Cohesion case solution of Walt disney

1. Cohesion Case Analysis On
Walt Disney Company 2007
Submitted To:
Sir Sohail Aslam
Submitted By:
Ruquia Batool Roll # 02
Lubna Mueen Arbi 06
Yasmeen Khan 33
Jamshaid 47
The Walt Disney Company,
together with its subsidiaries,
is a diversified worldwide
entertainment company with
operations in many business
segments.
This report is designed to gain
knowledge and experience in
preparation of “The Strategy-
Formulation Analytical
Framework” of Walt Disney
Company. Report Contain
current vision, mission, values,
strategies matrixes,
suggestion, implementations
and projected financial
statements.

3. Table of Contents
Overview & History......................................................................................................................................3
VISION, MISSION AND VALUES.....................................................................................................................3
Walt Disney Company’s Strategies ...............................................................................................................4
S.W.O.T. Analysis Table................................................................................................................................5
Competitive Profile Matrix ...........................................................................................................................6
Walt Disney External Factor Evaluation ........................................................................................................7
Internal factor matrix...................................................................................................................................9
Internal-External (IE) Matrix.......................................................................................................................10
SWOT Matrix..............................................................................................................................................10
BCG Matrix for Disney................................................................................................................................12
Grand Strategy Matrix................................................................................................................................13
Space matrix Walt Disney...........................................................................................................................15
QSPM MATRIX ...........................................................................................................................................17
RECOMMENDATIONS.................................................................................................................................19
IMPLEMENTATION.....................................................................................................................................20
EVALUATION AND CONTROL......................................................................................................................21
Projected Financial Statements ..................................................................................................................22

4. Overview & History
The Walt Disney Company is founded on October 16, 1923 by Walt Disney and his brother Roy as
a small cartoon animation studio, is a leading American diversified multinational entertainment and
mass media conglomerate, headquartered in Burbank California. After the great struggle and debut
of Mickey Mouse the company turned around. Now headed by Robert A. Iger Disney is one of the
largest entertainment corporations in the world with approximately 166,000 employees and annual
revenues approaching the $45 billion mark.
For eight decades, Walt Disney has entertained people around the world with its different products
theme parks, resorts, cruises, movies, TV shows, radio programming, and memorabilia. In start the
company established itself as a leader in the American animation industry then it diversified itself
into live-action film production, television and travel. The company went public in 1940 and was
Re incorporated under its current name in 1986 and expanded operations and also started divisions
focused on theatre, radio, music, publishing and online media.
VISION, MISSION AND VALUES
VISION
“To make people happy.”
MISSION
The Walt Disney Company's objective is to be one of the world's leading producers and providers
of entertainment and information, using its portfolio of brands to differentiate its content, services
and consumer products. The company's primary financial goals are to maximize earnings and cash
flow, and to allocate capital toward growth initiatives that will drive long-term shareholder value.
VALUES
Values make our brand Stand Out:
 Innovation
o We follow a strong tradition of innovation.
 Quality
o We strive to follow a high standard of excellence.
o We maintain high-quality standards across all product categories.
 Community
o We create positive and inclusive ideas about families.
o We provide entertainment experiences for all generations to share.

5.  Storytelling
o Every product tells a story.
o Timeless and engaging stories delight and inspire.
 Optimism
o At the Walt Disney Company, entertainment is about hope, aspiration and positive
resolutions.
 Decency
o We honor and respect the trust people place in us.
Walt Disney Company’s Strategies
 Horizontal Integration
Walt Disney Company acquired Marvel Entertainment to strengthen its brand portfolio. Just as the
2006 acquisition of Pixar that brought the incredible talented team of artists and writers behind such
award-winning and commercially successful films as Ratatouille, Wall-E and Up, Marvel can bring
long-lasting value to Disney.
 Market Development
Disney open world-class theme park in last November with Chinese In a new joint venture. This
innovative approach extends to retail as well. Last year the company opened 19 newly designed
Disney Stores around the world.
It is also expanding original programming at home and abroad. Disney focused on what kids and
tweens want to see and hear and this becomes a great source of talent and creative ideas for the
Company. It’s also become a very effective global ambassador. Last year, Disney Channel
expanded its market in Japan, Russia and Ukraine and launching a new joint-venture local language
channel in South Korea.
 Related Diversification
Disney also focused diversification for years and the company covers a wide array of products and
services. It always tries to practice effective economies of scale in production. Like the latest cruise
ship, The Disney Dream, a beautiful craftsmanship, uses technology in all kinds of interesting ways
to make the passenger experience more enjoyable.
 Globalization
Walt Disney Products and Services are found all over the world in different forms and areas.
Disney has focused on growth internationally in the last few years. The company’s recent focus has
been on establishing the foundations for long-term growth in the emerging markets of Latin
America, Russia, India and China. Recently more focus has been placed on Japan, Europe, the

6. Middle East and Africa, where the company is well established, yet there is substantial room for
growth .
Proposed Vision
Walt Disney strives to be the world’s most famous entertainment provider company by creating
innovative and complete brand portfolio and an amazing experience for individual of all ages.
Proposed Mission
Our Mission is to be one of the world’s leading entertainment and information producer and
provider, from parks to network media, and website for all ages. By remaining committed to
balancing environmental stewardship with its corporate innovative goals and operations by using
advance technology in all unique brands throughout the world for individuals. Which would
produce financial rewards to our shareholders. In everything we do, we try to contribute to our
communities by giving them the best experience.
S.W.O.T. Analysis Table
STRENGTHS
 Strong diversification.
 Responsiveness to markets.
 Brand recognition/ loyalty.
 Vast size of operations.
 Largest worldwide licensor of character
based merchandise.
 Global standardization.
 Well established divisions.
 Increasing trends in overall revenues
and profits.
 Wide and unique portfolio
 Innovative entertainment business
 Strong customer service
 Strong Media Networks and
Broadcasting division
WEAKNESSES
 High costs.
o Sunk costs.
o Costs of entertainment
production.
 Frequent change in top management
positions.
 Parks and Resorts are not easily
accessible leading to a costly trip for
visitors.
 Parks and Resorts success
unpredictable.
o Travel trends
o Leisure time
o Seasonal
 Large R & D
 Large risk factor
 Negative impact on children’s mind
OPPORTUNITIES
 Growth through further diversification.
 International growth and new markets
Recent acquisitions in India (UTV) and
Russia gives more room for
development.
THREATS
 Employee retention- retaining and
recruiting innovative people.
 Competition on finding and affording
 The most creative human resources.

7.  Increased media Networks/ online
presence.
 Changes in technology and consumer
consumption.
 Increase Music Channel.
 Growth from cable and satellite
networks.
 Marvel and Lucas film.
 International cable.
 Increasing salaries and labor costs.
 Changing consumption behavior. Switch
from physical to digital and online.
 More concern with content over quality.
 Piracy/ protection of intellectual property.
 Decrease of DVD sales.
 Maintaining product differentiation..
 Change of how people choose to spend
their ‘entertainment’ money not as willing
to spend on a park or resort.
 Uncontrollable changes in travel and
tourism.
 Viacom’s upcoming animation studio in
 2014.
 Lasting economic recession leading to slow
growth rate
 High unemployment rate
Competitive Profile Matrix
Walt Disney Time Warner News Corp
Critical Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 4 0.80 3 0.60 3 0.60
Product Quality 0.18 3 0.54 4 0.72 3 0.54
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.1
Management 0.08 3 0.24 2 0.16 4 0.32
Financial
Position
0.10 2 0.20 3 0.30 4 0.4
Customer
Loyalty
0.15 4 0.60 3 0.45 3 0.45
Global
Expansion
0.07 2 0.14 3 0.21 2 0.14
Market Share 0.12 3 0.36 4 0.48 3 0.36
Total 1.00 3.18 3.12 2 2.91

8. Walt Disney External Factor Evaluation
External Strategic
Factor
Weight Rating
Weighted
Score
Comments
OPPORTUNITIES
Opportunity to expand
and enhance
0.13 4 0.52
The company has the opportunity to
expand and enhance its services by
moving it into different segments in the
respective markets.
Proper and appropriate
inventory or stock
management
0.07 2 0.14
The operating cost of the company can
be reduced by the proper and
appropriate inventory or stock
management and hence profitability be
improved.
Development of market
in the under
development countries is
the great opportunity.
0.03 3 0.09
The development of the market by the
company in the under development
countries is the great opportunity and
also with the establishment of the online
websites can make the company to
success.
Improving the bench
mark rate according to
the market scenarios.
0.05 1 0.05
The Walt Disney Company can improve
its management practices by improving
the bench mark rate according to the
market scenarios.
Attaining more and more
interest of the people.
0.08 1 0.08
Through the development of the park
with different variations of the themes
that make them more and more
attractive so that they attain the interest
of the people.
Cheaper alternative toys
should be introduced.
0.04 1 0.04
Cheaper alternative toys should be
introduced by the company to grasp the
attention of the consumers and also
involve the characteristics of the
national and regional appeals.
The demand for the
Disney land is increasing
0.14 2 0.28
The demand for the Disney land from
the people is increasing rapidly so
development of the park in the Hong
Kong is the great incentive for the
company.
THREATS
Security Issues 0.05 4 0.2
The threats related to the security are the
major issue that occurred during the
terrorism.
High level of 0.05 4 0.2 There is the high competition for the

9. competition company in the media industry and also
in the domestic markets as well as the
international markets so there is the
tough job for the employees to maintain
its position.
Social and Ethnic
Groups
0.1 3 0.3
The social and ethnic groups are again
the threat for the company as they are
acting as the hurdle and barriers in the
success of the company.
High demand of
innovation and company
has to pace up with that
0.1 2 0.2
The high demand from the market in
case of the innovations in the product is
difficult to maintain as regulating with
the inventions.
Increasing cost of labor 0.06 2 0.12
The increase in the wages and the cost
of the labor declines the growth of the
company and also the factor of the
employee’s retention is the issue in front
of the success.
People preferences are
changing
0.08 1 0.08
The aspects and preferences that are
changing in the younger people are the
issue for the company so for that search
for the new young people and retain
them to their jobs.
Brand consistency,
unprofitability and
acquisitions
0.02 2 0.04
The case of brand consistency,
unprofitability and acquisitions is the
issue for the declining the company
from its growth.
Total Weighted Score 1 2.34

10. Internal factor matrix
Key Internal Factors Weight Rating Weighted Score
Strength
Best entertainment place in
the world
0.08 4 0.32
Strong diversification 0.15 3 0.45
Global standardization 0.09 4 0.36
Innovation (puppets to
digital media)
0.15 4 0.60
Strong customer service
0.08 3 0.24
Acquire popular teams of
different leagues.
0.05 3 0.15
Largest worldwide licensor 0.05 3 0.15
Weakness
Costly to visit 0.05 1 0.05
Huge investment with high
risk factor
0.10 2 0.20
Specific target market 0.05 2 0.10
More costly R & D 0.05 1 0.05
Negative impact on
children’s mind
0.10 1 0.10
TOTAL 1.00 2.77

11. Internal-External (IE) Matrix
IFE
STRONG AVERAGE WEAK
3.0 to 4.0 2.0 to 2.99 1.0 to 1.9
E
F 4
E
T
O
T
A
L 3
W
E
I
G
H 2
T
E
D
S
C 1
O
R
E
SWOT Matrix
Strength – S
1. Innovative entertainment
business.
2. Strong diversification.
3. Brand recognition/ loyalty
4. Wide and unique portfolio
5. Strong media networks and
broadcasting divisions
Weakness – W
1. Frequent change in top
management position
2. Costly to visit Disney Parks
and Resorts.
3. Huge investment with high
risk factor. (forecasting
based)
4. More costly Research and
I. II. III.
IV.
V.
VI.
VII. VIII. IX.

12. 6. Global standardization
7. Vast Size of Operation
Development.
5. Negative impact on
children’s mind.
Opportunities – O
1. Growth through
further
diversification.
2. International
growth and new
markets.
3. Change in
technology and
consumption.
4. Increase media
network.
SO Strategies
(S2,O2) (S3,O3)
WO Strategies
(W3,O3)
Threats – T
1. Swift change in
technology.
2. Unaffordable for
middle and
lower class.
3. Economic
recession
4. Stop physical
growth of
children.
ST Strategies
(S1,T5)
WT Strategies
(T1,W1)

13. 5. Piracy/
protection of
patent.
The Walt Disney Company founded by Walt and Roy Disney in 1923 is today a highly diversified
company with namely: theme parks and resorts, studio entertainment, consumer products, media
network and internet and media marketing.
BCG Matrix for Disney
Low
Growth
High
High Low
Market share
Cash cow
 Theme parks
Dogs
 Consumer products
Stars
 Studio Media
Question mark
 Internet

14.  Theme parks: Disney’s theme parks are considered to be cash cows with a large market
share but low market growth rate. The maximum revenue of the company comes from the
park. The company earned 6803 million but its market growth is low.
 Studio: Disney’s studio can be placed both in cash cow and stars, however shall be more in
the stars. With a high market share and high growth, Studio still generates good revenue,
despite being Disney’s first company due to its feature animation and motion picture, home
video, television and cable production, and stage plays. But market growth is slowly moving
towards the lower end.
 Media: media network will also be a star for the company as its growth in income increased
with the acquisition of ABC television, TV and radio stations and in cable network such as
ESPN, Disney channels. It had a high market share with a growth of 21% from 7970 million
9651 million in revenue.
 Consumer products: these mainly come under the category of dogs as the business growth
and the market share are low.
 Internet: Internet can be described as question mark for the company. Internet has a high
market growth. Disney has just entered in the market and does not cover a large market
share. Thus, adding up to this division in the grid. Also, Disney can any time exit the market
as there are almost nil capital expenditures.
Grand Strategy Matrix
The Grand Strategy Matrix is another Matching Stage (Stage #2) strategic management tool
designed to assist analysts in developing alternative strategies. The Grand Strategy Matrix is
position on a four- quadrant graph and is very simply illustrated. The y-axis of the graph represents
market growth, with positive y -figures representing rapid market growth and negative y- figures
representing slow market growth. Conversely, the x-axis represents competitive position, with
positive x- figures representing strong competitive position and negative x- figures representing
weak competitive position.
All companies will fall somewhere on the graph and, once placed, can make decisions based on the
recommended strategies for the company.
The Walt Disney Company falls within Quadrant I for simple reasons. The company is strong
within their markets and growing stronger. Too, the competitive position of The Walt Disney
Company is nothing short of stellar, as stated in the paragraphs detailing the SPACE Matrix.
Because of Disney’s past success, current positions, and expectantly spectacular future, the
Organization falls easily within the first quadrant on the Grand Strategy Matrix.
The Grand Strategy Matrix for The Walt Disney Company is included below.

16. Space matrix Walt Disney
Internal Position External Position
Financial Position Rating Stability Position Rating
Market Capitalization of
Walt Disney is $39 B which
is much higher than the
industry average.
5 Technological Change -4
Working Capital 3 Change in demand -6
Earnings Per Share [EPS
(2008) is 2.28 much higher
than industry requirements
and increment from 2007]
5 Economic Recession -2
Return On Investment 4 Competitive Pressure -5
Gross revenues increased by
12% since 2006
4
Incomplete or inefficient training of
employees in understanding the culture
-2
Total 22 Total -19
Average rating 4.4 Average rating -3.8
Competitive Position Rating Industry Position Rating
Market Share -1 Financial Stability 3
Product Quality -2 Market Growth 4
Customer Loyalty -3 Utilization of Resources 5
World’s largest amusement
park company -2 Increase media network 3
Brand Image and
Reputation -1
Huge barriers to entry
5
Total -9 Total 20
Average rating -1.8 Average rating 4.0

17. Y-axis = 4.4+ (-3.8) = 0.6
X-axis= 4.0+ (-1.8) = 2.2
Conclusion
The space matrix describes that Walt
Disney should adopt an aggressive
strategy. It needs to use its internal
strengths to develop a market penetration
and market development strategy. Other
possible strategies include product
development and concentric
diversification.

18. QSPM MATRIX

20. RECOMMENDATIONS
Disney Company is in strong position in the industry and thus maintains a competitive advantage
towards other companies like Paramount and Six-Flags Theme Park.
 Product development
Disney Company should create new and exciting
 Characters that children will love will surely strengthen Disney’s core vision. As technology
changes rapidly,
 Developing new and exciting adventures on their theme parks
 Creating fun-filled the motion pictures and animated cartoons
 Increase their market share over their rivals.
 International expansion of theme parks was a logical growth
 Research and Development
Disney’s global research and development activities should focus on creating the next generation of
sophisticated technologies in storytelling that requires long-term planning collaboration with world-
class innovators.
 Market Penetration by greater Marketing
Disney’s product and services are divided into four segments such as consumer Products, theme
parks and resorts, media networks and studio entertainment. Disney is Always in to advertising.
Since most of the people are online 24/7 Disney’s website is great way to endorse their product
offerings. Disney should know how to place the right Advertisements in the site, submit articles that
would entice people’s hunger for Information, run press releases to attract favorable media attention
for their product Offerings, they should also improve their search engine to give easy access to their
Products and services, they could also develop their website in other languages to help Their global
consumers understand their products and services.
Finance/ Accounting recommendations
 Properly allocate capital in their different segments to better utilize the firm’s Potential for
investing
 Provide sufficient funds for their strategies to be properly implemented
 Disney should also continue to provide financial services using its website Disney.com for its
customers such as online purchasing through credit cards and Shipping through common
carriers.

21.  Offer bulk attendees in their parks, cruise line and hotels discounts and freebies to improve
customer relationship
 Digitization of content to utilize technology and lower cost
IMPLEMENTATION
Product Development can be implemented by:
 Producing entertaining theatrical productions
 Family oriented and family friendly environment
 Stimulating enough to attract new customers
 Interactive and safe vacation spot both
 Resorts and parks, and also cruise lines
Market Penetration
Market Penetration can be implemented by greater marketing efforts in their segments Disney has
a long history and an established name, not only in the United States but throughout the world.
Operating globally, Disney should make it a point to update their website and put good
advertisements whether on television or in the airwaves, this will keep consumers updated
regarding their latest product offerings. Disney should focus its attention to customer benefit which
is a family-friendly, safe, fun environment that is open for business all year. Disney should offer
specials for families, such as discounts on flights, car rentals and hotel rooms to attract more people
to their parks. Through these efforts, we believe that Disney will be able to connect more to their
consumers and provide for the continued patronage of their product offerings.
Research and Development
Research and Development can be implemented by using following method:
 Engineers and built a section Disney Imagineering.
 This is basically the research and development section of Disney which thinks Up, designs, and
implements all aspects of the Walt Disney Company. From Developing rides and attractions of
Disney’s theme parks, water parks, and cruise Ships to their Disney resorts.
 Disney Imagineering should strive to be the leaders in technology on a global market scale
through integrated efforts from internal and external resources

22. EVALUATION AND CONTROL
We learned the importance and value of evaluation and control in the strategic management in its
last part. We also defined it as process of evaluating whether the Chosen strategy is achieving the
organization's objectives.
Information System
The current information system of Disney provided by technological Advancements and highly
trained and skilled staff is still reliable. Disney is able to utilize the information systems resources
to gain its competitive advantage over rivals
Evaluation System
Disney must evaluate those markets in which they are most successful, and what markets they need
to expand their ventures. This will allow the company to focus on the weak areas of the corporation
and build the strategy in the effective and the efficient manners areas that are struggling, while
continuing to maintain those that are thriving.
 Decrease film production costs
 Disney may want to increase partnerships and collaborations,
 Costs, but also promote business relations
 Secure Disney’s bottom line.
 A competitive advantage over its competitors.
 Disney Company as the world’s premiere entertainment company
 Rely on the corporate governance values

23. Projected Financial Statements

27. Reference:
http://www.4-traders.com/THE-WALT-DISNEY-COMPANY-
4842/financials/
http://www.nasdaq.com/symbol/dis/recommendations
http://en.wikipedia.org/wiki/Amusement_park
http://thewaltdisneycompany.com/investors
http://www.datamonitor.com/store/Product/company_financials_the_walt_
disney_company?productid=DBCM5310
http://perleybrook.umfk.maine.edu/slides/Spring13/BUS411/Assignment%
205%20Walt%20Disney.pdf
http://disney.com/
http://investing.businessweek.com/research/stocks/financials/ratios.asp?tic
ker=DIS
http://thewaltdisneycompany.com/investors/financial-information/annual-
report