CASE ANALYSIS: WALT DISNEY

EXECUTIVE SUMMARY
BACKGROUND
- Vision
Walt Disney is to be the worlds most famous entertainment company
- Mission
"The mission of The Walt Disney Company is to be one of the world's
leading producers and providers of entertainment and information. Using our
portfolio of brands to differentiate our content, services and consumer
products, we seek to develop the most creative, innovative and profitable
entertainment experiences and related products in the world."
-

Values

We aspire to inspire together.

Diversity
Having a diverse workforce is critical to our business. We welcome a
variety of opinions, ideas and perspectives to ensure we continue to top our
own performance and represent our global marketplace. When our people
reflect the communities we serve, it enhances the way we connect to our
guests, audiences and consumers. Together, we work toward an inclusive
environment that fosters creativity, innovation and camaraderie across all of
our companies.
Culture
Each of our companies has a unique ability to harness the imagination
in a way that inspires others, improves lives across the world and brings

hope, laughter and smiles to those who need it most. Together as one team,
we embrace the values that make The Walt Disney Company an
extraordinary place to work:
Innovation
We are committed to a tradition of innovation and technology.
o Quality
We strive to set a high standard of excellence.
We maintain high-quality standards across all product
categories.
o Community
We create positive and inclusive ideas about families.
We provide entertainment experiences for all generations to
share.

o Storytelling
Timeless and engaging stories delight and inspire.
o Optimism

 At The Walt Disney Company, entertainment is about hope,

aspiration and positive outcomes.
o Decency
We honor and respect the trust people place in us.
Our fun is about laughing at our experiences and ourselves
These values live in everything we do. They create a unified mission
that all our people believe in and work toward. And to recognize individual
efforts, we have a variety of reward programs, including:

Quality of Work
Length of Service
Community Volunteerism
Employee of the Month Recognition
These are just some of the ways The Walt Disney Company commits to
providing a rewarding, inclusive and supportive work environment.
-

Our Customer

Disney does not have one specific target market; it focuses on each member
of the family. It mainly targets average income families, who live in urban areas.
Almost all of the Disney Stores are located in large super-centers and malls; their

theme park in the United States is located in Orlando, Florida; and their films as well
as consumer products are conveniently priced for the average person.
-

Our Neighborhood

COMMUNITY IMPACTS AND COLLABORATION

We believe being a good global citizen means using our companywide resources to
make a positive change in the communities in which we live, work and do business.
We collaborate with local organizations and engage the time and talent of our cast
members and employees to provide inspiration and opportunities for kids and
families to enhance their local communities
Economic Impact
All Disney business units have an economic impact in the communities in which they
operate. Nowhere is this more evident than in the Disney Parks & Resorts segment.
Our parks conduct periodic economic impact studies to understand our contribution
to local communities through direct and indirect employment, taxation and other
factors. We regularly share key findings from these studies in our local community
reports.
Local Business Leadership
Disney is active in local chambers of commerce and economic development
organizations in many communities. We participate through financial assistance and
by lending our leadership and business expertise. For example, in Los Angeles we
are active on the boards of the Los Angeles, Burbank, and Glendale Chambers of
Commerce. CFO Jay Rasulo is also a board member of the Los Angeles Coalition for
the Economy and Jobs, which works to develop and advance public policy initiatives
that will grow the economy and create jobs throughout the Los Angeles region.

Executive Board Service

Every year, Disney executives serve on various nonprofit boards of directors around
the world. In Florida alone, cast members hold more than 130 board appointments
with organizations important to the community. These executives lend their personal
expertise to increase the capacity of nonprofits in governance, strategy and
fundraising.
Disney Ambassadors
Disney started the Disney Ambassadors program at Disneyland Resort in 1964.
Ambassadors serve a vital function: to share the magic, inspiration and optimism of
Disney destinations with the world. Disney Ambassadors, who are full-time cast
members at each site, are focused on engaging with our guests, our communities,
and our cast members. They bring goodwill in the community by visiting children's
hospitals, participating in VoluntEARS events and supporting other local efforts.
New Development
Disney seeks the advice of local community leaders on development projects around
the world from California to China. For example, Disney is actively collaborating
with cultural leaders in Hawaii in building Aulani Resort. We want to honor the spirit
and culture of the islands. We find the best way to do that is by inviting local
community members to share their advice, ideas and creativity. Learn more about
how Disney approaches new development in the feature story.
ORGANIZATIONAL CHART
I.
TIME CONTEXT
2007 Feel the impact of the absence of the vision.
3rd Quarter of 2009 Net Income fell at 26%
II.
VIEWPOINT

III.

STATEMENT OF THE PROBLEM

Major Problem
Walt Disney Companys major problem was they didnt conceptualize
their goals and they have no vision statement that could help them defines
the direction of the organization, sets the stage for strategic plans and
illustrates exactly what an organization stands for.
Minor Problems
B1. Walt Disneys net income fell 26 percent for the third quarter
B2. Walt Disney has no clear strategic plan
B3. Walt Disney focuses more on children as their target market

IV.

STEMENT OF OBJECTIVES
A. Wants or Long Term Objectives
A1. Long term Objectives
To be one of the most competitive live and on air entertainment
shows in the world.
Continue giving customers the happiness through their shows.
A2. Wants
To have an increasing rates in all their fields of entertainment.
Maintain and increase the number of their customers.
Always be on top of the competition
B. Needs or Short Term Objectives
B1. Short term Objectives
Increase monthly sales on their manufactured products.
Satisfy the expectation of every customers of all ages.
B2. Needs
Offer raffles and promos to attract more customers.
Improve advertisement to have more customers.

 To enhance more their creativity in terms of live shows.

V. AREAS OF CONSIDERATION
A. SWOT ANALYSIS
A.1. Strengths
1. Has one of the best amusement places in the world.
Disney is offering different products and services and because
of that it can attract many people to come and visit Disney.
Disney gives their customers an exceptional experience that
would make them patronize the theme park.
2. Well-Founded image in the mind of people.
Walt Disney brand has been known for more than 8 decades in
US and has been widely recognized worldwide, especially due
to its Disney Channel, Disney Park resorts and movies from
Walt Disney studios. The company is perceived as the primary
family entertainment provider and was the 13th most valuable
brand (valued at $27.4 billion) in the world in 2012.
3. Innovative and Creative process
It is strongly present in several branches of the entertainment
industry such as network television, cable network, publication,
theme parks and resorts etc. Due to such diverse operations,
Disney is less affected by changes in external environment than
its competitors are.
4. Competency in acquisition
One of the strongest sides the company has is its competency
in acquisitions. The Walt Disney Company has acquired Pixar
Animation Studios in 2006, Marvel Entertainment in 2009 and
Lucasfilm in 2012. The former 2 acquisitions have already proved
to be very successful in terms of revenue and profit growth. The

third acquisition is expected to be just as successful because

Disney has acquired rights to all of the Lucasfilm previous works
including Star Wars. Few other Disney competitors have had such
record of successful acquisitions.
5. Localization of products
Recently, Disney has started adapting its products to suit local
tastes. Besides the parks and resorts, companys movies and
consumer products are adapted for Chinese market to attract
more visitors. This is rarely initiated by the movie studio itself
and is something that few other studios are doing.

A.2. Weaknesses
1. Constant need of successful creative material
The media entertainment company depends heavily on its
ability to acquire develop, adopt and exploit new technologies to
differentiate for certain products. As such, Disney must keep up to date
with recent innovations in the technological sphere.
2. High cost of operation
According to the income statement of Disney, the cost and
expenses become every year. There is a possibility that the cost of
production is high because they are trying to build a new theme park
or produce a new movie.
3. Large research and development cost
Their nonstop need to produce something new to the audience,
something that will catch their attention and something that can
surpass their previous creations.
4. High dependence on income from North America
Although, Disney operates in more than 200 countries, it
heavily depends on US and Canada markets for its income. More than

70% of the business the revenues come from US alone, while the
major Disneys competitor News Corporation receives less than 50%
of revenues from US, making it less vulnerable to changes in US
market.
A.3. Opportunities
1. International growth or new markets
Walt Disney is a brand that has been well-known and widely
recognized worldwide through many years. By selling in the
international market and expanding globally it allows the brand name
to spread further. The good brand name assures consumer that they
are given good quality of service. The development of new attractions
internationally is localized according the country to follow with
consumers interest.
2. Changes in technology and innovative processes
Because of the development and improvement of technology, it
allows the use of technology to sell in the market. Also through the use
of international TV network that are broadcasted in different countries
which help Walt Disney to grow and expand and also give additional
revenue to the company.
3. Expansion into untapped geographical areas
Disney has an opportunity to expand its movie production to
such countries as India or China, where movie production industries
have developed good quality infrastructure. This would result in lower
movie production costs and more localized movies for India and
Chinas markets.
4. Increase media networks
ABC putting episodes of its shows on their websites has
created more areas for advertisements to be sold. Deals with

Netflix and possible other streaming sites could help solidify

and regain the profits lost by piracy and rental services

A.4. Threats
1. Economic recession
The Walt Disney company is vulnerable to recessions. When
there is an economic recession, people have less money to
spend on vacations due to loss of jobs or increase prices of
essential items such as clothing and food.
2. Strong Competition
Competition is always a threat to company. There is a strong
competition between other company in national and international
market. The Disneys broadcasting services compete for viewers
with other networks. The parks and resorts compete with other
large parks. Disney operates in very competitive industries such as
media, tourism, parks and resorts, interactive entertainment and
others. The competitive landscape changes quite drastically in the
media industry, where news and TV go online and new competitors
with new business models compete more successfully than
incumbent media companies. Disneys parks and resorts business
segment also receives strong competition from local competitors
who can offer better-adapted product. This results in growing
competitive pressure for Walt Disney Company.
3. Change in consumer preferences and taste
Different customers have different preferences and interest
which are unpredictable. We must evolve the consumers
preferences and give them diverse variety of choices to choose
from by this we have an advantage from the other competitors.

4. Increasing cases of piracy

The advancements in technology allow copying, transmitting
and distributing copyrighted material much easier. With an
increasing number of internet users and the speed of internet, this
poses a great risk to Disneys income, as fewer people would go to
watch movies in a cinema or buy its DVD, when its freely available
online.
5. Strong growth of online TV and online movie renting
Besides internet piracy, Disneys media and movie production
businesses may suffer from online TV and online movie rental
growth. Subscription to online TV streaming and movie rental
websites costs much less than to usual cable television providers.
In addition, internet infrastructure is often managed by different
companies, thus taking the power away from cable network
providers.

B. STEEPLE (PESTEL) FRAMEWORK

B.1. Social
1. Constant change of customers preferences in entertainment
2. Different local culture of customers
3. Recent social trend in Smartphone and tablet apps

B.2. Technological
1. Advancement in technology are having an intellectual depth on the
worlds media

2. Changes in technology affect a strong need for entertainment

product as well as outlays in production.

B.3. Economic
1. Arising markets offer a cost advantage in terms of overall cost of
production
2. Economic growth per capita income and stage of profitable
development among distinctive countries should be considered
3. Global financial crisis delays progressive development

B.4. Environmental
1. The protection of the environment is highly expected
2. Insurance that those natural resources are to be conserved
3. Management assures that facility provided complies with safety
standards

B.5. Political
1. Tighter bylaws regarding product safety
2. Political disparity is a hindrance to international trade
3. The animation industry enjoys tax benefits

B.6. Legal
1. Different countries have a very strict labor law enforce

2. Some countries has no flexibility or negotiation in terms of work

3. Fundamental understanding in the regulations of every government

B.7. Ethical
1. Allowing equal opportunities on stakeholders
2. Producing workplace policies that will prevent harassment and
discrimination to business conduct guidelines
V.
A.

ALTERNATIVE COURSES OF ACTION (ACA)

Walt Disney should accept and Implement the proposed vision
statement

Advantage:
Walt Disney will establish a more productive, goal-oriented corporate
culture
Elevate performance standards and a sense of shared expectations
among all managers and employees
Disadvantage:
Having a vision statement will create a change in Walt Disneys working
environment and some of the employees if not all may have a hard time
adapting to the changes.
B. Advancement of Media Networks specially the movie studio
Advantage:
Upgrading and innovating new ideas in Walt Disneys media networks like
the ABC Television Network, ABC Family, Disney Channels Worldwide,

Entertainment and Sports Programming Network and Disney/ABC

Television Group will help increase its revenue.
Disadvantage:
Upgrading and innovating new ideas could be risky and costly
C. Implement strategic plans that help lower costs and maintain
competitive advantage
Advantage:
It will create longevity of the business. It contributes to the clarification and
understanding of the mission and the purpose of the organization and
therefore increases employment of all staff for their achievement and for
the company strategy creates and develops a culture of enterprise with a
major role in ensuring the efficient development on long term.
Ensures consistency of strategic decisions with the current and tactical
ones and better coordination of all operational and functional units within
the company.
Disadvantage:
It takes hard work and spend of time and resources for an organization to
implement strategic management process
D. Walt Disney should change the age bracket for their target market,
instead of targeting mostly children, Disney should think of something
that will make adults consume the products they offer
Advantage:
The ability to target a larger number of total prospects with a marketing
campaign would lead to a sizable number of sales

 Economies of scale in producing or marketing.

Disadvantage
Conducting of primary research to determine who buys their products and
needs their services for national and international markets would be
mostly time-consuming and expensive.

H. Decision Matrix

ALTERNATIVES
Criteria

Accept and
Implement
the
proposed
vision
statement

Advancement
of

Media

Networks
specially

Implement
strategic
plans

the

movie studio

Change
the

age

bracket for
their target
market

Cost

of 1

of 2

Implementation
Potential Impact 3

on 3

Implementation
Easy to execute
Speed

in the Company
Customer
Preference
Impact
Revenue
Total
13

10

Scoring:
Weight

Speed

1- Not Important
1-Slow
2Slightly 2-Moderate

Cost

Impact

Ease

1-High
2-Medium

1-Low Impact
2-Medium

1-Difficult
2- Average

Important
3- Very Important

VI.

Impact
3- Fast

3-Low

3-High Impact

RECOMMENDATION
The most recommended alternative course of action is to implement the
proposed vision statement. We didnt choose other recommendations

3-Easy

because it is needed for the company to be fixed inside before dealing

with external issues. Thats why we recommend that Walt Disney
Company should create a vision statement to have a goal that they will
need to achieve in the near future. The Disney Company needs discover
new ways to be motivated and to look forward in developing the company
further. With this, they have a guide towards a better future and discover
VII.

new ways to be better than they were before.

CONCLUSION
We therefore conclude that with Implement and accept the proposed
vision statement because it is advised that the company should practice
contingency planning for it helps the company work more efficiently and
effectively by having prepared before-hand choices of possible approach
to a problem which they can access anytime.