Strategy & Objectives of Walt Disney Company: Essay Introduction
Walt Disney Company is a multinational corporation well known in the entertainment industry. The business has five distinguished divisions. The first division is Media Networks which comprises of several broadcast and publishing businesses such as the ABC TV (Walt Disney Company, 2012). The second division is Parks and Resorts which basically offers tour and travel services to various destinations across the globe.
The other segment, Studio Entertainment has distinguished itself as a leading producer of movies and music cross the globe. Walt Disney Company also a division called Consumer Products which manufactures toys, magazines, beverages etc. Finally, its Interactive segment is known to provide a wide array of interactive entertainment to children and families using various technologies (Walt Disney Company, 2012).
Strategic goal
The goal of Walt Disney Company is to maximize its financial performance in its various business engagements (Walt Disney Company, 2012). This is a very significant goal in line with the overall strategic growth of this business.
Due to stiff competition and the dynamic nature of business, Walt Disney Company needs to diversify its product offering across the globe (Kaplan & Norton, 2001). The various product divisions are meant to help the business tailor make its product offerings in line with the different cultures of consumers across the globe. To undertake this massive venture, Walt Disney Company will need solid financial asset base.
Objectives of Walt Disney Company
In order to realize its strategic goal, Walt Disney Company has identified a number of objectives; aggressive marketing, new product innovation, and minimizing operational costs (Walt Disney Company, 2012). Though these objectives, Walt Disney Company aims at achieving its main goal of growing revenues.
To accomplish these objectives, Walt Disney Company must develop an action plan. The company must invest heavily in marketing. It must equally seek measures of minimizing its costs. For all the identified objectives, the action plan must detail the process to be undertaken, the timelines, the expected results and the responsible people (Mainardi, 2011).
Loopholes in the Causal Chain
A causal chain is a series of inter related activities defining the root cause of a problem and its effects (McKay 1994, pp. 293-302). Causal chains are usually related to the strategic goals and objectives of a business. Causal chains demonstrate how a positive activity can subsequently cause a positive impact such as higher financial revenues. As such, causal chains are part and parcel of the BSC (Bukh & Teemu, 2005).
In the case of Walt Disney Company, two causal chains are highlighted. In the first causal chain, marketing and product innovation seeks to maximize revenues. In the second causal chain, cost minimization aims at reducing operational costs thereby expanding profit levels.
A keen analysis of the objectives reveals that each causal chain contributes towards increasing revenues – except for the cost minimization objective. This is a loophole in the causal chain (Bukh & Teemu, 2005). Walt Disney Company will only achieve its strategic goal if its objectives are well aligned (Kaplan & Norton, 2004).
The objectives will achieve the strategies only if they don’t conflict with one another (Kaplan & Norton, 2006). Cost minimization appears to negate the other objectives since product innovation and aggressive marketing calls for more investments in capital.
Financial Growth Strategic Action Plans
Source (Walt Disney Company, 2012)
The Balanced Scorecard
The BSC is a managerial tool used for implementing organizational strategies (Hannabarger et al., 2010). BSC comprises four perspectives; customer, financial, internal business process and learning (Kaplan & Norton, 2001). Customer perspective is concerned with the capability of business strategies in satisfying the customer.
Financial perspective is concerned with financial results and the strategies used to achieve that result. Internal processes shows the internal operations and how their performance is measured. The learning and growth perspective relates to organizational training and education and how the business uses knowledge to enhance its competitive ability (Kaplan & Norton, 2001).
Walt Disney Balanced Scorecard
Walt Disney Company Mission: To be a leader in the production and distribution of entertainment across the globe (Walt Disney Company, 2012).
Walt Disney Company Vision: To generate the best creative material, promote innovation; utilize the latest technology and venture into emerging markets across the globe (Walt Disney Company, 2012).
In line with the BSC, Walt Disney Company’s strategic goal shows activities which have an impact on the customer, financial resources and internal organizational processes. However, it has no provision for measures relating to human resource training (Walt Disney Company, 2012). Thus it leaves out a very crucial aspect critical in change management in line with the businesses’ future.
Training and education are catalysts for change management since they generate new business models (Bierly & Daly, 2007, pp. 493-516). To achieve organizational congruence, the business must balance all the four segments (Norreklit, 2000, pp. 65-88). In strategy formulation, the business must inculcate the goals and elements of the entire four segments of the BSC. Thus, to balance its strategic goals (Rohm, 2004) Walt Disney Company must introduce the learning and growth objectives.Source (Kaplan & Norton).
Objectives of Walt Disney Company: Essay Conclusion
Following our thesis that the balanced score card is a useful tool applicable to most organizations for identifying strategic action plans, a number of recommendations can be made from the above analysis. Using the BSC, Walt Disney Company should base its objectives on actions that flow harmoniously with one another (Gareth & George, 2011; Drummond & Stone, 2007, pp. 192-207).
In this case, cost minimization is ambiguous and may imply reducing general spending, in turn curtailing many other processes. The strategy of cost minimization should be re-examined. It should mean cost-effective investments. To further expand financial income, the business should invest in emerging markets (Gareth & George, 2011). Expanding income should not just revolve around cost minimization. Instead, Walt Disney Company should adopt cost effective strategies. The business should enhance its investments and reduce the risks of losses of revenue through poor investment plans.
References
Bierly, P. E., & Daly, P. S. (2007). Alternative knowledge strategies, competitive environment and organization performance in small manufacturing firms. Entrepreneurship, Theory & Practice, 31(4), 493-516.
Bukh, P. N., & Teemu, M. (2005). Re-examining the cause-and-effect principle of the balanced scorecard. Aarhus School of Business.
Drummond, I., & Stone, I. (2007). Exploring the potential of high-performance work systems in SME’s. Employee Relations, 29(2), 192-207.
Gareth, R. J., & George, J, M. (2011). Contemporary management (7th ed.). McGraw-Hill Education.
Hannabarger, C., Buchman, R., & Economy, P. (2010). Balanced scorecard strategy. New York: Wiley Publishing, Inc.
Kaplan, R.S., & Norton, D. P. (2006). Alignment: Using the balanced scorecard to create corporate synergies. Boston, MA: Harvard Business School Press.
Kaplan, R.S., & Norton, D. P. (2004). Strategy maps: Converting intangible assets into tangible outcomes. Boston, MA: Harvard Business School Press.
Kaplan, R.S., & Norton, D. P. (2001). The Strategy-focused organization: How balanced scorecard companies thrive in the new business environment.Boston, MA: Harvard Business School Press.
Mainardi, R.L. (2011). Harnessing the power of continuous auditing. New York: Wiley.
McKay, T. (1994). Names, causal chains, and de re beliefs. Philosophical Perspectives, 8, 293-302.
Norreklit H. (2000). The balance on the balanced scorecard – a critical analysis of some of its assumptions. Management Accounting Research, 11, 65–88.
Rohm, H. (2004). A balancing act. Perform Magazine, 2(2).
Walt Disney Company. (2012). Company information. Web.