Apply the industrial organization model and the resourcebase

Apply the industrial organization model and the resource-based model to determine how the Walt Disney Company\'s Media Networks (tv portion of the company) could earn above-average returns.

Solution

Industrial Organization method assumes that The external factors i.e. factors outside of the industry impact the strategic decisions taken in the business.This theory is designed on the following factors

- External factors like competotors , economic changes etc , would result in pressure & hurdles on the industry inducing them to earn maximum returns

- The businesses in the similar or same industry generally hold on to particular set of resources which is used by all of them in manufacturing or service rendering, & hence will formulate typical strategic framework , which would be alike for these industries in similar fields

- The resources or materials used by all these industries would be highly exchangeable , which means that industries can absorb the surplus or overcome scarcity.

- The managament strives hard to maximize the reutns & wealth of stakeholders

Resource based model contends that internal factors affect& impact the industrial perfromance.This theory is built on following assumptuons

- Internal resources like people , infrastructure etc . are unique for every industry even though ther are in the similar fields& hence evry industry will emaculate different strategic approach

- The firms will achieve more skills , capabilities & earn resources over time , which will help themm to adapt to growing competition in the industry

- The resources so acquired or developed may or may not be mobile through the similar industries

Lets see if these two theories can be applied to Walt Disney for earnings above average returns

- External factors

This would be threats & opportunities which can be avoided & exploited respectively by Walt disney company for maximum returns

1) Competitors

Walt Disney faces competition from the some of the largest names like Viacom , time Warner , twenty first century fox.This certainly impacts on the strategy fromed in Walt Disney.this is because Walt Disney will laways take advantage of the competition.The company known for its quality products would always have largest share, but has the greatest responsibility also in the form of higher expectations to ward off the competotion.

2) Stakeholders expectations

Being pioneer in the industry has its perks of high reputation.But maintaining such high standards always is also a cumbersome & regular process.The company should hence always review its strategy for continuous updation & changes in the stake holder expectations

- Internal factors

These are strengths & weaknesees which will be used at its best & taken care of so as to avoid getting expolited respectively.

1) People

The company has a large employee base , which makes them efficient for mainating the production schedules on track.So this is the strength as well as weaknesses, beacuse if the employees are satisfied about work environment , it will definitely impact as ezrning above avarge.But if there is employee turnover on large scale due to experience then it may be difficult to sustain the activities in cost effective way.

2) Infrastructure & technology

Walt disney certainly has an edge over others , as they possess high quality technology & infrastructure.this is the strength which can be used against competitors.But also the company should be aware of any changes in this technological environment so as to be at highest benefit of any innovations.This would definitely result in above avarage earnings