Walt Disney Case Study

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The Walt Disney Company

The Entertainment King

I. Executive Summary

After analyzing the Walt Disney case, we found that the root issues include the need to increase revenue to reach the 20% growth target set by upper management and to expand into new markets and/or industries. We used a Porter’s Five Forces analysis to develop our alternatives (Please See Exhibit A for further information). The alternatives that we proposed were to expand globally and enter the Internet and cable distribution industry. We analyzed these alternatives against a set of selected criteria including: the time to implement, how the alternatives fit with Disney’s corporate culture and corporate synergy, if the alternative would provide a competitive advantage, how costly the implementation would be for Disney, and the revenue potential for the alternative. Upon the completion of our analysis, we recommend that Disney should expand globally in order to capitalize on unrealized markets in order to alleviate its root issues.

II. Root Issues

The two root issues for Disney are:

• To increase revenue to reach the 20% growth target set by upper management

• To expand into new markets and/or industries

III. Alternatives

We proposed two alternatives that address Disney’s root issues. Both of these alternatives are possible solutions to the root issues that we proposed. The alternatives are:

• Expand globally

• Enter the Internet and cable distribution industry

IV. Evaluation Criteria:

A. Implementation Time

Throughout the past several years there have been many mergers especially in the telecommunications and broadcasting market which have left a couple extremely large companies to compete. One of the more recent was a merger between America Onli...

... middle of paper ...

...ng Competitors

Medium • Industry is growing rapidly and is cyclical with periods of over-capacity

• Fixed costs are relatively low

• Significant brand identities and product differences

• Competitors are more specialized than diversified

• Low switching costs for customers

• Competitors all come from somewhat the same background, are relatively the same size, and have similar training

Exhibit B: Operating Revenue of the Cable Industry

Exhibit from Report Entitled: Cable Mergers, Monopoly Power and Price Increases by Mark Cooper, January 2003 http://www.consumersunion.org/pdf/CFA103.pdf

Exhibit C: Competitive Advantage Comparison

The Walt Disney Company

Media Networks

Cable Distribution

Broadcasting Cable Networks & International

ABC ESPN

TV Stations Disney Channel

ABC Radio Networks Toon Disney

Radio Stations SoapNet

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