Financial Summary of the Walt Disney Company
The Walt Disney Company faces many threats outside of their control, including economic (exchange rates, terrorist attacks, weather, etc.), and political or legal issues (piracy) that can cause severe negative impacts on the companies many divisions. They also have a number of large competitors, including Time Warner, CBS, and News Corp., however it is unlikely for new competitors to take away from the well established Disney organization.
Disney has four major divisions, Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products. Each of the divisions has significant positive affects on one another when working in conjunction with one another. The Walt Disney Company focuses largely on this synergy between divisions for marketing and promotion.
The Walt Disney Company is financially secure however they have recently seen a large decrease in their Studio Entertainment division. This division is responsible for the feature films and has seen a 21% year-over-year revenue drop during the second quarter of its 2009 fiscal year. This has been attributed to disappointing movie releases, dismal sales, as well as the higher rate of illegal downloads by consumers.
The overall change from 2007 v. 2008 financially, was a revenue increase of 7%, or $2.3 billion, to $37.8 billion; net income decreased 6%, or $260 million, to $4.4 billion; and diluted earnings per share increased 1% to $2.28.
The organizational structure for The Walt Disney Company focuses on creativity. Ideas are born from within the departments and are worked-up throughout the relatively low hierarchy, where the final decisions are made. Disney has created a culture for their employees where they feel that they are valued as an individual and a vital part of the team.
The Disney Channel is targeted to the ‘tween’-to-teen viewer, aged roughly 8 to 15. This targeted channel allows Disney to reach children, an audience within their target market.
Overall, The Walt Disney Company is positioned very well for the future. However, there are a few problems that they are currently facing. First, they have not developed a market for young boys as they have done with the girls. As a solution to this problem, they need to utilize the characters of the recently purchased Marvel Comics to expand on within each of the Disney divisions, as the Marvel characters are generally targeted more towards boys. Second, Disney has a large failure rate with their movie releases. They should look at the quality and target audience of these movies and decrease the number of movies released per year. Lastly, Disney has failed in their attempt to create an internet presence. They need to create a partnership to build their internet presence, while remaining focused on what they do best.
