Disney Case Analysis 2020

Please answer each question in Detail with one source for each question:

1.What is your assessment of the competitive strength of The Walt Disney Company’s different business units?

2. What is your assessment of The Walt Disney Company’s financial and operating performance in fiscal years 2015-2019? What is your assessment of the relative contribution of each business unit to the financial strength of Disney based on the 2018 and 2019 fiscal year financial data?

3. What actions do you recommend that The Walt Disney Company’s management take to improve the company and increase shareholder value? Are there specific actions that you recommend to successfully integrate the 21stCentury Fox or improve the likelihood of success for Disney’s direct-to-consumer and over-the-top media services? Do you have recommendations for lessening the impact of COVID-19 on financial performance? Your recommended actions must be supported with a convincing, analysis-based argument.

ANSWER

Disney Case Analysis 2020

The Competitive Strength of Walt Disney Company’s Different Business Units

The Walt Disney Company focuses on high-quality entertainment and technological innovations that make their entertainment memorable. The Walt Disney Company is a broadly diversified entertainment and Media Company with various business lines that include resorts, theme parks, television networks, motion picture production, and local television stations (Wasko, 2020). The different business units allow the company to sell into a diverse customer base. This enables the company to grow and remain successful. For instance, their media networks have been different and cover big market share, especially after the 21^st Century Fox acquisition. Relatively, the company has gained competitive strength from the different business units due to the increased range of attractions that build the international expansion. Theme parks, resorts, and cable networks increased the brand reputation, product portfolio, diversity, and achievements of Walt Disney Company.

The Walt Disney Company’s Financial and Operating Performance in Fiscal Years 2015-2019

The company revenues have increased from $52.5 billion in 2015 to $62.6 billion in 2019. Therefore, the company has raised about $10 billion in its total revenue within the four years. The company has grown its revenue steadily, which means that its financial performance is commendable. This shows that the company has kept the growth pace by exceeding the previous growth years. They have also continued to diversity in their product line to provide entertainment to their consumers (Voigt, Buliga, and Michl, 2017). Much of their operating performance growth has resulted from the acquisition of leading motion picture production companies. For instance, their acquisition of 21^st Century Fox in 2019 has radically boosted their future financial performance.

The acquisition has increased Disney’s impressive media franchise collection, which has brought great financial value to Disney. Combining 21^st Century Fox and Disney has been an increasingly compelling proposition for consumers since it has allowed the company to create high-quality and more appealing content. This has also increased consumer offerings and international presence, which has boosted their financial performance.

Recommendations

To improve the company and increase its shareholder value, Walt Disney should expand in developing countries. Ideally, Disney has a competitive advantage due to the uniqueness of its products. Therefore, they will maintain their competitiveness in the new markets. Market penetration in developing countries will increase their existing consumer base and sales (Amason and Ward, 2020). Walt Disney requires to focus on aggressive advertising, which will boost consumer awareness and increase its revenue in the global entertainment industry. To effectively increase their stakeholder, Walt Disney needs to focus on strategic decisions that increase value and provide satisfactory growth, such as market and product development.

Walt Disney should work more to improve its over-the-top media services. Considerably, in the current digital age, most consumers prefer over-the-top media services to get the content they want through the internet. Walt Disney needs to design a unique content strategy and adapt television marketing tactics to build its OTT audience. These will provide opportunities to gain more audience across different viewers’ behaviors. To lessen the impact of the pandemic on their financial performance, Walt Disney should focus on restructuring their entertainment and media divisions. The company should also focus on a direct consumer strategy. This entails centralizing their media businesses to a single organization for cheaper ad sales and content distribution.

References

Amason, A. C., & Ward, A. (2020). Strategic management: From theory to practice. Routledge.

Voigt, K. I., Buliga, O., & Michl, K. (2017). Making People Happy: The Case of the Walt Disney Company. In Business Model Pioneers (pp. 113-126). Springer, Cham.

Wasko, J. (2020). Understanding Disney: The manufacture of fantasy. John Wiley & Sons.