Internal Factor Evaluation (IFE) Matrix

Internal Factor Evaluation (IFE) Matrix Key Internal Factors Weight Rating Score 1. Currently owns a variety of media outlets 0.08 4 0.32 2. Multiple theme parks around the world and cruise lines 0.09 3 0.27 3. Strong recognition and reputation around the world 0.12 4 0.48 4. Diverse investment portfolio 0.09 3 0.27 5. Effective advertisements 0.07 4 0.28 6. Overall increase of paid subscribers for streaming services 0.07 3 0.21 0.10 4 0.40 1. Overdependence on specific regions 0.10 2 0.20 2. First quarter revenues comparing 2020 to 2021 down 13% 0.06 2 0.12 3. Extremely large portfolio might lead to inefficiencies 0.04 2 0.08 4. High production costs in entertainment industry 0.05 1 0.05 5. High employee turnover 0.04 2 0.08 6. Some divisions have a narrow target market 0.04 2 0.08 7. Fluctuations in business 0.05 2 0.10 Strengths up 30% from Q1 2020 to Q1 2021 7. Increase of operating income from a loss of $25 million in Q1 of 2020 to a profit of $312 million in Q1 of 2021 Weaknesses Total 1.00 Strengths 2.94 1. The Walt Disney Company currently owns ABC, ESPN, Walt Disney Studios, and Pixar among other media outlets. They now have a variety of different content groups including Studios Content, General Entertainment Content, and Sports Content. By having a variety of content ownership, they are able to appeal to more consumers. This received a rating of 4 because this is one of The Walt Disney Company’s strengths. 2. The Walt Disney Company has multiple theme parks around the world including destinations such as the United States, Shanghai, Hong Kong, Paris, and Tokyo, as well as owning their very own Disney Cruise Line. By having all of these locations and destinations, people of all ages around the world are never too far from a magical Disney experience. This received a rating of 3 because this is one of The Walt Disney Company’s strengths but not the strongest aspect of the company. 3. The Walt Disney Company has a strong recognition and reputation around the world for their ability to entertain, inform, and inspire people through their excellent storytelling. They are one of the largest and most well-known family entertainment and media enterprises. This received a rating of 4 because this is one of The Walt Disney Company’s strengths. 4. The Walt Disney Company has a very diverse investment portfolio. They have expanded from their strictly animation business when they first began into theme parks, resorts, cruise lines, streaming services, TV broadcasting, live entertainment, and retailing among others. These brand extensions have helped to keep The Walt Disney Company as an entertainment industry leader. This received a rating of 3 because this is one of The Walt Disney Company’s strengths but not the strongest aspect of the company. 5. The Walt Disney Company has very effective advertisements. Because of the amount of data and consumer information that they are able to collect from ABC, ABC News, Disney Channels, Disney digital, ESPN networks, National Geographic, Hulu, and others, they are able to take this information and use it to their advantage to create advertisements for specific segments. They are able to better reach and engage their targeted audience through advertisements because of the plethora of data they are able to collect. This received a rating of 4 because this is one of The Walt Disney Company’s strengths. 6. From Quarter 1 of 2020 to Quarter 1 of 2021, The Walt Disney Company saw a 30% increase in paid subscribers for their streaming services which includes Disney+, ESPN+, and Hulu (The Walt Disney Company, 2021). These high numbers are partially due to the pandemic and their extensive content, but also increased due to Disney’s recent direct-to-consumer push. This received a rating of 3 because this is one of The Walt Disney Company’s strengths but not the strongest aspect of the company. 7. The Walt Disney Company’s operating income had a drastic increase from taking a loss of $25 million in Quarter 1 of 2020 to making a profit of $312 million in Quarter 1 of 2021 (The Walt Disney Company, 2021). In the first fiscal quarter of 2020, they took a big hit in operating income because of the COVID-19 outbreak but have since made adjustments and improvements. This received a rating of 4 because this is one of The Walt Disney Company’s strengths. Weaknesses 1. The Walt Disney Company tends to rely on their performance in specific regions of the world. They derive most of their revenues from North America, underperforming in other regions of the world. They need to find a way to improve their performance in other countries and regions. This received a rating of 2 because they have locations around the world and they make sales worldwide too, so it’s not a huge weakness, but it could use some improvement. 2. The first quarter revenues for The Walt Disney Company in 2021 are down 13% from what they were in 2020. The revenue for the Disney Media and Entertainment Distribution and the Disney Parks, Experiences and Products segment decreased from $18,025 million at the end of Quarter 1 in 2020 to $15,613 million at the end of Quarter 1 in 2021 (The Walt Disney Company, 2021). This is partially because of the huge hit that Disney+ was when it first launched at the beginning of the pandemic but has since plateaued. This received a rating of 2 because there are other aspects of the company that are seeing improvements, but their revenues still need improvement. 3. The Walt Disney Company’s large portfolio could potentially lead to inefficiencies within the company. Because of their diversified businesses, they will have to determine where resources and funding should go by determining which investments are more important. In this sense, some divisions might not get the funding or attention necessary to make them as profitable and successful as possible because resources have to be sent elsewhere. This received a rating of 2 because while this could potentially be a weakness, it can also be seen as a strength as well. 4. The Walt Disney Company operates primarily in the entertainment industry, and because production costs in the entertainment industry are so high, this hurts their profits. They then must find a price at a happy medium to satisfy both the company and the consumers. They can’t charge a price too high because consumers won’t make the purchase, but the prices have to be high enough to cover the costs of production or they will go out of business. This received a rating of 1 because their extremely high production costs is one of their largest weaknesses. 5. The Walt Disney Company has recently seen high employee turnover. This is harmful to Disney because of the costs to hire and train new employees, the loss of previously trained employees as well as institutional memory and abilities, and the loss of productivity within the business. This received a rating of 2 because although their turnover is fairly high, this is more for the lower skilled employees. 6. Some divisions of The Walt Disney Company have a very narrow target market. While their main target market is children, some of their divisions are very specific. This received a rating of 2 because narrow target markets are generally a good thing, but for Disney, some of these segments are only appealing to people with a specific set of interests. 7. The amount of business that The Walt Disney Company’s theme parks, resorts, and cruise lines bring in fluctuates from the seasonal nature of travel as well as the accessibility of local entertainment options. More recently, this has also been impacted by travel restrictions and business closures due to the COVID-19 pandemic. This received a rating of 2 because although this is a weakness, Disney has a large amount of revenue coming from other divisions as well even during the off season for traveling.