Question 1
The strategic management model that will be used within a company involves several steps and processes. Walt Disney Company had to follow these procedures before adopting a specific strategy. A strategy has to be formulated after identifying the goals that a company aims to achieve. A feasibility study is then conducted to assess the applicability of the strategy as well as compatibility with the company. A mission and vision is then obtained and this will assist the company to know the target. Assessment of its viability to address the problem is conducted which is both on internal and external level. The strategy is then implemented and monitored to see whether its outcome will address the issues that led to its creation. The feasibility study and assessment process requires a human resource as it is more engaging and requires skilled experts in the field. The company’s financial obligations are assessed to evaluate whether the company can be able to fund the implementation phase of the strategy.
Question 2:
IFE Matrix
Walt Disney Company employs certain strategies that have enabled it to perform outstandingly in its industry. These strategies are meant to ensure the company meets its targets thus increasing its strengths and improving the company’s weaknesses. Walt Disney has been able to acquire several entertainment industries like Pixar, ESPN, ABC, Marvel, Lucasfilms and star wars franchise. These have enabled the company to venture into all entertainment sectors making them control the entertainment industry. This acquisition strategy enables it to command effectively the market as well as continue generating large amounts of revenues.
The company adopts technology as it advances and as the world technological advances occur so as to provide high quality contents and broadcasts. This strategy enables it to offer their services in a convenient and efficient manner. This increases the customer’s loyalty to the company’s products and services hence making it record consistent levels of revenue. Their close relationship with customers and their increase loyalty is also enhanced by the company’s strategy of developing and continuous growth of Walt Disney’s brand all over the world in a unique admirable manner.
The strategies that the company adopts also enable it to improve its weaknesses. Strategies like venturing into different regions and markets in the world as well as acquiring entertainment and broadcasting industries. In India, UTV was acquired by Walt Disney Company which enabled it to meet its market demand as well as the preferences and tastes of its locals. The acquisitions act regulates and chooses the entertainment that best suits the region.
High costs of operation that are incurred by the company are often offset by its subsidiary ventures which have been able to generate huge amounts of revenue for the company. The ventures and the competitive edge of the company enables it to have large profits and revenues that adequately offset the expenses. Walt Disney has also employed highly qualified personnel who are characterized with integrity and innovativeness. These personnel, especially the IT department, enable the company to advance concurrently with the advances made in technology. The changes in technology do not affect its operations much.
It is unfortunate that the net income and revenue of the company can be highly affected by the economic conditions prevalent in the region it is operating. This has made the company opt to continue venturing into many regions in various countries rather than concentrating its operations in one region. There is a high possibility that economic meltdown will not affect the countries at the same time or equally hence this strategy acts as a hedge against changes in the economic conditions.
As much as the company faces competition from other companies that operate in the same industry, its control of market due to large economies of scale and revenue base enable it have adequate stand and a competitive edge over its competitors. Its large revenue enables it to offer competitive remuneration and incentives to its employees hence enabling it to acquire highly skilled personnel from the public. This element ensures that the competitors do not have a great impact on the business operations of the company.
Walt Disney’s strategic model is placed in a manner that conforms to the ethical and social responsibility framework. It has been able to consider certain values before effecting and implementing its strategic model. The company has numerous operations and requires highly skilled personnel from the labor market. The company, therefore, ensures that it offers reasonable, competitive remuneration and incentive packages so as not to exploit the human resources it has while it continues to generate large revenues.
Question 3
My thoughts on the strategies being perused by Disney in 2013
Any company needs to ensure that its foundation rests on solid ground before they can think of any moves to grow or make any profits. Walt Disney positioned itself as a very visionary developer that came up with new ways to create new cartoons.
In the fall of 2013, Disney unleashed its new strategy branded “the magic Bracelets”; a strategy geared towards making Disney lovers spend more cash at Disney world. During a conference organized by the Walt Disney company, the Chief finance Officer (CFO) Jay Rasulo explained the rationale behind the creative new technology named My magic +.
In the normal industry, the technology would be referred to as the Vacation management system while others called it a RFID bracelet that comes with an attached credit card. The new technology product would act as a theme park ticket and at the same time as a room key to the hotels accommodation services. The card would also be used by the management to their advantage. For instance, the product enables Disney to closely monitor the customers’ park activities and record such data for their use.
The technology, which is set to be implemented within the year 2013, would assist improve the number of visits by customers and most importantly raise the revenue stakes. A whopping one billion dollars has gone into investing in this marvelous technology and all the management can hope for is its success.
In my opinion, this new technology would be a wise move by Disney management in a bid to increase its revenues. The ability of to track customers’ usage of Disney’s park would assist the management to improve their understanding of the actual needs of the consumers. This would enable them develop strategies to meet such needs and offer quality services that would be customer driven as opposed to profit oriented.
The fancy technology would enable management to compel customers to spend more while at Disneyland. The multipurpose bracelet ensures the customers use it for different purposes so that they have it on them at all times. At the same time the attached credit card ensures the customer spend without limits while visiting Disneyland
Question 4
SWOT matrix
The nine cell matrix simply constitutes of a modified traditional four cell matrix. The nine cell matrix in addition includes strategies for ensuring an improvement in the firm’s position besides outlining the main weaknesses opportunities and threats. The matrix creation entails four distinct steps. The first step entails creating the four S-W-O-T set just like in the traditional matrix i.e.
- Strengths: the company core competencies’ list
- Weaknesses: Companies core weaknesses
- Opportunities: All the external opportunities are listed
- Threats: external threat the firm faces
The next step in formulating a SWOT matrix would be to match combinations of external factors against internal factors i.e.
- S-O strategies: Explains how the firms core competencies could help achieve competitive advantage
- S-T strategies: Shows how the firm’s competencies should reduce external threats.
- W-O strategies: Shows how the firm could mitigate its weakness and minimize threat simultaneously
- W-T strategies: tell how the firm through defensive mean could minimize weakness and avoid threat at the same time.
Internal strengths: Disney owns the most popular channels in cable television network at ESPN. Disney owns two channels: the Disney channel and ABC family. The popularity of its channels attracts huge advertising revenues thus improving its operating income by a comfortable margin.
In the recent past Disney has been able to invest in new parks, vocational properties and new resorts. The firm incurred capital expenditures of about three billion dollars in the year 2012. Due to this investment, profits seem to be rising due to the new facilities in Hong Kong and Aulani.
With regards to internal weaknesses; an emergence of the general trend of dumping traditional cable television to give way to new forms of media, has seen Disney’s cable channel ABC lose its viewership and now ranks third after CBS and Comcast.
Another internal weakness would be the declining DVD market. In the 2012 fiscal year, Disney’s entertainment revenues declined by a margin of 9%. The proliferation of Small DVD kiosks could be a major cause of this unprecedented decline in DVD sales. The home entertainment docket provided 5% of the entire revenue in 2012.
Opportunities:
Disney recently spent a whopping four billion dollars to buy lucasfilm. Lucas’s famous film the Avengers is set to encourage and bring about more blockbuster movies.
Another opportunity would be the international cable ESPN that would help popularize Disney Entertainment. Due to the possibility of broadcasting in over 35 languages, Disney channel is to reap more in profits.
Threats
New media appearances in the entertainment business make Disney less profitable. Disney in fact made a move to downscale its video game program yet the gaming experience was meant to improve consumer share of attention.
The strategies that could be adopted from the SWOT analysis include: S-O; Since Disney channel is the most popular cable TV, the firm could maximize on commercials run on the channel in a bid to gain an edge in the competitive market. With regards to W-O strategies, Disney should engage in through research and development to alleviate the weaknesses and neutralize threats. S-T; the firm should reduce the cost of video gaming instead of down scaling since they have good capital base to absorb small losses momentarily and retain customers. W-T; Disney should start on a thorough product promotion campaign to reduce competition and overshadow new market entries by other conglomerates firms.
Question 5:
As much as it targets to increase its revenues and net income each financial year, it ensures that it participates in various charities and allocates considerable amounts of cash to the corporate responsibility sector. It ensures that ethical issues are addressed and that the company maintains a good relationship with its community. It has placed its strategies in a manner that ethics and virtues are maintained and that its social responsibility to its employees, government and the community is upheld.
References
http://www.theatlantic.com/business/archive/2013/05/disneys-1-billion-strategy-to-make-you-spend-more-money-at-disney-world-is-magic-bracelets/275679/
http://beta.fool.com/dchurchwell/2012/12/31/swot-analysis-walt-disney-co/20189/
