The Walt Disney Company has been a leading corporation in the entertainment industry. It is a very successful company in making smart strategic decisions in regards to diversifying and expanding their company in different sectors. It has large market shares in many different industries, including the film industry, the entertainment parks industry, resorts and travel industry, consumer products industry, and most recently the streaming service industry. Founded in 1923 by Walter Disney in the back of a tiny office in Los Angeles, this company has been growing in size and market share ever since. That is, until the world shut down completely in March of 2020.
When the CoronaVirus pandemic hit the world in March of 2020, everyone was in shock. People were being told to stay home, do not travel, and do not go anywhere that is not completely necessary. The stock market crashed as companies, including the Walt Disney Company (Disney), were losing revenues unseen since the 2008 stock market crash. In 2020, for the first time ever, Disney’s stock price dropped below $100 for the first time in over three years. It lost more than $85 billion in market value in 6 months. One of Disney’s main revenue drivers, its theme parks, were ordered to be shut down, ultimately causing losses in operating income by $2.4 billion in one quarter. However, thankfully for Disney’s diversification strategy and its new streaming service Disney Plus, Disney did not experience as drastic of a loss as expected. While comparing the fourth quarter results in 2020 to 2019, its Parks, Experiences and Products segment was down 61%, but the Direct-to-Consumer segment was able to reduce Disney’s total loss by having an increase in revenue of 41%.
Thankfully, Covid-19 vaccines are being dispersed throughout the world, and there is light at the end of the tunnel. Slowly, restrictions are easing in places. The pandemic is not over yet, but it is time for companies to start their planning for when it is over. While Disney Plus was Disney’s saving grace in 2020, the company cannot solely rely on its streaming services once the pandemic is over and life goes back to “normal”. Going forward, the main strategic issue for Disney is going to be how are they going to regain their market share in its multiple different industries while still attempting to grow its market share in the streaming service industry.
What should be done to address the issue?
– provide 2 alternatives
– with justification