company based on its business environment condition. Finally, the report provides recommendations for future operations. Disney being one of the largest entertainment companies both in market share and revenue, it also operates the word`s largest holiday resort. In addition, it also runs 8 most visited resorts which are spread over various countries. Although the resorts attract large number of tourists every year, the services at these resorts are expensive compared to other similar resorts. Mostly people visit these resorts because of the various Disney characters that 3 are always on display and to have an encounter of the highly publicized Disney amusement parks. SWOT Analysis For a company to be successful, it must have a plan that guides its activities based on the conditions of its business environment. To develop an appropriate plan, a company needs to strategically analyse its position in the industry. Strategic analysis allows a company to know where it is in relation to other rival companies in the industry. As such, strategic analysis is often used as a tool by top management to analyze a company`s strengths and weaknesses. There are several tools that can be used to conduct such analyses, however, the most common one is the SWOT analysis (Phadermrod et al., 2019). The analysis will reveal the decisions Walt Disney has made to propel it to its current position. SWOT is an acronym that stands for strength, weaknesses, opportunities and threats. It assesses the strategies taken by a company that make it have a competitive edge over its competitors based on a company`s internal strengths and opportunities for growth. In contrast, SWOT analysis also reveals the weakness and threats in the internal and external environment that may prevent a company from growth. Strengths Walt Disney is a world-renowned entertainment company which puts it in an elevated position in the market. First, since the company has been in business for a long time its resources and has adopted a low-cost strategy of doing business. Over, the years, Disney has also developed a strong brand and a variety of product and services which protect it from low sales of a specific product. As previously mentioned, Disney has diversified its product line to cover film production, radio, merchandise, television networks and theme parks. Moreover, its products are available in the United States, some countries in Europe and Asia. Based on these advances, the major internal strengths enjoyed by Disney are availability of 4 adequate financial and human resources. Due to financial strength, the company can easily invest in areas that may be profitable to the company. Conversely, the company has a creative employee base that has helped in the development of competitive products in the market. Without quality and competitive products, a company cannot effectively compete. The lowcost strategy is also a strength because the company can produce high quality products at a low cost. Diversifying its investment also cushions the company from any sales shocks of one of its products. Weaknesses As other corporations, Disney also is faced with a myriad of weaknesses. Being a multinational corporation, it has high expenses, a lot of workload and several changes in the executive management. As of 2019, the company has over 200,000 employees. Although these employees are highly skilled, their high population can pose a challenge in communication. At the same time, the compony suffer bureaucracy difficulty which makes communication much more challenging yet it has to expand its businesses to other niches of interest (Forbes, 2019). Although Disney has enjoyed a fair wave of success, its constant changes of the top management affect its operations because of the high cost of changes that need to be implemented whenever a new executive gets into office. Opportunities The external environment is as crucial to the growth of a company as the internal environment. As such, the external environment must be identified, analyzed and decisions made based on the existing opportunities. In Disney`s external environment, there are several opportunities. First, favorable government regulations which has allowed the company to expand its operations in many countries. Second, there are barrier to entry in the industry due to high initial capital investment hence increasing its competitive advantage. Third, in some countries, such as France, the government offered the company tax relief and built 5 communication infrastructure for the company use. This increased the company`s opportunity to grow. Threats Recently, Disney has been facing major threats mostly due to politics, competition from local and foreign companies, flooded markets and contractual issues. For instance, there are several small companies that offer the same product as Disney, however, Disney has countered this threat by producing high quality products at lower prices, other big played in the industries such as Universal Studios are doing the same making the industry more competitive. Similarly, in foreign market, the competition is stiff because large corporations such as Netflix, Amazon Prime, Apple TV+ among others provide similar service as Hulu which bis Disney owned. Porter`s Five Forces Model All external factors that may influence the performance of a company are usually subjected to an external analysis. The analysis provides guidance to a company`s top management on the best decisions to make based on the conditions of external factors so as to increase a company`s profitability. The widely used tool for external analysis is the Five Forces analysis model developed by Michael Porter in 1980 (Yang, 2019). The model determines the level of competition a company faces within a market. Therefore, the profitability of a company lies on the adequate application of Five Forces model. By understanding the dynamics of the prevailing external factors, a company can easily gain competitive advantage over its competitors. By analyzing Disney`s external environment using the Porter`s model shows that it has numerous competitors who are aggressively working to woo several potential customers as possible (Vlados, 2019). Due to the presence of several sellers, this have given consumers a bargaining power which affect the pricing of players in the entertainment industry such as Disney. At the same time, buyers can move from 6 one seller to the other at a low cost. For suppliers, their bargaining power was limited because they were many suppliers supplying a few companies. Other threats that Disney faces is the wide availability of substitutes produced by other companies. Threats to New Entrants Disney is a large player in a small niche of the entertainment industry which enjoys barrier to entry allowing the company to grow exponentially over a long period. This can be explained by several products and brands under Disney`s control. As the products expanded so did departments such as marketing, research and development, finance and human resource. Being in the business for long has also enabled Disney to properly understand their customers needs. The advantages together with high capital requirement for a company to enter the industry, have made threats to entry minimal. Threats of Substitutes Regardless of any niche in the entertainment industry, the threat of substitutes is usually moderately low and Disney is no exception. Disney and other companies in the same niche produce similar products. However, adding theme parks into the mix has made Disney a formidable competitor within the niche. This further reduces the threat of substitutes. Additionally, the pricing of the company`s products are flexible the price competitions present in the niche industry. Bargaining Power of Suppliers There are numerous suppliers in the niche market that Disney operate. However, they serve very few customers who consume large volume of supplies. Therefore, suppliers cannot easily shift from one customer to the next hence reducing their bargaining power. The goods supplied to these companies are of high cost further thwarting the will to shift to another buyer. However, Disney being a large corporation, has a good rapport with numerous 7 suppliers who are willing to supply good in large volumes. Despite this advantage suppliers have low bargaining power. Bargaining Power of Buyers Since there are several buyers but few sellers selling highly differentiated products in the entertainment industry, customers have a high bargaining power. Disney is a large company with very high operational costs, therefore, it has to produce what several customers want for the company to run efficiently. For instance, if the price of on of Disney`s video is high, customers could opt to purchase the products of another company and in doing so Disney risks suffering losses. Internal Environment Analysis The internal factors of a firm are as important as the external factors because they also affect the existence of a firm both at present and in the future. Similar as in external analysis, there are tools used to analyze the internal factors that affect a firm. One such tool is known as the VRIO analysis (Kadlecova, 2012). The internal analysis tool was developed by J.B Barney. It is ana acronym that stands for valuable, rarity, imitability and organization. The main objective of VRIO is to guide a firm of how it can use its resources to gain a competitive edge in the market. According to VRIO for a firm to be profitable, the resource used in production must be scarce, not easy to imitate hence creating value (Dyer et al., 2018). On being valuable, Disney has not spared any expense. A part from being an entertainment company that produces content like other players it has also invested in theme parks and acquired several brands to bolster its position in the industry. Some of the valuable brands acquired by Disney are but not limited to Marvel, Lucas films, ESPN, Pixar among others. Such acquisitions have helped the company increase its revenue base. For instance, in 8 2018, Disney had more 30% of the entire box office sales (Govindarajan, 2018). The brands have also made Disney the largest market share in the industry it operates. Rarity wise, the brands owned by Disney are unique. Although competitors may produce similar content, they cannot exactly copy those of Disney as what happens in the manufacturing industry due to strict copy right and intellectual property laws. On imitability, it is impossible for other firms to directly imitate Disney`s products. For instance, there is only one Toy story, Despicable Me or Frozen movie. Other firms can produce similar content but so far, none of such firms have managed to out do Disney. In fact, Disney`s strategy of exploiting its brands to stay ahead in the industry is being adopted by Warner Brothers with Justice League but it falls short of Disney`s success (Rockwell, 2018). Essentially, it is expensive and almost impossible for any company to copy Disney`s content. Finally, Disney`s organization is top notch. In addition to effectively exploiting its brands, the company also produces quality content which usually matches with the theme parks and their merchandise. This makes the experience customers have with Disney products unforgettable hence making the brand more competitive. Strategic Leadership Analysis Transformational leadership theory best explains Disney`s strategic leadership style. Though the leadership at Disney may be considered semi-formal, it works for the company. The ideas are developed by the top management, they are then arranged in order of preference and finally, the ideas are relayed to other employees who innovate and coordinate to ensure the ideas come to fruition (Berkovich, 2016). Most notably, the leadership at Disney motivates its employees to innovate in the best way they can. This is done by ensuring that employees receive the best training on relevant skills. At the same time, Disney constantly changes its management by replacing underperforming managers. The newly appointed top management team work within strict budgets and usually work closely with mid-level 9 managers and other employees at lower levels to execute an activity. Thus, the management plays a significant role in ensuring the company manages its costs while producing competitive content. The management style at Disney comes with additional costs such as costs associated with the changes implemented by new management and bonuses and high pay scales offered to performing managers. The leadership approach employed at the company is focussed on constant change because of the highly competitive environment. As such, the company has been growing steadily despite a not favourable economic environment (Collis & Hartman, 2017). Additionally, the leadership strategy employed by the company focusses on separating creative work from administrative work. This allows for the creation of more quality content that can easily be sold in countries that do not harbour the Disney company. When pricing its products, Disney uses strategic pricing which majorly targets the middle class. The pricing approach makes Disney merchandise and tickets available to a several consumers at affordable rates. The objective is to attract as many people as possible to Disney brands and products. To further reinforce its revenue stream, Disney had its parks and resorts located in different countries. This can also be viewed as a way the company woos people from different cultures to the Disney experience. Finally, the company trains its employees on how to treat customers so that they can enjoy the experience of consuming Disney products. Summary Strategy is not simply an act but a process that involves setting objectives and implement policies that will ensure the achievement of the set objectives. The strategy chosen depends on the prevailing internal and external factors that affect a business then selecting a tool that will best inform the business of its position in both the internal and external environment. An analysis of Disney`s external and internal environment using the SWOT 10 analysis tool reveals that its strength lies on the share of the market it controls. The contributing factor to this strength is the acquisition of numerous brands which assured the company of customer retention (Williams, 2017). What`s more, the brands are spread across various sub-sectors within the same entertainment industry. Some of the brands are Pixar and Marvel which produces animated films, ESPN which focuses on sports broadcasting and Touchstone which only deals with movies. These brands are not only popular but people depend on them for quality content. The major weakness of Disney is its overreliance on single regions to sell their contents (Brown, 2017). Although the company has a vast coverage in terms of its content, the biggest chunk of its profits is from the North American market. This make the company vulnerable to financial shocks that affect its largest market (North America). The opportunity that exist for Disney is joining the online movie streaming services. This is due to the recent growth of mobile phone and internet consumption especially by the younger generation who are the majority. Venturing into this space will prove to be a cash cow for the company. By providing such services, the company will likely increase its revenues substantially. Fortunately, in 2016, the company launched its online streaming service to rival Netflix. The major threat faced by the company is piracy because several people can stream and watch content without proper licenses hence reducing the revenues for Disney. This usually due to improved and readily available technology. Competition is a looming threat. Though currently Disney is considered a pace setter in the industry, there are small companies that produce content that people love and it is just about time until these companies start reducing Disney`s market share. Recommendations Although Disney has taken advantage of the opportunity that exists in the online video streaming services by launching Hulu, more price restructuring needs to be done to 11 ensure it competes with Netflix which is the industry leader. Netflix offer lower subscriptions for customers and higher prices for movie owners to use their platform. It also enjoys a large number of subscribers across the world. It is important for Disney to be also aware of other competitors such as Amazon Prime and Apple TV+. Although they are fairly new in the business, they can affect Hulu customer base due to low cost of shifting from one company to the next by customers. Conclusion So far, the company has employed competitive strategies that has made it maintain its position as t...

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Walt Disney Culture Case Study: Challenges And Threats Faced

Task: This report is based on the case study provided in “Reawakening the Magic: Bob Iger and the Walt Disney Company” and has found two major issues. One of the issues must be from your Part A submission. The report will present and analyse the two issues in depth and provide a set of recommendations using the support from peer reviewed journal articles.

1.0 Introduction The Walt Disney Company is known for entertaining people and inspiring them through the power of their storytelling, creative minds and innovative technology throughout the world. It was founded in 1923, and was known as the Disney brother’s studio. But before opening the Disney Brothers Studio, Walt Disney worked in many places as an animator and illustrator in Kansas. As mentioned by Friedman et al. (2016), the Walt Disney Company started with the main vision to provide classical entertainments in the form of 2D cartoons. The Walt Disney Company is a leading international family entertainment along with five business sections: Studio entertainment, direct to customers, interactive media, park and resorts and, Media networks, etc. In 1955 Walt Disney launched Disney land in Anaheim, California and it quickly became one of the best places where different cartoon characters could be seen. The Walt Disney Company has faced many issues over the years. The main issue faced by them is that they will be able to maintain their high level of status which they have gained over last few decades. In this Walt Disney culture case study the two challenges and all issues which have been faced by the Walt Disney Company have been discussed.

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2.0 1st strategic issue As mentioned by Roper et al. (2016), the Walt Disney Company has experienced different strategic issues. The strategic management has determined that its competitors are taking advantages of its weakness and can easily pull the Walt Disney Company behind in the market. When its competitors found a better way to provide sports program at a very low price to the consumer, the Walt Disney Company did not pay attention to keep up with this technology. This is the main reason Disney lost a majority of its youth audience. The Walt Disney Company also faces challenges from its competitors who have strong presence in the market. The Walt Disney Company has focused on providing entertainment programs according to the taste and preference of the customers if the company’s management does not focus on the changes in the taste of the customers then it will easily lead to its downfall. It is the duty of the company to determine its customers taste and preferences to make its brand more interesting. Disney has faced a lot of criticism in the market along with that it also faced motivating response. The company started making changes to attract a large number of customers which may be achieved or can never be achieved. Disney realized that the positive thought have turned into critics. The company got clear message from the people that the company had started to release irrelevant program. The company also faces challenges regarding price of its products. The competitors of Disney are providing the products and programs to the public at very low price comparing to the cost of product of the company and they can act as threat for the Disney Company. Disney did not focus on maintaining the technology and new strategies. The positive changes made by the management of the Walt Disney Company have been transformed from positive to a criticism. This was a very hard time for Disney to maintain their status more specifically maintaining a good position in the market along with the constant focus on tastes and preference of the customers.

2.1 Issue statement According to Massetti et al. (2016), Disney is located in America and is a well-known company. Disney characters have played a significant role as an influence and entertaining figure in the lives of most adults these days. This is one of the most famous companies in the world and the reason behind this is it has used its external environment effectively to achieve its goal. External environment are event of outside a company which can easily affect an environment. All children love the experience to be a princess or queen and king or a prince. The people who visit Disney land are never bored. Disney land allows visitors to meet their favourite Disney characters, be it animated or live action. The company has many competitors. The competitors of the company enable them to improve and get better and better. Mickey mouse has been characterised as the unofficial mascot of the Disney company for decades.

The company also wants to promote more characters, cartoons and movies. For this they have to analyse all the external factors to set new goals. The management of Disney also started planning according to the needs of the customers and according to their feedback after watching the cartoons and movies to achieve the goals.

Internal environment of the company include strength and weakness. Disney is a multinational corporation facing internal weakness and strength. Internal environment of Disney totally enclosed its strength and weakness with which the company has faced much criticism. The corporate culture of Disney circulates at all the levels of hierarchy and its workforce is aware of its principles. It has adopted different backgrounds. It is one of the largest multinational companies. It has generic hierarchical structure and also has a maintained balance of power and additionally it has a large amount of resources. As opined by DeMicco et al. (2016), the company faces challenges regarding price of its products and also faces a strong competition in the market. Disney has started losing a good number of subscribers for ESPN. The company faced much criticism in the market along with that it also experiences motivating response.

2.2 Analysis External environment: Opportunities and Threats Opportunities: According to McCoskey et al. (2018), these opportunities can be determined through the SWOT analysis. In Disney opportunities are the external strategies factors which lead to increase revenue. The Walt Disney Company needs to focus on the following opportunities:

growth in various industries
growth of developing market
technological innovation

The Walt Disney Company got an opportunity to adopt all the new technologies for example digital technologies for improvement of the business. The Walt Disney Company also got an opportunity of growth in various industry which leads to grow its business through the managerial approaches. The growth of developing market is an important factor which also creates an opportunity for the company to develop their business into the market. Through expansion, innovation and diversification the company can grow its revenue.

Threats: The threats have been identified through the SWOT analysis. The Walt Disney company management needs to handle the following threats towards business:

Competition- digital
content piracy
technological disruption

The competitors of the Walt Disney Company offer movies which are similar to the ones provided by the Disney-Marvel studio. Technological disruptions present in the Walt Disney Company and can reduce the profit of the company. Digital piracy reduces the revenue of the company. The Walt Disney Company needs to apply SWOT analysis increase its advantages against technological disruption and piracy.

Internal environment: strength and weakness Strength: Strength of the business protects the company from the problem in future. In SWOT analysis the internal factor strengthen the growth of the business by supporting the strategies of management which leads to grow the business. The following are the strength which gives strength to the Walt Disney Company:

Grand portfolio of popular products
popular and strong brand
strong cooperative growth

Disney is a very popular brand all over the world. The portfolio of popular products is growing and this is one of the important strength of the business. The company's movies, programs, amusement park, cartoon characters and services are increasing. As opined by Holcomb et al. (2017), the company has gained high popularity from the public. This is one of the most important strengths of the company.

Weakness: The SWOT analysis given in this Walt Disney case study determines the weakness of the Walt Disney Company which leads to downfall of the company and can affect the business growth and development. The following are the weakness of the company on which the Disney needs to focus:

Limited innovation
limited expansion of parks
limited diversification

The Walt Disney Company has faced many weaknesses which have been identified by the swot analysis the company have many limited innovations the company needs to innovate continuously for the development of the product. In adopting new technologies the company has faced reactive approaches instead of aggressive approach. The company needs to focus on expansion of its amusement park and all other different types of park. Limited expansion of park is a weakness for Disney. According to Koontz et al. (2019), the company has focused on quality of product and features instead of focusing on continuous innovations. Limited diversification is also a weakness which has been identified during this analysis of Disney.

Corporate culture: Business corporate culture is related to American culture. According to Xiaoli et al. (2019), the business is successful because it has a corporate culture that gives power to the employee to improve their performance and profit of the company. The corporate culture gives support in managing the growth strategy and opportunities to the corporation. As per Li et al. (2018), this culture puts emphasis on the innovations which motivates the company to develop its product which matches with the new technologies and trends in the entertainment industry, mass media industry and in the amusement parks and resorts industry.

2.3 Recommendations It is recommended in this Walt Disney case study that the company needs to focus on improving the competitiveness it needs to focus on how to get success in the international markets and it also needs to focus and resolve all the issues associated with the organisation. It is recommended that the company needs to continue its innovations to increase its brand image in the market and to stay in the competition. As per Edwards et al. (2018), the company needs to focus on its mission and vision and also needs to identify threats. The company should release movies and characters according to the taste and preferences of the consumer and after getting their feedback. It is recommended in this Walt Disney case study that the company needs to buy the cheapest system which has been adopted by the company, means to adopt any operation so that it reduces the price with the same quality. Reducing price with the same quality help the company to maintain its customers and will bring back those customers which have been lost to competitors. The company needs to improve its organizational culture by providing support for deviation from family orientation. This support allows the company flexibility in some part of the international market. People are focusing on internet more than TV this is the opportunity for Disney to expand its market. The company could be doing better by considering the share from acquisitions and by considering the slow growth of the divisions which includes ABC.

3.0 2nd Strategic Issue As opined by Pelletier-Gagnon et al. (2017), the Walt Disney Company faces many challenges in formulation of strategy. The biggest problem the Walt Disney Company has been facing in recent year is decreasing in subscribers to its network, ESPN. In 2010 it had 100 million subscribers, the figure dropped in 2015 to 92 million. This shows the decline of the Walt Disney Company and its revenue in media network parts fell by 2% year over year in 2017. According to Brito et al. (2018), its operating income also decreased by 4%. Star wars franchise and box office help the studio entertainment section bring Disney back in the game. This represents a major problem that networks needs to deal with. The company needs to convert TV to internet services. One of the important strategic issues that the world Disney has been facing is it losing a good number of subscribers in the ESPN. As per Aleong et al. (2018), when the company began its journey it had more number of customers compared to the recent years. It is holding very few customers in entertainment program and sports program network. The company is facing this issue because it is not applying the new technologies which have been applied by its competitors that is the reason it is facing a tough competition in the market. The company faces challenges in adopting the new technologies, competitors of the company has already adopted the new technologies but the Walt Disney Company has focused more on providing quality product and in making strategy instead of focusing on the recent trend and taste and preference of the consumer.

3.1 Issue statement According to Warrick et al. (2017), the Walt Disney Company can be differentiated by its fundamental practice and knowledge. Disney has a clear corporate strategy which has been contributed to the success of the company and gives importance to its brand image. The company's strategy is to make exclusive and magical products. The biggest problem the Walt Disney Company has been facing in recent year is decreasing number of subscribers for their ESPN network. The company faces challenges in adopting the new technologies. The corporate culture of the Disney circulates at all the level of hierarchy and its workforce is aware of its principles. it has adopted different backgrounds. It is one of the largest multinational companies in the world. The company needs to convert TV to internet services. Disney has announced a creation of direct customer in international unit. The company is facing this issue because it is not applying the new technologies which have been applied by its competitors and it is one of the reasons for the growing competition in the market.

3.2 Analysis on issues Trend analysis: In trend analysis in 2014 the gross domestic product was 4% and next 5 years it became 3%. The unemployment rate had decreased by 9%. Disposable income of the company increased by 9% in next 10 years and in 2013 its consumer spending increased up by 5%. State spending went up globally 3.2% - 4.6 % of gross domestic product (McCoskey et al., 2018).

Swot analysis: SWOT analysis model helps an organization in identifying the internal strategic factors such as strength and weakness and external strategic factors such as opportunities and threats. The Walt Disney Company has applied SWOT analysis model to identify its internal and external environmental factors.

Strength: The strength of the company can be identified by the SWOT analysis which has been applied to determine the internal factor of the organization. The company has gained high popularity from the public. This is one of the most important strength of the company. The brand of the company has a very great image in the eye of the public. The Walt Disney Company has strong cash flow which helps the company to expand its new projects. The company has a lot of products and services and has developed a large distribution network. Company invested resources in the development and training process of the employee and the workers .the brand of the company is very important and the company wants to introduce new innovative products in the market in this the strong brand portfolio is very important. It is also one of the strength of the company because they only promote the product of the company which the customer look for and can gain maximum benefits out of the products and services.

Weakness: According to O’Toole et al. (2016), the SWOT analysis model has been applied by the organization to determine the weakness of the company. The Walt Disney Company has high cost structure and has high attrition rate and it needs to invest a lot of money compared to its competitors in development and training programs of the employees. The current asset ratio represents that the company needs to use its cash in a better manner the way it's doing at present. Due to high rate of its product it's losing its opportunities. As per Isabella et al. (2017), the Walt Disney Company is focusing on quality of the goods not on the rising price which is not good for demand forecasting. The most important factor which can lead to downfall of the company is its inability to adopt continuous innovation. In the viewpoint of Voigt et al. (2017), the company is releasing irrelevant programs and characters which public does not like. The company needs a large amount of capital in executing an innovation and entertaining and development program of its employees.

Opportunities: According to Smagorinsky et al. (2016), the swot analysis model has been used to identify the external factors and the model has been applied by the company to identify the opportunity so that the company can attain those opportunities for its development. As opined by Kelleher et al. (2016), the Walt Disney Company has got many opportunities in expansion of its business. The cost of transportation decreases because of less shipping price and this is an opportunity for the Walt Disney Company’s products by which the company can earn profit and can provide benefit to its consumers to gain market share. New trends and technologies in the market is an opportunity for the company to expand its business by building new revenue stream in their new products. The Walt Disney Company also invested money in online streaming through this the company gets to know more about the needs of the customer. The government free trade agreement and deduction of new technology also provide an opportunity to the Walt Disney Company to enter into a new market (Haslanger et al. 2019).

Threats: SWOT analysis tool has been used to identify the threats of the company. This is important for the advancement of the company to be aware about the threats in the market. In the viewpoint of Van de Vijver et al. (2016), the new technology which has been adopted by the competitors can be a threat to the industry. Rising price of raw materials can also be a threat to the profit of Walt Disney Company. The competitors of the world Disney Company can easily make substitute of the products provided by the Disney. Technological disruptions present in the Walt Disney Company and can reduce the profit of the company. The games, movies and characters which have been produced by the Walt Disney Company can easily be shown by the competitors at a less cost comparing to the Disney's cost. The Walt Disney Company is a very popular company and need a large amount of capital to enter into a market but its competitors has the advantages that they can easily enter into the market with a low capital.

3.3 Recommendations

This case study of Walt Disney Company recommends that the company should make a strategy which reduces the expenses during the production of their products in order to decrease the price of the product. This will enable the company to provide a quality product to their consumer at a very low price. If the company provides low quality products to the consumers then it will lose its consumers who give value to quality products rather than price.
The company needs to maintain the quality along with an affordable price. This way the company will be able to maintain its position in the market and it will continuously get new opportunities to expand its business. As opined by de Aguillar Pinho et al. (2017), it has been recommend to the company to find out alternative strategy.
The company needs to release the cartoons and characters according to the interest and preference of the consumers because the interest of the audience may change. If the consumers do not like the characters and entertainment films then there will be a decline in income of the company and customer will not purchase the product.
It is recommended in this case study of Walt Disney Company that the company needs to predict the reaction of the public introducing the new characters before releasing it. The feedback and response from the customer will help the company to understand their interest.
The company should produce different types of products in order to remain stable in the market. The company should attract the market through their innovative and educational product which is easy rather than providing entertainment forms of products. The management of the Walt Disney Company needs to make relevant decisions for the expansion of the strategies to achieve the goal of the company.

Conclusion The Walt Disney Company was established in 1923 and it is a very popular company and a strong company. They started the Walt Disney Company to provide classical entertainments in the form of 2D cartoons. The Walt Disney Company is a leading International family entertainment conglomerate. The Walt Disney Company has faced many issues. Two main strategic issues have been explain in the above report. Disney has faced much criticism in the market along with that it also faces motivating response and has faced tough competition. The external and internal environment of the company has been explained in the above report. External environment are events outside a company which can easily affect the internal environment. Internal environment of the Walt Disney Company includes its strength and weakness with which the company has faced a lot of criticism. The SWOT analysis has been explained to identify the internal and external factors of the organization. In the above Walt Disney case study. The Walt Disney Company faces many challenges in formulation of strategy. It has been evaluated that the trend analysis and SWOT analysis is very important tool which has been used to analyse the different factors of the organization and recommendations has been made which is very important for the company to adopt. The company should focus on the recommendations made in the above case study of the Walt Disney Company. Walt Disney case study assignments are being prepared by our management assignment help experts from top universities which let us to provide you a reliable assignment help online service.

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5.0 Appendices Appendix 1: Walt Disney Revenue

Appendix 2: Earning history OF Walt Disney Company

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