Walt Disney Company PDF

Walt Disney Company:
Its Diversification Strategy
Brion, De Los Santos, Lee, Ramos, Venturina & Yun

COMPANY INTRODUCTION
CEO: Robert Iger Brief History Successful Films
Industries: 1928: 1937 - 1961 :
- Media Networks
1955: Opening in
Anaheim, California
- Parks & Resorts
1966: Death of Walt Disney
- Studio Entertainment Current Strategies:
Generic Strategy - Broad Differentiation
International Strategy - Global
- Consumer Products 1.) Creating high-quality family content
2.) Exploiting technological innovations to make
entertainment experiences more memorable
- Interactive Media 3.) Expanding to new markets internationally
EXTERNAL ANALYSIS: INDUSTRY ANALYSIS
Major Competitors:
Media Networks Parks & Resorts
EXTERNAL ANALYSIS: PESTEL ANALYSIS & PORTERS FIVE FORCES
Pestel Analysis Porters 5 Forces

Political :
- Political Differences that serves as a Barrier THREAT OF NEW ENTRANTS : Mod - High
Economical :
- Consumer Disposable Income
THREAT OF SUBSTITUTES : High
- Economic Growth/Recession
Sociocultural :
- Consumers Preference for other sources of
BARGAIN POWER OF SUPPLIERS : Low
entertainment and its Value
- Increase in Travel and tourism
Technological:
- Adapting to New Technologies BARGAIN POWER OF BUYERS : Moderate
Environmental :
- Environmental Standards to Operate (Proper
Waste Disposal & Treatment) RIVALRY AMONG FIRMS : High
Legal :
- Safety Regulation Requirements (Products/Parks)
EXTERNAL ANALYSIS: OPPORTUNITIES & THREATS
Opportunities Threats
O1: Use of Technological T1: Issues on Piracy

Advancements (IT & Mobile Gaming) T2: Intense competition
O2: Growth through Expansion to
T3: Changes in Consumer
Emerging and Developed Countries
O3: New Development (More Preferences
Successful Films, Characters & T4: Negative Event that could
Products) Affect the Brand Image
T5: Strict Safety Regulations /
Standard Requirements
EXTERNAL ANALYSIS: EFE MATRIX
Key External Factors Weight Rating Weighted
Score
Opportunities
1. Use of Technological Advancements 0.12 3 0.36
2. Growth through Expansion to 0.15 4 0.6
Emerging and Developed Countries
3. New Development(More Successful 0.15 4 0.6

Films, Characters & Products)
Threats
1. Issues on Piracy 0.12 2 0.24
2. Intense competition 0.1 2 0.2
3. Changes in Consumer Preferences 0.14 4 0.56
4. Negative Event that could Affect the 0.12 3 0.36

Brand Image
5. Strict Safety Regulations / 0.1 3 0.3

Standard Requirements
Total 1.00 3.22

INTERNAL ANALYSIS: SUPPLY & VALUE CHAIN
INTERNAL ANALYSIS: FINANCIAL ANALYSIS
Horizontal and Vertical Analysis
Common-Size Income Statement

2009 2010 2011
Revenue 100% 100% 100%
Cost and 84.24% 82.33% 80.97%

Expenses
Net Income 15.65% 17.41% 19.67%

Before Tax
INTERNAL ANALYSIS: FINANCIAL ANALYSIS
Financial Ratios
2009 2010 2011
Current 1.11 1.14

Ratio
Debt Ratio 0.43 0.45
Net Profit 15.65% 17.42% 19.67%

Margin
Total Asset 0.57 0.55 0.57

Turnover
Equity 1.87 1.84 1.93

Multiplier
DuPont 16.77% 16.84% 20.39%

ROE
INTERNAL ANALYSIS: STRENGTHS & WEAKNESSES
Strengths Weaknesses
S1: Strong brand recognition W1: Not doing well in the

S2: Strong financial performance interactive media business
S3: Strong diversification W2: High operating costs
S4: Strategic Acquisitions W3: High cost of recent
(Acquiring brands that add value acquisitions
to the company)
S5: Penetrating the global market
INTERNAL ANALYSIS: IFE MATRIX
STRATEGY ANALYSIS: I/E MATRIX
IFE Total Weighted score
Strong Average Weak
4.0 3.0 2.0 1.0
High
3.0
Medium
2.0
Low
1.0
STRATEGY ANALYSIS: GRAND STRATEGY MATRIX
RAPID Market Penetration
MARKET Market Development
GROWTH Vertical Integration
Horizontal Integration
Product Diversification
WEAK STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION
SLOW
MARKET
GROWTH
STRATEGY ANALYSIS: I/E MATRIX
Internal
External
Key Strategic Issues
What are the other opportunities left to be maximized by the company?
How can we improve the companys Interactive Media?
What should be considered before further expanding into emerging markets such
as Asia?
Alternative Course of Action 1
Final Recommendation
1. Invest in R&D
2. Collaborate Game Developers to enhance the companys interactive media
Implementation Plan
1. Invest in R&D
a. Market Analysis per target country for the products to be produced
i. Popular characters
ii. Willingness to pay / purchasing power
b. Innovate Products
i. Consumer game play behavior and trends
ii. Game trends
c. Feasibility Study
2. Collaborate Game Developers to enhance the companys interactive media
a. Find a better console developer other than Activision (spider man) like Naughty Dog, Ubisoft,
Rocksteady, etc
b. Use characters in Marvel for the console games like what DC did using Batman.

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Walt Disney Company:

Its Diversification Strategy

Brion, De Los Santos, Lee, Ramos, Venturina & Yun

CEO: Robert Iger Brief History Successful Films

Industries: 1928: 1937 - 1961 :

Pestel Analysis Porters 5 Forces

O1: Use of Technological T1: Issues on Piracy

3. New Development(More Successful 0.15 4 0.6

1. Issues on Piracy 0.12 2 0.24

2. Intense competition 0.1 2 0.2

3. Changes in Consumer Preferences 0.14 4 0.56

4. Negative Event that could Affect the 0.12 3 0.36

5. Strict Safety Regulations / 0.1 3 0.3

Total 1.00 3.22

Common-Size Income Statement

Revenue 100% 100% 100%

Cost and 84.24% 82.33% 80.97%

Net Income 15.65% 17.41% 19.67%

2009 2010 2011

Current 1.11 1.14

Debt Ratio 0.43 0.45

Net Profit 15.65% 17.42% 19.67%

Total Asset 0.57 0.55 0.57

Equity 1.87 1.84 1.93

DuPont 16.77% 16.84% 20.39%

S1: Strong brand recognition W1: Not doing well in the

Strong Average Weak

4.0 3.0 2.0 1.0

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