1. Corporate Strategic Case by Dwi Joko Pramudito WA Song Young Kang
Walt Disney Company
Corporate Strategic Case by
Dwi Joko Pramudito WA
Song Young Kang

2. Disney Growing Entertainment Empire
Michael Easner, Disney’s former CEO built Disney’s core strengths in the three areas of:
Entertainment and recreation
Motion pictures
Video and consumer product

3. Entertainment and Recreation
Disney’s top managers began by enlarging the size and variety of its theme parks and other entertainment properties
In 1995, Disney announced it would build a $500 million zoological park at Orlando in addition to Disney World, EPCOT and Disney
Another entertainment venture Disney finalized was a revitalization of West 42nd Street in New York

4. Studio Entertainment
Through out 1990s, Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures, and Buena Vista Pictures divisions continued to increase the number of movies they produced
Disney acquired Miramax Pictures
By late of 90’s, Disney’s studios division had run into hard times
By 1995, Disney’s domestic home video division reach a phenomenal sales of $ 2 billion

5. Consumer Product
By 1995, Disney had opened 429 specialty Disney Stores worldwide.
Disney started a catalogue mail-order
Disney’s publishing interests also increased sharply, publishing more than 500 million books a year

6. The Disney-Capital Cities/ABC Merger
In 1995, Eisner announced that Disney would acquire Capital Cities/ABC for $19 billion
ABC’s poor performance in the following year, brought its top management under intense scrutiny from Eisner
Eisner had a very centralized management style and expected all his top manager to craft five years and ten years plans for their division
At ABC, its executives used one year plan to guide their choices for the next year’s programming
It became clear that there was conflict between Disney and ABC. In the fall 1995, ABC performance deteriorated

7. New Problem for Eisner and Disney
The main reason for a major decrease in Disney’s performance was that Disney’s entertainment asset began to perform poorly
Problem in Media Networks
Problem in ABC continued to worsen in time
By 2003, ESPN became a major contributor to Disney profit

8. New Problem for Eisner and Disney
Problem in Studio Entertainment
The profitability of Disney’s movies continued to fall:
Disney studio found it impossible to create new blockbuster
The shift to produce animated movies using computer- based digital technology
Problem in Consumer Product
Eisner bought two major sports team franchise ( Mighty Ducks & Anaheim Angels)
DVD sales drop due to the lack of its new hit movies
Eisner opened Disney Stores retail in 2000, and in 2003, Disney sold them to Children’s Place retail

9. New Problem for Eisner and Disney
Problem in Theme Parks and Resort
In the early 2000, Disney spent almost $5 billion to build new rides and modernize its Anaheim and Orlando properties
External factor such as 9/11 attack and SARS epidemic in Asia occored

10. Bob Iger Takes Over (Sept 2005)
A new decentralized approach
Disney under Eisner was too tall and bureaucratic
Iger dismantled Disney SPO
The result was it quickly let managers of different business unit to generate and implement many new strategies

11. New initiatives since 2005 Media Networks The main source of revenue:
Advertising revenues
Distribution agreement with the major cable companies
In 2007, Disney spin off ABC Radio Holding
In 2009, Disney merged ABC entertainment and ABC Studios into ABC Entertainment Group
Disney focused on the teen franchise to exploit commonalities between business unit

12. Studio Entertainment
In 2006, Disney had a major success when it released High School Musical (HSM), followed by HSM 2 in 2007, and HSM 3 in 2008
Disney acquire Pixar Animation Studios
Cost cutting by reducing number of movies produced each year, and unify several marketing and production division within its TV and film operation

13. Consumer Product Division
Parks and Resorts
Disney announced two major expansion would be made to its Walt Disney theme park in Florida
In October 2007, Disney also announced a $1.1 billion, five year plan to overhaul its California Disneyland park
Disney has also continued of opening new theme parks abroad in Hongkong, France, China
Consumer Product Division
Enter the videogame business
In 2005, Disney acquire many video
games developer
Merchandise using Disney name

14. Internet Entertainment
Disney would buy a 30% stake in Hulu.com
In January 2009, Disney announced an agreement with Verizon wireless to catch Smartphone‘s user by offering Verizon’s V CAST video and mobile web customer full of a comprehensive portfolio of Disney news, entertainment, sports programming, including full-length episodes of ABC TV show, news, Disney Channel, and ESPN
In 2007, Disney acquired Club penguin, one of the leading online virtual world for kids
Iger believed that internet entertainment unit will enjoy the fastest growth during next five year.

15. Disney Future Prospect
In 2007, Disney’s revenue were a record %35.5 billion, 5% hinger than 2006
In May 2009, Bob Iger admitted for the first time the shift of customer to use internet to access digital entertainment was beginning to impact the company’s business unit in important ways
The recession had also led to a 45% fall in revenues from its park and resort unit

16. Suggestion
As internet is becoming a new way on accessing digital entertainment, Disney should continue its expansion in internet entertainment unit
Cross collaboration from videogame business and programs of TV or Movie to attract customer
As the economic world is getting better, Disney should continue its strategy on theme park and resort to attract customer

17. Thank You