One of the biggest entertainment companies in the world, The Walt Disney Company, has had an immense influence on popular culture. However, the company was dealing with several issues that jeopardized its success in the early 2000s (Collis & Hartman, 2017). Poor financial performance, declining ABC network ratings, and a hostile Comcast bid were some of the challenges the corporation was experiencing. These challenges endangered the stability of the business and jeopardized its future. With its media assets, theme parks, and brands like Star Wars, Frozen, Pirates of the Caribbean, and Iron Man, the company was able to turn things around and thrive despite these challenges. This paper will look at the critical details of the case, pinpoint the most pressing issues, analyze the stakeholders, assess the performance of management choices, and provide recommendations for the future.
Problem Identification
Central Facts of the Case
The central facts of the case centre on Comcast’s aggressive offer, the ABC network’s poor financial performance, and declining viewership. These three crucial components help shape the ABC network’s overall state and provide the ground for the subsequent events. The ABC network’s dismal financial performance is a significant issue hurting the company’s bottom line (Collis & Hartman, 2017). The organization has a long history of producing high-quality content and a distinctive brand, but lately, it has not been profitable. Shareholders and other stakeholders have become concerned due to the company’s dwindling sales and profitability. Due to this financial volatility, the ABC network has found it challenging to hold onto its position in the fiercely competitive television market, resulting in a decline in network investment.
The business is very concerned about the ABC network’s declining ratings. The ABC network’s ratings have significantly declined in recent years, which is a significant loss given that ratings are a vital measure of a network’s popularity and performance (Collis & Hartman, 2017). The company’s financial problems have been worsened by the decline in advertising income brought on by this loss in audience. The network has needed help adapting to shifting viewer tastes and has been unable to pull in a big enough audience to sustain its ranking as a top network.
Comcast’s aggressive offer exacerbates the challenges facing the ABC network. Many stakeholders see Comcast’s attempt to purchase ABC, one of the world’s most extensive cable and media corporations, as a danger. Since Comcast is attempting to purchase the ABC network for a discounted price rather than a premium, the bid is hostile (Collis & Hartman, 2017). Many stakeholders perceive this as a hostile action and see it as Comcast trying to profit from the network’s financial woes.
Major Overriding Issues
The company’s need to revitalize its brand and essential brands, like Disney Animation, is one of the most overriding issues it is now dealing with. Disney Animation has seen a fall in popularity in recent years due to some of the studio’s most recent box office failures. The capacity of the business to continue creating quality animated material that appeals to audiences of all ages has been called into doubt as a result. Disney Animation has attempted to solve this problem, including investing in new technology and employing fresh talent. However, it is still being determined if these measures will be sufficient to return the company to its former glory.
The need to solve ABC’s dropping ratings is another crucial problem that the Walt Disney Company must address. Since dropping ratings may result in a loss of ad income and can affect the network’s ability to recruit and keep top talent, this has been a source of worry for the business for a long time (Collis & Hartman, 2017). To address this problem, the firm has launched new programming and updated current programs, but the results have needed to be consistent thus far. The ABC network continues to be one of the company’s most valuable assets and is essential to its brand identity. Thus it must find a means to turn around its fortunes.
Finally, Comcast’s aggressive purchase of the Walt Disney Company is a concern. As a result, there is now intense pressure on the company’s management and board of directors to assess the advantages of a prospective acquisition against any associated dangers. On the one hand, a Comcast merger may provide the Walt Disney Company with the cash and operational know-how it needs to reverse its failing operations (Collis & Hartman, 2017). On the other hand, a hostile takeover might seriously disrupt the business’s operations and harm its image and brand. The company’s management and board of directors must carefully weigh the benefits and hazards of a possible takeover since the result may significantly influence the company’s future.
Sub-Issues or Related Issues
The Walt Disney Company deals with several sub-issues related to its overall struggles. The first of these underlying problems is the rivalry with other media organizations. Over the last several decades, the media industry has seen substantial growth due to the entry of many new companies and the development of cutting-edge methods for audience engagement. Disney is under pressure from this rivalry to keep on top of the game and to stay relevant in a market that is changing quickly (Collis & Hartman, 2017). Disney needs to work on keeping audiences interested in this competitive market, which is another concern. With so many innovative and exciting entertainment and media alternatives, audiences need to be more consistent and challenging to engage. Disney has made great efforts to solve this issue, but it remains a top worry for the company as it strives to stay at the forefront of the sector.
The strain to stay relevant in the changing media environment is another related issue Disney deals with. The company has been operational for about a century and, throughout that time, has amassed a vast array of valuable franchises and intellectual property. The emergence of new platforms and technology, altering how people consume information, has caused a significant change in the media landscape in recent years. If Disney wants to stay relevant and develop its company, it must adapt to these changes.
Stakeholder Analysis and Management Evaluation
Stakeholder analysis is a critical component of corporate strategy because it enables organizations to comprehend the goals and objectives of different stakeholder groups interested in the company’s choices and activities. The Walt Disney Company has several stakeholders, including shareholders, employees, customers, and the general public. On financial gains, shareholders have a stake in the company’s success. They anticipate that the company’s investments will increase and be profitable since they are the biggest shareholder group. Walt Disney’s business has seen some bad financial outcomes, which has decreased shareholder trust and put pressure on management to improve things. Given that these variables can negatively affect the company’s financial performance and decrease the value of investors’ investments, shareholders are likely to be worried about the ABC network’s dropping ratings and Comcast’s aggressive takeover proposal (Collis & Hartman, 2017). Another important stakeholder group is the company’s employees, who are crucial to its success. Walt Disney employees must be reassured about their employment security, pay, and working conditions. Concerns about layoffs and other changes to their employment conditions may arise due to the drop in network ratings and the possibility of a hostile takeover. The management may need to explain its strategies for safeguarding employment and ensuring that workers are adequately treated throughout restructuring initiatives to allay these worries.
Customers are another important stakeholder group since they are the business’s primary income source. Customers expect the Disney brand to provide high-quality goods and services. They want the organization to maintain its quality dedication while demonstrating innovation and originality in its product offerings (Collis & Hartman, 2017). Especially in light of the evolving media environment, they are especially concerned about the quality and relevance of the company’s goods and services. Concerns regarding the company’s future and capacity to continue offering high-quality content and services may arise due to the drop in network ratings and the potential of a hostile takeover.
The general public is another key stakeholder group since the Walt Disney Company’s operations and activities significantly affect society as a whole. Given the importance and influence of the Disney brand on culture, it has a stake in the success of the Walt Disney Company. They anticipate that the business will continue to contribute positively to society and preserve its good name and reputation. The public is also probably worried about the company’s ethics and social responsibility activities. Concerns about the company’s future and its capacity to keep making contributions to society at large may also arise in the event of a hostile takeover threat.
The Walt Disney Company’s challenges were addressed, and the company was turned around owing to Bob Iger’s leadership as CEO (Collis & Hartman, 2017). Under his direction, the company made tactical choices to revitalize the Disney brand and boost its financial performance, such as acquiring Pixar Animation Studios, Marvel Entertainment, and Lucasfilm. By investing in original programming and enhancing distribution, he also attempted to solve the ABC network’s dropping ratings, which helped the network perform better.
Iger’s managerial choices improved the business’s financial performance and brought back the Disney spirit (Collis & Hartman, 2017). The value of the company’s shares has increased, and it has continuously produced positive financial results. Also, the company’s image has improved under Iger’s leadership, and its cultural relevance has been restored. Iger has effectively navigated the problems of the Walt Disney Company and set up the business for future success by concentrating on the requirements and expectations of the stakeholders.
Recommendations and Implementation
Several management recommendations may be made in the Walt Disney Company case to deal with the significant overarching challenges the business is now experiencing. Disney should first concentrate on creating original content and investing in its significant properties, including Disney Animation and Marvel, on overcoming the downturn in network ratings. This may be accomplished by collaborating with other media organizations and developing fresh, cutting-edge content that appeals to a larger audience. Secondly, the company should continue investigating new distribution methods, including over-the-top streaming services, to reach a larger audience, stay relevant in the evolving media environment and preserve public engagement. The business should also invest in technological and digital skills to improve its services and provide consumers with a seamless experience. Lastly, the Walt Disney Company should look into strategic alliances and collaborations with other media companies to enhance its position and foster more market competition to counter the prospect of a hostile acquisition from Comcast (Rangaswamy et al., 2020). Collaborative marketing activities, strategic investments, and joint ventures are a few examples of this.
In the short term, the organization should enhance its financial performance by minimizing expenses and boosting income (Larsen et al., n.d.). This may be accomplished by simplifying processes, increasing effectiveness, and using the company’s resources. The company should create and implement a long-term growth plan that considers its leading franchises, original content, and new distribution methods. This will allow the company to compete successfully with other media firms in the ever-changing media ecosystem.
The Walt Disney Company must incorporate all parties, including employees, customers, and shareholders, in the decision-making process regarding implementation issues (Eddula et al., 2023). This will make it easier to ensure that the company’s plans match the objectives and interests of all stakeholders and that it upholds its fundamental values and culture. The Walt Disney Company is a cultural institution and occupies a special place in the hearts of many people all around the globe. Thus the company should also consider the possible influence of any choices on the general public.
In conclusion, the Walt Disney Company had several challenges during the time in question, including dropping ABC network ratings and a hostile acquisition offer from Comcast. However, the company was able to turn things around because of solid management and strategic choices, such as buying Pixar, Marvel, and Lucasfilm. The Walt Disney Company will need to discover strategies to stay relevant and engaging to people as the media environment continues to change quickly. To improve the viewing experience, this may include investigating new distribution methods and making investments in cutting-edge technology. In order to preserve shareholder trust and fend off more hostile takeover efforts, the company must also keep concentrating on improving its financial performance. The Walt Disney Company case has significant implications for the media sector and emphasizes businesses’ need to be proactive and responsive to market developments. In a continually changing sector, businesses that are slow to adapt or do not invest in new technology and distribution methods run the danger of falling behind. Other media firms seeking to be successful in the 21st century may learn from and be inspired by The Walt Disney Company.
References
Collis, D. J., & Hartman, A. S. H. L. E. Y. (2017). Reawakening the magic: Bob Iger and the Walt Disney Company. Harvard Business School case, pp. 717–483.Top of Form
Eddula, S. V., Peraka, N. S. P., & Biligiri, K. P. (2023). Stakeholder-Oriented Optimization of Pavement Maintenance Interventions Using Multi-Criteria Decision-Making Approach. International Journal of Pavement Research and Technology, 1-13.
Larsen, V., Carriaga, R., Wething, H., Zhao, J., & Hall, C. (n.d.). Behavioural Consequences of Income and Expense Shocks. Available at SSRN 4340574.
Rangaswamy, A., Moch, N., Felten, C., Van Bruggen, G., Wieringa, J. E., & Wirtz, J. (2020). The role of marketing in digital business platforms. Journal of Interactive Marketing, 51(1), 72-90.
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