A Strategic Business Analysis

Presented by

Table of Contents
Introduction Company Background Purpose of Strategic Management Company Mission Statement Objectives Strategies Internal Audit Strengths Weaknesses Internal Factor Evaluation (IFE) Matrix External Audit Opportunities Threats External Factor Evaluation (EFE) Matrix Strategic Analysis
Strenghts-Weaknesses-Oppurtunities-Threats (SWOT) Matrix

3 3 3 4 4 4 4 4 6 7 7 7 8 10 10
10

Strategic Position and Action Evaluation (SPACE) Matrix Grand Strategy Matrix Internal-External (I-E) Matrix Quantitative Strategic Planning Matrix (QSPM) Recommendations Mission Statement Short-term Goals Long-term Goals Implementation Sources

12 15 15 16 19 19 19 20 20 23

Introduction
Company Background
When brothers Walt and Roy Disney moved to Los Angeles in 1923, they went there to sell their cartoons and animated shorts. One could only dream that their name would one day be synonymous with entertainment worldwide. But then again, that is how The Walt Disney Company has made their fortunes over the last several decades: making dreams come true. The Disney brothers began creating countless cartoons (some successful and others not so much), and in 1928, introduced Mickey Mouse to the world in the animated short, Steamboat Williewidely described as the first animated film to be synchronized with post-produced music. The Mickey Mouse character gained enormous popularity, and Walt and Roy enjoyed incredible success thereafter with feature films both related and unrelated to the Mickey Mouse character. The Walt Disney Company produced several of its animated classics throughout the 1940s such as Pinocchio, Fantasia, Dumbo, and Bambi; and in 1955, Disneyland opened its doors as the Disney brothers first amusement park. In 1966, Walt Disney died leaving Roy as the new President, CEO, and Chairman of the Board of The Walt Disney Company. Walt never had the opportunity to witness his namesake creation (Roy rebranded Disney World as Walt Disney World in honor of his late brother) as Walt Disney World opened five years later on October 1, 1971. Since that first day of October in 71, The Walt Disney Company has expanded exponentially. The Company owns media networks such as ABC, ESPN, the Disney Channels, SOAPnet, and A & E (television networks); ABC Radio and The Radio Disney Network (online and satellite radio station); and Hyperion Books (literary publishing company). The Company has spread its parks across the world to Paris, Hong Kong, and Tokyo and has taken to sea with four Disney ocean liners. The Walt Disney Company continues to grow with a major expansion to Walt Disney World currently underway and several feature films currently in production in the Disney-Pixar Animation Studio (the result of the Companys 2006 acquisition of Pixar Animation Studios.) Though profits have been stagnant for the last two fiscal years, the companys revenue continues to increase.

Purpose of Strategic Management

Strategic management is a management function that consists of three distinct actions. They are (1) formulating, (2) implement, and (3) evaluate cross-functional decisions that enable an organization to achieve its objectives. Strategic management is vital for companies wishing to prosper in such a dynamic world. With globalization at an all time high, the practice of strategic management among a companys top executives (at the very least) is an absolute necessity. Considering that communication is a key to successful strategic management and that the empowering of employees is a great benefit of strategic management, it is recommended that strategic management is implemented at a company-wide level. Simply put: successful, polished, professional companies perform strategic planning. A large percentage of the companies that fail in America each year do not perform strategic planning.

Company Mission Statement

A mission statement defines in a paragraphany entity's reason for existence. It embodies its philosophies, goals, ambitions and [morals]. Any entity that attempts to operate without a mission statement runs the risk of wandering through the world without having the ability to verify that it is on its intended course. www.missionstatements.com. The mission statement can also be defined as a companys statement of purpose. The current mission statement for the Walt Disney Company is: To be the worlds 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.

Objectives
The objectives of a company are the same as a companys goals. When setting goals, an organization is determining what results they expect to achieve in both the short-term and the long-term. What is the goal of this company? Of this division? What do we want to have accomplished within the next year? Within the next five years? Generically, the answers to these questions would be a compiled list of objectives of which a company should strive to obtain. Given the current economic climate, setting objectives (or goal-setting) is difficult. As with every company, The Walt Disney Company should set goals for the company as a whole and along functional lines that pressure the company to greatness yet are obtainable. Measurability should be constantly remembered in setting these objectives, and precise and unambiguous language should be used to eliminate all hints of confusion. The Walt Disney Company does not publish its corporate objectives.

Strategies
Strategies are a companys methods to reaching its established objectives. Just because a company may have a final destination in mind (an objective or goal) doesnt mean that every path to that destination is a good one. After setting strategically sound objectives, it is imperative that strategically sound strategies are generated to provide the means of transportation for said objectives. The courses of action on which an organization decides to embark affects all divisions and aspects of said organization. Strategies should be formulated and implemented only once all internal and external factors are assessed. Only then can a strategy be deemed safe for a company for implementation.

Internal Audit
Strengths
All companies have actions that they perform more than capably. All companies (at least all those that have been around for a period of time) have past successes on which to build. A companys strengths

are those such factors: the positive components of a companys collective portfolio that have made the company better in one way or another. The strengths for The Walt Disney Company are detailed below. A Vast and Diverse Portfolio The Disney brothers began drawing cartoons long before moving to Hollywood. The Missouri natives spent the majority of their lives imagining characters to which to introduce to the world. Along with the Disneys impressive collection of new adaptations of old classics such as Robin Hood, Sleeping Beauty, Peter Pan, and Alice In Wonderland; the Company has created countless characters to star in their feature films. Disneys original characters include Mickey Mouse, Minnie Mouse, Donald Duck, Pluto, Chip & Dale, Simba, Buzz Lightyear, Belle, and Aladdin (to name only a very limited few.) The Walt Disney Companys huge portfolio is the single best strength of the entire organization. Diversification Disney has moved well beyond its cartoon-oriented roots. Though the company is still involved the production of original feature films and other related media (and though the media network division of the Company is still the organizations leading generator of revenue) the company has long since stopped being your typical animation studio or film production company. In 1951, with the opening of Disneys first theme park (Disneyland, in Anaheim, California) the Company made a dramatic shift from a media-oriented company to the broader category of an entertainment-oriented company. In the midst of the rollercoasters and hot dog stands in sunny California, the Company found also a unique market place for consumer products and a chance to entwine and implement the Organizations already impressive portfolio of film characters into the parks attractions. The Walt Disney Company also began launching and purchasing media outlets for which their productions and promotions to air. Disney owns now several media broadcasting networks television as well as several radio stations for terrestrial, satellite, and online hosts. Incredible Customer Service The Walt Disney Company prides itself in many things and rightfully so. If you ask the average person what Disney is known for Mickey Mouse or the castle might quickly be their reply. Ask any business professional, however, and one thing is certain to be heard time and time again. Customer service. Disney demands nothing less than stellar customer service from their employees. If you have never experienced the Disney Difference, I urge you to travel to one of their many theme parks or retail stores worldwide. Their level of customer service takes those who know to look for it back. Former customer service experts and teachers for Disney have written very successful books on the topic and their experiences from the holy grail of customer satisfaction. Acquisition of Pixar Animation Studios In 2006, The Walt Disney Company made an acquisition of Pixar Animation Studios. Until 2006, Pixar had collaborated with Disney on multiple occasions to produce such award winning films such as Toy Story, Finding Nemo, and Monsters, Inc. Because of the partnership involved in these movies, however, Disney had limitations on the rights to use and reuse the characters contained within the films. The Company saw this as a negative. Too, seeing as Disney produces the majority of its films without collaboration or partnership, the Disney-Pixar relationship was an enigma around which to carefully navigate.

In addition, as Disneys traditionally produced animated films (with pen and color artists) being left in the shadows in comparison to the progressively produced animated films (with CGI and digital artwork), it seemed like the best approach that could be taken in order to catch up with the times.

Weaknesses
With the fact that all companies have actions that they perform more than capably, the fact also arises that there are some internal factors that are of a negative consequence. Even companies as successful as The Walt Disney Company have attributes and characteristics that are not at all positive. A companys weaknesses are those such factors: the negative components of a companys collective portfolio that have made the company worse in one way or another. The weaknesses for The Walt Disney Company are detailed below. The Constant Need of Successful Creative Material Any analyst should be quick in stating that Disney is wonderful at generating successful creative materialwhich they are. The weakness associated with this factor, however, is of great importance. The key words in this factor are constant need. Though The Walt Disney Company is possibly the worlds greatest generator of successful creative material, the constant need to churn out successful film after successful film and wonderful attraction after wonderful attraction is daunting at the very least. The fact that there could be a flop at the box office, or a ride that is negatively reviewed is terrifying for the Company that prides itself in its perfection. High (and Increasing) Cost of Operation Unfortunately for the Disney Company, their industry is one with astronomical costs and expenses. Needless to say, it is quite expensive to produce or successful feature film or build a theme park. With recently diminishing profits and the economic recession, the companys realization to the increasing costs of doing business has been mundane. This weakness is not to be confused with high barriers for entry, which might be viewed as an opportunity. That would be considered an external factor. From an internal point of view, however, the high (and increasing) costs to operate are doubtlessly a weakness for The Walt Disney Company. Lack of Developmental Property The Walt Disney Company Parks and Resorts Division has expanded drastically over the last three decades. With the first international park being established in Tokyo in 1983, the Paris, Hong Kong, and Shanghai parks began to fall in place shortly after. At the Disney World Resort in Orlando, Florida, the Company owns several square miles of land that will surely be apportioned for park editions in the longterm. Outside of the extra property in Florida, however, The Walt Disney Company has little acreage elsewhere. Future developments in Californias Disneyland Resort are very unlikely due to the rapid pace at which property was bought in the forties when the new theme park project hit the news, limiting Disneys land around the resort. Lack of developmental property within a company that survives due to its innovation is a serious issue and a strong internal weakness of this organization. Lagging Consumer Products Revenue The consumer products division of The Walt Disney Company is handedly the smallest division within the organization. While revenues continue to trend upward for the division, they do so at a slower rate to the other Disney divisions, proportionally. Consumer products should be a division of the Company that performs, proportionately, as well as the other three divisions of the company.

If a consumer watches and really thoroughly enjoys Disneys new studio release, Cars 2, than it is safe to say that the viewer might also want a Cars 2 t-shirt or action figure. The same is true for the media networks or parks and resorts divisions: a consumer who has experienced the products of any division of the Organization should be prone to purchase consumer products related to such products. The fact that the increasing revenue of the consumer products division is doing so at a slower rate of the other divisions shows a lack of marketing and promotion put on the division.

Internal Factor Evaluation (IFE) Matrix

The Internal Factor Evaluation (IFE) Matrix is an Input State (State 1) strategic management tool that that helps with the summarization and evaluation of the major strengths and weaknesses in the functional areas of an organization. Internal factors (namely strengths and weaknesses) are compiled, given weights as it relates their relative importance, and assigned a rating. The weighted scores [weight (x) rating] are totaled to comprise a total weighted score for the IFE Matrix. The figures generated in the IFE Matrix are used in a multitude of other strategic management tools and matrices. The IFE Matrix for The Walt Disney Company is included below.

External Audit
Opportunities
With the internal factors detailed above, an organization has the ability (if not responsibility) to utilize its strengths and improve on its weaknesses. They are controllable factorsattributes than can be altered. With the external audit, we discuss factors that are not controllable and are focused outside the four walls of a corporation. The first such component of the external audit are opportunities. Opportunities make up the one portion of the external factors to be detailed in this analysis. These opportunities are factors that provide a chance for an organization to make positive changes. These factors can be governmental, environmental, economic, or legal (among other descriptors.) The opportunities for The Walt Disney Company are detailed below.

Increasing Impact in the Music Industry Disneys original shows that air on The Disney Channels are crammed full of child starschildren and young adults from ages 10-18. These child stars, however, are not handpicked just for their acting ability. The Walt Disney Company has, for some time, selected actors with the dual talents, namely singing and dancing. With the meteoric rise of television programs such as American Idol, and Americas Got Talent, The Disney Company has made a point to hire actors with multifaceted abilities. As a result, Disney has seen huge success with films such as High School Musical and Camp Rock; and stars such as Miley Cyrus/Hannah Montana, The Jonas Brothers, and Selena Gomez. The idea that the music industry is ripe and ready for Disney to take an even larger plunge is the single best opportunity of the entire Organization. Expansion into Untapped Geographical Areas One of the weaknesses of The Walt Disney Company is the lack of developmental property, which is discussed in detail above. The idea of expanding into untapped geographical areas is a perfect cure for such weaknesses. Expanding into new and exciting areas of the world is a wonderful opportunity. Disneys currently standing parks and resorts (in Florida, California, Tokyo, Paris, Hong Kong, and Shanghai) are all located in areas of great population. The opportunity being discussed here is placing parks and resorts in new areas away from population mainstreams. Disney should look into planting parks and attractions in worldwide tourist attractions. For example, the native population in Hawaii or the Jamaica is not staggering by any means, but the tourist descends on these destinations like in droves. The idea of planting a resort in this type of area would provide a great opportunity for the Company. Expand Radio Operations This opportunity can (and should) be looked at individually. It can also be coupled with the first listed opportunity, increasing impact in the music industry, so that this opportunity is somewhat of a step #2 to opportunity #1. Disney currently owns and operates ABC Radio and Radio Disney, two radio stations that broadcast content via satellite, terrestrial, and online formats. With satellite and online radio exponentially increasing their popularity, now is a better time than any to utilize Disneys entertainment portfolio to make a larger impact across all of radio. Reuse of Past Portfolio A strength of The Walt Disney Company (was stated above) is its vast and diverse portfolio. An opportunity of Disneys, then, would be taking advantage of said portfolio. This option has been utilized in the past, but a continued use of past characters would serve as a cash cow for the Company. Mickey Mouse celebrated his 83rd birthday this year, and is still being introduced to children worldwide everyday in the form of Mickey Mouse Club House, a childrens television program on the Disney Junior portion of The Disney Channels. Mickey isnt the only Disney character worth revisiting, though. There are literally hundreds of characters that would garner their own programs, new feature films, or theme park attractions. This reuse of a wonderful portfolio would generate increased revenue with lesser expenses associated with it.

Threats
The second components of the external audit are threatsdirect opposite of an organizations opportunities. Just like organizations should take advantage of their opportunities, threats are also equally advantageous for a company if they are handled correctly. Threats make up the one portion of the external factors to be detailed in this analysis. These threats are factors that would otherwise be 8

considered a negative aspect of the business climate, but can also provide a chance for an organization to make positive improvements by utilizing these very situations. Just like with opportunities, these factors can be governmental, environmental, economic, or legal (among other descriptors.) The threats for The Walt Disney Company are detailed below. Struggling Global Economy It seems almost unnecessary to list the struggling economy as a major threat to any worldwide organization. The slowly recovering economy has begun to feel like a permanent part of our business landscape. Naturally though, like an elephant in the room, it continually represents the largest factor in the landscape. The economic climate too, when compiled with a company who is leisure-driven and produces nonessential products, profits drag even more than normal, as is clearly evident by the Companys most recent income statement. The struggling global economy represents the largest threat to the entire Organization. Rapid Pace of Changing Media and Technology The rate at which media and technology has changed in the last in the last 15 years is unprecedented. Since widespread availability of the Internet occurred in the late 1990s, media and technological advances have bred more media and technological advances. While that is wonderful news for the consumer, it leaves companies struggling to stay on top of changes occurring at an almost daily rateso much so that often times technological departments have been bolstered just to keep organizations competitive on the online. There is a positive side to this threat of ever changing media platforms, however. The company that stays on abreast of these quickly changing components of business is king. With new media platforms such as Facebook and Twitter, it seems that the company that best takes advantage of these forums is at the forefront of pop cultureright where an entertainment corporation would hope to be. Competition with Universal Orlando When the Disney brothers parked a theme right in the middle of Florida swampland in 1971, they were the only show in town. Orlando was not the town we know today. Walt and Roy selected Orlando simply because it met many of their requirements: pretty, warm weather for the majority of the year, property in abundance, cheap per acre land costs. The Disney brothers bought over forty square miles and set to work building a second theme park to the original Disneyland in California. Walt Disney World anchored the Magic Kingdom Park in 1971 and EPCOT in 1982. Around this time The Walt Disney Company learned that Universal Studios planned to capitalize on the droves of tourist Disney was bringing to central Florida by planting a rival park in Orlando as well centered on movies and film. Disney beat Universal to the punch and opened what is now Disneys Hollywood Studios in 1989. The two companies have been in heated competition since that time with it culminating with Universal opening their Wizarding World of Harry Potter in 2010, an addition that Disney desperately wanted build within their walls. The competition is one though that can be healthy for The Walt Disney Company if handled correctly, however. Universal Orlandos two parks could not possibly supply enough content to guests wishing to stay a full weekthe length of time Disney recommends to see their four Orlando theme parks. The two parks owned and operated by Universal Orlando are just enough to lure additional guests to Florida but not quite enough to keep guests on their property for much more than a few days. Unionized Work Force Honest corporate executives would almost always give you the answer that unionized workforces are

something that (if they do not have one) are terrified of or (if they do have one) absolutely hate dealing with. This factor is considered a threat not a weakness because it is, in fact, external in the sense that Disney cannot control the workforce that they employ. Disney is considered by many employees, however, as a wonderful place to work and most are very happy with their employment. The financial stain on the company to suffice union organizers, however, is always a dangerone that is a definite threat to any corporation.

External Factor Evaluation (EFE) Matrix

The External Factor Evaluation (EFE) Matrix is much like the IFE Matrix in that it is an Input State (State 1) strategic management tool that that helps with the summarization and evaluation of the major opportunities and threats in the functional areas of an organization. External factors (namely opportunities and threats) are compiled, given weights as it relates their relative importance, and assigned a rating relative to an organizations response to each factor. The weighted scores [weight (x) rating] are totaled to comprise a total weighted score for the EFE Matrix. The figures generated in the EFE Matrix are used (in conjunction with the figures from the IFE Matrix) in a multitude of other strategic management tools and matrices. The EFE Matrix for The Walt Disney Company is included below.

Strategic Analysis
Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis is a Matching Stage (Stage #2) strategic management tool that affords analysts the opportunity to match internal and external factors for strategy development. The idea is that positive advances can be made by taking advantages of internal factors and having proper responses to external ones. The SWOT Matrix matches Strengths and Weaknesses with Opportunities or Threats. Thus four possible types of strategies are possible: StrengthOpportunities Strategies (SO Strategies), Weaknesses-Opportunity Strategies (WO Strategies), StrengthThreats (ST Strategies), and lastly Weakness-Threats Strategies (WT Strategies). These generic strategies will be discussed later with the precise strategies developed for The Walt Disney Company.

10

The SWOT Matrix for The Walt Disney Company is included below.

SO Strategies SO Strategies are strategies that utilize an organizations internal strengths to take of advantage of external opportunities. Through the SWOT Matrix, three distinct SO Strategies have been developed by for The Walt Disney Company. The first SO Strategy for The Walt Disney Company is the launching of musicians careers that were/are affiliated with past/current Disney programming. Disneys vast and diverse portfolio of television programs and films has been stocked with countless stars with great vocal talent. With the opportunity listed of increasing impact in the music industry, the two factors line up perfectly to make a push musically using current (or past) Disney stars. The second SO Strategy for The Walt Disney Company is using former Pixar characters and films as springboards for new but related content. Using Disneys portfolio and the opportunity of using new adaptations, sequels, and prequels of past material, the two factors gel easily to create a great new initiative for both the production and parks/resorts divisions. The last SO Strategy for The Walt Disney Company is creating additional channels for satellite radio with content-filled programming. The further diversification within the Company and the expansion of radio operations (which is directly tied to furthering music activity) falls in line closely to the first SO Strategy developed for the Disney. The idea of having more stations on which to put their original content performed by Disney stars under contract with the Company is an exceptional idea to boost Disneys musical initiative. WO Strategies WO Strategies are strategies that take advantage of external opportunities to improve an organizations internal weaknesses. Through the SWOT Matrix, two distinct SO Strategies have been developed by for The Walt Disney Company. The first WO Strategy for The Walt Disney Company is to rerelease past classic films on DVD as new editions or with new special features. This is a cash cow option for the company as profits slip and operating costs increase. The rerelease of classic films with no editions or with new special features is a cheap way to bolster revenues and make use of the Companys wonderful past portfolio.

11

The second WO Strategy for The Walt Disney Company is to purchase and build parks in emerging geographical areas rather than older, expensive areas. When looking to expand, The Walt Disney Company should look to new, emerging economies in which to plant and foster new parks and initiatives. Disney should consider emerging markets such as India, Brazil, and South Korea to cut costs and beat the crowds, in a sense. Where emerging markets develop so does the population. If Disney can plant parks in these areas before the growth stabilizes, then they have made a sound financial decision. ST Strategies ST Strategies are strategies that utilize an organizations internal strengths to reduce the impact of external threats. Through the SWOT Matrix, two distinct SO Strategies have been developed by for The Walt Disney Company. The first ST Strategy for The Walt Disney Company is to push cheaper entertainment options to consumers rather than high priced options. Seeing as consumers are experiencing the poor economy just like members of the business communities, offering cheaper-priced entertainment options would be a sure way to include the struggling consumer in the consumption of entertainment products. The second ST Strategy for The Walt Disney Company is to boost quality of the parks and resorts not by bettering the product, but by serving the customer better than the competitor does. Resorts dont need an extra pool or five arcades rather than three to be more successful than their competition. To beat the competition, simply out serve them. Make customer happier by focusing on customer service. More often than not, the quality of a product can be raised drastically when coupled with incredible customer service. WT Strategies WT Strategies are defensive strategies that reduce internal weaknesses and avoid external threats. Through the SWOT Matrix, two distinct WT Strategies have been developed by for The Walt Disney Company. The first WT Strategy for The Walt Disney Company is to research and consider lower budget entertainment options rather than pricier choices. Because of increasing costs of operation, Disney needs to consider less expensive options. Disney is known for their excellence, not their sheer size. That being said, the Company should consider building a water park in Chicago or a small amusement park in Kansas City. The savings would be great for the company and it would open its doors to areas of the country that could access the parks without travelling, causing currently economically-struggling citizens to visit the parks in greater numbers than if the parks stayed hundreds of miles away in their sunny Floridian and Californian homes. The second WT Strategy for The Walt Disney Company is to demand nothing less than exceptional service from employees. What is so advantageous about demanding exceptional service is that it costs no more than poor service. In a sense, its free. So long Disney is in the entertainment industry, the Company will forever have customer-guest interactions. The question is why not make these interactions as memorable as the rollercoasters guests have come to ride. Obviously (as evident from Strength #2), Disney has done a wonderful job at serving guests for many years, but no one is perfect. Customer serviceas good as it already iscould be made better, and just like Disney magic, you have increased the quality of your park with spending a dime.

Strategic Position and Action Evaluation (SPACE) Matrix

Like the SWOT Matrix, The Strategic Position and Action Evaluation (SPACE) Matrix is another Matching Stage (Stage #2) strategic management tool. The SPACE Matrix is a four-quadrant graphical axis that indicates whether an organization should pursue conservative, aggressive, defensive, or

12

competitive strategic strategies. The graph is charted based on the average scores of ratings given to four types positions, namely, the Organizations Financial Position (FP), Stability Position (SP), Competitive Position (CP), and Industry Position (IP). Financial Position (FP) The financial position for The Walt Disney Company scored an averaged rating 3.5 out or a possible 7 (with 7 being the best possible score and 1 being the worst possible score.) Its middle-of-the-road rating can mostly be attributed to the Companys marginal increase in the current ratio from 2007 to 2008 and a meager 12% increase in gross revenues in the last three reported years. A company of Disneys stature should arguably have better financial ratios. The economy, no doubt, is a major reason the Company has underperformed financially over the last few years, but sufficient strategic planning should allow us to minimize such threats. Competitive Position (CP) The competitive position of The Walt Disney Company is nothing short of stellar. The Company scored an average rating of -1.75 our of 7 (with -1 being the best possible score and -7 being the worst possible score.) The fact that Disneys product life cycle has literally been around for almost a century is very significant in determining the Companys competitive position. Couple with that the Organizations almost cult-like fan base and the sheer size of the Company, and The Walt Disney Company has scored an almost perfect score in the competitive position test. Stability Position (SP) The stability position for The Walt Disney Company, much like their financial position, is middle-of-theroad. The Company garnered a high score when focusing on the barriers to entry associated with potential competitors, but generated a low rating when accessing the risk of such a high-risk industry. When the fact that fresh and successful content is needed regularly but is priced at industry rates, the stagnancy of the stability position rating is expected. In the end, The Walt Disney Company scored an average rating of -3.25 our of -7 (with -1 being the best possible score and -7 being the worst possible score.) Industry Position (IP) The industry position for The Walt Disney Company mirrors its competitive position in that it reflects a high score. The Company earned high scores for the reusing of its past portfolio and the fact that the ease of entry into the entertainment industry is difficult to say the least. When one considers the fact that the Companys leverage position has increased in the last year, a great score is both what is deserved and what was given. In the end, The Walt Disney Company scored an average rating of 5.25 out of 7 (with 7 being the best possible score and 1 being the worst possible score.) The SPACE Matrix is included below.

13

14

This graph shows that The Walt Disney Company falls within the first quadrant of the SPACE Matrix Graph. This indicates that the Company should pursue aggressive profiles.

Grand Strategy Matrix

The Grand Strategy Matrix is another Matching Stage (Stage #2) strategic management tool designed to assist analysts in developing alternative strategies. The Grand Strategy Matrix is position on a fourquadrant graph and is very simply illustrated. The y-axis of the graph represents market growth, with positive y -figures representing rapid market growth and negative y- figures representing slow market growth. Conversely, the x-axis represents competitive position, with positive x- figures representing strong competitive position and negative x- figures representing weak competitive position. All companies will fall somewhere on the graph and, once placed, can make decisions based on the recommended strategies for the company. The Walt Disney Company falls within Quadrant I for simple reasons. The company is strong within their markets and growing stronger. Too, the competitive position of The Walt Disney Company is nothing short of stellar, as stated in the paragraphs detailing the SPACE Matrix. Because of Disneys past success, current positions, and expectantly spectacular future, the Organization falls easily within the first quadrant on the Grand Strategy Matrix. The Grand Strategy Matrix for The Walt Disney Company is included below.

Internal-External (I-E) Matrix

The Internal-External (I-E) Matrix is somewhat of a continuation and combination on and of the IFE and EFE Matrices. The I-E Matrix pictures nine boxes that represented three quadrants. Quadrants I, II, and IV represent the Grow and Build section. Quadrants III, V, and VII represent the Hold and Maintain

15

section. Quadrants VI, VIII, and IX represent the Harvest or Divest section. The total weighted score from the IFE Matrix is graphed on the x-axis of the I-E Matrix, and the total weighted score from the EFE Matrix is graphed on the y-axis of the I-E Matrix. The I-E Matrix for The Walt Disney Company is included below.

The I-E Matrix generated The Walt Disney Companys coordinates on the matrix as in Quadrant IV. This means that Disney should look to Grow and Build. The generic strategies recommended for this section include market penetration mark development, and product development. These generic strategies agree with the strategies developed by using the SPACE and Grand Strategy Matrices.

Quantitative Strategy Planning Matrix (QSPM)

The Quantitative Strategy Planning Matrix (QSPM) is the only Decision Stage (Stage #3) to be used in the analysis of The Walt Disney Company. The QSPM is a strategic management tool used to determine the attractiveness of the strategies formulated for The Walt Disney Company in the Matching Stage (Stage #2) tools as they relate to the internal and external factors compiled in earlier matrices. The intent with the QSPM is that not all derived strategies are feasible for The Walt Disney Company, as they are generic strategies that have not been evaluated against the Organizations specific internal and external factors. The QSPM for The Walt Disney Company is included below.

16

17

18

Recommendations
Mission Statement
The current Mission Statement for The Walt Disney Company is listed below. To be the worlds 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. Though the Companys current Mission Statement is adequate, there are a few components of the current Mission Statement that were neglected. Firstly, Disney makes no mention of their customers. An organization must never loose focus on their customer, seeing as without the customer business ceases. In the altered Mission Statement, we have made note of to whom The Walt Disney Company is selling their products. The remaining neglected components of a sufficient Mission Statement are corporate philosophy, concern for public image, and concern for employees. All of the neglected components of a successful Mission Statement were corrected. The new Mission Statement for The Walt Disney Company should read as follows: To produce and provide entertainment and information to all citizens of the world, regardless of ages. Using our portfolio 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, doing so responsibly as it relates to our stakeholders and our world.

Short-Term Goals
Short-term goals are considered goals achievable within a years time. After completing and analyzing the several strategic management tools and matrices contained within this analysis, the following shortterm goals have been recommended for The Walt Disney Company: Rerelease past Disney classics to DVD as special editions or with new special features. This goal is one that could without question be completed in a years time. Too, this goal is a cash cow of sorts for the companythe products are already produced and completed so that a marketing push would be the only serious movement by the company to get this cheap option underway and a success. Boost customer service in the parks as a way of besting competition without increasing expenses. The great thing about exceptional service is that it is no more expensive than adequate service. Already in place is a series of managers that supervise Disney employees who have direct contact with guests. This goal is as simple as developing a new standard for customer service and ensure that managers implement them to perfection. If an employee, then, has a negative attitude toward a guest, either the employee needs reprimanding because they know the customer service standards and are not living up to them or they are his/her direct supervisor needs reprimanding because the new standards were not properly explained. This new (and almost free) goal is a sure way to increase vacationing experiences with all of the Companys guests.

19

 More heavily market cheaper entertainment options rather than pricier choices. In times of economic difficulty for all members of our global economy, a $5,000 weeklong Walt Disney World Vacation might not be in the budget. Thus is the reasoning behind this short-term goal. The Walt Disney Company should aim marketing dollars at cheaper entertainment options rather than pricier ones with the idea of involving more individuals in the revenue generating process. Much like the lowering taxes and closing loopholes argument, the idea would bring more people out of the woodwork in which to purchase Disney products.

Long-Term Goals
Long-term goals are goals considered unachievable within a years time. After completing and analyzing the several strategic management tools and matrices contained within this analysis, the following longterm goals have been recommended for The Walt Disney Company: Develop current Disney Channel actors into musicians with their multitalented abilities. In a time where the American Idol and Americas Got Talent television programs are at the forefront of pop culture, now is as good as time as any for The Walt Disney Company to develop their actors into music stars as well. Disney has had success with this in the past, but an increased focus should be made on the goal to drive the Company into the music industry as a main player rather than just a novelty act. Place increasing focus on radio channels and programming. As a follow up to the above listed longterm goal, The Walt Disney Company should look for every outlet on which to feature the music of their new music stars, and what better way to manage that than to own radio channels and control the programming on those channels. Much like Disney has done with The Disney Channels and ABC, the Company does not worry about what station will air the shows that their studios have producedthe Company owns their own channels on which to show their content. Plant cheaper entertainment options in smaller markets and emerging economies. The Walt Disney Company is done a fantastic job of placing their parks and resorts where the masses are. California, Florida, Tokyo, Paris, Hong Kong, and Shanghai are all points on the global with higher than normal populations. This long-term goal suggests that the Company look at smaller markets in which to place cheaper entertainment options such a solitary water park, one amusement park, or a single resort. A Disney-quality water park in Indianapolis would surely draw considerable more people than if the consumers living in that area had to fly to Anaheim for their summer vacation. Cheaper entertainment options in emerging markets too (such as Brazil, India, and South Korea) should be examined too, especially as The Walt Disney Company currently has no footing whatsoever in South America.

Implementation
The corporate structure of The Walt Disney Company is comprised of four divisions, Disney Consumer Products, Studio Entertainment, Parks and Resorts, and Media Networks Broadcasting. Each division must implement the new long- and short-term goals appropriately or the goals will be ineffective and unsuccessful. Careful attention should be paid to each division functionally as it moves to implement the recommended goals. Parks and Resorts The Walt Disney Company Parks and Resorts division will contribute heavily in the implementation of

20

the recommended goals. Two of the recommended goals (one short-term goal and one long-term goal) deal almost exclusively with Disneys parks and resorts. The short-term goal associated with the Parks and Resorts division is to boost customer service in the parks as a way of besting competition without increasing expenses. The Parks and Resorts department must improve on their admittedly already stellar customer service. Nothing is perfect, however, and in this case; a little tweaking of corporate service standards and customer service expectations is all that would be necessary to bolster guests experiences with just a little added dose of Disney magic. Secondly, the long-term goal associated with the Parks and Resorts departments is to plant cheaper entertainment options in smaller markets and emerging economies. As stated before, The Walt Disney Company has made tremendous use of populated areas. Their current parks sit in some of the most populated areas on the globe. This long-term initiative, however, abandons the strategy that has worked so well for the Company in the past. This long-term goal recommends The Walt Disney Company plant smaller, less expensive parks in smaller markets and emerging economies. Building these parks and resorts in less expensive areas saves money for the Company and opens Disney parks to individuals who may never have had an opportunity to travel to one of the Organizations major parks. Media Networks Broadcasting The Walt Disney Company Media Networks Broadcasting division has a major role forward progression and diversification of the Company. To place increasing focus on radio channels and programming and to develop current Disney Channel actors into musicians with their multitalented abilities are the two long-term goals directly associated with this division. The Media Networks Broadcasting division will be the division solely responsible for the expansion of Disneys radio initiative as well as the promotion of the new corporately backed musicians. The music and radio content will require a home, and the Media Networks Broadcasting will provide the source of the Companys new programming and music. If The Walt Disney Company is to make a successful push to bolster their standings in the music and radio industry, the Media Networks Broadcasting division must be successful in getting the Companys new content on the airwaves. Studio Entertainment The Walt Disney Company Studio Entertainment division, as always, has the monumental task of creating the content to be used by all other divisions. All other divisions of the Company rely on the Studio Entertainment division to supply something to be broadcasted, made into a thrill ride, or sold as a consumer product. Without the Studio Entertainment division creating fresh and successful content, The Walt Disney Company becomes immediately stagnant. With the recommended goals, the same is true once again. Much of the recommended courses of action for The Walt Disney Company presented in this analysis deal with the Company becoming a bigger player in the music industry. This cannot happen without the Studio Entertainment division producing quality music. To develop current Disney Channel actors into musicians with their multitalented abilities is easier said than done. The division must take Disneys brightest and best stars into the studio to create music that will be loved by their target markets. The Studio Entertainment department can effectively make or break nearly the entirety of the recommended goals in this analysis.

21

Disney Consumer Products The Walt Disney Company Consumer Products Division is the smallest division of the Company by far, both in terms of size and of revenue generated. The Disney Consumer Products Division has a serious advantage, however. This division is a cash cow for the company, effectively generating few costs but incurring somewhat sizeable revenues. The Studio Entertainment Division produced the new Toy Story 3 movie; the Disney Consumer Products Division must only sale the finished product. The Parks and Resorts Division is the division that spent millions to create The Rockin Roller Coaster: Starring Aerosmith; The Disney Consumer Products Division must only sale the t-shirts depicting its image. The short-term goal associated with The Disney Consumer Products Division, to rerelease past Disney classics to DVD as special editions or with new special features, is one that can generated quite a bit of revenue with few expenses being incurred, especially considering that there are little-to-no production costs associated with the new releases. The division should bolster the Companys financial standing by providing these revenue generating, inexpensive actions.

22

Sources
David, F. (2010). Strategic management: concepts and cases. Boston: Prentice Hall. The walt disney company and affiliated companies - company history. (n.d.). Retrieved from http://corporate.disney.go.com/corporate/complete_history.html

23