The Walt Disney Company Case Study

The Walt Disney Company

Operations

Disney currently has approximately 1.8 billion shares outstanding and is worth approximately $90 billion. With annual revenue of $41 billion in 2011, the company balances rewarding shareholders through dividends, share buybacks and investing in current operations. About 67% of the cash generated is reinvested in current operations.

Market Segments

Disney creates and distributes entertainment through five main market segments:

Segment | Approximate Revenues |

Media Networks | $18,714 Million 46% |

Parks and Resorts | $11,797 Million 29% |

Walt Disney Studios | $6,351 Million 16% |

Disney Consumer Products | $3,049 Million 7% |

Disney Interactive | $982 Million 2% |

The Walt Disney Company is growing by using various segments to help maximize the economic value of its products, as well as trying to expand the company’s international presence. 25.7% of the company’s revenues came from countries other than the US and Canada in the fiscal year of 2010.

Evaluation of the Company's External Environment

The Walt Disney Company faces the threat of new entrants. The company has developed a distinctive niche in their industry, causing entry barriers to be relatively high. The development of the company over a long period of time has enabled The Walt Disney company to become a leader in the departments of research and development, marketing and finance. The company is aware of their target customer and strives to provide each customer with the Disney experience. Disney’s domination of the family entertainment market makes entering the market difficult for new organizations to develop brand recognition and product differentiation that can complete with the well-known company. Also, extremely large amounts of capital investment is required for new entrants into the industry. Only very large companies can meet such large capital requirement.

Customers in the service and entertainment industry have high...