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Corporate Strategy

The Walt Disney has always been known for one thing: vision. Founded more than 80 years ago, the company has spent many years at the forefront of the entertainment industry. It has accomplished this by never resting on its laurels, but by making prodigious efforts to bring a measure of happiness into the lives of people around the world. From the introduction of Mickey Mouse to the creation of Walt Disney World to the acquisition of Pixar, the company has exerted Herculean efforts to achieve this goal.

Today, the success of Disney is obvious, and it has achieved this through its ability to endear itself to the minds of billions of people. Current Objectives and Current Strategy The success of Disney is obvious, but how and why it was able to achieve that success is not as plain. The biggest strength of Disney as a company, is really the firm’s “share of mind,” and it is also the company’s strongest competitive advantage, or its economic moat. To illustrate this, each one of us, after hearing the name “Disney” will automatically have something in mind – an animated film, perhaps, or a character, or a theme park.

No matter what that is, the association is most likely a very positive one: One of entertainment, imagination, and perhaps a family setting. In contrast, the mention of Columbia Pictures or Universal Studios will not evoke the same type of response. Disney, then, has succeeded over the years in promoting itself and its products as a wholesome entertainment outlet for the entire family. This reputation is as invaluable to the company now as it has been in the past, and will continue to be the major factor driving its success. Current Environmental Opportunities and Threats

In a globalizing world, entertainment – the company’s main product – has become a commodity business. Whereas Disney home videos could once be sold for $80-$90 dollars, price competition and improvements in technology has lowered that figure drastically. In other words, even an established firm such as Disney will have to compete ruthlessly for the time and attention of its customers. Only by coming up with newer and better products will it continue to thrive in a more competitive market. Also, because the firm derives much of its revenues on the sales of home videos, the problem of piracy becomes very salient.

Piracy is much more of a problem overseas than in the United States, but with the increasing wealth of countries such as China and India, the international market simply cannot be ignored. In the aforementioned countries, piracy is rampant, and videos that might sell for $30-$40 in America will have counterfeit copies that can sell for less than $1. Disney’s animated films, for instance, are very popular in China – but with counterfeit copies available everywhere, the company is having a very difficult time realizing the profits that it justly deserves.

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