Analysis of Corporate Strategies of the Walt Disney Company since 2002

Corporate strategy refers to the path that firms follow and the manner in which they operate in order to attain the stated goals (Montiel and Delgado-Ceballos 2014, p. 113). The approach includes strategies for creating value and competitiveness, as well as how the firm positions itself to coexist with the numerous market entrants (Montiel and Delgado-Ceballos 2014, p. 115). In general, the corporate technique entails a critical review and designation of internal and external players and activities with the goal of achieving success.

In the past, the Walt Disney Corporation was at the forefront of employing effective business strategy (Montiel and Delgado-Ceballos 2014, p. 116). The company began in 1923 by Walter and Roy who started a Disney brother studio in which they created the animated films that finally resulted to the advancement of Disney. Henceforth, the firm has had a series of venture including the formation of theme parks in 1955 and additional of media assets among others. Driven by the mission, to become one of the world’s leading producers and provider of entertainment, the firm has been keen to monitor its corporate tactics (Montiel and Delgado-Ceballos 2014, p. 116). This paper will countercheck the current corporate approaches used by the Walt Disney Company, provide a comprehensive analysis as well as propose the strategies that would increase the level of competency of the company.

Analysis of Corporate Strategies of the Walt Disney Company since 2002 to Date

Mergers and Acquisitions

Following the commission to appear most dominant in the entertainment and media sector, the Walt Disney Company has been carrying various mergers and acquisition deals (Latif et al., 2014, p. 274). For instance, the firm bought American Film and Television Production company in the year 2012 (The Walt Disney Company 2012, n.p). Among the reasons for purchasing the Lucasfilm include the desire to obtain intellectual property rights, an instance that would enable them to release new star movies. Also, the approach was meant to advance the company’s creativity and effectiveness through the production of exclusive services such as cable television networks as opposed to the rivals in the market. Additionally, mergers would make the Walt Disney Company to share the operational costs while reaching a more significant market segment.

Similarly, the Walt Disney Company decided to sell its Marimax after which it divested it in independent distribution of foreign films (Latif et al., 2014, p. 274). Purportedly, the new venture mainly concerned with family-oriented divisions for various films such as troy that appeared as a profitable merchandising opportunity. As a result, the company is currently renowned for selling the family movies over time; hence the amount of revenue has been continuously flowing in the firm.

The core issue in corporate strategy for businesses is to proceed to form the synergistic collaborations with other firms (Latif et al., 2014, p. 275). Purportedly, the approach is highly rewarding as it substantially creates value for the diversified corporation of Walt Disney Company with other organizations. On the other hand, such merges are also very crucial in the expansion of different businesses.

Different corporate strategy theories like traditional model maintained that whenever unity exists amongst various businesses, there is a likelihood of high performance (Juárez 2014, p. 49). A similar thought is supported by the complexity concept by suggesting that firms should at times combined with the aim of overcoming market cost that would be expensive for an individual firm (Juárez 2014, p. 50). Likewise, the Walt Disney Company has combined with diverse business partners including theme parks, TV channels, retail stores, and TV channels. The result has been increased value of products and satisfaction of the clients

Use of Vertical Integration

Vertical integration is a form of a configuration where the supply chain of an establishment is owned by that specific company (Atalay, Hortaçsu, and Syverson 2014, p. 1120). The Walt Disney Company has maintained this kind of relationship since the Disney-Pixar scenario, an instance that has prevented the company from outsourcing experts to produce films. Pixar has been helping the company to provide 3D and 2D animated movies at a higher quality that has added value to the films of the Walt Disney Company’s services (Robins 2012, p. 8). The perceived merits that the company has been obtaining by adopting vertical integration include reduced dependency, time, and finance in negotiating for new contracts.

Similarly, a forward vertical integration has been paramount in the setup. The tactic requires the mobility of the firms down the value chain to the buyers’ market (Atalay, Hortaçsu, and Syverson 2014, p. 1122). In response to the technique, the Walt Disney company is operating more than three hundred retail stores that sell merchandise that resemble Disney’s characters and movies (The Walt Disney Company 2012, n.p). In turn, the Walt Disney company enjoys more profit that would be obtained by other parties and stores. Often, the company’s store has been able to make more sales that would otherwise be for online retailers like the Amazon.

Due to vertical integration deal, the Walt Disney company has been in a long-term deal with the Pixar to produce varieties of animated films (Latif et al., 2014, p. 277). Although the approach has some merits including reduced cost and time required to sign new contracts, certain disadvantages are attached to the activity. For instance, limitation to one supplier would reduce the efficiency of animated films by giving products that are less valuable as compared to their competitors’, an issue that would make the firm to lose customers (Robins 2012, p. 8). On the other hand, the company’s operation would be hampered in case the single vendor purport to cancel the deal. In support, the complexity theory calls for an adequate collaboration amongst businesses including cooperation with different dealers and other commerce for increased operational competence.

Niche Focused

Niche strategy aims to target a particular group of consumers with products and services designed to meet their needs. Apart from dealing with the video, interactive media, and other entertainment aspects, the company is selling other products such as consumer electronics, footwear, stationeries, health and beauty, and home décor and furnishings (Robins 2012, p.18). Since the operation is not limited to amusement, the diverse needs of various clients are catered for by the Walt Disney Company.

Walt Disney Company has been successful in designing products that suit specific market segments based on the individual demands (Robins 2012, p.19). Through channeling efforts to avail appropriate items to the potential market such as entertainment, consumer products, and other recreation amenities, the company has remained relevant and kept on rising and advancing in several countries. Similarly, Porter’s strategic matrix maintains that all successful business must be intelligent allocators of the market gap, hence supplying the relevant items to satisfy the opportunity.

Divested Market Coverage/ Mass Market

In addition to the media business, the Walt Disney Company is operating parks and resorts. With help of company’s castles, cruise ships, and hotels, several clients have been brought in the business despite the company not being in pure attraction commerce (The Walt Disney 2017, n.p). Notably, the approach to engage in attraction would enable the company to capture a group of clients who would wish to have the entertainment in the primary settings as opposed to viewing the same over the media and videos.

Imbalance in the Market Segment- Majorly the US and Canada

Despite the approaches made by the Walt Disney Company to reach out different countries, a large volume of sales is still unevenly distributed. Although the company is existing in South America, Europe, North America, and Asia Pacific, a significant revenue of approximately 75.1 percent was from the US and Canada markets in the year 2012 (Robins 2012, p. 14). Notably, the figure lacked the global footprint while showing a geographic concentration and specialization in a small region. As a result, the company is vulnerable to economic losses during the depression in the two countries.

Similarly, the concept from Porter’s strategic matrix advocates for a keen focus on both existing and new markets to diversify the market as well as enjoying the economies of scale (Rothaerme 2015, p. 504). Through a vigorous appeal to all markets, sales could be proportional as well as the reduced uncertainty in case inflation and economic recession in some potential markets. In this regard, the Walt Disney company is usually vulnerable to the limitation on the matured marketplaces like the US and Canada as compared to the competitors.

High Differentiation of Products

One of the corporate strategies of the Walt Disney is to differentiate its product to suit the diverse classes of the perceived clients (Robins 2012, p. 12). The range of market offer is numerous, starting from consumer products, studios, parks, and resorts, as well as media networks. According to the Walt Disney Company (2017, n.p), differentiation adds the attractiveness of the products in the phase of buyers who perceive their unique attributes as compared to the competitors’ provisions.

As a result of efficient differentiation of Walt Disney Company’s products, the firm has managed to acquire a diverse market for different products. The same idea of distinction is under reinforcement by the corporate theories such as complexity model as well as Porter’s strategic matrix. As maintained by the complexity concept, businesses that continually bring new offers on the market are better placed to withstand stiff competition as well as spreading the risk such as losses Juárez (2014, p. 48). Therefore distinguishing the products of Walt Disney has not only enabled it to have substantial market coverage but also maintaining the regular revenue earning from different market segments.

Recruiting Highly Proficient Employees, Management, and Corporate Directors in Walt Disney Company to Run the Business

Apparently, the internal staff of the Walt Disney Company has been vigilant to run the multiple businesses within the firm efficiently (Robins 2012, p. 9). In each segment, there is a set of competent personnel with the appropriate talents and self-determination and enthusiasm to achieve the goals of the business. With the help of Disney’s unique culture that is documented in the books like ’The Imagineering Way,’ Robins (2012, p. 22) adds that the company has maintained a success in family entertainment through uncompromised creativity amongst the internal stakeholders-employees.

Besides, the employees are very much comfortable and ambitious with the nature of their work. Based on the corporate survey result, several workers were found to be highly impressed with the Disney’s brands (Latif et al., 2014, p. 275). On the other hand, they felt valued, respected, and adequately cared for. Additionally, the prevalence of functional corporate culture enables them to bear job challenges while contemplating to advance following the regular training that is usually conducted. As reiterated by Goetsch and Davis (2014, p. 227), a corporate culture at work inspires employees to explore their entire potentials to stimulate a periodic competitiveness of such firms.

Board of Directors Monitor the Operation of Managers and the Rest of Staff

To monitor and evaluate the activities of managers, Disney Company has an established pool of board of directors that comprises of ten members (The Walt Disney Company 2017, n.p). The complexity theory suggested that managers could be opportunistic as well as go to the extent of pursuing a personal interest with a company’s resources; therefore, they should be governed by the corporate executives (Juárez (2014, p. 51). Additionally, the administrators are motivating the commerce and its managers for the attainment of high performance. Hence, the presence of the board of directors of the Walt Disney Company has kept the leaders on toes especially the ones who would be having ill intentions to loot the firm.

Failure to Incorporate External Auditors for Effective Corporate Governance

Among the ten member board of directors for the Walt Disney Company, both operate by monitoring the actions of managers (Robins 2012, p. 13). It is also the entire executives with the mandate of doing all the internal audit of both financial and other activities. In comparison, the prosperous organization like the Amazon.com has been hiring external assessors to assist the executives, an instance that has increased the transparency and accountability. According to Juárez (2014, p 52), a similar idea is being supported by the complexity and corporate strategy that calls for a thorough evaluation of managers by different techniques such as liaising with the assessors who are not part of the company yet vital and endowed with proficiencies and expertise. Perhaps, the missing practice of hiring external editors would compromise transparency of financial records to some in some instances.

Improper Cultural Diversity in the Workplace (Composition of Employees)

Cultural diversity connotes various efforts taken by the organizations to include and represent different groups in an establishment (Belni et al., 2013, p. 122). While evaluating the composition of workers in the Walt Disney Company especially the board of directors, the executives are not well represented, for instance, majorly they come from the potential market segments of the business (Robins 2012, p. 19). It would be better if the auditors are from different continents while considering that it is still the dream of Walt Disney to penetrate to the entire globe. In support, the complexity and corporate strategy model supports the reinstatement of competent boards of directors to foresee the operations of managers (Juárez 2014, p. 54). Additionally, the concept proposes for the diversity observation while recruiting the staff to brand the company a positive image.

In support, the complexity theory and corporate strategy argue that businesses should create the unique environment. Among the approaches proposed for the approach include the creation of a common culture, steady human resource practices, and better understanding and collaboration within the business (Juárez (2014, p. 49). Notably, the favorable working atmosphere is one of the factors that have ensured a continuous exclusiveness and efficiency as well as diversification of the Walt Disney Company.

What the Walt Disney Should Do to be Competent in the Market (5 -10 years) From Now

Increasing Market Coverage to Other Continents/Breaking Geographical Barrier

Eminently, it has transpired that the main market segment of the Walt Disney Company is mainly found in California and US that has been giving more revenue to the firm (Robins 2014, p. 21). Therefore, it becomes apparent that perhaps, the company has been reluctant to reach other segments such as Europe, Africa, and different continents. In the future, the company should be focused to reach out other Africa by introducing their consumer products like the publications and merchandise licensing to give an authority of utilizing the intellectual properties of the company.

Similarly, the Walt Disney firm should appear aggressive in identifying highly determined individuals, especially from its less dominated regions to franchise the concept. In this aspect, it would require an active coordination with entertainment companies of various countries whereas initial training would be proposed to the willing parties. Through the practice, the increased brand awareness would be felt in several parts of the world at relatively lower cost. Instead, the company would benefit possibly by the beginning of the seventh year henceforth.

Adding Other Crucial Programs to on Offer Besides Entertainment

Indeed, the Walt Disney Company has been prosperous in the field of entertainment. However, to be more competitive, the company should break the boundary from recreation to religious activities alongside the amusement programs. Over the company’s media network including ESPN, ABC Television, and ABC Owned televisions among others, the company should incorporate various religious songs, messages, and preaching (Robins 2012, p. 22). Before initiating the program, it will be necessary to assess the commonly preferred performances for the Christians. The influence of religion and culture towards the firms’ brands cannot be understated. Perhaps, the company is still new to some clients who oppose the entertainment due to personal beliefs.

Engaging More Than One Dealer in producing Animated Films

Having used the vertical integration where Pixar has been the sole producer of 3D and 2D animated films, the firm should break this boundary in the coming year (Walt Disney Company 2017, n.p). With the desire to increase coverage to different parts of the world, the company should struggle to nurture some experts in the targeted countries so that they can independently produce the videos under the assistance of reputed experts (Walt Disney Company 2017, n.p). For the consumer products of the firm, a comprehensive awareness to producers in the dominated countries would reduce transportation cost of transferring such items from the central warehouse to overseas. Undoubtedly, the entire process will significantly improve the effectiveness of the company’s operations.

Careful Designation of Films to Capture Emotions of the Viewers and Extensive Use of Social Media

While planning to be practical as well as increasing competency, the Walt Disney Company would show more expertise in designing videos that are capable of capturing emotions of the audience. With the help of appropriate colors and relevant instances that can persuade the targeted parties, several clients would subscribe to the programs and media (Grossman 2014, p. 6). Additionally, the company should continually utilize the vast opportunity of readily available internet users to market various brands via online. Instead of using online retailers like the Amazon to promote the company brands, the Walt Disney could achieve this by merely becoming aggressive.

Overall, the success of the Walt Disney Company has been exacerbated by observing corporate strategies. The corporate tactics used include mergers and acquisitions, vertical integration, niche-focused and mass market coverage. Likewise, strengths of the corporate approach in line with corporate strategy theories like complexity incorporate high products differentiation, influential adaptation and administration due to skilled workers, availability of transparent board of directors, and powerful connection with other business units. The weaknesses are lack of external auditors in the corporate governance team, imbalance in the market segment, improper cultural diversity in the workplace, and limitation to a single supplier through vertical integration. Therefore, the Walt Disney Company should expand its market coverage, consider religious aspects alongside entertainment offers, engaging more than one animated dealers, and the careful design of films that capture the emotions of targeted groups while exploring the extensive use of social media. With the massive use of media for promotion, the company would reduce a significant amount of cash that would be given to various online retailers for the development like the Amazon.com. The observation of the mentioned proposals would improve the efficiency of the company as well as making it prosper amidst the rivals.

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