Ref: IMD-7-2179

Case study

Reference: IMD-7-2179

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Disney at the crossroads of disruptive trends

By Professor Arnaud ChevallierArnaud Chevallier, Richemn Mourad, Sami Uddin Ahmad and Fares Benouari

Owing to its intangible nature and oligopolistic structure, the Media & Entertainment industry used to seem particularly difficulty to disrupt, and Disney was sitting right at the top.

Yet, ten years after Netflix launched its online video streaming service, incumbents acknowledged that surviving the online revolution requires drastic changes. Until 2017, Disney had not taken the threat seriously. Its streaming strategy could be described as exploratory, at best: It had a 30% stake in Hulu, a third-party streaming platform jointly owned by media giants, and it sold its “old” content to Netflix.

However, as Disney’s cable partners (e.g., Comcast) started to lose millions of highly profitable subscribers, the company realized that its half-hearted approach to online streaming was a recipe for disaster. That year marked the turnaround of Disney’s approach to streaming. First, it shocked the world in August, when it announced that it would gradually withdraw its movie content from Netflix. That same month, it revealed it had taken a controlling stake in BAMTech, a technology company providing streaming video technology. Finally, in December, it announced its intention to acquire 21st Century Fox in a deal that closed 15 months later, giving it a controlling stake in Hulu and greatly expanding Disney’s already formidable content library. With the nomination of Kevin Mayer at the helm of DTCI in March 2018, Disney realized its intention to transition into a B2C company.

However, it was going to be a long road for Mayer, who faced both external and internal challenges. The case explores Mayer’s options to succeed in a rapidly evolving marketplace in which former partners and internet giants have become the competitors. It also examines how Mayer can position DTCI within Disney, addressing the complexities of collaborating with other business units and the potential cannibalization of the Media Networks division.

Learning Objective

The case aims to helps participants:

  • Acquire a holistic view of what is needed to create and support a firm’s overall strategy by conducting a thorough analysis of the environment and the competitors.
  • Identify key aspects of strategy formulation and strategy execution in a global dynamic and highly competitive industry.
SettingsWalt Disney Company, Travel and Leisure, Entertainment
Forward looking with last 3 years background illustration
TypePublished Sources
Copyright©2020
Related materialTeaching notes
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Reference: IMD-7-2179

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Case study

Reference: IMD-7-2179

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