This case was described about the Walt Disney Company's history from 1923 to 2001. The company was declined after the dead of its founder Walter Elias Disney and resurgence under Michael Eisner, former Chief Executive Officers. Walt Disney Company (Walt Disney) was founded in 1923 known as Disney Brother Studio. Walt Disney has became a world leader in family entertainment. Today, the company is operating on a multinational level, and has over 58,000 employees world wide, and over 189,000 shareholders. What are the factors that contributed to the company's successes and failures on its way towards becoming the World's largest family entertaining company? I would discuss the stated question by analyzing the Disney's industry in relation to Porter's Five-Forces Model. In addition, I would like to make a recommendation on the strategic changes and tactical changes that are needed to be made at the Walt Disney Company.
Porter's-Five-Forces Model focuses on the external environment that the company has to be able to cope with.
The first force to be discussed is the threat of new entrants. Since the Disney Company has been able to find a very distinctive niche in the industry, the entrance barriers are relatively high. As Disney pretty much dominates the family entertainment market and it would be very difficult for such a new organization to develop brand recognition and product differentiation. In addition, extremely large amounts of capital investment are required for new entrants into the industry.
The bargaining power of customers is high in the service and in the entertainment industry. Since a large number of customers are needed to make Disney's operations run smoothly, the customers have certain powers. For instance, if the price on a particular home video is too high, customers may be reluctant to spending the money needed to...