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For this assignment, you will need to access the full-length case study attached below for Amazon.com. You are required to read and analyze this case study.Please be sure to review the attached Case study handout attached below to guide you through the process as well as the Case Study format example (Must be written in the same format)Your analysis must:Describe the company’s current Value Chain. (minimum of 1 page)Identify and explain/justify any changes to the Value Chain you think are appropriate. If no changes, explain why not. (minimum of 1 page)Provide a total of four findings of fact; 1 from the following four functional areas of business:ManagementMarketingFinance or AccountingManagement Information SystemsProvide a full justification and recommendation for each finding of fact (minimum of 1 page each)Directions:Case Study Assignment 3 should be double-spaced, 12-point font, and not exceed 10 pages. casestudy_handout__1_.doc case_study_3_strategic_mgmt_02032020__1_.docx columbia_college__mgmt__amazon_case_study.pdf gmail___example_how_to_write_week_4_assignment_for_strategic_management.pdf Unformatted Attachment Preview Case Study Handout Please utilize the following to assist in the preparation of the case studies for MGMT 479. Resources. Resources are inputs into a firm’s production process, such as financial capital, equipment, the skills of individual employees, patents, finance, and talented managers. Each case study paper will contain the resources identified. Capabilities. Capabilities is the capacity for a set of resources to integratively perform a task or and activity. Through continued use, capabilities become stronger and more difficult for competitors to understand and imitate and usually lead to a competitive advantage. Each case study paper will contain the capabilities identified. Core Competencies. Core competencies is a resource and/or capability that service as a source of competitive advantage for a firm over its rivals. A firm’s functional skills. What the firm does better than its competitors. A core competency must first be listed as a resource or capability and meet all four of the following criteria: • It must be rare and • It must be valuable and • It must be costly to imitate and • It must be non-substitutable Resources, Capabilities, and Core Competencies are to be bulletized. No explanation is required. Please utilize the Resources, Capabilities, and Core Competencies Handout attached to the Welcome Email to assist in the identification of each. Findings of Fact. Findings of fact are strategic issues discussed in the case studies and usually identify potential problem areas for the firm. Additionally, these strategic issues are facing the firm’s strategic managers at the end of the case’s time frame. Strategic problem statements. Each case study paper will identify one finding of fact for each of the four functional areas required for that case study (e.g., management, marketing, accounting, finance, international business). Recommendations/Justifications. Recommendations are directly tied to the findings of fact. For each finding of fact, a thorough, justified, recommendation must be provided. How are you going to rectify the strategic problems that you have identified and why. Additionally, this section should also include an implementation discussion. General statements and blanket conceptual recommendations that are not fully justified with the facts of the case, are not acceptable. The recommendations/justifications section of the paper should be one page each in length. Format for findings of fact/recommendation/justifications. Management: Finding of fact (strategic problem statement) Recommendation/Justification: One page in length Marketing: Finding of fact (strategy problem statement) Recommendation/Justification: One page in length Finance or Accounting: Finding of fact (strategy problem statement) Recommendation/Justification: One page in length International business: Finding of fact (strategy problem statement) Recommendation/Justification: One page in length Finally, ensure you address the specific additional requirements for each case study assignment as each case study requirements, including the functional findings of fact, are different. Walt Disney Case Study Introduction The Walt Disney Corporation has the resources, capabilities, and core competencies to help the company maintain a competitive advantage. Yet, Disney faces problems that stem from several strategic issues in management, marketing, finance/accounting and management information systems, as well as the value chain and vertical integration (MGMT) Through implementing recommendations and justification, changes in Disney’s strategic management will help the strategic advantage of the company. Let’s start with Disney’s resources, capabilities, and core competencies: • Resources Intangible- Technicians, motion pictures, animation, interactive media, streaming media, patents, copyrights Tangible – Financial revenue, theme parks, rides, property • Capabilities Innovative technology and provide entertainment via studio and media networks as well as theme parks. Is also capable of providing streaming entertainment. • Core Competencies o The Disney brand makes their products rare. o The value of Disney’s theme parks worldwide. (MGMT) o Disney’s products are patented, meaning that a company cannot imitate it. o Disney’s brand is non-substitutable. The brand is exclusively theirs. There are alternatives, but not substitutes. (MGMT) Management One of the biggest problems with the Walt Disney Corporation’s strategic management appears to be with its competition in the multimedia realm. It is recommended that Disney come up with more diverse versions of its own original content because much of the overwhelming success of Netflix, Hulu, and Amazon has been because they are creating their own original material. Disney does not want to fall behind the relative newcomers and remain stagnant in releasing familiar televised and animated interactive media material. They need to adjust to the changing tastes of their viewers. The demographics such as age and gender fluctuate daily. Disney’s competition is taking advantage of Disney’s slowness to adjust. It is imperative for Disney to come up with new, original material. (MGMT) Perhaps the company should remind itself of Bob Iger’s three pillars of strategy, which is to make the best creative subject matter possible, to nurture innovation and make use of the newest technology and be able to cultivate new markets worldwide. (MGMT) This means that Disney’s innovative tendencies should also evolve. In so doing, this should resolve any competitive issues the company has and retain or regain the necessary audience. This will prove to be crucial as Disney tries to expand its international base with an effective marketing plan. (MGMT) The justification for previous strategy inflexibility on the Walt Disney Corporation’s behalf likely hinges on the continued success of the company despite the competition. However, Disney faces more formidable competition than it faced in previous generations. Other interactive media corporations have joined forces with major amusement parks to create a similar experience to Disneyland or Disney World, so they must keep or exceed pace. By the end of 2020, Netflix will also be competitive with Disney, as most Disney content will be removed from Netflix by then. (MGMT) This will help marketing as well. Marketing The problem at hand in marketing is for the company to become adept at understanding the way of life, traditions and laws of the foreign countries, which has never been a strong suit of the Walt Disney Corporation. But it is necessary in order to do an effective marketing plan. It is recommended that the Walt Disney Corporation make a first impression that puts them in a favorable light with its international consumer base as an American company. They must change the perception that the company has in Europe and parts of Asia that they are cultural imperialists. Disney’s justification right now is that there is a demand for their product worldwide. And there are huge inroads to be made abroad. Hong Kong and China represent a tremendous financial opportunity for Disney and its brand of entertainment. But Hong Kong governmental officials are appalled that Hong Kong Disneyland management disregarded the observation of the Lunar New Year. The subsequent overcrowding issues at the park symbolized major cultural insensitivity in the eyes of the Hong Kong governmental officials. Meanwhile, in China, fierce Disney rivals Universal Studios and Dreamworks animation are opening new theme parks in Beijing and Shanghai, respectively. Disney needs to match or exceed the intensity of their competition with their innovation and corporate strategy. However, a challenge Disney must somehow overcome is quotas imposed by the Chinese government on imported movies. (MGMT) Disney may need to shift their marketing strategy to Europe, but the perception of Disney’s ethnic colonialism began in part in Paris. It has hurt their profits there to a point where they cannot even go private with their shares there. Visitors to the theme park in Paris are down 2 million from 10 years ago. Disney must mend its broken relationships with its foreign consumer base to remain relevant globally. Financial/Accounting Disney also has a problem when it comes to its streaming television business. Disney gets about 50 percent of its revenue from TV. (MGMT) But Disney television outlets are being outdone by the competition. It is recommended that Disney shift its strategy and synergies to accommodate this massive new streaming audience. Iger, to his credit, has already begun the process by buying equity in BAMTech, a multifaceted streaming media service. (MGMT) This has allowed them to transition ESPN into streaming services in addition to live televised sporting events. Disney is also in the process of converting its own classic material into streaming services. These strategic moves by Disney should go a long way in generating increased revenue for them and win over a new generation of customers, as well as retaining its current base. Disney’s previous justification for the way it handled its streaming services is that in the past, they had no peer in terms of televised material. Disney enhanced its television service in 1996 when it purchased the American Broadcasting Company (ABC). Along with ABC, an 80\% share of cable sports giant ESPN was included in that $19 million purchase.1 This was before the advent of streaming media.2 Streaming media changed the game for television viewing, but Disney resisted changing with it. Consequently, Disney’s future earning potential is in serious jeopardy because streaming is now the preferred choice for most viewers. ESPN, once the star of Disney’s services, now lags behind streaming services such as Netflix, YouTube, and Hulu. (MGMT, PACE) as much less time is spent watching live television. 1 The New York Times: THE MEDIA BUSINESS: THE MERGER; WALT DISNEY TO ACQUIRE ABC IN $19 BILLION DEAL TO BUILD A GIANT FOR ENTERTAINMENT by Geraldine Fabrikant, Aug. 1, 1995. https://www.nytimes.com/1995/08/01/business/media-business-merger-walt-disney-acquire-abc-19-billion-dealbuild-giant-for.html. Online. Accessed February 2, 2 PACE Technical: A Brief History of Streaming Media. https://www.pacetechnical.com/brief-history-streamingmedia/. Online. Accessed February 2, Management Information Systems The problems as it pertains with management information systems is that any problems The Walt Disney Corporation encountered in terms of management, marketing, or finances are rooted in a less than adequate Management Information System [MIS]. (MGMT) Justification for the system currently in place lies in the fact that the strategies and synergies used in this system are what has made the company a multi-billion-dollar conglomerate. (MGMT) A MIS must be up to the challenge of the disruptions and discomfort of the competitors like Netflix, Amazon, and Hulu. The more advanced the technology, the more lucrative it is for the business. It is recommended that Disney line up with the vision of its CEO Bob Iger and create unique new entertainment programming with technology that is innovative. (MGMT) That is always an appropriate response to competition. But just as important is to be able to deftly identify the threats and be able to respond appropriately. This means Disney recognizing that those companies that are creating their own original dynamic streaming content is the reason they are losing ground to them. They must also carefully consider their pricing strategy on their streaming services in comparison to their competition, who is taking full advantage of any slippage or oversights by Disney. Their strategic planning should help them get a head start on a solution, as well as the competition. Their synergies should be such that they are able to meet or preferably exceed their own performance, as well as the competition. But the Disney Corporation must meet the challenges, particularly from the streaming competitors they face. It is a challenge they have not always had to face. But the demographics change from one generation to the next. But it has always been a challenge Disney has met with success in the past. As CEO Iger said, Walt Disney was a person who loved technology. In that spirit, the company must embrace technology and strategize appropriately, as other companies are doing. Value Chain In analyzing the value chain of the Walt Disney Corporation, it becomes apparent why this prestigious corporation enjoys unprecedented success worldwide. Despite the previous internal management strife, Disney has generally adhered to the vision and enthusiasm of the company’s founder, Walt Disney. Disney CEO Robert Iger has done his best to achieve what Disney envisioned nearly 100 years ago, and it shows in the overall performance of the company, beginning with its infrastructure. The infrastructure for The Walt Disney Corporation is strong. Based on the fiscal 2015 report, Disney’s combined profits are $52.4 million, which is an increase of 7\%. The segment operating income is $14.6 million, a growth of 14\%. Disney has been able to increase its investment activities from $1.18 million in 2014 to $1.46 million in 2015. This has allowed them to develop new attractions, improve on the infrastructure and improvements. To manage its legal affairs, both home and abroad, they have the legal personnel to handle contracts, patents, copyrights and the law as it pertains to a country. In terms of its Human Resources, The Walt Disney Corporation has a consistent hiring policy for prospective new employees. The only requirements are that they adhere to the seven facets of the vision: Honesty, Openness, Balance, Diversity, Integrity, Respect, and Courage. The vision of Walt Disney is impressed upon new hires at the company school, “Disney University”. Disney looks out for the welfare of its employees by providing a comprehensive benefits package which consists of medical and accident benefits, annual leave and standard overtime pay. An employee discount for reduced price admission to Disney venues worldwide is also included in the benefits package. All these things contributed to the company’s long-term success and the continuity of the company’s value chain. (MGMT) Changes to the Disney Value Chain There has not been much fluctuation in terms of the value chain of The Walt Disney Corporation. The advancements made over time of company management and concepts appear to be a part of the vertical integration that normally takes place in a company’s value chain or use strategic outsourcing as an alternative. (Rothaermel) For example, there have been four CEOs in the history of The Walt Disney corporation – Walt Disney, the company’s founder, followed by Walt’s brother, Roy Disney. Roy was followed by Michael Eisner. Eisner was succeeded by Robert Iger.3 Each new leader took the previous leader’s enhancement of the company’s innovation to the next level. Walt created the character of Mickey Mouse, added other animated characters such as Donald Duck, turned them into televised cartoon creatures and centered his creation of the Disneyland amusement park after them. After Walt Disney died in 1966, brother Roy Disney completed Walt’s Florida amusement park, Disney World, and created EPCOT Center and Tokyo Disneyland. (MGMT) Roy’s successor, Michael Eisner, introduced the Disney Brand to synergy. By doing this, revenues soared from $2 million to $25 million. The company had reached a brief period of stagnation in its growth by this time. But Iger, who reacquired Pixar studios from Apple creator Steve Jobs for $74 million, took the synergy that Eisner brought to Disney to a whole new level. (MGMT) Disney also purchased cartoon media giant Marvel Studios for $4 billion in 2009, thus adding the Incredible Hulk and Spider-Man to its repertoire. (MGMT) In 2012, Disney tightened their stranglehold on the multimedia industry, acquiring Lucasfilm, and its Star Wars characters such as Darth Vader, for $4 billion. The focus on maintaining the vision created by Walt Disney many years ago remains intact. 3 Rothaermel, Frank. Strategic Management: Concepts. [Columbia College]. Conclusion The Walt Disney Corporation has the resources, capabilities, and core competencies to help the company maintain a competitive advantage. Their resources run deep, and their capabilities are more than adequate to stay in the game in the interactive media and theme park businesses that generate most of their revenue. (MGMT) Disney’s core competencies highlight the uniqueness and originality of their brand, a brand that can be imitated, but never duplicated. Disney’s Value Chain points out that despite the competition, both past and present, the business is strong. It also states that it has not been necessary to make wholesale changes, if any, to the Value Chain. If the recommendations are adhered to, it is believed that The Walt Disney Corporation will continue it long, successful journey as an American and worldwide icon in the business and entertainment arena. Works Cited – MGMT. [Columbia College]. Retrieved from https://ccis.vitalsource.com/#/books/9781307288827/ The New York Times: THE MEDIA BUSINESS: THE MERGER; WALT DISNEY TO ACQUIRE ABC IN $19 BILLION DEAL TO BUILD A GIANT FOR ENTERTAINMENT by Geraldine Fabrikant, Aug. 1, 1995. https://www.nytimes.com/1995/08/01/business/media-business-mergerwalt-disney-acquire-abc-19-billion-deal-build-giant-for.html. Online. Accessed February 2, 2020. PACE Technical: A Brief History of Streaming Media. https://www.pacetechnical.com/briefhistory-streaming-media/. Online. Accessed February 2, 2020. Rothaermel, F. Strategic Management: Concepts. [Columbia College]. 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