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1、Chen Yida (Nicole)Student No.:1401213973The Walt Disney Companv： The Entertainment KingIntroductionWalt 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 agai
2、n struggled in a deteriorating status of damaging brand, lacking creativity and most importantly, the limits of its core strategy - synergy.ChallengesLimits 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
3、 to promote synergy in the whole company since culture difference and management complexity makes it hard to integrate. Also, its hard to balance the development and avoid overlap in different division and thus lagged its growth.1. Brand damage. Shows and movies involving sensitive issues, including
4、 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.2. Lack of creativity. Too much inside conflict in Disney culture and divisions has
5、 led to heavy internal pressure, which leads to brain drain.AnalysisIn this case, we conduct SWOT analysis and Porters 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 approp
6、riately 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.StrengthsBeing a leading entertainment company, Disney has strong assets and financi
7、al power, e.g. Disney holds theme park and hotels as fixed asset.1. Strong channel, marketing and network power, e.g. ABC, Disney individual website.2. Loyal fans ranging from kids to adult fans.3. The synergy strategy which affects both the scope and cost of Disney.4. Popular movies and shows which
8、 earn large amount of profit, e.g. the ABC TV show Who Wants to Be a Millionaire.WeaknessesLarge size due to acquisition of ABC and expansion to other business, which lead to a managerial problem, culture conflict, overlaps, cannibalization are thus occurred.1. Brand image damage because of certain
9、shows and movies involving sensitive issues, whichled to boycott and objection.2. 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.3. Lack of creativity, focus too much on cutting the cost and bud
10、get, ignore the importance of inside creativity and led to a large brain drain.4. 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.5. Diversification l
11、eading to a low capital efficiency, which reflected by the dropping ROE and ROA.6. Movie and animation sector become less competitive with higher budget, larger quantity yet lower box-office per movie.7. Eisner being the leader, after Katzenbergs leave, takes too much control and focus too much on s
12、ynergy strategy, which also lead to a series management changes and revenue decline. OpportunitiesLarge overseas market remains to be developed, leaving Disney with huge development space.1. The setup of Disney website, taking advantage of new technology, provides a new platform both for marketing a
13、nd sell.2. Cutting down of some bloated division enables Disney to cut the cost and manage the group better.3. Refocus on creativity and reshape a harmonious inside culture may lead Disney to sustainable development.ThreatsTechnology development, especially internet technology, lead to a sharp decli
14、ne in some profitable division, with the representative being Disneys home video division, which rely on VCR and DVD.1. More fierce completion with Nielson and Time-Warnec ranking only the third among young kids. And competitors from other businesses, such as the portal rivalry forced Disney to shut
15、 down the GO.com portal.2. 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, its experiencing a hard time due to its over diversification, i
16、nside 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.Porters 5 Forces ModelTo further analyze the internal environment, we use Porters 5 Forces Model to get a more detailed view of Disneys competitiveness. B
