STEP 1 Evaluating Industry Attractiveness

Industry
Attractive
ness
Measure
Market
size and
projected
growth
rate
Intensity
of
competitio
n
Emerging
opportunit
ies and
threats
Crossindustry
strategic
fit
Resource
requireme
nts
Seasonal
and
cyclical
influence
Social,
political,
regulatory
, and
environme
ntal
factors
Industry
profitabilit
y
Industry
uncertaint
y and
business
risk

Importa
nce
Weight
0.10

Industry Attractiveness Assessments

Industry Industry Industry Industry
1
2
3
4
AR WS AR WS AR WS AR WS
7
0.7 9
0.9 9
0.9 7
0.7

Industry
5
AR WS
5
0.5

0.25

2.2
5

1.5

1.7
5

1.7
5

0.10

0.7

0.7

0.6

0.7

0.5

0.20

1.6

1.4

1.6

1.4

1.6

0.10

0.8

0.6

0.7

0.9

0.6

0.05

0.4
5

0.3

0.4

0.2
5

0.2

0.05

0.3
5

0.3
5

0.4

0.3

0.3
5

0.10

0.9

0.8

6.5

0.6
5

0.7

0.2

0.05

0.3
5

0.3
5

0.3
5

0.3
5

0.2

Sum of
importanc
e weights
Weighted
overall
industry
attractive
ness score

1.00

7.8
5

7.6
5

7.1
0

7.0
5

5.9

Attractiveness Rating (AR)

Weighted Score
Based on the scores, Disneys business portfolio will have a promising future,
especially for the media networks, parks and resorts, studio entertainment, and
consumer products industry. But Disney needs to pay more attention to the
interactive media industry. Even though modern technology are keep developing in
recent years and so many years ahead, but if Disney could not create new and
innovative products within this industry, then it can weaken overall Disneys
performance.
STEP 2 Evaluating Business-Unit Competitive Strength
Disney has a lot of business-units in each of industry they operated in. The
following assessment is only evaluates one interesting business unit of each
industry.
Competitive
strength
measures

Importa
nce
Weight

0.20

Industry Attractiveness Assessments

ESPN
Theme
Retail
Marvel
Park
Store
AR WS AR WS AR WS AR WS
8
1.2 9
1.3 6
0.9 9
1.3
5
5
7
1.4 8
1.6 7
1.4 7
1.4

Industr
y5
AR WS
3
0.4
5
6
1.2

Relative
market share
Cost relative
to
competitors
costs
Ability to
match or beat
rivals on key
product
attributes
Ability to
benefit from
strategic fit

0.15

0.05

0.4
5

0.4
5

0.4
5

0.4
5

0.3
5

0.20

1.6

1.6

1.4

1.6

1.2

with sister
businesses
Bargaining
leverage with
suppliers/cust
omers
Brand image
and reputation
Competitively
valuable
capabilities
Profitability
relative to
competitors
Sum of
importance
weights
Weighted
overall
competitive
strength
scores

0.05

0.4

0.3
5

0.3

0.3
5

0.3
5

0.10

10

10

0.7

0.9

0.7

0.15

1.3
5

1.3
5

1.0
5

1.3
5

0.9

0.10

0.8

0.8

0.8

0.7

0.5

1.00

8.2

8.5

6.9
5

8.1

Based on the text book, business-unit with competitive strength ratings

above 6.7 are strong market contenders in their industries. While business with
ratings in the 3.3-6.7 have moderate competitive strength. The business-unit of
Disney which belongs to this position is the business-unit in interactive media
industry, with the score of 5.65. But with future technology improvement, this
business can still make profit for Disney.
A Nine-Cell Industry Attractiveness-Competitive Strength Matrix

5.6
5

STEP 3 Determining the Competitive Value of Strategic Fit in Diversified

Companies
Disney has many business-units in each industry they operated in. In each
industry, one business-unit can perform strategic fit well with the other businessunit. Even in some business-units, even for its unrelated business, there are some
valuable resources and capabilities that can be trasfered to other business-unit in
different industry, namely marketing and distribution channels. There are a lot of
strategic fit opportunities, including a common brand name and after sales
activities.
STEP 4 Checking for Resource Fit
Disney had made a lot of investments and acquisitions of famous and big
companies in different industries. They can also able to do share buyback. Which
means, Disney has a stong financial resource fit. For non financial resource fit,
Disney has some valuable resouces that can be transferred to all of its businessunits, namely, the brand and also the character. These strong Disneys characters
and Disney brand name itself become a valuable resource in each industry.
STEP 5 Ranking Business-Units and Assigning a Priority for Resource
Allocation
Looking through the assessments, here is the ranking of Disneys businessunit (other business-units were considered the same with the other business-units
within the same industry):
1.
2.
3.
4.
5.

Disneyland Parks and Resorts

ESPN Media Network
Marvel Studio Entertainment
Retail Store Consumer Products
Playdom Interactive Media

STEP 6 Crafting New Strategic Moves to Improve Overall Corporate

Performance