Disney Case Analysis Alexa van Bergen Jericca Pearson

Disney Case AnalysisAlexa van BergenJericca Pearson

Background

o Founded on October 16, 1923 by brothers Walt and Roy Disney as an animation studio

o One of the biggest Hollywood Studioso Licensor of:

- 11 theme parks - Several television networks,

including ABC and ESPN

Background

o Headquarters and primary production facilities The Walt Disney Studios in Burbank, California

o Mickey Mouse serves as the official mascot of The Walt Disney Company

o Walt Disney passed away on December 15, 1966.

o Urban legend says his corpse would be frozen and stored beneath the Pirates of the Caribbean ride at Disneyland. . .

o Disney purchased Marvel Entertainment ‘09o Roy Disney died at age 79

- He was a key person in Disney’s animation legacy

o Received approval to build a theme park in Shanghai in ‘09

Background

Market GrowthoThey bought four companies Number of RivalsoThere are 200 or so companies in the industry, 7 are dominant

o 1. Walt Disney o 2. News Corp.o 3. Time Warnero 4. CBSo 5. Viacomo 6. Foxo 7. Comcast

Pace of Technological ChangeNew technologies for the entertainment industry:

3D filmmaking and programming. Online video and programming distribution. Digital and eBook advances and distributions. Cell phones with video and TV streaming abilities.

Dominant Industry Characteristic

Sawyer & Geoff

Dominant Industry Characteristic

•Market Size and Growth• Within Six Years acquired 4 different

companies

•Number of Rivals• Within this Industry there are numerous

rivals but they are dominant

•Product Innovation• Within the market that deals greatly with

technology they need to strive to stay ahead of the curve.

Dominant Industry Characteristic

Five Forces

Mark Peetzke and Mitch Walkup

Five Forces Analysis

Five Forces

EFEKey External Factors Weights Rating WeightedOpportunitiesCreate a wider target group 0.05 3 0.15Build more parks in other areas (U.S. and internationally) 0.10 4 0.40Governments positive attitude toward Disney's organization 0.07 3 0.21Barriers of entry are significant 0.06 2 0.12Renovate parks and resorts to create a different type of attractiveness 0.09 4 0.36Grow the media network to create more potential for Disney to increase their income (ESPN, Lifetime, Disney, History) 0.08 4 0.32Invest in different theme parks to create a different themes and increase the amount of money guest are willing to spend on production, admission, and hotels 0.07 4 0.28Threats 0.00Service/ Entertainment business competitors 0.04 1 0.04Unemployment rate is high 0.06 2 0.12Do to streaming online, the change in technology lead to a decrease in buying DVDs 0.07 3 0.21Economy possible regression 0.06 1 0.06Expense increase due to labor cost increase 0.06 2 0.12Theme parks and resorts are unpredictable due the travel industry, customers vacation availability, prices, and seasonality 0.09 3 0.27Consumer product retail is based on seasonal purchasing and the time of production of movies or shows 0.10 4 0.40Totals 1.00 3.06

EFE

Adrienne & Maddie

EFE

Strategic Group Map

Low High

0

150,000

Strategic Group Map

Joel Haywood & Zach Klatt

Strategic Group Map

IFEKey Internal Factors (IFE) Weights Ratings Weighted ScoreStrengthsKnown throughout the world for being one of the top recognizable entrainment companies 0.08 4 0.32Broad Differentiation Strategy 0.06 3 0.18Based on retail sales, Disney is the largest worldwide licensor of character-based merchandise and producer of children's products based off movies 0.07 4 0.28Portfolio is extremely wide and unique 0.1 4 0.4Disney owns a verity of companies and is multiple industries; Media Network, Theme Parks and Resorts, Consumer Products, Studio Entertainment, and Interactive Media 0.08 4 0.32Strong customer service 0.04 3 0.12Media Networks and broadcasting is really strong 0.05 4 0.2Innovative entertainment business 0.06 3 0.18Strong Advertising 0.07 3 0.21Weaknesses 0Employee turnover is high 0.04 1 0.04Narrow target market 0.04 2 0.08

Disney is known as a costly trip because of its limited locations and accessibility 0.07 3 0.21Entertainment production costs are high 0.05 1 0.05Very large work load 0.06 2 0.12Concentrates primarily on the revenue in North America 0.08 3 0.24Insurance is continuing to rise in parks and resorts 0.05 2 0.1Totals 1.00 3.05

IFE

Adrienne & Maddie

IFE

"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."

Mission and Vision Statement

Competitive Strategy

Broad Differentiation

Horizontal management approach

Diversifying its products and services

Rapidly expanding overseas

Developing a new theme park more

accessible to North East area

Enhancing the Business efficiently and

suppression

Grow slowly, not to impress others.

Competitive Strategy

John-Jay and Nate

Competitive Strategy

Broad Differentiation

- Broadly diversified media and entertainment company

- Many different segmentso Theme parkso Hotels and resortso Cruise shipso Cable networkso Music publishingo Children’s book publishing

o Etc.

- Company’s corporate strategyo Creating high-quality family contento Exploiting technological innovations to make entertainment

experiences more memorableo International expansion

Always looking to grow and increase presence/capabilities in new or current markets

SWOT Analysis

Known throughout the world for being one of the top recognizable entrainment companies

Broad Differentiation Strategy Based on retail sales, Disney is the largest worldwide licensor of

character-based merchandise and producer of children's products based off movies

Portfolio is extremely wide and unique Disney owns a verity of companies and is multiple industries; Media

Network, Theme Parks and Resorts, Consumer Products, Studio Entertainment, and Interactive Media

Strong customer service Media Networks and broadcasting is really strong Innovative entertainment business Strong Advertising

Strengths

Employee turnover is high Narrow target market Disney is known as a costly trip because of its limited locations and

accessibility Entertainment production costs are high Very large work load Concentrates primarily on the revenue in North America Insurance is continuing to rise in parks and resorts

Weaknesses

o Create a wider target groupo Build more parks in other areas (U.S. and internationally)o Governments positive attitude toward Disney's organizationo Barriers of entry are significant o Renovate parks and resorts to create a different type of

attractivenesso Grow the media network to create more potential for Disney to

increase their income (ESPN, Lifetime, Disney, History)o Invest in different theme parks to create a different themes and

increase the amount of money guest are willing to spend on production, admission, and hotels

Opportunities

Service/ Entertainment business competitors Unemployment rate is high Do to streaming online, the change in technology lead to a decrease

in buying DVDs Economy possible regression Expense increase due to labor cost increase Theme parks and resorts are unpredictable due the travel industry,

customers vacation availability, prices, and seasonality Cunsumer product retail is based on seasonal purchasing and the

time of prodution of movies or shows

Threats

SWOT Matrix

SO Strategieso(S2, O2): Create a customized targeted advertising plan for all their segmentso(S3, O3): Expand Hong Kong Disney and research in one new marketo(S4, O4): Research and Develop a way to tell stories to kids through technology ST Strategies o(S2, T1): Lower their costs and utilize technology (digital content)o(S2, T3): Create and document a trade market and an IP protection plano(S2, T4): Create marketing strategies promotions for customers to use during slow periods at their resorts and theme parks.

SWOT Matrix

WO Strategieso(W1, O1): Research and develop a plan for emerging markets with low costso(W4, O3): Target those new markets and look into expanding around consumer productso(W2, O4): Research the consumers use and need of technology

WT Strategieso(W4, T1): Digitize content utilize technology and lower costso(W1, T2): Put more efforts on high techs and then and research and develop in that segment

SWOT Analysis

Sam & Edwin

SWOT Analysis

SWOT Analysis

CPM

CPM

Critical Success Factors Weights Rating Score Rating Score Rating Score Advertising 0.13 4 0.52 4 0.52 3 0.39Company Image 0.14 3 0.42 4 0.56 3 0.42Global Expansion 0.10 4 0.40 1 0.10 2 0.20Consumer Loyalty 0.12 4 0.48 4 0.48 3 0.36Production Capacity 0.10 3 0.30 3 0.30 3 0.30Market Share 0.11 4 0.44 2 0.22 3 0.33Price Competitiveness 0.13 3 0.39 2 0.26 4 0.52Technology 0.09 3 0.27 4 0.36 2 0.18Management 0.08 3 0.24 3 0.24 3 0.24Totals 1.00 3.46 3.04 2.94

Disney Time Warner Fox

CPM

Emma and Bailey

CPM

Ethics

For the most part they are pretty ethical

Lawsuits:

1.Disney Hit With New Lawsuits By Kids With Autism (November 2014)

- Disney wasn’t Disability friendly with their rides. 2.Tanikumi vs. Disney (October 2014)

-Tanikumi sued the Walt Disney Co. for $250 million, claiming the studio based the movie “Frozen” on her life. The Peruvian author asserts that Disney stole the story, characters, plots and subplots from two of her autobiographical books, “Living My Truth” and “Yearnings of the Heart,” that depict her life in the Andes.

Financials

2014 2013 2012 2011Operating Profit Margin 23.35% 20.51% 20.73% 18.89%Net Profit Margin 15.37% 13.62% 13.44% 11.76%Earnings Per Share 4.26 3.38 3.13 2.52Return on Assets 8.91% 7.55% 7.59% 6.66%Return on Equity 16.68% 13.51% 14.29% 12.86%Current Ratio 1.14 1.21 1.07 1.14 Working Capital 1,884 2,405 896 1,669 Total-Debt-to-Assets 0.22 0.21 0.24 0.26Debt-to-Equity 0.28 0.29 0.28 0.30Long-Term Debt to Equity 0.29 0.28 0.31 0.33Days of Inventory 21.14 15.51 17.11 16.74Inventory Turnover 17.26 23.54 21.34 21.81Net Income 7,501 6,136 5,682 4,807 CAGR 11.77%Three years 9.70

Financials

Financials

Financials

Shawn R. & Josh H.

Financials

Alex Melius and Mitch Kreifels

Scope of Operations

Horizontal 2006 acquisition of Pixar 2009 acquisition of Marvel 2010 acquisition of Playdom 2011 acquisition of UTV

Scope of Operations

Recommendations

Disney should…

-Improve advertising to reach a more mature market-Get rid of Interactive Media-Remodel and expand in existing parks and resorts to stay appealing

Sources

Annual Reports | The Walt Disney Company. (n.d.). Retrieved March 30, 2015, from http://thewaltdisneycompany.com/investors/financial-information/annual-report

DIS Balance Sheet | Walt Disney Company (The) Commo Stock - Yahoo! Finance. (n.d.). Retrieved March 30, 2015, from http://finance.yahoo.com/q/bs?s=DIS Balance Sheet&annual

Disney Hit With New Lawsuits By Kids With Autism; Many More Expected. (2014, November 20). Retrieved March 30, 2015, from http://deadline.com/2014/11/disney-new-lawsuit-autistic-kids-more-expected-1201289687/

Lawsuit against Disney for 'Frozen' is no fantasy. (n.d.). Retrieved March 30, 2015, from http://www.postcrescent.com/story/money/2014/10/18/lawsuit-disney-frozen-fantasy/17442139/

Walt Disney Co. (n.d.). Retrieved March 30, 2015, from http://performance.morningstar.com/stock/performance-return.action?t=DIS®ion=usa&culture=en-US

Walt Disney Co. (n.d.). Retrieved March 30, 2015, from http://financials.morningstar.com/ratios/r.html?t=DIS®ion=usa&culture=en-US

Walt Disney Profit Margin (Quarterly):. (n.d.). Retrieved March 30, 2015, from http://ycharts.com/companies/DIS/profit_margin