“ Language of the Course “
The “ Language of the Course “ is extremely important. It demonstrates that you are able to grasp the concepts and apply them appropriately. Therefore,
Your written and oral presentation should incorporate as many “ key concepts “ from the Chapters we cover throughout the course. A partial list of terms are posted in the Glossary of Terms under Syllabus. This list is limited to Chapters 1-4. Please refer back to the text for terms from Chapters 5-7. Your grade for this assignment will depend on how well you integrate these terms into your final project.
Your oral defense of your case on the designated day per the Syllabus will involve a visual presentation. No note cards will be allowed. One person from each team will be asked to present their slides in the class the day of the presentations. The presentation should not exceed 10 min.
Your team is required to use the 10K SEC Filing for your company as the only outside research tool. Each project must cite at least 5 quotes from this document.
1. Your visual presentation consists of 4 slides plus the cover slide. The Professor will ask one student from each team to present the case on behalf of their team. The format is as follows;
Cover Slide: Team names, photos, and company name
Slide # 1-2: List the Problems/Issues of the case ( Step 2 Below)
Slide # 3-4: List your Recommendations to address each problem ( Step 3 Below)
Use this template for your powerpoint only.
2. After both cases are presented by the selected individual from each team, both teams will come to the front of the class at the same time to answer questions by the Professor from the list of questions of each other’s team.
The written portion of your case will answer the following questions. Please use this outline as the format of your report. Cut and paste your answer below each question.
If your report has financial statements, you will be responsible for calculating the rations that the financials provide enough information to calculate.
The average length of the final project report is 24 pages, 1.5in. spaced not including the cover page.
Also, remember if your project has financial statements, you will need to include the ratio analysis as per the in-class assignment
The Walt Disney Company:
Its Diversification Strategy in 2014
BA 405 Sloan
A. External analysis of each company: ( Chapter 2)
1. General environmental factors:
a. What are the general or macro environmental factors impacting the industry?
Political factors, economic factors, social factors, legal factors and technological factors.
b. How are they likely to affect industry conditions?
Political factors are very important for Disney to operate in different countries. Different countries tend to have different political environment and political system risks. Disney company needs to analyze political stability and importance of entertainment, level of corruption, bureaucracy and interference in entertainment, trade regulations and tariffs related to services, pricing regulations, taxation, wage legislation, mandatory employee benefits, ect.
Economic factors, such as inflation rate, savings rate, foreign exchange rate and economic cycle, can determine the return of investment for company. Moreover, if a country’s economy is very bad, people are in high unemployment or have a very low income, they tend to spend less for entertainment.
Social factors can impact the culture of organization in an environment. The culture of organization is a important key to understand the customer behaviors in a country and design the marketing strategy for entertainment. Social factors of the Disney company need to analyze social factors, such as demographics and education level of the people, gender roles, leisure interest.
Technological factors is very crucial for Disney too. For example, transportation industry is part of technological factors. Good transportation structure can help Disney serve more customer because customers can go to there easily. High technology also can decrease the cost structure in entertainment and improve the service quality.
2. Industry analysis:
a. Use Porter’s 5 force model, industry life cycle , strategic group , and the (SW)OT analysis to understand the opportunities and threats in the industry. Keep in mind that whether each condition is a threat or opportunity will depend on each firm’s unique set of resources and competencies. So, identify the opportunities and threats confronted by each firm, and its key rivals.
Threat of new entrants in an industry can give pressure industry to establish reasonable price and provide more valuable products and service to the customers. Moreover, new entrants also bring innovation and change the way industry doing things in order to have more profitability. The entrance barriers to Disney are relatively high. Disney established long time ago and has been developing on past experience. It knows what its target customers wants and how to expand the market. Other cartoon figures, theme parks and movies can be the substitute for Disney Company. However, Disney’s uniqueness create the difficulties for its competitors to copy, so the threat of substitute is moderate. Disney is very large and an important customers for its suppliers. Disney can order large volumes of special products with high switching costs, so bargaining power of suppliers is high. The bargaining power of buyers is high in service and in entertainment industry because entertainment is not necessary part of life. If entertainment industry charge too much, customers are likely to refuse spending the money. Disney’s exit barriers is very high and expanded in very large investment. . Disney’s product is highly differentiated and thus the switching costs are quite high. The external forces like opportunities and threats are not easily to control, but Disney has to adopt it and learn to take advantage of those opportunities.
Disney’s strategic group has low-cost-corporate-strategy that can effectively control the cost and produce high qualities goods and service. From the text, we can tell Disney has many different businesses. Since 2014, Disney has been broadly diversified. Disney owned theme park, hotels and resorts, cruise ships, cable networks, broadcast television networks, television production, television station operations, animated motion picture production and distribution, music publishing,living theatrical productions, children’s book publishing, interactive media, and consumer products retailing. Moreover, Disney acquired many excellent company, such as Pixar, Playdom and UTV to expanded its company’s business areas. Even though Disney’s business is very diversified, all of its business share its resource and help each other to grow bigger. Corporate-level strategy can create value through diversification. However, if a firm desires to benefit from diversification, different business in the diversified corporation must be similar in at least one important way related to the core competence.The core competence can create value and lay the foundation for synergy among the business in a corporation. As a result, a related diversification can let a company benefit from horizontal relationships across businesses by sharing activities, intangible or tangible resources. Disney definitely is a perfect example of diversification. The theme park, hotels and resorts are popular because people love its television production, children’s book publishing, music publishing living theatrical production. People love Disney’s fairy tale and love story of princess and prince. Disney use its broadcast television networks and television station operations to reach more people and let more people love its television products, which is an example of a revenue increasing due to the differentiation strategy. Therefore, all of Disney business together build a healthy business cycle.
In the SWOT analysis, Walt Disney’s strength is its resources, experience in the business, and its low cost strategies. Moreover, Disney also spent many years to build its well-know brand name. Employees in Disney is very innovative and they create stable finance and economy for Disney. Disney has several external opportunities and those opportunities need to recognized. Those opportunities includes government’s positive attitude toward Disney’s operation, high barriers of entry. It is very hard for other company to imitate Disney because Disney has established many years and its movies and fairy tales are many people’s childrenhood, so Disney has many loyal customers. Furthermore, Disney is a gigant company with huge asset and effective business operation, therefore, other company has high barriers of entry and it is too costly to imitate Disney. The threats for Walt Disney company’s global operations. Even though Disney has a lot of experience, global operations still has high level of risk and only most powerful companies can survive in the end. The Walt Disney’s corporate level strategy is based on horizontal management approach. The management for Disney focus on teamwork and group creativity. The most creative and talented employees can meet the target by creating new ideas. On the other hand, it can be very costly to attract the best human capital.
3. How are they likely to affect industry conditions?
a. What are the immediate and long-term growth, product, and pricing trends in your industry?
b. Is market demand for your industry’s offerings growing, shrinking, or holding steady?
c. Is it easy or difficult for new competitors to enter your industry?
d. How fast are technologies, regulations, or other fundamentals of your industry changing?
e. Has your business adapted to changes in your industry, and how well are you prepared to adapt to the changes you see on the horizon?
f. How serious a competitive threat do you face?
g. Who really drives your industry: customers, distributors, or suppliers?
h. Will you be able to ride the rising tide of an expanding industry, or will you have to find ways to succeed in spite of a general industry slowdown?
i. Do you anticipate major transformations –– in technology, production processes, global influences, or customer buying patterns –– that could affect your competitive position and profitability?
B. Internal analysis: ( Chapter 3 and 4)
1. The company’s strengths and weaknesses SW (OT):
a. Perform a value chain analysis and conclude with a statement on how the company’s various components of its value chain are adding value to the firm?