Disney

Case Analysis of The Walt Disney Company: The Magic of Disney

Fall 2003 Sean Housley Haas School of Business University of California, Berkeley MBA Candidate, Spring 2004 [e-mail]

Abstract Disney has led the entertainment industry for much of its storied 80-year history. What exactly is the ‘Magic of Disney’? And how has Disney sustained the magic for so long? This paper analyzes Disney’s historical competitive advantage, drawing emphasis on the remarkable synergies Disney created across its various businesses. This paper then addresses the contributions of CEO Michael Eisner, credited with restoring Disney to greatness in the mideighties. Finally, this paper evaluates Disney’s growth strategy over the last decade.

Sustainable Success Disney is an outstanding example of a company that has maintained its competitive advantage by routinely making wise decisions about what resources and capabilities to acquire, invest in, and develop. Further, Disney has exhibited an uncanny ability to successfully make decisions about what to do with its resources and capabilities given its competitive environment. These decisions constitute Disney’s strategy. And, while Disney’s strategic decision-making record is not perfect, it is strikingly superior to most firms.1 As with enduring market leaders in other industries, Disney’s sustainability is explained by elements of its strategy that are heterogeneous, are inimitable, exhibit foresight, and include imperfectly mobile and co-specialized elements. Heterogeneity Disney is different. No other entertainment company – perhaps no other company period – evokes the feeling of wholesome family goodness that does Disney. Disney has taken extreme care from its early roots under founder Walt Disney in 1928 to ensure that its image is fun, imaginative, clean, and appeals to people of all ages. It places high priority on making products predictable and safe. The control of image and attention to detail exists