Strategy Formulation and Implementation

INTRODUCTION

The Entertainment Industry was once a niche’ market in the early 20s and 30s. Back then they were backed by big corporate executives. But in 1923, came a person called Walter Elias Disney and set up the Walt Disney Company and created a disruption in the entertainment and animation industry. Now, this entertainment giant is headquartered at Burbank, California and has a revenue of $2.3 billion dollars as of 2017.

Disney has been part of the entertainment industry for 80 plus years and reinventing itself countless times to fit the mould that its stakeholders demand. The company makes movies for both adult and children alike and dominates the industry having a strong foothold in the movie industry and hegemony in the distribution sector.

But it was not all smooth sailing the company was at a verge of bankruptcy in 1932, but was saved by the development of character we all have started associating synonymously with Disney i.e the Mickey Mouse.

After being nominated for the awards through the 30s for its animation films, the company started having difficulties in terms of production which accentuated due to the World War 2. After the war, the company found it difficult to regain its strong presence in the market again. But, the turning point came in 1950 with release of Treasure Island and Cinderella.

From then on, Disney has penetrated the International market and, in the process, undergoing tectonic shifts in its change in leadership changes. Although through out the 70s and 80s Disney survived many takeover and mergers, By the end of 2010s Disney took over host of Acquisitions most high profile being of Marvel, LucasFilms and 21st Century Fox.

The following Report will take to through the strategies and the methodology adopted by Disney Studios to become the leading market shareholder in the entertainment Business.

VISION

“To make people happy”

MISSION

“To be one of the world’s leading producers and providers of entertainment and information”

PORTER’S FIVE FORCE MODEL

• COMPETITORS:

Walt Disney Studios although has a lion share of the market but also has a lot many competitors namely Time Warner , NBC/Universal , Sony Pictures, Paramount and Lionsgate. Not only these but the company also faces competitions from other studio houses and the competition is aggressive which one can see from the number of movies that each studio releases per year. Also the product is same leading to the flexibility of the movie goer to pick a substitute to watch.

• NEW ENTRANTS:

The new entrants have the ability to cause disruption in the market and since they are paving away for alternatives in terms of alternatives the switching becomes easier. Also the capital cost of making a movie for Disney is very high but whereas for new entrants it is low leading to the profit margin of the new entrants to be high. Also, the brand development holds a key position , Disney in order to maintain and develop its brand constantly has to invest more as compared to the new entrants.

• BARGAINING POWER OF BUYERS:

The buyers have a strong tendency to switch owing to their fickle sense of likings. So the studio has constantly keep its stakeholders satisfied leading to more investment in terms of its movie production. The price sensitivity also plays a moderate role that owing to the huge demand and to cater to all masses of audience the studio has to keep the price at a reasonable scale. The ability to substitute also remains moderate as the studio has to constantly give into the demands of the consumer or risk of loosing them to the substitutes.