Implementing Offensive and Defensive Strategy in the Media Business: A Case Study of the Walt Disney

Technological advancements in the media industry, like high-speed Internet, have spawned the breakdown of industry barriers that have effectively blurred the lines of corporate strategy and consumer interactions (Priem, Butler, & Li, 2013). Dynamic industries like media production require change management strategies (Thompson, Strickland, & Gamble, 2009) and business models that are consumer-centric (Priem et al., 2013).

Research shows the importance of integrating both supply and demand functions in a balanced way that ensures true value creation while securing economic profit (Stank, Esper, Crook, & Autry, 2012; Priem et al., 2013), which can be done through the strategic implementation of both offensive and defensive moves in the marketplace (Thompson et al., 2009). This investigation takes a look at the Walt Disney Company and its differentiation strategies for delivering superior customer value through well-managed consumer value and supply chain efforts.

Offensive Strategies that Improve Market Position

Organizations need to continually create and enhance value through strategy (Priem et al., 2013) that can be readily adapted in leading, anticipating, and reacting to change (Thompson et al., 2009). The Walt Disney Company has been around since 1923, and has since become a worldwide phenomenon (Inglesson, Eriksson, & Lilja, 2012) gradually improving its market position through offensive strategies.

One of the strategic priorities of Disney is to internationally extend its impact by expanding into growth markets (Stank et al., 2012). This offensive strategic priority can be clearly seen most recently in the acquisition of Maker Studios, one the most popular YouTube channels for original online content creation (Fritz, 2014).

Being the first major studio to acquire an Internet multichannel network puts Disney in the driver’s seat for leading change in the media industry, an offensive stance that effectively changes the rules of the competitive landscape undergoing rapid industry change (Thompson et al., 2009).

By proactively making strategic purchases that enhance the reach of its competencies and assets, Disney can continue to enhance its market position through fresh actions that do not wait until the industry requires them (Thompson et al., 2009).

Another part of the offensive strategy adopted by Disney includes the ongoing implementation of pioneering fresh technologies in an effort to set new standards in the industry (Thompson et al., 2009). A second strategic priority touted by current CEO, Robert Iger, is to maximize the reach and quality of its entertainment offerings through the adoption of new technology (Stank et al., 2012).

Disney makes a concerted effort to align itself with the values of its customers by differentiating itself as a family friendly experience, and makes sure to adopt these practices in all of its operational activities (Stank et al., 2012) while continuously enhancing its market position through decisive offensive strategies.

Using Defensive Strategies to Protect a Position

Disney has also taken on some defensive strategies in an effort to continously protect its position in the media landscape. Part of their continued success in the theme park experience comes from the rigorous selection and socialization processes the company fosters to inculcate the values of the organization into its “Cast Members” (Ingelsson et al., 2012, p. 7).

Disney has implemented a total quality management (TQM) culture which focuses on continuous improvements that create customer value and satisfaction driven through its culture, something that has been difficult for rivals to successfully repeat (Ingelsson et al., 2012). In terms of staffing, Disney has an eight-step procedure it goes through to weed out individuals who do not fit into the value system of the organization (Ingelsson et al., 2012).

Those eight steps include:

1. Sourcing - finding where the talent is.

2. Recruiting - requesting active inquiries for employment.

3. Reviewing - checking all resumes for accuracy.

4. Interviewing - making sure there is a good fit with the firm's value system.

5. Selection - secondary interviewing and final selection, creating the best person-organization fit.

6. Negotiating - contracting the new hire.

7. On boarding - welcoming the new Cast Member and training her or him.

8. Retention - showing appreciation with follow-up corporate values and culture socialization.

Disney has been able to defend its top industry position throughout the years by insisting on a recruitment methodology that sometimes begins the hiring process six years in advance, as in the case of its Animal Kingdom property (Ingelsson et al., 2012).

A third strategic priority for Disney includes continuing to develop entertainment experiences that people want to consume (Stank et al., 2012). This consumer-focused, differentiation strategy helps to defend Disney’s position by keeping its focus on competencies that are intrinsically linked to activities that offer customers what they desire (Stank et al., 2012).

Disney does this while remaining profitable, showing their knack for understanding both the voice of the consumer and the voice of the supply chain, which results in their ability to identify segments where the firm’s value proposition surpasses the costs required to produce that value (Stank et al., 2012).

This, in turn, creates a balancing act with their supply and value chains, which result in economic profits that maintain industry leadership, and reflect competencies and capabilities not easily copied (Stank et al., 2012), thus providing a sustainable competitive advantage for the firm (Thompson et al., 2009).

Implementing Defensive and Offensive Strategy for Sustainability

The volatile and ever-changing industry landscape of the media business requires firms to understand and implement both defensive and offensive strategies appropriate to their given circumstances (Thompson et al., 2009).

The Walt Disney Company has imposed three strategic priorities that have fostered activities to both protect its current market position while competitively improving it by (1) constantly inventing new entertainment experiences, (2) using the latest technology to advance their product offerings, and (3) driving international expansion to extend the firm’s reach and impact (Stank et al., 2012).

Arguably, Disney has created a way to generate significant economic profits by aligning consumer segments with organizational capabilities (Stank et al., 2012) that foster strategic differentiation strategies that have the right balance with offensive and defensive stances (Thompson et al., 2009), which have sustained the company’s legacy for many years, and threaten its rivalry to continue doing so for years to come.

What can your media company learn from the business strategies employed by the Walt Disney Company? Here is a recap:

• The choice of a firm's fundamental values and corporate culture should strategically match that of its chosen core target customer demographic. Just having "values" for the sake of having them is not sufficient.

• Media firms need to make sure that their overall business strategy, mission statement, values, and strategic vision all coincide with being consumer-centric while remembering not to neglect the importance of efficient supply chain management. The proper balance can mean the difference between short and long term success.

• The proper balance of demand and supply integration requires an astute understanding of not only what your customer base wants and how to exceed that with added value, but also how you will successfully deliver it with an efficiently run operation.

• Part of having a total quality management strategy should include starting with core values, selecting people who can support, embellish, and lead others with those values, and providing the proper techniques and tools to make sure your firm can deliver customer satisfaction while finding ways to reduce resources required to make that happen.

• Find the best mix of both offensive and defensive strategy, and continuously refine these for your firm to secure long-term profits, longevity, and sustainable competitive advantage.

• Look for ways to become an industry leader by anticipating the logical next moves of competitors and where the industry is headed through astute research and observation, then take bold moves that put you in the driver's seat for industry change.

What are your thoughts? Do you agree with this assessment or have something you would like to add? Feel free to jump in on the conversation! Thanks for being here...

All the Best,

Joshua

Founder/Minerva Films, LLC

References

Fritz, B. (2014, March 24). Disney to buy online-video network Maker Studios. The Wall Street Journal [Online article.]. Retrieved from http://online.wsj.com/news/articles/SB10001424052702303949704579459811194114736

Inglesson, P. Eriksson, M., & Lilja, J. (2012, Jan.). Can selecting the right values help TQM implementation? A case study about organisational homogeneity at the Walt Disney Company. Total Quality Management, 23(1), 1-11.

Priem, R. L., Butler, J. E., & Li, S. (2013). Toward reimagining strategy research: Retrospection and prospection on the 2011 AMR Decade Award article. Academy of Management Review, 38(4), 471-489. doi: 10.5465/amr.2013.0097

Stank, T. P., Esper, T. L., Crook, T. R., & Autry, C. W. (2012). Creating relevant value through demand and supply integration. Journal of Business Logistics, 33(2), 167-172.

Thompson, Jr., A. A., Strickland III, A. J. & Gamble, J. E. (2009). Crafting & Executing Strategy (17th Ed.) New York: McGraw Hill/Irwin.

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