The Walt Disney Company Disney is the largest entertainment and media conglomerate in the world. The company includes four business segments. Its assets include media networks, various parks and resorts, studio entertainment and a variety of consumer products. The company's television and media network involve ten broadcasting stations and the ABC television network. The cable networks of the Disney Corporation include the Disney Channel, ESPN, ABC Family and Toon Disney ("About the Walt Disney Company," 2016). As far as film producing is concerned, the Walt Disney Studio produces movies through various branches, such as Touchstone, Pixar, Marvel Entertainment and recently Lucasfilms. The company's entertainment service includes 11 parks, four cruise lines and four resorts ("About the Walt Disney Company," 2016).
Company's Vision and Mission Statement
The mission of the Walt Disney Company is to become a leading producer and largest entertainment provider in the world. The company's principal financial goals are to increase income and cash flow ("About the Walt Disney Company," 2016). Furthermore, it has a policy of allocating the capital to growth initiatives, which will lead to long-term shareholder value.
Disney is a perspective conglomerate firm as it expands to Europe and Asia. The company's potential growth is in its domination at the theme parks and entertainment industry. Thus, the domination of the Walt Disney Company is the world's entertainment is explained by its unlimited ability to stay diverse.
Company Overview (DIS)
Founded in 1922, the company together with its affiliates and subsidiaries has already become a leading international family entertainment enterprise. The company has over 137,000 workers worldwide. Furthermore, Disney is considered the second largest entertainment enterprise in the world ("The Walt Disney Company (DIS)," 2016).
Lately, the Disney Stocks (DIS) remains steady even in the highly volatile stock market. The lowest earnings of the Walt Disney Company were reported in 2001, when the stock prices per share amounted to $0.55. Since that time, the company's share has been increasing steadily, and in 2007, the whole time record of the company amounted $1.92 per share ("Walt Disney Co," 2016). Currently, the income from the Disney's shares equals $1.42 for one year per share.
Company History and Operations
The Disney Company primarily originated as an animation studios. Then it developed into several adjacent businesses and related avenues aimed to bring happiness to families. The history of the company tells that Roy Disney established the largest conglomerate in October 1923. First, Disney began from creating animated films. In 1937, the first animated film Snow White and the Seven Dwarfs was released, which is now considered one of the greatest American films of all times.
Disney opened its first amusement park in 1955 in Anaheim, California. It was called Disneyland and spread to over 160 acres. Roy Disney's brother, Walt, personally supervised construction of the park. Unfortunately, in December 1966, Walt Disney died from lung cancer. However, brother's death did not stop Roy from fulfilling Walt's dream ("About the Walt Disney Company," 2016). Thus, in 1971, the Walt Disney World was opened in Florida. After Roy's death, the control over the entire company passed to Donn Tatum, then to Card Walker, and finally to Ron Miller.
Disney amusement parks and other entertainment facilities created by the company had become extremely popular not only with children but also with adults and entire families. Therefore, in 1983, the company launched The Disney Channel; thus, the empire extended internationally. In the same year, Disneyland along with two theme parks and three Disney hotels opened in Tokyo, and in 1992, two theme parks and seven hotels of the company were launched in Europe. The Disney Company diversified substantially when the owners purchased the Miramax Film Corporation and multiplied its income by 28 per cent. Another Disney's successful acquisition occurred in 1995, when the company purchased the Capital Cities / ABC. Thus, it gained access to the television of ABC and ESPN ("About the Walt Disney Company," 2016). Finally, after purchasing the Pixar Company and Marvel Entertainment, the Disney Company had become the largest and the most successful entertaining company worldwide.
Products and Services
The largest media conglomerate offers a wide variety of products and services. The main services include Disney Media Network, park and resorts, studios, consumer products and Disney Interactive. These business branches made the Disney Company successful and the richest in comparison to other similar enterprises.
The first Disney's product is Disney Media Network. It is the largest segment that covers all Disney's operations in cable television and radio networks, including digital operations. It comprises approximately 76% of the entire income of the company ("About the Walt Disney Company," 2016). The majority of Media Network's operations are focused in the USA. However, Disney uses the differentiation strategy and has a stake in international operations. Media Network operations consist of eight groups, particularly ABC family, Disney Channels, ABC Entertainment Group, ESPN, Disney Television, ABC Television Stations, and Hyperion. They are mostly focused on entertainment programming and broadcasting the news or other factual television content ("About the Walt Disney Company," 2016).
Parks and resorts can be considered the second largest revenue producer for The Walt Disney Company. They comprise nearly 19% of income. Currently, in the USA, the Disney Company owns Disneyland in Anaheim, California, and in Orlando, Florida, a Resort in Aulani, Hawaii, and two cruise lines. In addition, overseas the company possesses parks and resorts in Hong Kong, Paris and Shanghai. Even though these assets do not contribute to the firm's income as much as the U.S. properties, they help Disney to breed internationally. Cast that is working on the scheming of the parks are not only designers. Many writers, engineers, sculptors, researches, managers and construction experts are working in Disneyland resorts.
As far as the Walt Disney Studios are concerned, this segment consists of animated films, theatrical plays and music. It is one of the major divisions of the entire company. Over the year, the Walt Disney Studios generate approximately $6 billion ("About the Walt Disney Company," 2016). It consists of eight segments, which produce family movies, superhero content, documentary movies, animated films, and live entertainment.
The Disney Company consumer products provide video concepts, which Disney further capitalizes on the entities that the company produces. All these products are available in the form of toys, furnishing, accessories, home d?cor, clothes, electronics and footwear. The products are usually divided into three separate divisions, namely Publishing, Retail business, and Merchandise Licensing.
Even though Disney Interactive is the smallest segment, it is one of the most important divisions as it operates interactive media and video games. Moreover, it provides consumers with other Disney products and gives them an opportunity to play with various Disney franchises.
The main strength of the Disney Company is its recognized name and logo. Brand recognition of the corporation helped it master brand extension. The Walt Disney Company is famous for children's movies and theme parks. The enterprise has an exceptional cash flow and remains active in the stock market. Moreover, Disney has created many characters and superheroes, which are sold in form of toys, video games, etc. and bring a high income to the company.
The weakness of the company is the risk that the Disney Company incurs when financing an unreliable film or other product. The loss of revenues is potentially hazardous for further company growth (Jurevicius, 2013). Moreover, the broadcasting segment turns to be expensive, and its work results in company's poor ratings and low advertising revenue. The poor games sale brought company to the debt in the last couple of years. Thus, the main weakness of the company is its unprofitable interaction.
The major opportunity of the company is the growth of entertainment industries in the emerging markets. The next opportunity is the expansion of the movie production to new countries (Jurevicius, 2013). However, the threats are also present in the company's performance. These include intense competition, a strong growth of online TV and movie rental. In addition, the increased rate of privacy also threatens corporation's success.
Corporate Values and Strategies
The main strategy of the Walt Disney Company is to create a customized media advertising plan for all segments as advertising is a weak part of the company's policy. Another potential strategy is to expand Hong Kong Disney and to open a Disneyland in one more country. Besides, it is important for the company to target three markets and develop a strong expansion plan for all the consumer products. Other strategies of the company are to digitize the content, to utilize the technology and lower its costs. The most recent plan is to create a marketing strategy and promotion to use during adverse conditions. However, the main strategy of the company is to fully develop and modernize all franchises with an intention of increasing the company's international presence (Nielson, 2014). As far as values are concerned, the company defined its own "chain of excellence." It includes leadership excellence, cast excellence, guest satisfaction, and finally the financial result.
Even though the diversified Disney Company remains extremely popular, it faces a range of competitors in various business segments, such as media networks, parks and resorts, studio entertainment, and consumer products. The company's Media Networks compete with other television networks, independent cable stations, DVD and Blue-ray formats, and the Internet for the audience. The amplified competitive compression for promoting revenues for broadcasting and cable networks stemmed from the growth in the number of networks distributed by MVPD. Disney also competes for acquisition of sports and other programming. Thus, the company has contractual sports agreement with the NFL, NBA, MLB, the World Cup and various soccer leagues, tennis and golf associations. As the market of programming is very competitive, the decision of agreement between the largest markets was right to maintain the economy and high revenue of the company.
The other competitors of Disney Parks are other resorts that have similar themes and ideas. Nowadays, the company's theme parks compete with Six Flags entertainment, Universal Studios, and Cedar Fair. The competition in this business segment has intensified lately due to the opening of the Universal's Wizarding World of Harry Potter theme park, which enhanced attendance of Universal Studios. Disney parks and resorts usually experience fluctuations in attendance in winter months and school times. The peak of attendance occurs during school vocations, summer and spring seasons.
The Walt Disney's Studio of Entertainment competes with all other forms of entertainment, for example studios owned by Time Warner, Sony, Viacom and the Twenty-First Century Fox ("About the Walt Disney Company," 2016). The success of Disney's studio depends heavily on public preferences. Similar to the parks and resorts, the Disney Entertainment's revenue fluctuates due to the several factors. These factors are the timing of vocation and the holiday periods.
The last competitive business segments of Disney are its consumer products and interactive. The company's merchandise licensing, retail business, and publishing compete with other similar categories. The Online Interactive competes with a wide variety of other online sites. Disney's video games primarily compete with other types of game entertainment. The revenues from these sections are the subject for similar trends. However, even though the Walt Disney Company has competitors in each business segment, it maintains the position of the largest media conglomerate with the highest income in the world.
Management Team and Leadership
Since 2005, the chairperson and chief executive officer of the company has been Robert A. Iger. Iger successfully eased tension that had increased after the previous leader Robert Eisner. Moreover, he effectively began expansion of the company. During the tenure of Iger, Disney purchased Pixar, Marvel and Lucasfilm, which increased the company's income ("Investor Relations," 2016). The corporation invested millions in its parks and resorts over the world. Even though the company generally improved under Iger's management, not all shareholders agreed that the result cost the investment.
The Disney Company's board of directors consists of ten members. However, the publically traded company has 1.8 billion shares, with outstanding values at almost $90 billion. The largest investor is Robert Iger, who owns 1.1 million shares. In contrast, the Fidelity Investments and the Vanguard Group hold over 4% of the entire stock ("Investor Relations," 2016). The number of employees is also great. Only in 2010, Disney employed 134, 532 workers, the majority of whom were full time employees and approximately 15% were temporary and seasonal workers (Nielson, 2014).
The Financial Outlook
As for November 11, the Walt Disney Company has a median target of 106.50, with a maxim estimate of 125.00. The year before, the corporation reported a dividend of 1.81USD. It represents 110.47 % increase over 2014 ("Walt Disney Co," 2016). On November 10, 2016, the company reported earnings increase of 1.10 per share. Thus, the annual earnings are 5.72 per share. Lately, the Walt Disney Company has revenues of $55.63 billion for annually. In comparison to previous year results, it shows 6.04% increase ("Walt Disney Co," 2016).
Since its establishment, the Walt Disney Company has built a diverse empire. The company's current opportunities profoundly overweight its weaknesses. The company is increasing and opening new enterprises in Europe and Asian- Pacific areas. Nowadays, the corporation is a legitimate success within North America. Thus, the logical direction is to expand its eastern segments. Disney is famous for creating a range of lucrative products in a number of marketplaces. The company is considered the largest mass media conglomerate that is well known for TV and film production all over the world. The Disney Company owns and controls ten broadcasting stations, ABC television, and a great number of cable networks, such as Disney Channel and ABC Family or ESPN. The high-income company owns studios that produce films for the Disney Studio. Even though the company has a wide variety of competitors in various business segments, it remains popular as its annual revenues and stock prices increase every year. However, the Walt Disney Company has to implement a strategic plan and a balanced approach to innovation and cost-savings, which would help the company maintain its financial and human resources.