I.

Executive Summary:

Proposed company: Walt Disney Company

The purpose of this report is to analyze the popular company The Walt Disney Company,
particularly with respect to its competition and strengths and criticism. The Walt Disney
Company was founded in 1923 and since then, the company has registered tremendous growth
not only in terms of key financial numbers but also in terms of its global presence and huge
brand recognition amongst the audiences. The company enjoys tremendous fan following of
people who are very loyal and diehard fans of the company products. The year 2017 registered
a slight decline in the Walt Disney Company’s financial numbers which can be attributed go
seasonality, overall economic sentiment and also to the timing of release of its movies. While
the company stands strong, it also faces controversies and criticism regarding content presented
in various formats, especially the animated movies targeted at the children

This will be a report for the conducting and launching of an international business in the
Philippines that aims to be one of the world’s leading producers and providers of entertainment
and information. This business pertains to the Walt Disney Company. Using their portfolio of
brands to differentiate their content, services and consumer products, they seek to develop the
most creative, innovative and profitable entertainment experiences and related products in the
world. It is therefore, their mission to entertain, inform and inspire people around the globe
through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and
innovative technologies that make ours the world’s premier entertainment company. Disney’s
leadership team oversees the world’s premier entertainment company. Media networks is the
primary unit of the Walt Disney Company that contains the company’s vast array of television
networks, cable channels, associated production and distribution companies and owned and
operated television stations across two divisions. Disney parks, experiences and products is the
global hub that brings Disney’s stories, characters, and franchises to life through theme parks
and resorts, cruise and vacation experiences, and consumer products everything from toys to
apparel, and books to video games. And their Studio Entertainment that has been the
foundation on which the Walt Disney Company was built. Disney studio’s magical vision was
idealized by two brothers, Walt Disney and Roy O. Disney. Today, the studio brings quality
movies, music and stage plays to consumers throughout the world. From humble beginnings as
a cartoon studio in the 1920’s to its preeminent name in the entertainment industry today,
Disney proudly continues its legacy of creating world-class stories and experiences for every
member of the family. We would like to revive and relive the abandoned Fantasy land in
Batangas and improve it to be one of the Disney parks and studios here in our country. We will
now bring the experience of Disneyland here in the Philippines. The Company has established
strong networks and negotiated deals to set up distributors and dealers throughout the United
States. Disney is also the number one company for a lot of children and adults who grew up
during the Walt Disney era. Disney alone is a perfect branding source that can be used as an
alternative to promote further and market a business. Partnering up with Walt Disney Company
is a beneficial move that any company can make.
 Introduction
Industry Overview

The following pages discuss the Walt Disney Company that operates in the mass media and
entertainment industry. According to the US Department of Commerce, this industry reached $1.9
trillion revenues level as of 2016 and the expected revenue value for 2017 stands close to $2.0trillion.
The report also discusses emerging trends in the industry that include increasing hold of piracy,
interactive devices, augmented and virtual reality, eSports etc.

COMPANY OVERVIEW

Headquartered in California, the Walt Disney Company (NYSE: DIS) is a public company that was
founded by two brothers, Walt Disney and Roy Disney in 1923. Popularly, the company is known as
‘Walt Disney’ or ‘Disney’. The company is one of the largest Multimedia and Entertainment Company in
the world. The company is currently headed by Robert Iger who is the Chairman of the Board and also
the Chief Executive Officer (Company Annual Report, 2017). As of September, 2018, the company had a
market capitalization of $162.8 billion. The company is amongst Top 100 Fortune companies
(ycharts.com, 2018). The company reported revenue of $55.1 million for the year ending September,
2017, a decline of around 1 per cent from previous year.

OBJECTIVE OF THE COMPANY

Walt Disney Company's objective is to be one of the world's leading producers and providers of
entertainment and information, using its porfolio of brands and differentiate its content, services and
consumer product.

BUSINESS SEGMENTS

The company’s business segments consist of following (Company Annual Report, 2017):

Media Networks: This segment accounts for various television and distribution networks, radio
networks, broadcast operations, etc. These include the well-known ESPN, Disney, ABC Television
network, Freeform apart from many others. The company has various competitors in this
segment including whoever competes for similar audiences.

Parks & Resorts: The Company is popular for its theme adventure parks and resorts operating
around the world. Some of them are completely owned by the company while some of these
have effective ownership interests of the company. These include Magic Kingdom, Animal
Kingdom, Epcot, Hollywood Studios, Cruise Lines, and Hotels/Clubs/Resorts etc. The company
faces competition from various entertainment/recreation and tourism providing companies.
 Studio Entertainment: This segment refers to various live performances, animated motion
pictures, musical recordings and stage plays. This includes distribution to Walt Disney Pictures,
Pixar, Marvel, Touchstone, Dreamworks etc. Again, the competitors include any company that
provides entertainment and recreation.
Consumer Products & Interactive Media: This segment refers to licensing of characters, content
etc., retail merchandise, games and applications, books and comics, etc. The competitors
include those providing characters, content, merchandise for sale, comic books etc.

Disney’s Strengths – Internal Factor

Reliability – Disney has strong ties with its suppliers who provide high-quality raw materials for the
company’s production line.

Large Cash Flow – Disney has a very strong cash flow system that allows the company to make
additional investments in other regions of the company. As of end of 2018, they had a total operating
cash flow of 14.3 billion. 

Strong Negotiation Skills – The Company has established strong networks and negotiated deals to set
up distributors and dealers throughout the United States.

Proficient Team – Disney has some of the most creative teams that consist of artists, story scriptwriters,
and graphic designers. The qualified teams are a mix of experienced professionals with extensive years
of experience in the mass media industry.

High Brand Value – Disney’s brand name and their logo are easily recognizable. All movies and products
that are introduced to the public, usually have the “D” symbol somewhere to show that it’s from Walt
Disney Studios, Production, or Company. According to Forbes world’s most valuable brands list, Disney is
ranked at number 8 position and its brand value is estimated to be $52.2 Billion.

Disney’s Weaknesses

Sky-High Attrition Rate – Walt Disney Company has spent enormous amounts on training and grooming
their employees. It has still not improved its high attrition rate.

Poor Financial Planning – According to company’s 2018 annual report, Walt Disney has reported a loss
of over $ 1 billion. Loss of $580 million due to investment in Hulu and loss of $469 million due to its
investment in BAMtech streaming technology. 

Vulnerable To Competitors – The lack of marketing and promotion could leave Disney vulnerable to
competitors. The only time they use ads is when they are introducing another movie or toy. Apart from
that, most marketing is done visually, through cross promotion. 

Insufficient Product Demand Scaling – Disney product designers have poor judgment for the “next-big-
idea,” which leads Disney to lose many opportunities compared to its competitors. Whenever there is a
serious demand, companies take advantage by coiling up a campaign in relevance. However, Walt
Disney fails to take advantage of such opportunities.

Disney’s Opportunities – External Factors

Gear Up for Marketing – If Disney decides to make a change in investing in marketing, it could change
the many opportunities that they have missed, and possibly stir up new prospects.

Core Competencies – With Disney’s expertise in the mass media industry, their set of skills can
help innovate technologies and other relative aspects.

Big Names Are Worth It – Disney is the number one company for a lot of children and adults who grew
up during the Walt Disney era. Disney alone is a perfect branding source that can be used as an
alternative to promote further and market a business. Partnering up with Walt Disney Company is a
beneficial move that any company can make.

Disney’s online streaming service: (Disney+) – Disney is developing a new Direct-to-consumer (DTC)
service “Disney+” that will feature all Disney, Marvel, Star Wars, and Pixar movies. Disney+ is expected
to launch in the US market in late 2019. The service could potentially give a tough fight to Netflix with its
massive collection of movies and shows. Additionally, Disney+’s basic subscription plan starts at $6.99
per month compared to $8.99 for Netflix. Overall, it is good for consumers because we will have more
options and competition may bring the prices down. 

Disney’s Potential & Ongoing Threats

High Expense Toll – Disney has always spent large amounts on their workforce, employee development,
and training. Currently, the average salary offered for a beginner at Disney is $15 an hour. Salary wages
around the globe are continuously increasing. With salary wages rising by the country’s law, Disney
could end up with lower profits when it comes to paying off their external workforce in foreign
countries.

Isolation in America – Due to the many ongoing issues with other countries, most of the administration
is trying to pull out of international contracts. It includes many manufacturers. A portion of Disney’s
manufacturers are in foreign countries, if the isolation phase continues, Disney could be under pressure
to gain sufficient profits.

Better Products & Technology – Since they are kings in mass media production, the technology could be
beneficial for them. Disney isn’t a technology or a software house and therefore cannot make
technology to work specifically for them.

As technology progresses, the use of viewing entertaining content has become accessible through smart
devices, which is something that Disney lacks in. The only way they can retain a safe zone is to design an
application that would provide Disney content only through subscription.
Conclusion

Disney was established in 1923 and is still standing strong. They started with a vision to provide
wonderful classical content in the form of 2D cartoons. Over a period of 95 years, they have become an
iconic company, reaching out to the hearts of billions.

It is unlikely that Disney will vanish anytime soon. They are in high demand for their products and
especially their animated movies. Disney has acquired enough companies and has enough cash flow to
sustain their company for the years to come.

SWOT analysis of Disney