The global brand Disney has been delighting and entertaining consumers for a century with motion pictures, sports programming, theme parks, resorts and television networks. Netflix, founded in 1997 started as a distribution service for entertainment, and Disney was one of their suppliers of licensed content. As internet speeds increased, Netflix became the premier provider of streaming content. Netflix accessed content from the full spectrum of content providers and networks. Both companies are global behemoths, Disney with a market cap of $321B and Netflix at $230B. Both create incredible value for consumers and customers in the growing entertainment sector and experience/service economies.
Fast forward to Fall 2019, and Disney launched a streaming service of their own, Disney +. Part of their new DTCI (Direct-to-Consumer & International) division. Disney + has exceeded their initial expectations for subscriptions. It is available solo, or bundled with Hulu and ESPN + (both properties of the Disney Co.)
During this same time, we have seen Paramount, Peacock (NBC), Amazon, Apple TV, and many others enter this technology-enabled business. Disney + currently has half of the subscribers of Netflix, after only 16 months. The global pandemic, closing of theaters, and lock-downs have been a boost for the industry in general. It is not just a two horse race, but a crowded field of multiple providers.
In this case analysis, you will look at the current entertainment industry, and deep dive into Disney and Netflix. You will talk about their missions, core competencies, strengths and position in the entertainment industry. You will also look at the battle for share of consumers’ household spending on entertainment. You will be applying course concepts to the discussion of the growing streaming market, and specifically the work and business models of Disney and Netflix.
Read the 2 cases provided in your Harvard Coursepack on Disney and Netflix.
• The Video-Streaming Wars in 2019: Can Disney Catch Netflix?
• Netflix: Will Content be Enough?
Answer the following questions, utilizing the cases, PLUS a minimum of 4 ADDITIONAL outside sources. Your sources should be from independent, reputable business press. (i.e. Wall Street Journal, Bloomberg, Economist, Fortune).
For formatting this assignment, answer each question individually as a short answer do not create a lengthy narrative. Number your answers consistent with the questions. Be specific and concise.
- The mission statement is a broad description of a firm’s objectives and the scope of activities it plans to undertake. Disney’s Mission Statement, from their website is below.
“The mission of The Walt Disney Company is to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world’s premier entertainment company.”
Netflix does not have an official mission statement. Given your reading about the company, and their actions, if you were to write their mission statement, what would it be? The statement should be concise, and state their objectives and scope of business.
(10 pts)
- What are the relative strengths of Disney, and strengths of Netflix? Name at least 5 strengths for each organization. You can utilize bullets, or a table if desired.
Do any of these strengths create sustainable competitive advantage in the entertainment category? If so, which ones, and why do you believe it is sustainable? (Sustainable advantages are not easily copied by competitors, and can be maintained for a long period.) (30 pts) - Use Porter’s competitive framework discussed in lecture, and detailed here https://hbr.org/1979/03/how-competitive-forces-shape-strategy and do a competitive analysis on the streaming industry. Specifically assess the:
a. Threat of new entrants into the market
b. Power of suppliers
c. Power of buyers
d. Competitive rivalry
Rate the risk from each of these competitive forces as Low, Medium or High and explain your rating with proof and examples. What specific actions or disruptions in the entertainment industry have resulted from this competitive scenario? (20 pts)
- According to Ansoff’s growth matrix, what type of growth strategy was adding Disney+ to the Disney portfolio? Explain and provide rationale for your answer. (10 pts)
- What is the average family willing to pay for streaming services? How many streaming services does the average family use? Is there enough room for everyone? Why or why not? Give your reasoning. (10 pts)
- As we would expect, the streaming industry growth was rapid during the global pandemic. Recent press shows that post-pandemic, Disney+ has slowing growth, and Netflix subscriptions have declined in UCAN. Where are the growth opportunities for both Netflix and Disney? Are there other opportunities for revenue stream and monetization for these entertainment giants? If so, what are they? Be specific. Name a minimum of five total growth opportunities(not five for each company, but five total for both companies.) (20 pts)
• One author: (Francisco, 2019); (IBIS, 2019)
• Two authors: (Cropper & Edwards, 2017)
• Three authors: (Abram, Pyrah, and Choi, 2020)
• More than three authors: (Kim et al., 2019)
https://hbsp.harvard.edu/coursepacks/848565?itemFindingMethod=Coursepack+Navigation Usernames and password is for harvard coursepack
Sample Solution