Walt Disney Company
Outline of Presentation
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About the Company
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Analyses
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Scope and Reach
○
Value Chain
○
Vission and Mission Statements
○
SWOT
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Business Model Canvas
●
Financial Overview
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Resources and Capabilities
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Strategy Map
●
Recommendations
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References
○
●
Tangible, Intangible, and
Capabilities
Environments
○
Macroenvironment
Walt Disney Company
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Classified as a media and
entertainment company
●
Operations in
○ North America
○ Europe
○ Asia Pacific
○ Latin America
○ Africa
Business Segments
1.
Media Networks
Vision and Mission Statement
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."
Vision: “Disney’s leadership team manages the world’s largest media company and are the visionaries behind
some of the most respected and beloved brands around the globe. Their strategic direction for The Walt Disney
Company focuses on generating the best creative content possible, fostering innovation and utilizing the latest
technology, while expanding into new markets around the world.”
Disney’s Business Model Canvas
Resources and Capabilities
Resources
Tangible Assets
Capabilities
Physical Resources
Innovation Capabilities
Financial Resources
Storytelling Capabilities
Technological Resources
Imagineers’ Capabilities
Intangible Assets
PR Capabilities
Reputation Resources
Innovative Resources
Human Resources
Macroenvironment
Political factors - taxation policies in different countries, unstable political climate
Economic factors - unstable currencies in certain countries, U.S. economic crises trickled down onto other
countries which reduced 2016 revenue by 4%
Socioeconomic factors - changing buyer preferences and cultural differences in consumer market internationally;
changing age and population distribution in the U.S.
Technological factors - evolving modern technology increases efficiency for info systems in theme parks and
resorts, new technology such as virtual reality can enhance customer experience and elevate quality of film
production
Environmental factors - environmental regulations; natural disasters, weather climate can affect park attendance
rates; Disney reduces emissions through the use of biodiesel to promote clean renewable energy and minimizes
waste by recycling
Legal factors - FCC regulations for cable networks, labor laws in different countries; health and safety regulations
for employees
Driving Forces
Changes in technology/ease of access - more homes with more bandwidth means a healthy increase
in customers/viewers - boost profits
Fragmentation - more media networks are continuously being split up = less viewer time per channel squeeze profits, competition more intense
Cost to create content is falling - many people subscribe to/consume nonprofessional media via social
networks - squeeze profits, more difficult to attract/retain viewers
New revenue models - trends are moving away from subscription based models and towards adsupported models - boost/squeeze
Recommended actions:
- Expand current business with companies such as Netflix and Hulu to make accessing media networks more
accessible which would support the more popular ad-supported models
- Could create it’s own streaming site/app with its current Disney films and shows
Corporate Business Strategy
Cross-Promote brands across different business units
Example: Marvel movie -> TV Show -> Products -> Rides
Specific Business Strategies
1) Coming out with high-profile movies in the 2016-17
- Many already with brand recognition (Marvel,
Pirates)
1) Acquire companies with high-brand recognition in
place
- Marvel, Pixar, Lucasfilm
1) Owns a large portion of media networks that relate to
a wide range audience
- ABC, Lifetime, ESPN
1) Disney holds employees to a higher standardattention to detail
- Uniforms, keeping in character, talking to guests
Broad Business Strategies
Broad Differentiation:
- appeal to a broad spectrum of users
Media: Channels for every person
- ABC, Disney, ESPN
Parks: Different from other theme parks because it is an
experience that you are immersed in
Verses if you go to Knotts/Six Flags, the focus is just going on
rides
Focused Differentiation:
Media: bought specific channels to appeal to specific niches
- bought ESPN to appeal to older male market because
they were not capturing that audience in their parks
Value Chain Analysis
Primary Activities
Supply
Chain
Casting actors,
directors,
producers for films
and shows
Equity ownership
interest in cable
networks and TV
stations
Establishing venue
for park and resort;
construction of
infrastructure;,
equipment for
rides; contracts
with restaurants
Operations
Production of
television
programming.
Filming TV shows,
graphing
animation; set up
venues for
production set
Ride operation,
maintenance of
equipment and
theme park; food
and beverage
handling
Distribution
Sales and
Marketing
Broadcasting films
and distribution of
programming
domestically and
internationally
Advertising
revenue
annual theme park
pass packages, singleday admission tickets,
“park hopper”
admission for several
Disney theme parks at
single venue
Advertising in
Disney-branded
consumer
products;
Theme parks
decorations
Commercials,
films, animation
Services
Video on demand
services;
Multichannel video
channel distributor
subscription;
customer support
Maintenance and
repair for rides;
theme park customer
center
Value Chain Analysis
Support Activities
Procurement: acquiring raw materials, strengthening relationships while
reducing amount of suppliers
Technology: constantly evolving modern technology applicable to film and
television programming and theme park rides that would excel and improve
customer experience.
Activity sharing
and support throughout value chain (E.g. Central Imagineering Division creates
special effects for films, then matching characters, attractions, and products for
theme parks, retail stores, and catalogs)
Human Resources: one of the best-trained employees in the industry;
established corporate culture. Disney University provides consistent training for
employees across the company
Administration: acquisition of cable networks, BAMtech, UTV; expansion of
parks and resorts, extension of broadcasting capacity and distribution, equity
investments in cable networks and theme parks such as Euro Disney.
SWOT Analysis
Strengths large market share with vast cable network. spans many countries worldwide - has 123 million subscribers around the world
High revenues and margins in relation to competitors
Weaknesses Too dependent on single region (North America accounts for 77% revenues) this makes Disney vulnerable to regulations in this
area
High liabilities - 3 billion in unpaid pensions
Opportunities Online videos via streaming and social media
Gaming industry with key brands (Marvel and Lucasfilm)
Increase in internet development and technology capabilities
Threats Piracy can drastically reduce revenue from movies/dvd’s etc
Competitors - consumers/advertisers catering to same markets in media channels
Streaming websites (netflix, amazon) offering a broad range of content that would replace paying for cable
Key Competitors
Media and Studio Industry
-
Competitors compete for advertising revenue,
viewers, and broadcasting channels
FOX, Viacom, CBS, Time Warner
Parks and Resorts
-
Competitors compete for ticket sales,
featured attractions, and theme park
attendees
Universal Studios, Six Flags, Knott’s Berry Farm
(Cedar Fair)
Strategy Map
Benchmarking
Disney’s generates the highest revenue from its media sector. Compared to its major
competitors in the industry, Disney continues to generate more revenue.
Disney
Time
Warner
Viacom
FOX
CBS
Industry
Avg
Revenue
$9.2
billion
$4.1
billion
$1.2
billion
$3.0
billion
$536
million
$20.6 billion
Market
Capitalization
$163.3
billion
$77.3
billion
$14
million
$50.1
billion
$25.8
billion
$5.7 billion
Dividend Yield
1.4%
1.6%
2.0%
1.3%
1.1%
1.2%
Financial Information
Operating Profit Margin
26%
ROA
10.6%
Working Capital
$124 million
Current Ratio
1.01
Long term debt to capital ratio
33.8%
P/E
18.25
Recommendations
Increase presence in emerging economies
- Implement learning and aid services in order to build brand recognition where it
does not exist and increase it where it does
Purchase more shares in broadcasting networks in Disney’s developing markets
Ex. Disney purchase of UTV in India
Aggressively attack piracy, lobby for stricter anti-piracy laws.
Recommendations
As streaming media services become more popular Disney needs to continue to expand
on this market. Currently, Disney has investments in Hulu and agreements with Netflix to
license Disney media. In order to capitalize on this market Disney should,
- Expand DisneyLife outside Europe
- Increase investment in Hulu to majority share to capture an extra $2.4 billion in
Revenue
- Push Hulu to foreign markets (outside US and Japan)
Recommendations
Problem: Disney Needs to Capture Foreign Markets
Recommendations
Need to capture foreign market
Too expensive to build infrastructure
Face government regulations
Solution: Build more Disney Cruise ships that travel
internationally
Australia, New Zealand
South America- Argentina, Brazil, Chile
Asia- Bali, Singapore, South Korea, Japan, China
Theme parks in Japan and China (Shanghai and
Conclusion
Disney is a very successful company with highly effective
business strategies in place
In order to continue this Disney should:
Optimize streaming services to keep up with current
trends
Expand Disney Cruise Line
Reduce Operating Costs
Resources
https://disneycruise.disney.go.com/?sourcecode=16102&CMP=KNC-FY17_DCL_TRA_DOM_ExPh%7CBR%7CG%7C4173700.CL.AM.01.04&keyword_id=kwd115584122%7Cdc%7Cdisney%20cruise%20ships%7C176269114272%7Ce%7C5050:3%7C&s_kwcid=AL!5050!3!176269114272!e!!!!disney%20cruise%20
ships&ef_id=WUwYVwAAAeSbA-xq:20170622191951:s
https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/
http://time.com/4186137/netflix-hours-per-day/
https://disneylife.com/
http://www.bizcommunity.com/InBrief/196/23/12017.html
https://thewaltdisneycompany.com/philanthropy/
http://www.citi.columbia.edu/B8210/read28a/disney.pdf
https://ditm-twdc-us.storage.googleapis.com/2016-Annual-Report.pdf
http://www.morningstar.com/stocks/XNYS/DIS/quote.html
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