Business Operation/ Business Activity

. EFE Matrix for Walt Disney Company

Key External Weight Rating Weighted

Factors Score

Opportunities

1. Spend 1.1bil in 2008-20011 to revitalize the Disney California 0.06 4 0.24

Adventure in Anaheim,California.
2. Disney and Citadel announced an agreement to merge with 0.09 3 0.27
ABC radio business.
3. Disney opened Grand Floridian Beach and Carribean Beach 0.06 2 0.12
Resorts that include three new gated attractions.
4. Parks and Resorts division increased 10% in 2006 to 9.9 billion 0.09 3 0.27
Due to domestic and internationals resorts.
5. Buena Vista Games has reach a sales growth to an increase of 0.07 3 0.21
14%.
6.Disney’s 50th anniversary celebration at its parks and resorts 0.07 4 0.28
increased attendance and hotel occupancy.

Threats

1. Time Warner is a major rival to Disney Company 0.10 4 0.40

2. This industry is dominated by conglomerates Walt Disney 0.08 2 0.16 ,
Time Warner Inc., New York Times, News Corp., and CBS
Corporation.
3. Disney also compete with satellite providers such as Direct TV 0.06 2 0.12
4. Disney competes with other advertising media such as 0.08 3 0.24
Newspapers, Billboards, Internet and magazine.
5. Disney’s theme park and resorts really depends on travel trends 0.08 3 0.24
Seasons and also the security to travel
6 Competitors are consolidating and spending aggressively 0.08 3 0.24
To promote new hit movies and TV shows

Total 1.00 2.79

What Weights mean: 0.0 = least important; 1.0 = most important
What Ratings mean: 1 = the response is poor; 2 = response is average; 3 = response is above average;
4 = the response is superior
An External factors evaluation model is based upon the external audit and evaluates key
external factors that affect a firm and also studies how well a firm responds to these factors. In
our evaluation of Walt Disney we found the following factors that affect Walt Disney’s
business and profitability. Based on the weight assigned it can be concluded that the growth of
internet users, the heavy weight, stiff and the ever growing competition are perhaps the most
important factors in online retail industry, having a high effect on Walt Disney business.
 A weighted score of 2.79 (above average and midpoint 2.5) shows that the Walt Disney has
been able to manipulate the opportunities and have been able to counter threats and is doing
rather well but its business isn’t still great. Walt Disney can still manipulate the opportunities
and counter the threats that it has failed to do i.e. Walt Disney has not been able to work well
with the foreign exchange market and it has not been able to expand its business activities in
Asia

IFE Matrix for Walt Disney Company

Key Internal Factors Weight Rating Weighted

Score
Strengths

1. Disney owns ABC Television Network 0.08 2 0.16

2. Disney’s net revenue climbed 5.2% to 35.5 billion 0.10 4 0.4
3. Walt Disney company operates using a strategic 0.08 4 0.32
business unit(SBU)
4. Disney WABC-TV ranked as the 1st in television market ranking 0.10 3 0.3
In Ney York.
5. Disney unveiled Disney Xtreme Digital which competes against 0.09 2 0.18
Myspace.
6. Parks and Resorts division increased 10% in 2006 to 9.9 billion 0.10 3 0.3
Due to domestic and internationals resorts.
Weaknesses

1. Disney revenues from Studio Entertainment and Consumer product 0.08 2 0.16
segment decreased by 1%
2. Hong Kong Disneyland has been struggling because the company 0.08 3 0.24
Might have to persuade lenders to refinance the debt.
3. Disney has lost the competitiveness on consumers products to 0.12 4 0.28
Nickelodeon as they had launch SpongeBob and it’s a hit.
4. Disney has smaller industry segments in the broadcasting industry 0.09 3 0.27
As news corp. operates in eight industry segments.
5. The theme park and resorts business experiences fluctuations 0.08 4 0.32
from the seasonal Nature of vacation travel and local
entertainment excursions.

Total 1.00 2.93

What Weights mean: 0.0 = least important; 1.0 = most important

What Ratings mean: 1 = major weakness; 2 = minor weakness; 3 = minor strength; 4 = major
strength

Internal factors evaluation matrix (IFE) is a tool that uses internal audit’s report to analyze a
firm’s internal strengths and weaknesses. An IFE matrix gives important information and helps
in strategy formulation.

The main strengths of online retail market in which Walt Disney operates is the strong brand
names and recognition also corporate culture and sales and post sales services are of relative
importance, too. The major weakness of this industry is the risk associated with venturing into
retailing of products that are unrelated and high shipping cost related to some products.
The weighted score of 2.93 (which is greater than 2.5) shows a strong internal position but
there are still issues to be sorted out. As in case of Walt Disney due to high product
diversification and venturing into new product markets costs have been high and though net
sales have increased since 2004 the net income has significantly decreased. Walt Disney’s
website lacks an important aspect of having different languages for different regions have also
a significant impact on their sales as well over the years