7 April 2013
Value Chain Analysis
By conducting a value chain analysis for Walt Disney Company, I will be able to accurately show the “parts of its operations that create value, and those that don’t” (Hitt, Ireland, and Hoskisson, 87). The value chain is segmented into two categories: support functions and value chain activities. Support functions include finance, human resources, and management information systems which “support the work being done to produce, sell, distribute, and service the products [Walt Disney] is creating” (Hitt, Ireland, and Hoskisson, 87). Value chain activities include supply chain management, operations, distribution, marketing, and follow-up services, which Walt Disney “completes in order to produce products and then sell, distribute, and service them” (Hitt, Ireland, and Hoskisson, 87). After a value chain analysis is completed, strengths and weaknesses of Walt Disney’s internal business structure will be exposed and analyzed for visibility. I. Support Functions
i. Walt Disney has exceptional financial capital through revenues of their products and service. Their net income was reported as $1,382,000,000 on December 29, 2012 (The Walt Disney Company Financial Report). ii. Research and development is in constant work to develop effective and profitable means for producing and distributing its products. iii. Walt Disney is a unique and important customer for their suppliers. They hold high bargaining power and create mutually beneficial relationships. b. Human Resources
iv. Walt Disney hires the most experienced, creative, and talented staff to produce unique, high-quality products. v. Teamwork and communication are key and highly enforced in all divisions to create synergy between business segments. vi. Training programs for all employees are well developed and sustained. vii. Walt Disney offers many incentives and benefits to their employees, creating a competitive hiring process for new employees while, also, maintaining employee retention. c. Management Information Systems:
viii. Excellent, constant communication between all levels of staff help to effectively link and distribute company knowledge, values, and goals. ix. Walt Disney maintains the most effective, high quality equipment to ensure their leadership in the entertainment market. x. Licenses and patents are registered to secure the use of their unique research, technology, scripts, and characters.
II. Value Chain Activities:
d. Supply Chain Management
xi. Walt Disney uses “strategic sourcing with suppliers to develop and maintain a mutually beneficial relationship” (Walt Disney Company). xii. Walt Disney “abides by Supply Management Code of Ethics” (Walt Disney Company). xiii. Walt Disney maintains the ability to fulfill high expectations for: “pricing, quality, on-time delivery, communication, integrity, technical competence, environmental protection, supplier and subcontractor compliance with The Walt Disney Company’s International Labor Standards and Disney’s Code of Conduct for Suppliers, supplier financial stability, and willingness to share business risks with the Walt Disney Company” (The Walt Disney Company). e. Operations
xiv. Walt Disney sustains their leadership using highly developed technology and creativity through all processes of product development. xv. Walt Disney’s exceptional relationships with employees and the drive for teamwork produces high quality products and experiences consumers demand. xvi. Unique layouts and themes for movies, theme parks, cruise lines, and retail stores are developed for a quality experience. xvii. Walt Disney maintains consumer friendly navigations on both websites and theme parks through the use of search functions, menu options, free...
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