Strategic Management of The Walt Disney Company

This report provides insight into the strategic management of The Walt Disney Company, including an analysis of the company's internal and external environment, strategies for gaining competitive advantage, and recommendations for future growth.

Running head: MANAGEMENT
Strategic Management (BMO2002)
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The aim of the report is to provide insight into the strategic management of one of the most
renowned international company known as The Walt Disney Company. The report commences
with the brief introduction of the company along with a mention of the mission and the vision.
The report then undertakes an external and internal analysis with a mention of the SWOT,
Porter’s and PESEL analysis. The report also mentions the particular strategies related to the
business, functional, international and corporate levels that enables the company in gaining
competitive advantage in present environment. The report also put across recommendations and
future strategies adopted by the company.

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Table of Contents
a. Introduction:.................................................................................................................................3
Company Overview:....................................................................................................................3
Mission:........................................................................................................................................3
Vision:..........................................................................................................................................4
b. An Analysis of the Internal and External Audit of the Organization..........................................4
Porter’s Five Forces Analysis:.....................................................................................................4
SWOT Analysis:..........................................................................................................................7
PESTEL Analysis:.......................................................................................................................8
c. Strategies that Enable the Company in Gaining Competitive Advantage.................................11
d. Recommendations/ Future Analysis the Organization would adopt.........................................13
Recommendations:.....................................................................................................................13
Future Strategies:.......................................................................................................................14
e. Conclusion:................................................................................................................................15
References:....................................................................................................................................16

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a. Introduction:
Company Overview:
The report aims at providing an insight into strategic management of The Walt Disney
Company. It was a multinational company headquartered in America and having multiple
entities. The company was found by Roy O. Disney and the Walt Brothers in the year October
16, 1923. As per the records of 2018, the total revenue of the company stood at 59, 434 million
USD (thewaltdisneycompany.com 2019). Together with the substitutes and the affiliates, Walt
Disney represented one of the diversified family entertainment and media enterprise at the global
level and operated across business segments like Parks, Products and Experiences; Media
Networks; Direct-to-Consumer and International and Studio Entertainment. However, media
network has been the key unit of the company that contained huge array of the company’s cable
channels, television network, associated distribution and production companies, cable channels
and operated and owned television stations across the two divisions ESPN and the Walt Disney
Television.
Mission:
The mission statement of the company referred to “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”( thewaltdisneycompany.com 2019). Thus, the mission statement of Walt Disney lies in
entertaining, inspiring and informing people around globe through unparallel storytelling,
reflection of the iconic brands, innovative technologies and creative minds that make the
company one of the leading entertainment company across the world. The mission statement of

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Walt Disney boils down to content, services and the consumer products, development of most
innovative, creative and profitable content and entertainment experiences and the related
products in work.
Vision:
On the other hand the vision statement of the company refers to “to be one of the world’s
leading producers and providers of entertainment and information” (thewaltdisneycompany.com
2019). Thus, the vision statement of Walt Disney focused primarily on the world, leading
providers and producers and information and entertainment.
b. An Analysis of the Internal and External Audit of the Organization
Porter’s Five Forces Analysis include: (Mathooko & Ogutu, 2015):
Threat of Substitute:
The threat of substitute for Walt Disney is lower:
 Due to popularity of the brand
 Differentiation in production
 Industry experience.
The company can however manage the threat of substitutes by:
 Stressing on becoming service oriented instead of being product oriented.
 Understanding core need of customers instead of what the consumer buys
 Increasing the cost of switching of the customers

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Threat of New Entrant:
The threat of new entrant is lower in case of The Walt Disney Company (E. Dobbs 2014):
 Due to massive investment
 Popularity in the market.
The company can tackle the threat of the new entrants by:
 Through innovation of newer products and services. Newer products not only bring in
newer customer but also provide an opportunity to the older customers in buying
products from the company.
 By establishing economies of scale that is able to lower fixed cost per unit.
 By spending money and building capacities on the research and the development. It is
also to be noted that new entrants finds it less likely in entering dynamic industry where
established players like The Walt Disney Company keeps defining standards at
regularized intervals. It reduces window of the extraordinary profits for newer firms
thereby discouraging the newer players in industry.
Rivalry amongst Existing Firms:
The rivalry amongst the existing firms in case of Walt Disney is higher since it has different
outlets for entertainment that includes Fox Studios, Themed parks and the Entertainment
Platforms (Cubbin, 2013).
The company can tackle intense rivalry amongst existing competitors by:
 Building sustainable differentiation

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 Building scale so that it can be completed better
 Ensure collaborating with the competitors for increasing market size instead of
undertaking competition in smaller market.
Bargaining Power of Buyer:
The bargaining power of the buyers is higher since (Dertwinkel-Kalt, Haucap and Wey
2015):
 It is not a necessity but luxury
 Existence of different economic status in the different countries
The company can tackle the buying power of the buyers by:
 Building larger customers base. This will not only help in reducing bargaining power of
buyers but also provide opportunity for the firm in streamlining the production and sales
process.
 Through rapid innovation of newer products. Based on the customer offerings and
discounts on the established products if the company keeps coming with newer product it
limits bargaining power of the buyers.
 Newer products will reduce defection of the existing customers of Walt Disney to the
competitors.
Bargaining Power of Suppliers:
The bargaining power of suppliers is medium in Walt Disney due to (Ma et al. 2015):
 Subscription platform and technological alignment

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 Construction, real estate and equipment
The company can tackle the buying power of the suppliers by:
 Building of effective supply chain along with multiple suppliers.
 Ensuring experimentation of product designs using varied materials such that if price
rises for a raw material then the company is able to shift to the other.
 Development of the dedicated suppliers the business of whose depends on the company.
SWOT Analysis:
Strength Weakness
 It is a highly recognizable brand. The
brand name and logo of Walt Disney
can be recognized easily.
 Have capital close to 14.3 billion that
enables the company in making
additional investments in other regions
 Have wide understanding of
entertainment industry
 Often linked to reliable supplier who
provides higher quality raw materials
for the product line of the company.
• Reports poor financial planning.
Availability of cash flow and collection
of the accounts implies insufficient and
poor financial planning.
• The lack of promotion and marketing
left Walt Disney vulnerable to the
competitors like Legoland and Twenty
first century Fox.
• The company experiences immensely
higher rate of attrition in spite of
spending enormous amounts on the
grooming and the training of

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employees.
• The company has insufficient scaling of
product demand. This implied that the
designers of the products of Disney
portray poor judgment for Next big
idea.
Opportunities Threats
• The popularity of Walt Disney allows
it in gearing for further marketing
• The core competencies of the company
lies in its expertise that helps it in
making newer innovations
• The company acts as the perfect source
of branding and comes up with wide
marketing strategies.
• The company lacks technological
alignment and hence is incapable of
making proper use of technology.
• The company has higher dependencies
on the workforce and spends huge
amounts on the employee development,
work force and training.
• Due to the various international crises,
the administration of the company is
pulling out the international contracts.
PESTEL Analysis:
Political:
The political factors include rules and policies of government (Rothaermel 2013). As
Disney is an entertainment company known for providing amusement so the policies of the

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government has a direct impact on the company. The company is also affected by the import
policies and tax issues in the foreign countries. For instance, the intellectual policies impacts
global business. In the mass media, entertainment and the amusement park environment it is the
following external factors that influences the strategic management of Disney.
• Stronger protection intellectual property
• Shifting of the trade policies
• Stability of the political conditions in the major markets
Economic:
The economic factors of Walt Disney include economic system in the different countries
and the labor cost. The company is also influenced by the exchange rates of state and the per
capita income. For instance, the US market provides the revenues of resorts and the amusement
parks of Walt Disney (Grünig and Kühn 2015). The success of the strategic management of the
company of the company depends on how the economic condition remains linked to the external
factors mentioned below:
• Fast economic development of the economic development
• Increasing the levels of the disposable income
• Slower level’s of growth with Chinese economy
Social:
The social factors include the entertainment interest. The modern societies remain
increasingly interested in business companies like Walt Disney that provides the family
entertainment in the most fascinated and the comfortable manner (Omri, Frikha and Bouraoui

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2015). Societies eager towards adopting contemporary trends of entertainment welcome
innovations. For instance, strategies should be able to manage the customer expectation and
behavior related to the global business. Taking into account, the situation of industrial
environments, the company is able to experience the impacts of following external socio-cultural
factors:
• Favorable leisure attitudes
• Increasing level of online activity
• Increasing level of cultural diversity
Technological:
This factor includes the change in the entertainment structure and the integration of the
technology. Walt Disney has been inclined towards innovation and followed contemporary
trends (Isabelle 2013). Technology enables in spreading innovation within a matter of seconds.
For instance, impacts of digital technologies on the film production are the factors that enable
company to survive in an international industry environment. It is the following technology
based on external factors that determines various management efforts and strategies at Walt
Disney.
• High level of R&D rate within the industry
• Increasing usage of mobile device
• Increasing popularity of the augmented reality
Environmental:

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The environmental factors include manufacturing and the management of the product
waste and the installation of the eco friendly parks ( Bouazza, Ardjouman and Abada 2015). The
world has taken vows in making the planet pollution free and beautiful. Walt Disney plays a very
supporting role in such campaigns thereby following norms of the world. Thus, the global
environment concerns of the industry includes climate and weather change, availability of
resource, impact of weather conditions on the resorts and the amusement park, merchandise and
film production. Disney however face strategic challenge in relation to the external factors
mentioned below:
• Worsening and changing cyclical weather
• Increasing the availability of the renewable energy
• Increasing the industry support for the aspect of sustainability
Legal:
The legal factors of Walt Disney included the intellectual and the copyright property
along with health, safety and the employment issues. It is also vital for the company to fulfill the
legal issues pertaining to state (Bialowolski and Weziak-Bialowolska 2014). Disney represents
the brand of elites or the upper middle class who remain concerned about the legit stuff. For
instance, in this analysis the European and American regulations were considered as the strategic
influences considered in the analysis. This component refers to following external factors that
impose limits on the global business of Disney.
• Impact of the protection law of the environmental
• Influence of the improved legal protection for the consumer rights in the development of
the markets

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• Broadening of the protections related to intellectual property
c. Strategies that Enable the Company in Gaining Competitive Advantage
Product Development: It is the primary growth intensive strategy of Walt Disney
Company. This strategy involves offering newer products in the current and the existing market
of the company (Kahn 2014). For instance, the company releases newer movies with the
corresponding merchandize for generating increased amount of profit from the target customers.
The analysis of the company sheds light on importance of the organizational structure of Disney
that provides organizational design for effectively managing the product development. This
particular intensive strategy is linked to generic competitive strategy in emphasizing the
uniqueness of product development. However, related strategic objective has been in the
achievement of the business growth through effective persuasion of the customers in purchasing
the products of Disney based on the unique attributes.
Market Penetration: The Company achieves growth by means of market penetration. In
fact, market penetration enhances growth by enhancing the sales of the existing products in the
current market of the company (Lawton 2017). For instance, the strategic objectives of the
corporation lay in using aggressive advertising for increasing the revenues from the released
products in global entertainment industry. The strengths portrayed contribute to the company’s
success in the implementation of the growth strategy. Besides, it is to be noted that a stronger
brand dependent on differentiation strategy results in competitive advantage for attracting the
customers to the products of the company thereby managing the expectations of the customer.
Market Development: It is a much less frequently used growth intensive strategy in the
business of Walt Disney (Kang and Montoya 2014). In ensuring the growth of business, this

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strategy requires Disney in introducing the existing products to the newer market or segments.
For instance, growth is acquired through establishment of operations in the newer market. In
presence of competitive challenges, entry into the newer market can enhance the strength of the
company in managing the competitive forces. A crucial objective in the market development lies
in using differentiation competitive strategy for successfully introducing the products of the
company into the newer markets.
Diversification: This acts as the supporting intensive strategy for the business growth.
Acquiring or developing newer business has been the typical approach of the growth strategy (Lu
2014). For instance, the company adopted diversification through establishment of Disney Cruise
Line. The differentiation strategy develops competitive advantage of the newer business
operations that uses brand of the company. In diversification, the strategic objective lies in
managing the competitive challenges through development of newer business that spread the
brand popularity and company’s presence in international market.
d. Recommendations/ Future Analysis the Organization would adopt
Recommendations:
1. Disney could establish a higher product scope and ensure creation of a diversified
business: This minimizes the loss of risk which implies that if one of the investment delivers
poor performance compared to the other investments over the same period then it becomes
necessary in reducing loss of the investment portfolio from concentrating the capital under a
single kind of investment. It also enables in preserving capital. In this context, it is to be noted
that all investors are not in accumulation phase of the life. Diversification helps in protecting the
savings(Alces 2013). Diversification helps in generating greater amounts of return which implies

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that sometimes the investment might not perform as expected. It is then when diversifying helps
in relying upon the other sources of income.
2. The company could venture into the newer platforms of entertainment: This ensured
better access for the business and the consumers, creates the appropriate conditions and the level
playing grounds for the digitalized networks, ensures innovative service in flourishing and
maximizes growth potential of digital economy (Aliloupour 2016).
3. Development of an Interactive Market: This enables increase in the sale conversions. In
other words, it converts the consumer from the reader to the buyer. Unlike the traditional radio
and television, the technique of interactive marketing provides the audience with the opportunity
of making on spot purchase. An interactive market also helps in lowering the overhead expenses
in payroll, rent, printing and shipping (Laudon and Laudon 2016). An interactive market also
saves on postage and printing. Instead of mailing or printing the product catalogue, a catalogue
created online is able to reach the millions of people without any cost of delivery. Besides, it can
also be updated easily for saving on the distribution and the reprinting of the newer print
catalogs. An interactive market also enhances engagement of the audience thereby allowing the
sellers in engaging the audience largely by put forward interesting stuffs.
Future Strategies:
They include:
1. Newer and exceptional streaming service: Convenience and cost are the key reasons for
using the streaming service (Yitong et al. 2013). Over half which is closer to around 58.5%
indicates that the streaming service is quite cheaper compared to the cable. It is to be noted that
in the streaming of the audio and the video the travelling information acts as the stream of the

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data from the server. The decoder acts as the standalone player or the plug in which works as the
part of the Web browser. The information stream, server and the decoder works together in
letting people in watching live or view a pre recorded broadcast.
2. Ending competition by acquiring fox studios: Larger companies often acquire the other
firms for the benefit of the products (Lunev et al. 2016). By acquiring the smaller company, the
innovative projects of the other firms get shelved.
3. Gain closer to sixty percent ownership by controlling Hulu: This would help in
strengthening employee employer relationship and instills confidence and mutual trust within
workplace. It would also help in building relationship within functions and departments within
the organizational hierarchy (Amran and Ahmad 2013). Gaining an ownership also help in
putting forward ideas to forefront in relation to particular project that might have been in the
dormant stage due to the lack of resources and time. Employees also attain the self confidence
and become result oriented. In other words, the employees become increasingly stronger,
productive and more action oriented. Besides, the employees also develop a proactive finding
and ensure solving the problems. Further, ownership channelizes energies of the employees in
the positive direction.
e. Conclusion:
On a concluding note, it be said that strategic planning is required for Walt Disney. It has
also been found that implementation of strategies helps in lowering the cost and maintaining
competitive advantage for the Company. It also follows a balanced approach towards cost
savings and innovation. Strategic planning is vital for the organizations as it puts across
measurable goals and instigates a direction sense. It is basically a tool used for guiding the daily

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decisions along with changing approaches and evaluation of the progress while moving forward.
On the other hand strategic implementation acts critical to the success of the company and
addresses who, where, when and the how of reaching desired objectives and goals. It helps in
focusing on the whole organization. Besides, implementation also involves assigning of
timelines and tasks to individuals for helping the organization in reaching the goals. The
balanced approach involves comprehension and development of the business strategies.
It is also to be noted that the international popularity of Walt Disney Company has been
the result of the efficient strategic management that remains applicable to the mission and the
vision statement and quite suitable to the amusement park, entertainment and the industries
related to mass media. The corporate mission often determines what business does while
corporate vision set direction for the development and growth that pertains to the desired
futuristic condition of business. The analysis of Walt Disney Company portrays mission
statement that focus on the leadership for business. However, like other companies, Walt Disney
can improve the mission and the vision statement for suiting the business needs and addressing
the current trends influencing the industry. For instance, an increasingly specific vision functions
as the better guide for expansion of the Disneyland and the other resorts and parks. These
improvements were able to open newer opportunities for the development of corporation.

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