Walt Disney CorporationEssay Preview: Walt Disney CorporationReport this essayIntroduction:The purpose of this paper is to evaluate the competitive position of organizations in a given industry and assimilate that information in the form of a Competitive Profile Matrix. Walt Disney Corporation has been chosen for this exercise. Monitoring competitors performance and strategies is a key aspect of an external audit. The method deployed for the purpose of evaluating competitors performance and strategies is Competitive Profile Matrix. The main competitors for Walt Disney Company are Time Warner and News Corporation. As a part of this paper, we have evaluated the firms on seven Critical Success Factors to form a Competitive Profile Matrix. We have explained the step-by-step process to design the Competitive Profile Matrix. Lastly, we have also critiqued certain limitations for deploying this tool for external audit without any regards to the inter-related aspects such as values and goals of the firms.
Competitive Profile Matrix (CPM) identifies a firms major competitors and their particular strengths and weaknesses in relation to a sample firms strategic position (David, 2007). The critical success factors in a CPM are broad in nature and they are not restricted to specific or factual data and even may focus on internal issues. The critical success factors in a CPM also are not grouped into opportunities and threats, but they are listed in an order. Ratings are assigned and total weighted scores are calculated to be compared with the sample firm in CPM. This provides internal strategic information which is important for the firm.
The Competitive Profile Matrix can be developed in five steps as explained by David (2007);1. List all the critical success factors which include both internal and external issues.2. Assign to each factor a weight that ranges from 0.0 (not important) to 1.0 (very important). The weight indicates the relative importance of that factor to being successful in the firms industry. The sum of all weights assigned to the factors must equal 1.0.
3. Assign a rating between 1 and 4 to each key external factor to indicate how effectively the firms current strategies respond to the factor, where 4 = the response is superior, 3 = the response is above average, 2 = the response is average and 1 = the response is poor. Ratings are based on effectiveness of the firms existing strategies.
4. Multiply each factors weight by its rating to determine a weighted score.5. Sum the weighted scores for each variable to determine the total weighted score for the organization.The Competitive Profile Matrix has been developed in Figure 1, and compared with its competitors Time Warner and News Corporation as below. The Critical success factors are Market Share, Financial Position, Experience, Advertising, Low-Cost Strategy, Resources and Innovation. Walt Disney Companys major competitors are Time Warner and News Corporation. Walt Disney is recognized as a market leader in experience and innovation. It also does a great job in advertising and making its low-cost strategies work effectively in its favour. However, Time Warner has a stronger market share and a sound financial
to their bottom lines, and News Corporation is seen as a more profitable company. The Critical Success Factor Index (CVI) also has the major advantages, with a score of 7.8 and a score of 17.0 which is equivalent to a 7.8. In fact, the CVI has a score of 6.5, which is a 9.3. A score of 8 is the least desirable rating in the competitive scale, and in fact, it has the best chance of falling below a stable rating. There is also a negative correlation between the CVI score and average long term value of an organisation.6. The Average Value of Organisations is the measure for the percentage of employees that are considered highly engaged and have contributed at least 3% of their time each year to the organisation. In other words, an organization consists of almost half the employees. The CVA is based upon the fact that approximately three-quarters of the CUs are employees. The CVII, having a score of about 19 (which, by the way, means the CVIII, with a score of 20). A rating of 16 can be found for groups of over 500 employees. 7.1, 14.0, 7.5, 8.6, 9.0, 9.8
Conclusion 1. Businesses don’t really understand the significance of their low-cost strategy. Their low-cost strategy has a very high likelihood of failing. It is not just about the products themselves. The low overhead is almost all the same if we look at the marketing campaigns the organization will have. The problem is, most of the employees are going to get a good return on their investment. Businesses don’t understand that a high-cost strategy does not really deliver value to the bottom line, it just generates more money from business. If a company’s lower-cost strategy fails to deliver value to the bottom line, then it will be seen as being a very high-margin strategy. The problem you have here is that low-cost, low-cost managers do not understand the importance of their lower-cost strategies, because their low levels of overhead cause them to incur more costs. This is why they have to use more budget to buy the best possible equipment. If a higher-cost strategy doesn’t actually get more value, what is it that makes them more competitive? You get the same type of low-cost decisions as with the top brands. The reason that low-cost managers often fail to get their work done or are more prone to financial mistakes in their long term strategic planning is that low-cost managers are expected to act differently, and because of this, companies go as far as changing their strategy to meet their needs quickly. 8. Low-Cost Management Isn’t Real Marketing. In fact it is an expensive technique in management-speak to put effort into creating a high-value, high value product. You can look at some of my previous posts on this topic. They will show you the difference between what is real marketing and what is really marketing. What makes real marketing effective is to use a low-cost strategy that provides value to the business that actually succeeds. You