balanced scorecard (case study disney)

• The Walt Disney Company’s Strategic Assessment Words: 4226
• Disney Corporation: Company Analysis Words: 935
• The Walt Disney Company Analysis Words: 673
• The Walt Disney Company: Workforce Diversity Words: 2151
• Walt Disney Human Resources Strategy Words: 4730
• The Walt Disney Company: Strategic Analysis Words: 3687
• The Walt Disney Company: Main Strategies Words: 1155
• Walt Disney Company: Change Management Words: 2008
• Walt Disney Company Corporate Social Responsibility Plan Words: 2434
• The Walt Disney Company’s Generic Strategy Words: 564
• Walt Disney Company’s International Services and Strategies Words: 867
• The Disney Company’s Strategy Assessment Words: 1267

The Walt Disney Company’s Balanced Scorecard

Introduction, the walt disney company’s objectives.

The Walt Disney Company (TWDC), or simply Disney, is a multinational entertainment and mass media conglomerate that was established in Los Angeles in 1923. According to the company’s website, TWDC seeks to entertain, inspire, and impact people through the power of stories (The Walt Disney Company, n.d.). At the same time, Disney continuously searches for ways to grow profitably and sets goals that will lead the company in that direction. For one, as per TWDC’s 2021 report, the company’s further growth plan includes accelerating expansion in its leading market, North America, launching new franchises, and continuing to extend its streaming platforms influence (The Walt Disney Company, 2021). Moreover, Disney aims to broaden its global reach through alliances with other companies while increasing stakeholder returns. In addition to that, The Walt Disney Company (2020) emphasized that it has a long-term vision and specific goals when it comes to sustainability policy. Seeing how the entertainment market today is more large and attractive than ever and how it continues to grow globally, it seems that further success for Disney is almost ensured.

For each group of operational steps in four areas – financial, customer, internal business project, and learning and growth objectives – there will be a team of specialists to control the process of goal achievement. According to Jefferson and Quadrani (2022), in 2022’s second fiscal quarter, Disney’s revenues grew by 23%, and in the past six months – by 29%. This figure seems to be related to the world slowly starting to recover from the effects of the global pandemic, which, for instance, explains the brilliant financial performance of Disney’s theme parks in 2022. Moreover, Disney’s 100+ additional store locations that were opened at Target all over North America by the end of 2021 are doing exceptionally well too. It reflects the company’s confidence in gaining additional market share while strengthening its influence in its most heavily penetrated market.

However, apart from continuing to target North America, TWDC needs to consider the better establishment of its presence elsewhere. It will allow the company to increase its customer base and celebrate its unique culture, which promotes diversity and inclusion all over the world. For this plan to be successfully brought to life, the company is to focus on improving its internal business processes. It includes a decrease in the number of production errors and more efficient use of technology for information storage.

Furthermore, the pandemic has contributed to particular changes in customer behavior, and TWDC, like any other organization, has to be prepared to adapt the business to its short-term and long-term effects. The current times demand that companies continue to meet their customers’ needs while ensuring that people’s engagement with the brand happens in whichever way it is convenient for them. For Disney, innovations in this field are to include the continuation of consumer experience elevation, the creation of new online platforms, and the expansion of digital relationships with the customer base.

Finally, Disney has recently announced that it strives to be a resource-efficient company – that is, it cares about the environment and gives back to the planet. More investments will need to be made in various sustainability policies and operations for the company to actually establish itself as a leader in this area. TWDC’s efforts include its commitment to reaching net-zero greenhouse gas emissions from its direct operations, producing zero-carbon electricity, and implementing localized water stewardship programs by 2030 (The Walt Disney Company, 2021). Disney realizes that, as an organization with a unique position and the ability to make a long-lasting impact, it is responsible for addressing critical issues regarding the planet which sustains humankind. In this way, Disney drives the innovation that allows people to give to the environment more than they take.

Jefferson, D., & Quadrani, A. (2022). The Walt Disney Company reports the second quarter and six months earnings for fiscal 2022. The Walt Disney Company.

The Walt Disney Company. (n.d.). About the Walt Disney Company .

The Walt Disney Company. (2020). The Walt Disney Company announces strategic reorganization of its media and entertainment businesses .

The Walt Disney Company (2021). 2021 Corporate Social Responsibility report [PDF file]. Web.

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Walt Disney Company’s Strategic Case Essay Example

Financial performance analysis for the period of 2012-2014.

The current report presents the strategic case of the Walt Disney Company, based on the analysis of the recent sources on their strategic policy, external environment research and financial performance analysis for the period of 2012-2014. The study comprises the analysis of internal and external environment using the four-criterion test of the resources and competences, the Porter’s five forces model, and a SWOT analysis. The financial report includes analysis of the company’s performance for the three years, calculation of the ratios as well as the horizontal and vertical analysis of their performance. The balanced scorecard comprising key performance indicators of the business is elaborated based on the financial targets and other strategic metrics. Finally, the paper contains a list of Blue Ocean strategies based on the strategic positioning of the Walt Disney Company.

1. Major Industry Trends

Founded in 1923 as an animation film studio, the Walt Disney Company eventually diversified the business into a number of broad family entertainment and media segments, expanding its presence on all the continents and becoming a leading family brand. Currently, the company operates in five business segments: Media Networks, Parks & Resorts, Studio Entertainment, Consumer Products and Interactive Media (Forbes, 2015). The key trends of each industry segment are presented in the following sections.

1.1. Media Networks

The Media Networks segment of the company is comprised of a “domestic broadcast television network, television production and distribution operations, domestic television stations, international and domestic cable networks, domestic broadcast radio networks and stations, and publishing and digital operations” (Forbes, 2015). The main networks are ESPN, Disney Channels Worldwide, ABC Family as well as SOAPnet and UTV/Bindass networks in the TV, radio, and internet channels.

Disney remains the leader in the U.S. TV industry. The Disney Channel, targeting the kids under 11, maintains the “current penetration levels of around 91% among the U.S. pay-TV households” (Trefis Team, 2015a). However, due to the growing competition from the alternative platforms, the subscriber base has declined during the last years. ABC Family targets the “becomers” of female audience aged 14-34 and was estimated as the “top-rated” ad-supported cable network (Poggi, 2015).

Due to the fact that the company does not use regular commercial advertising in the Disney Channel, the major drivers of the revenue growth are monthly subscription fees, which have been increased during the last years. The very high family customer affinity depends on the high quality content and the continued no-ads policy. The success of ESPN channels, which contribute to a large part of the company’s revenues, is determined by the effective strategy of live (online) content delivery.

1.2. Parks and Resorts

The Parks & Resorts segment includes “theme parks, resort hotels, retail, dining, and entertainment complexes, conference centers, campgrounds, water parks, and other recreational facilities” (Forbes, 2015). This sector features unique synergy benefits from the other Disney business segments. Strategically, the Walt Disney Company does not compete with the other hotel and recreation facilities; instead, the Parks & Resorts segment contributes to a comprehensive customer experience related to the guest journey in the Disney world across all the channels. The key drivers that are expected to contribute to the growth of the segments are economic recovery and increased disposable personal income levels in the USA and worldwide. These factors should “give rise to the demand for luxuries including travel, leisure, entertainment etc.” (Trefis Team, 2015b). The U.S. disposable income has increased by 8% since January, 2014; the amount of travel and tourism in the USA rose by 7% in 2014 (ibidem). Both in the USA and internationally, the development of new themes, attractions, and other recreational facilities in the Disney’s resorts shall result in the increased number of visitors as well as contribute to the growth of the global hotel and resort business.

1.3. Studio Entertainment

The Studio Entertainment segment of the company “produces and acquires live-action and animated motion pictures for worldwide distribution to the theatrical, home entertainment, and television markets” (Forbes, 2015). The core production brands are Walt Disney Pictures, Touchstone Pictures, Pixar, Marvel, Disneynature, and LucasFilms. Considering the whole industry, the performance of the segment “can be erratic as it largely depends on the audience and box office response, which can be fickle and hard to anticipate” (Trefis Team, 2014). However, the company’s recent acquisitions provided an extraordinary boost to the studio production, resulting in the strong growth in 2014. The company has a strong plan of upcoming pictures, which shall provide the stable cash flow of the segment and contribute to the increased dependent areas of the business.

1.4. Consumer Products

The Consumer Products segment “licenses trade names, characters and visual and literary properties to various manufacturers, retailers, show promoters, and publishers throughout the world” (Forbes, 2015). It also includes the retail distribution in physical and online Disney Stores as well educational products and services worldwide. Due to the fact that this segment is uniquely tied to the performance of the studio and park business, the factors of the Disney business strategy described above affect the results of this segment more than competition pressure from other retailers. Another key factor affecting the segment revenues is the issues of property rights protection.

1.5. Interactive Games

The Interactive Media segment “creates and delivers branded entertainment and lifestyle content across interactive media platforms” (Forbes, 2015). Although mobile, online, and console games as well as online services feature unique growth rates, the company does not provide significant competition to the numerous technological and development companies. The organization launched a number of successful mobile applications in 2013, which were successful in the USA and Asia. However, the segment remains a small “niche” part of the business. Its further development shall be determined by the Disney’s successful integration of the new digital technologies in its core business.

1.6. Industry Trends: Conclusion

As outlined in the previous sections, the company’s performance in its five business segments is subject to intense competition and a number of industry challenges. It also depends on the successful execution of the Disney core strategy, aimed at providing the highest quality entertainment. In order to pursue this goal and maintain high profitability of the business, the company relies on the number of specific business competencies. These will be analyzed in detail in the next part of the paper.

2. The Analysis of Competencies

This part of the report elaborates the detailed analysis of the core competencies possessed by the Walt Disney Company. As described by McKinsey, the competitive advantage of the company “stems from two sources of scarcity: positional advantages and special capabilities” (Bradley, Hirt & Smit, 2011). The former scarcity benefits from entering the untapped markets as well as from entry barriers or high costs of the business. These advantages comprise the Disney’s strong diversification strategy and the solid scope of the business. The latter takes roots in the company’s internal capabilities, encouraged by its corporate culture, practiced in all the divisions and envisioned by its leaders. Consequently, the effective management of these scarcities results in the sustainable competitive advantage of the company. The ability to maintain the competitive advantage in the long term is measured via the four-criterion test, presented in the last section of this part in the paper.

2.1. Unique Innovation and Creativity Culture

From the early years, when the company functioned as a cartoon studio to the current enterprise, the Walt Disney business was grounded on the creativity spirit, entrepreneurship, and innovation. A great innovator Walt Disney started, practiced, and encouraged the striving for great discoveries. He urged the staff to review the outside industries, and many novelties were born from associating the previously unconnected elements, “including a string of industry firsts such as joining animation with full length movies and putting themes into amusement parks” (Dyer, Gregersen & Christensen, 2011).

What started from the Walt Disney’s creative genius became the base for the corporate team management afterwards. Namely, Disney combined the three necessary elements of the creativity in one person. The presence of all the three elements in the company’s creative teams facilitated the business and enabled it to increase the profits it earns today.

Creativity as a total process involves the coordination of these three subprocesses: dreamer, realist and critic. A dreamer without a realist cannot turn ideas into tangible expressions. A critic and a dreamer without a realist just become stuck in a perpetual conflict. The dreamer and a realist might create things, but they might not achieve a high degree of quality without a critic. The critic helps to evaluate and refined the products of creativity. (From the “Strategies of Genius” book by Robert B. Dilts, in McGuiness, 2009).

Perhaps the ‘dreamer’ ability is the most rare to find in the modern organizations. As Steve Jobs was a board member and a major stakeholder at Disney, he transferred his “Think Different” campaign of Apple to the Disney’s business. Each of the company personnel aims to “dream bigger”, to redesign the business processes, products, and services in order to deliver more value to the customers (Dyer, Gregersen & Christensen, 2011). Today, the company makes great investments in order to ensure more diversity into the team, aiming to further inspire individualism, different point of views, problem solving creativity. Diversity in this broader innovational sense became a top management strategy: “We work very hard on getting diversity at the top of the organization, and like many organizations we still have room to improve. That will make us more creative” (Wetlaufer, 2000). The culture of long collaborative meetings is spread across the organization and many great ideas originated these team discussions. Several times a year, senior executives have an eight-day synergy training program encompassing all aspects and divisions of the organization. The environment for creativity “became institutionalized” in the company (Wetlaufer, 2000). Further, the organization aims at establishing the special attitude in all divisions, improve the employee satisfaction, and build a clear corporate culture. The corporate environment at Disney works effectively to fulfill its mission, which is to enhance the customer experience. For example, Disney uses the “business language to set the right tone” and create atmosphere in the company, calling the employees “cast members”, uniform “costumes”, and visitors “guests” (Coverly, 2013).

2.2. Brand Management and Diversification

Growing the disney brand.

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The brand is considered as the greatest asset in the Walt Disney company. It was assessed as the #14 brand in the world by Forbes (Forbes, 2015) and ranked #13 in the Interbrand Best Global Brands list (Best Global Brands, 2015). An idea from Warren Buffett, interpreted by the Disney’s CEO, is that a brand resembles “a pointillist painting… Everything you do for your brand is a point on the canvas” (Wetlaufer, 2000). This explains the attention to the small details, which is typical for Disney. With the first Disneyland, Walt Disney tried to make the scenery and costume changing as seamless as possible, to create the really “magical” experience for the visitors. This attention to the smallest brand decision becomes critical for its success: “A brand takes a long time to build, and a long time to destroy, and both happen as a result of lots and lots of small actions. If you want to be strong, each point along the way has to be as close to perfect as possible” (Wetlaufer, 2000). The Disney theming in the resorts is comprehensive, seamless, and immersive. The visitors and viewers are involved in the Disney classic story, whereas this experience is enhanced in every point of their relationship with Disney products and services.

Brand Acquisitions

In the first decades of the Disney business, Walt Disney created a chart describing the strategic assets of his enterprise. This unique ability to identify inimitable opportunities and achieve synergy from valuable partnerships and acquisitions was pursued in the company since that time. The company possessed the “cross-sight — the ability to identify adjacent assets uniquely valuable to your firm or assets with value that others are simply unable to perceive” (Zenger, 2013).

In 1990-s, after the “Coca-Cola’s unsuccessful attempt to acquire Disney in 1982 (it acquired Columbia Pictures instead) and Saul Steinberg’s failed buyout in 1984”, the company began its fast track of expansion (Parr, 2012). New businesses were acquired in the existing and new industry segments. Miramax Films was acquired in 1993 (and subsequently sold), in 1990-s the company bought ABC and ESPN networks, Fox Family, Saban Entertainment. In 2006, there was a critically important acquisition of Pixar; New Horizon Interactive, Playdom, and Marvel Entertainment followed the same process. In 2012, the company made another incredible deal, when it acquired Lucasfilm to two exceptionally important franchises to its offering.

As described by the CEO Michael Eisner, after the ABC and ESPN networks were acquired by the Walt Disney Company, these acquisitions were intended to “keep us strong and help keep gatekeepers from diverting our products” (Wetlaufer, 2000). The diversification strategy was generally pursuing the main strategic goal in order to provide the families in the whole world with the best quality entertainment and to respond to the diverse needs of the targeted segments in the best possible way. The majority of the acquired assets brought a great boost to the cash flows and unique synergy effect to the company’s creative proposition.

2.3. Technological Expertise and the Multichannel Proposition

In order to tackle the industry challenges, evolve along with the changes in technology and meet the dynamic expectations of the new customer generation, the Walt Disney Company has been investing in the advanced technologies. As described by the CEO, the company embraced the challenge and started turning it into its strength: Rather than watch technology grow threat after threat at us and disrupt our very valuable business models, we decided to embrace it and use it not only to enhance the quality of our product and the connection we have to our customers and make the company more efficient but, ultimately, to reach more people in more ways. (Gamble, 2012). Actually, since the Pixar acquisition in 2006, when Steve Jobs was the largest single shareholder of the Walt Disney, the company has been partnering with Apple during the development of the technological innovations. In September 2013, Walt Disney launched the Apple’s innovative mobile payment system and introduced Apple Pay and Apple Watch capabilities “at the media company’s stores and theme parks to make life easier for guests and employees” (Fox, 2014).

The recent acquisition of the YouTube multichannel network, Maker Studios, is expected to deliver unique value for the company’s proposition in the Internet channel. As commented by the company’s CFO: “We want to be where these millennial eyeballs are moving and they are moving to the Internet, they’re moving to short form, they’re moving to YouTube. We want to have an incredibly strong presence there” (Fox, 2014).

2.4. Leadership and Management

Being a company focused on the content creation, Disney relies heavily on the corporate culture, professionalism, and charisma of its leaders. Since 2005, the organization has been managed by Robert (Bob) Iger, who upgraded the strategy and succeeded to develop the business to the unprecedented value with the large potential to sustain the growth. He facilitated a number of successful acquisitions to revive the animation as well as increase parks and resorts. Under his leadership, Disney’s technological innovations, envisioned in the Imagineering innovation factory by Walt Disney, reached a new level. Essentially, Iger combined the roles of the CEO and CTO as well as “helped Disney get a headstart on those trends by making big and early bets on new technologies, even some that were seemingly at odds with the company’s business model” (Lev-Ram, 2014). His visionary in this area is still a critical element of the company’s ability to meet industry challenges and mitigate competition threats. Iger’s management was duly acknowledged by the shareholders at the time his retirement was planned:

Under his tenure, Disney has reached unprecedented creative and financial heights, driving the stock price to record levels and creating extraordinary value for shareholders. He has transformed Disney’s culture and empowered its businesses to effectively capitalize on evolving markets and new technologies, making Disney a company that doesn’t merely embrace change, but leads it. (Grazer, 2014).

After the prolongation of Mr. Iger’s contract till 2018, he assigned the new Chief Operating Officer of the company in February 2015, who is expected to eventually succeed him in the CEO post. Thomas Staggs, the current chief of the company’s Parks and Resorts business division, was chosen among the two most expected candidates. Having worked in the company for 25 years, Staggs was described by the CEO “an incredibly experienced, talented and versatile executive who has led Parks and Resorts during a time of unprecedented growth and expansion” (Pallotta, 2015). The other candidate was the current CFO Jay Rusulo. It is worth noting that the two executives “swapped jobs” in 2009, an “out-of-the-box” move of the CEO, which allowed enhancing the managerial experience of the team (Finke, 2009).

In March 2015, shareholders re-elected the ten members of the board of directors after which that year was considered as the most successful in the company’s history: “Driven by extraordinary creativity, innovative technology and global expansion, 2014 was in fact the best year in our history” (Walt Disney Press Releases, 2015a). In line with the technology-driven strategy, “the addition of Jack Dorsey, Chairman of Twitter Inc. and CEO of Square Inc., to the Walt Disney Co. board signifies the company’s commitment to leveraging next generation media and platforms to increase relevance” (Best Global Brands, 2015).

2.5. Strong Corporate Responsibility Programs

In addition to its mission to be the leader in the family entertainment segment, Disney pays much attention to its corporate responsibility programs. The company was ranked #6 in the 2015 Reputation Institute’s Global RepTrak® 100 rating, which distinguishes “the world’s most reputable companies on innovation, governance, citizenship and more” (Reputation Institute, 2015).

Shaped around the two citizenship realms, “Act Responsibly” and “Inspire Others”, the Disney’s corporate responsibility programs contributed to “another exceptional year for both the company and its citizenship efforts” (Disney Citizenship, 2015). The company sets ambitious goals in the environmental stewardship, ethical and responsible conduct and production, community support, as well as education in creativity and innovations. These programs contribute to the unique brand value achieved by the Walt Disney Company during the 92 years of its operations.

2.6. The Four-Criteria Test of Distinctive Competencies

Whereas the Walt Disney Company continuously faces pressure from the market, it possesses a number of valuable capabilities that enable it to mitigate or reverse the impact of these factors. To summarize the observations of the previous sections, it should be noted that brand value and internal corporate culture form the distinctive competencies of the company. They are facilitated by the Disney’s strong executive team. The ability of the management to identify and pursue unique diversification opportunities, which have not been used by the competitors, influences as a stabilizing factor on the company’s performance risks and balances the large investments in the business. The international presence is both an opportunity and a major cost factor, which results in the average return when considering the effects of these factors. However, unique management of the customer experience practiced at Disney stems from the company’s corporate culture and, in addition to the high brand perception, enables the company to charge premium prices and still gain high customer affinity in the long term. Regarding the last competence, the organization has already begun developing the technology and channel expertise. This competence shall be critical to address the largest competition challenges and mitigate potential revenue reduction. However, this competency is easily aging; therefore, it is a continuous subject for the improvement. The evaluation of the competencies is presented in Table 1 below.

According to the four-criterion test, the core competencies presented in this section of the paper form the basis for Disney’s sustainable competitive advantage and allow the company to manage effectively the pressure of the external powers. The relevant environment factors are presented using the Porter’s five forces model in the following section.

3. The Porter’s Five Forces Model

This section presents the analysis of the key factors in the competitive environment faced by the company in its five business segments. Overall, the company’s competitive model evolves around the customers as the key market force. As an effect of the Disney’s unique content creation expertise, enhanced by successful diversification of the business, the company is protected from the attacks of the competitors in its core industry. The Disneyland facilities are unique and characterized by strong incumbency advantages. In fact, it is not feasible to repeat such offering in the market. The success of the segment relies more often on the company’s execution excellence, rather than on the external factors. However, the organization operates under a large threat of meeting highly dynamic technology challenges and growing consumer demands. In particular, it faces serious threats in the media industry, which can result in a significant loss of revenues and profits.

3.1. Competitors

The company faces high competition from multiple rivals in the media industry. Disney competes with a number of other cable and broadcasting networks, multi-channel video providers, providers of online streaming services, etc. Increased competition with the digital channels poses the significant threat to the company’s viewer audiences and advertising revenues. The works connected with the distribution model for the Disney’s digital content are still in progress. However, the performance of the company remains good as compared to that of the competitors in the same business sector. Selected rivals from the Media Networks and Studio Entertainment industries will be examined in the financial analysis section of the paper.

3.2. Potential Entrants

As a result of the successful growth strategy, the company is strongly protected from the entrance of the new market players in its Studio Entertainment segment. There are a number of obstacles to the new entrants such as economies of scale and unique customer preferences and large capital expenditures of the industry. The performance of the Parks and Resorts segment as well as Disney Consumer Products is unique and closed to the competitors, which are closely connected with the Disney franchises, property rights and rely on the success of its films and entertainment products. However, the company has not gained any break-through dynamics in the Interactive segment, where its expertise is new and the results remain below average as compared to those of the numerous rivals.

3.3. Substitutes

Piracy and the weak protection of intellectual property rights present a major risk for the company’s position, in particular, in the emerging markets. This can challenge the company’s market share in the international markets as well as introduce additional costs related to the protection of property rights. Additionally, the Disney’s operations in media network face a serious threat posed by the online streaming services and online pay-TV products. The company addressed these issues by developing plans in order to offer online content. In addition, they “announced an exclusive deal to create Marvel programming for Netflix by 2015 and acquired YouTube network Maker Studios” as well as introduced several successful mobile applications to enable multiple-device access to the content and enhance user interactive and gaming experience (Best Global Brands, 2015).

3.4. Suppliers

The Disney’s business segments feature high level of costs and additional complexity related to the international management of the supply and distribution chain. This particularly refers to the segments involving the high volume of investments and physical assets: Studio Entertainment, Parks and Resorts, and Consumer Products. The company practices the total quality management and cost control programs in all areas. However, the organization does not fully control the majority of the distribution warehouses, which poses considerable risks, especially to the international projects. The respective contracts signed for international operations were typically formed with multiple vendors and often managed independently. However, there are issues, which require improvement in the areas of asset optimization and business synergy in the whole world. In the recent years, the company started to revisit its supply chain management policy in order to enhance its contribution to the customer experience and brand perception. In the Disney facilities, asset utilization was reviewed to maintain the high guest satisfaction, despite the fact it did not always relate to the direct financial benefits. The company also turned to address the quality issues: “To maintain the image of the Disney brand, the company works with suppliers it considers to be of high integrity”, reducing the number of vendors by 50% during the period of 2008-2012 (SupplyChainQuarterly, 2012).

3.5. Customers

The customers represent the key market force with the highest bargaining power over the Walt Disney operations. The company is highly customer-centric. Disney has been for years investing into its brand, strengthening it effectively with industry acquisitions and striving continuously for the unmatched customer experience. These programs allowed achieving correspondingly high level of the customer loyalty. However, the changes in the industry as well as the growing demands of the new generation of ‘millennial customers’ pose the high threat to the company’s long-term revenues.

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In this section of the paper, the previously described strategic competencies and the external environment drivers are summarized in a single analysis of the company’s internal and external factors (see Table 2 below). The SWOT analysis presents the strengths and weaknesses inherent to the company’s internal structure, as well as the opportunities and threats presented by its external environment. Despite a number of risks related to the company’s successful international expansion and the strong competition pressure, Disney possesses unique capabilities that allow the company to offset the negative impact of the external environment. The weaknesses of the business are rather side effects of its strong areas. For example, Disney is a unique family brand, which is effectively addressing traditional family values and providing high quality entertainment during the nine decades of its history. However, the perception of the brand might change dramatically, unless Disney manages to keep the customer experience standards high and evolve together with the changing audience.

The Walt Disney Company’s SWOT Factors

• Unique brand value and strong product portfolio
• Deep expertise in creative content provision, strengthened by successful acquisitions
• Diversified structure of the business, effects from volume and synergy worldwide
• Management challenges caused by the international structure (labor conditions, corporate culture, etc.)
• Underestimation of the park and resort capacity limits during the peak seasons
• Still strong reliance on the traditional family entertainment model
• Consumer Products revenues depend heavily on the film production

Opportunities

• International expansion, including densely populated regions and emerging markets
• Upgrading of the existing facilities to increase time of stay and visit frequency
• Mobile apps and multiple device strategy
• Online content and video streaming
• Multi-channel brand communication
• Weak macroeconomic conditions, in particular, decline in travel and tourism, currency exchange risks
• Poor protection of intellectual property rights worldwide
• Substitution of the licensed cable and broadcasting networks by online streaming and Pay-TV services

Overall, the balance of the SWOT elements resulted in the steady growth of the company during the last years. The overall financial performance metrics are presented in the next part of the paper (see part 5). A detailed examination of the segment results provides the base for a balanced scorecard, which represents critical metrics of the business performance (see part 6).

5. The Overall Financial Performance Evaluation

5.1. overview of the recent financial results.

The company closed the fiscal year 2014 with excellent results both in revenue and in net profits. Consolidated revenues increased by 8% as compared to 2013 to reach $48.8 billion. The increase of expenses in theatrical production, TV programming, labor cost inflation, as well as growth of selling and administrative expenses did not exceed the strong sales performance. In 2014, net profits attributable to Disney increased by as high as “22% to $7.5 billion”, and a much lower 8% increase in 2013 as compared to 2012 (Walt Disney 2014 Annual Report, 2015). The growth trend was maintained in the first quarter of the FY 2015: “Our results once again reflect the strength of our brands and high quality content and demonstrate that our proven franchise strategy creates long-term value across all of our businesses” (Walt Disney Press Releases, 2015b). The announcement of the FY 2015-Q2 performance shall take place on May 5, 2015.

Given the diversified business structure of the company, the comprehensive financial analysis should include the examination of the specific business segments. Key performance indicators of the Walt Disney’s businesses will be presented below in the balance scorecard section of the paper. A more specific analysis of the overall financial results, based on the ratio analysis, is elaborated in the following section.

5.2. Financial Ratio Analysis

The profitability ratios, which are calculated and based on the Walt Disney income statements and balance sheets for the fiscal years 2012-2014, reflect the successful results achieved by the company. The company has been growing its profitability margins by increasing sales and controlling the costs. The net profit margin made 15.4% in 2014, which demonstrates better results than the performance of the two largest competitors from the media and studio entertainment segments. Despite having significant costs invested in the projects in progress and the land for future resorts, the company managed to achieve the higher ROA than any of the competitors, and operated with good turnover ratios. The company maintained acceptable liquidity ratios and increased them in 2014. While not relying on the financial leverage from the borrowings, the company reinvested the earned cash flows, paid dividends, and implemented large share buy-back programs to improve further the shareholders incentives. The strong growth of the share prices during 2014 reflected the market value placed by the company’s shareholders in its recent performance and the CEO’s strategic actions. The stock price grew by 31% during the 2014 and soared in 2015, having reached the record mark and increased by 27% already since the end of the FY 2014.

5.3. Overall Financial Performance: Conclusion

During the last three years, the company featured stable financial performance and achieved an extraordinary growth of net profits in 2014. It significantly improved key business ratios such as profitability margins, ROE, ROA, while relying primarily on the effective cost management and the shareholder equity usage. The company have been enhancing the benefits provided to the shareholders and achieved spectacular growth of the market value. The key financial ratios provide the basis for a balanced scorecard template presented in the following section.

6. A Balanced Scorecard of the Company’s Performance

A balanced scorecard constructed for the Walt Disney Company reflects key performance areas of the enterprise such as overall performance as well as results by segments and territories, where applicable. In addition, the scorecard should track benchmark metrics and milestones for the strategic projects of the company. However, as the data is not publicly available, this part of the scorecard remains empty in the current report. The same situation relates to the budget performance, which is a key element of the scorecard. The reported data is taken from the last quarter available at the data of the report creation, which is FY 2015-Q1. The scorecard indicators are highlighted with graphical symbols and traffic light signs to demonstrate the levels of the budget performance. If applicable, the year-to-year comparison should be accompanied by the comparison with the previous quarter performance. The overall profitability section of the scorecard reflects considerable improvements in operational revenues, profits, and share performance. These results are accompanied by the substantial growth of investments, which explain the relatively low increase of the ROE. The main part of the free cash flow is reinvested.

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The profitability indicators by business segments reveal the significant change of income and project structure in the Media Networks sector. In particular, broadcasting programs contributed more to the net income than in the same quarter of the previous year. Parks and Resorts maintained their share in revenues, incomes, while the investments grew significantly. The investments are primarily related to the “higher Shanghai Disney Resort preopening expenses” (Walt Disney Press Releases, 2015b).

Studio Entertainment and Consumer Products featured revenue and income growth, which was reflected in the increase of their contribution to total financial performance. Interactive segment remains a niche, but it is fast growing. The significant income increase is explained by the mobile games success.

7. Blue Ocean Strategies of the Walt Disney Company

Several decades ago, the Walt Disney Company started its never-ending journey into the ‘family fairytale’, a world unforeseen by any of the contemporaries. The creativity genius of Disney allowed him to shape the theme park, which until now remains a “Blue ocean” of the entertainment industry. Essentially, Disney expanded the boundaries and worked in the “untapped market space” (Kim & Mauborgne, 2005), creating the demand for previously non-existing products and services. In addition, he utilized this opportunity to provide highly profitable sustainable growth of the company few decades later. Today, it is virtually impossible to identify, which companies from the resort industry, or which production studios, are the actual competitors of the Walt Disney Company: in both segments, “the competition is irrelevant” to the Disney’s creation (ibidem). The high costs of running and maintaining the existing facilities as well as developing new projects are not the obstacle for the company. Given the synergy of the whole enterprise, the numerous franchises and property rights owned by this organization as well as the plan to produce four films per year on average shall contribute to the further growth of the profits in this segment.

As each Blue Ocean strategy, the theme parks development is subject to many risks. For example, during the last years the high popularity of the Disneyland parks, combined with the economic revival and tourism growth, challenged the capacities of the resorts. The parks were overcrowded, and people had to wait in the queues for hours. Disney managers produced several solutions aimed to improve the situation. In particular, they made the queuing areas interactive and interesting as well as developed alternative facilities. Recently, they introduced a new Blue Ocean solution to the problem trying to eliminate the queues via the interactive reservation and Magic Bands. The Disney journey is personalized and connected: “through MyMagic+, plans can now be made online or via mobile and new RFID ticketing technology opens up access to the Disney experience of one’s design” (Best Global Brands, 2015).

The company has been experimenting with interactive technologies and virtual reality in its Imagineering labs. It has already addressed the diverse interests of the customers in the theme parks, while staying primarily in the family-with-kids segment. The new Blue Ocean strategy would address the new generation of the young customers and develop the physical theme offerings based on the new technologies, interconnected closely with the customized gaming and communication platforms. With its mature executive team, partnerships with Facebook, Twitter, YouTube, and Apple, and effective innovation culture, the company is well equipped to present the viable Omni-channel entertainment strategy.

The Walt Disney Company embodies the best industry practices in the wide range of family entertainment services and products. It possesses valuable and sustainable competitive advantages by maintaining and growing the unique Disney brand and a number of strong acquired brands. The company’s innovation and creativity culture, high quality standards, and customer-centric orientation serve to secure Disney’s position in the dynamic market environment. In addition, the company derives value by designing a unique set of Blue Ocean market offerings, including the further expansion of the theme parks, technological novelties aimed at enriching customer experience, and development of multi-channel platforms to reach the new generation of the clients. This successful strategy execution is reflected in the excellent financial performance in 2014, with the most optimistic forecasts for 2015-2016.

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Balanced Scorecard Disney

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Running head: DISNEY COMPANY BALANCED SCORECARD 1

Disney Company Balanced Scorecard Milka Cayoja, Sharon Chimere-Dan, Peter Kazmierczak, and Nguyet Nguyen BUSI 601 Liberty University

This study source was downloaded by 100000843445235 from CourseHero on 03-14-2022 12:00:45 GMT -05:

Introduction Disney aims to be a leading producer of quality entertainment and has managed to accomplish many feats of creative genius that have led to its enduring legacy. Using a balanced scorecard allows Disney to remain financially healthy, maintain a positive customer perspective, continually evaluate its internal processes and exploit learning and growth possibilities. Financial The financial analysis of a company is extremely beneficial to the wealth accumulation and cash flow planning of a company. According to one professional, “investors use financial analysis as the basis for their investment opinion on a company” (Finpipe, 2014). According to Disney’s 2015 Company Annual Report, the company saw a large stock price growth throughout the 2015 fiscal year. The 1st quarter saw a high stock price of $95, and then $108, $115, and $122 for the next three quarters, respectively. In 2015, Disney saw a revenue of $52. 4 billion, with net income of $8 billion, up from $48 billion in revenue and $8 billion in net income in 2014. The company also reported $88 billion in total assets, up from $84 billion in 2014. Disney has reported $19 billion in long-term obligations. Lastly, it has reported $44. 5 billion in shareholders’ equity (Annual financial report, 2015). Moving forward, Disney should continue their 2016 fiscal year in modeling the 2015 progress it has made. Its stock price continued to rise and assets were accumulated. If Disney can continue this progression, it will be set up for a great 2016 fiscal year end. Customer Perspective The importance of customers to a company’s performance is emphasized in a recent study that states that the more values a company provides for its customers, the more successful it is in business (Grace & Lo lacono, 2015). Recognizing this critical factor, Disney focuses on three

Learning and Growth Perspective Disney answers the questions of learning and growth by focusing on specific threat mitigation areas, including strategic acquisitions and competition from others studios and media. Strategic acquisitions are an effective learning area that allow Disney to branch into entertainment categories that are currently popular (Annual financial report, 2015). This is evidenced by the purchases of Pixar (animations such as the princess story Frozen ), Marvel (decades-old comic book adaptations such as Captain America ) and Lucasfilm ( Starwars franchise). These acquisitions are in keeping with Disney’s value for timeless stories. The company should continue in this learning area, domestically and internationally. Issues such as company structure (overall and strategic business units) are another important learning area, as their alignment with Disney’s various strategies can contribute to Disney’s continued success in the entertainment industry. Regarding completion, Disney can overcome this potential growth hindrance by the continued funding of strategic franchises like Starwars . Another growth option is strategic alliances with new media distributors like Netflix, such as with the exclusive streaming deal between the two (La Monica, 2016). Yet another is investment into other areas of differentiation, such as video games and augmented and virtual reality. Conclusion To enable relevant innovation, industry leadership and value creation, Disney’s top management should embrace an attitude of continuous learning and growth (Rao, 2013), being actively aware of all of the above information. By thoroughly examining and connecting all these areas through the balanced scorecard and strategy map tools, Disney can achieve the sustainability that accompanies its mission and vision of continuously being a leading entertainment provider.

References Annual financial report and shareholder letter - 2015 fiscal year . (2015). Walt Disney Company. Grace, D & Lo Lacono, J. (2015). Value creation: an internal customers’ perspective. Journal of Services Marketing , 29 (6/7), 560 - 570 . Retrieve from: dx.doi.org.ezproxy.liberty/10.1108/JSM-09-2014- Hicks, M. (2010). Accounting for decision making: A study guide . Roanoke, VA: Synergistics. ISBN: 978-1-934748-07-7. Ingelsson, P., Eriksson, M., & Lilja, J. (2012). Can selecting the right values help TQM implementation? A case study about organizational homogeneity at the Walt Disney Company. Total Quality Management & Business Excellence , 23 (1), 1-11. doi:10/14783363. 2011. 637801 La Monica, P. (2016, May 31). Netflix rebounds on merger rumors and Disney deal. Retrieved September 20, 2016, from money.cnn/2016/05/31/investing/netflix-stock- rebound-takeover-rumors-apple-disney/index Rao, M. (2013). Smart leadership blends hard and soft skills: and emphasizes the importance of continuous learning. Human Resource Management International Digest , 21 (4), 38-40. doi:10/hrmid-04-2013-

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Question: For a Balanced scorecard, using the Walt Disney Company what would be at least 3 strategic customer objectives, how would they be measured and what would be the timeline?

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Identify the first strategic customer objective suitable for Walt Disney Company within the context of a balanced scorecard.

Answer: For the balance scorecard using the Walt Disney Company some of the strategic objectives will be 1. To increase the customer satisf …

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Examples & Success Stories

What organizations are successfully using balanced scorecard.

Increasingly, as balanced scorecard (BSC) concepts become more refined, we have had more inquiries asking for examples of organizations that have implemented the BSC, how the BSC applies to a particular business sector, what metrics are appropriate for different sectors, etc. This page provides a database of working balanced scorecard examples that our research has located.

By 2004 about 57% of global companies were working with the balanced scorecard (according to  Bain ). Much of the information in the commercial sector is proprietary, because it relates to the strategies of specific companies. Public-sector (government) organizations are usually not concerned with proprietary information, but also they may not have a mandate (or much funding) to post their management information on web sites.

Example One-Page Balanced Scorecard Strategic Plan 

The One-Page Strategic Plan illustrates how strategy and strategic elements fit together and reinforce each other. This one-page summary graphic includes vision, mission, core values, perspectives, strategic themes & results, strategic objectives, strategy map, performance measures, targets, and strategic initiatives. 

Sample One-Page Balanced Scorecard Strategic Plan for Government

Click here to download (PDF Format)

Sample One-Page Balanced Scorecard Strategic Plan for Not for Profit

Sample One-Page Balanced Scorecard Strategic Plan for Business (for profit)

Mecklenburg county, nc.

At the time, they had no way of predicting the long-term impact of this decision but the system he implemented led to break-through performance toward achieving the County’s vision and the framework is, to this day, in use at Mecklenburg County.  It is an integral part of how the County is managed and has become a model for other municipal governments around the country.

The National Marrow Donor Program®/Be The Match Registry®

Veolia Water North America

Federal Ministry of Health–Ethiopia 

This case study primarily focuses on the recalibration of the FMOH scorecard in 2009-2010, the cascade work performed in 2011-2013, and the break-through improvements that the Ethiopian Health Sector achieved as a result of improved strategic direction and alignment using The Institute Wa y . In fact, it has been such a success that the Prime Minster of Ethiopia has now mandated that all Ministries in Ethiopia adopt the balanced scorecard as a strategic planning and performance management methodology.

Tolko Industries Ltd.

Shat-R-Shield

Kenya Red Cross

Douglas County, Colorado

The Douglas County Government shares their “eat the elephant one bite at time” approach for how they strategically aligned their organization from the top floor to the first floor.

U.S. Army Medical Department (AMEDD)

The following link will take you to our compilation of data on organizations that have reported at least a partial adoption of the balanced scorecard:

Adopters of the balanced scorecard  (in alphabetical order of organization name)

Balanced Scorecard Examples

Below we offer links to some files and publications that will show you what the documents and results of balanced scorecards look like. Although these all differ in format and details, they serve to illustrate the visual effectiveness of the balanced scorecard approach to strategic management. (Note: these documents are the products of their respective organizations, not the Balanced Scorecard Institute).

Non-profit Organizations

Oak Knoll Academy  – A primer on development of a management strategy for a fictitious private school. A  strategy map  for the school is also available.

Vinfen Corporation  – A private, non-profit human services organization based in Cambridge, MA. They recently published a  scorecard  and a  newsletter  that provides details about their strategic plan and performance measures.

Government Organizations

Defense Finance and  Accounting Service  (DFAS) – Example of a balanced scorecard-based strategic plan for this world-class financial organization, and some additional information about how it was developed (Nov. 2001).

Federal Aviation Administration Logistics Center  – A highly customer-focused organization with a balanced scorecard-based strategic plan. Their original plan is a rather large (37 MB) file, so we have removed the graphics and here we provide the text content only, in order to reduce the file size.

Department of Energy Federal Procurement System – One of the early Federal Government adopters of the balanced scorecard. Continues to lead by example with this FY2003 Performance Assessment.

Department of Energy Federal Personal Property Management Program  – Example of a balanced scorecard for a major government program.

Government Strategy Map Example  – Example of a generic strategy map for a government organization on the Federal, State or local level.

Commercial Organizations

Regional Airline  – A strategy map, with objectives, performance measures and initiatives in the balanced scorecard framework.

Credit Card Company  – A generic example of a possible strategy map for an innovative credit card company.

If you would like to share your balanced scorecard plans and/or results with the world contact us! .

Contact us to find out how we can help your organization focus on strategy and improve performance..

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• Walt Disney Co.: The Entertainment King
• Strategy & Execution / MBA Resources

Introduction to Balanced Scorecard Analysis

At EMBA PRO , we believe that Balanced Scorecard approach is highly efficient strategic tool to formulate a cohesive strategy. Balanced Scorecard approach focuses on comprehensive metrics rather than only local optimization in various spheres such as – financials, operations, internal processes, and customers’ needs.

EMBA Pro Balanced Scorecard Analysis Solution for " Walt Disney Co.: The Entertainment King" case study

The first ten pages of the case 'Walt Disney Co.: The Entertainment King' are comprised of the company's history, from 1923 to 2001. The Walt years are described, as is the company's decline after his death and its resurgence under Eisner. The last five pages are devoted to Eisner's strategic challenges in 2001: managing synergy, managing the brand, and managing creativity. Students are asked to think about the keys to Disney's mid-1980s turnaround, about the proper boundaries of the firm, and about what Disney's strategy should be beyond 2001.

Case Authors : Michael G. Rukstad, David J. Collis, Tyrrell Levine

Topic : strategy & execution, related areas : change management, creativity, risk management, strategy execution, emba pro balanced scorecard analysis approach to walt disney co.: the entertainment king case study.

The Balanced Scorecard approach was first proposed by Robert S. Kaplan and David P. Norton in their January – February 1992, Harvard Business Review article titled – “The Balanced Scorecard—Measures that Drive Performance”. Kaplan and Norton approach to organization performance is – “What you measure is what you get”. Balanced Scorecard also provides a base to build a metrics framework that is aligned and consistent. EMBA PRO immersive learning methodology from – case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Strategy & Execution field. Balanced Scorecard Analysis, case solution, Balanced Scorecard Solution.

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What is Balanced Scorecard Framework?

The Balanced scorecard is an integrated approach to assesses performance of business strategy and how changes can be made in the areas such as – financial objectives and goals, customer preferences and choice architecture, operations management and supply chain bottleneck resolutions, and organizations learning ability and capacity building Balanced Scorecard is a resource focused strategic analysis tool. Leaders at Walt Disney's can use Balanced Scorecard strategic tool to build sustainable competitive advantage by better understanding the relationship among - financial resources, internal processes, customer preferences, and operations management in Walt Disney's’s overall strategy.

Why is it called a Balanced Scorecard? How Balanced Scorecard is Useful?

Companies generally fail at implementing a strategy or managing operations because they lack an overarching management system to integrate and align these vital processes. Balanced Scorecard analysis of Walt Disney's is a comprehensive effort to integrate and align strategy and operations. Walt Disney Co.: The Entertainment King case study provides a strategic dilemma for the protagonist. Balanced Scorecard strategic analysis can help Walt Disney's managers in understanding the relationship between activites and take the systems approach rather than the local optimization approach.

***It is a broad analysis and not all factors are relevant to the company specific. For greater details connect with us.

Applying Balanced Scorecard Approach to Walt Disney Co.: The Entertainment King Case Study

According to by Robert S. Kaplan and David P. Norton , 85 percent of executive teams spent less than one hour per month discussing strategy, with 50 percent reporting that they spent virtually no time on strategy discussions. Balanced Scorecards help "Walt Disney's" to translate, communicate, and measure its strategies. Some of the questions answered by Balance Scorecard Analysis of Walt Disney Co.: The Entertainment King are -

- Are we innovative and ready for the future? In today’s market place a company’s ability to sustain competitive advantage is highly dependent upon Walt Disney's's ability to innovate and stay ahead of the curve vis a vis to its competitors.

- What is important for Walt Disney's shareholders? How the decisions that Walt Disney's is making can impact the financial reports and balance sheet?

- Which internal processes can add value? What are the core competencies of Walt Disney's and how it can add value going future? Do the firm require to make either small tweaks or big changes in the internal processes to build of maintain sustainable competitive advantage.

- How do customers perceive Walt Disney's? What is required to improve the brand equity or market performance in terms of – marketing, sales, distribution, and pricing strategy.

What are the main features of balanced scorecard? / What are the four perspectives of the balanced scorecard?

The Balance Scorecard of each company varies based on the nature, size of the firm and industry it operates in. Broadly there are four main components / features of Balance Scorecard. These four perspectives / components of Balance Scorecard are –

• • Financial Perspective
• • Customer Perspective
• • Internal Business Perspective
• • Innovation and Learning Perspective

What are the advantages of Balance Scorecard Approach?

The biggest advantage of Balance Scorecard approach for Walt Disney Co.: The Entertainment King is that it provides senior executives and leaders with a framework that they can use to develop a holistic strategy rather than just optimizing just one part of the business. The balanced scorecard allows managers to look at the business from four different perspectives. Secondly people lower down in the organization are more likely to be measured by the non-financial metrics so Balance Scorecard approach provides a good framework to not only include their efforts in overall strategy but also to communicate to them how their efforts is contributing to the overall strategy and success of Walt Disney's.

Customer Perspective in Balanced Scorecard Approach

Some of the Customer Perspective metrics that can be used in Balanced Scorecard approach are - • Market share in target segments • Existing customer business development • Customer profitability and customer life time value • Timely delivery of goods and services • Return policy • Claims and complaints handling • Handling service calls.

Internal Process Perspective in Balanced Scorecard Approach

Some of the Internal Processes metrics that can be used in Balanced Scorecard approach are - • New sales as a percentage of total sales • Meeting product introduction goals • Product development cycle • Break-even time realized.

Balanced Scorecard approach to Human Resources

Some of the Human Resources metrics that can be used in Balanced Scorecard approach are - • Employee satisfaction and retention, or the opposite (turnover rate) • Revenue and/or value added per employee • Strategic redundancy in job skills (job-coverage ratio) • Employee retraining cycle time • New ideas (per employee, implemented) • Information availability relative to need.

What are the disadvantages of Balanced Scorecard Approach?

Theoretically there are no great disadvantages of Balance Scorecard approach but in practices managers face a number of hurdles such as – • Poorly defined metrics – metrics are either too broad or too narrow. • Data collection challenges – apart from digitally native companies, traditional organizations still faces lots of problem in collecting and organizing data. • Lack of review structure – often Balance Scorecards are made by consultant and lacks a clear organization wide review structure. A number of times they often clash with the chain of command in the organization.

5C Marketing Analysis of Walt Disney Co.: The Entertainment King

4p marketing analysis of walt disney co.: the entertainment king, porter five forces analysis and solution of walt disney co.: the entertainment king, porter value chain analysis and solution of walt disney co.: the entertainment king, case memo & recommendation memo of walt disney co.: the entertainment king, blue ocean analysis and solution of walt disney co.: the entertainment king, marketing strategy and analysis walt disney co.: the entertainment king, vrio /vrin analysis & solution of walt disney co.: the entertainment king, pestel / step / pest analysis of walt disney co.: the entertainment king, case study solution of walt disney co.: the entertainment king, swot analysis and solution of walt disney co.: the entertainment king, references & further readings.

M. E. Porter , Competitive Strategy(New York: Free Press, 1980) Michael G. Rukstad, David J. Collis, Tyrrell Levine (2018) , "Walt Disney Co.: The Entertainment King Harvard Business Review Case Study. Published by HBR Publications. O. E. Williamson , Markets and Hierarchies(New York: Free Press, 1975) Barney, J. B. (1995) "Looking Inside for Competitive Advantage". Academy of Management Executive, Vol. 9, Issue 4, pp. 49-61

Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published by Pearson Publications.

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