Chen Yida (Nicole)Student No.:1401213973The Walt Disney Company: The Entertainment King Introduction Walt Disney Company, the world largest entertainment empire, under the lead of once Disney brothers and latter Michael Eisner, has gone through periods of crisis and rebirth, and in the 1990s, has again struggled in a deteriorating status of damaging brand, lacking creativity and most importantly, the limits of its core strategy – synergy.Challenges1. Limits of synergy. With the acquisition of ABC and the development of new businesses, which to a company size boom, it is hard for Eisner and his team to promote synergy in the whole company since culture difference and management complexity makes it hard to integrate. Also, it’s hard to balance the development and avoid overlap in different division and thus lagged its growth.2. Brand damage. Shows and movies involving sensitive issues, including religion, sexual orientation and so on, lead to a damage in the brand image and reputation. Also, the focus of wholesome image rather than contemporary design has led to a competitive disadvantage to its competitors.3. Lack of creativity. Too much inside conflict in Disney culture and divisions has led to heavy internal pressure, which leads to brain drain.AnalysisIn this case, we conduct SWOT analysis and Porter’s 5 Forces Model, since the challenge of the Walt Disney Company challenge is mainly caused by internal management turmoil which leads to failure in allocating internal sources appropriately and strengthening its core capability which is continuous creation of new and popular animation.SWOT AnalysisWe firstly conduct situation analysis to investigate both Disney internal and external environment.vStrengths1. Being a leading entertainment company, Disney has strong assets and financial power, e.g. Disney holds theme park and hotels as fixed asset.2. Strong channel, marketing and network power, e.g. ABC, Disney individual website.3. Loyal fans ranging from kids to adult fans.4. The synergy strategy which affects both the scope and cost of Disney.5. Popular movies and shows which earn large amount of profit, e.g. the ABC TV show Who Wants to Be a Millionaire.vWeaknesses1. Large size due to acquisition of ABC and expansion to other business, which lead to a managerial problem, culture conflict, overlaps, cannibalization are thus occurred.2. Brand image damage because of certain shows and movies involving sensitive issues, which led to boycott and objection.3. Wholesome image of Disney alienates itself from focusing on contemporary design of animation and movie for kids, which led to a lower ranking among kids.4. Lack of creativity, focus too much on cutting the cost and budget, ignore the importance of inside creativity and led to a large brain drain.5. Conflict and culture clash inside culture and management level disagreement lead to large number of executive leaving Disney, failed to provide a stable internal environment for further development.6. Diversification leading to a low capital efficiency, which reflected by the dropping ROE and ROA.7. Movie and animation sector become less competitive with higher budget, larger quantity yet lower box-office per movie.8. Eisner being the leader, after Katzenberg’s leave, takes too much control and focus too much on synergy strategy, which also lead to a series management changes and revenue decline.vOpportunities1. Large overseas market remains to be developed, leaving Disney with huge development space.2. The setup of Disney website, taking advantage of new technology, provides a new platform both for marketing and sell.3. Cutting down of some bloated division enables Disney to cut the cost and manage the group better.4. Refocus on creativity and reshape a harmonious inside culture may lead Disney to sustainable development.vThreats1. Technology development, especially internet technology, lead to a sharp decline in some profitable division, with the representative being Disney’s home video division, which rely on VCR and DVD.2. More fierce completion with Nielson and Time-Warner, ranking only the third among young kids. And competitors from other businesses, such as the portal rivalry forced Disney to shut down the GO.com portal.3. Boycotts and objections from certain communities due to sensitive issues presented in the movies and shows.With SWOT analysis we can see, although Disney still stands as a leader in the entertainment industry, it’s experiencing a hard time due to its over diversification, inside culture clash which lead to management changes, lack of core competency which is original creativity, brain drain. At the same time, competitors have gained power to win over Disney. All this external and internal environment has put Disney into a severe situation.Porter’s 5 Forces ModelTo further analyze the internal environment, we use Porter’s 5 Forces Model。