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The paper is for Strategic Management under Walt Disney who faces challenges due to various internal factors

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Strategic Management

Walt Disney

. Diagnosis of the challenge

1.            State the challenge

Like any other company, Disney faces challenges due to various internal factors. However, one such factor that has been widespread and noted, not only by Disney but also, in the entire entertainment industry is piracy. Piracy is an unfair trade practice wherein another organization uses the ideas and concepts developed by Disney for its benefit without any legal permission from Disney. Piracy is a huge issue for Disney since most of its business offering is in the form of characters, cartoons, animations, etc. Due to increased use of technology and widespread internet usage, privacy is a far pledging issue than it was a few years ago (About -Leadership, Management Team, Global, History, Awards, Corporate Responsibility, n.d.).

1.            Provide evidence about the importance of this challenge – why is this the main challenge

Piracy is a threat not only to Disney but also to across the market. Piracy is a global phenomenon that concerns all the intellectual property of Disney. Invasion into the business ideas affects Disney's reputation, financial position, market holdings, and, most importantly, the future of Disney. Piracy is a serious challenge for Disney since:

•             The creation, development, and commercialization of intellectual property are not easy tasks. They require intense investment in terms of money, time, and cost. However, due to piracy, Disney (the holder of intellectual property) faces loses and can't recover the costs. And even a worse scenario, the creators lose interest and motivation over time, due to the lack of rewards both personal and monetary.

•             Intellectual property (IP) helps Disney to stand out in the market and gain market share and dominance. The strategic advantage is lost in case the IP is freely available in the market.

1.            Discuss the company's current position relative to competitors in addressing this challenge

Large corporations across the globe (including Microsoft, Apple, Dell, and House of Hollywood) have faced challenges related to IP and piracy. To ensure that they stay on top of the competition with other competitors, Disney took some strategic steps to prevent piracy, such as:

•             Disney along with other law enforcement agencies has cracked down multiple sites involving piracy.

•             The internal policies at Disney to safeguard IP is strong. The issue is addressed at all stages including employee recruitment and separation, use of LAN and official internet connection to laptops, and firewalls and other software restriction on the personal machines or equipment that are used for business purposes.

•             The issue must be addressed at the grassroots level i.e. the users of pirated goods and services. So, Disney has led campaigns and awareness programs (online and offline) to educate its customers of the consequences of pirated products.

II. Guiding policy

1.            State the company's guiding policy

To handle the issues related to IP, Disney has Antipiracy Policy. This policy is the sole of the internal department that investigates problems related to IP. To ensure the department works to the fullest of its capacity, it defines IP as " the characters, titles, names, programs, brands, and properties that entire belong to Disney or any of its subsidiaries". The policy takes into consideration other business names, motion pictures, resorts, hotels, publications, gaming apps, animations, music, videos, etc., that are the sole property of Disney. The mission of the department is to provide a high-quality entertainment and meet the standards of its market so that customers have an everlasting experience. (Investor Relations - Stock Information, Events, Reports, Financial Information, Shareholder Information, n.d.)

1.            Describe how this policy has shaped past strategic choices

Concerns over infringement of IP have been a growing since early 2000s. The primary reasons for these infringements are the widespread cheap internet and the advent of technology in every sphere of business, which make business information vulnerable to external and unlawful population. To curb piracy, strategic decisions are taken to improve the overall business environment. Some of these strategies are:

•             Issues related to piracy are widespread especially in Asia due to lack of strict laws. So, Disney has always maintained a safe one arm distance from these countries despite that the market potential is huge.

•             Anti-Piracy (internal department) is allocating a considerable amount of funds along with manpower to work effectively and ensure the lawful use of Disney’s properties.

•             A higher level of employee recruitments and separations to ensure that secrets from a previous employer stay confidential and will not be spread elsewhere.

(Investor Relations - Stock Information, Events, Reports, Financial Information, Shareholder Information.)

1.            Discuss how this policy applies to address the current challenge.

The anti-piracy policy ensures any IP of Disney or its subsidiaries are used only by authorized individuals and corporations. To do so, Disney has considerably changed its way of making deals with stakeholders, both internally and externally.

•             To make sure no employee knows the complete details of the project, the employees are strategically separated to ensure the sanctity of the products. Thus, ensuring there is no breach due to the availability of excess information.

•             From a long time, Disney has avoided in joint venture, collaboration, or any other strategic partnership ways to ensure no information is linked to another party. (Investor Relations - Stock Information, Events, Reports, Financial Information, Shareholder Information.)

 

III. Set of Coherent Actions

1.            Propose a strategic action plan which addresses the current challenge and is in line with the company's guiding policy.

It is not an easy task in today's tech-savvy world to protect IP however the following points providing some suggestions:

•             To develop new IP, Disney should largely depend on the open-source platform through the usage of highly effective developers and engineers to design the IP. This will make the development of the IP by competitors hard in terms of funds and time.

•             Over 80% of causes related to piracy are rooted or sponsored by internal stakeholders. Thus, Disney should realize that information related to IP must be kept safe in a security system with multiple layers of identifications and authorizations.

•             A nondisclosure agreement should be signed by every member of Disney, no matter how remotely connected, and the document should be strong, foolproof and detailed (Rumelt, 2012).

2.            Provide information about what the company is trying to achieve as well as specific actions that can be taken to achieve this.

Objective

The secure atmosphere for its IP.

Install a sense of accountability and fear among the stakeholder.

Ensure the wrongdoer (if an internal member) faces legal charges.

Create awareness among its customers of piracy.

 

Action Plan

Implementation of Anti-Piracy Policy

Shake hands with the federal government to run an undercover operation to scoop out the wrongdoers.

Any proven infringement of policy is directly handed over to law enforcement agencies.

Running regular programs and campaigns that increase customers’ moral awareness, such as “enjoying pirated products might not be legally punishable, but it is morally disturbing”.

 

1.            Describe how these actions address the challenge and fit with the guiding policy.

By adopting the above action plans, Disney may ensure the IP is lawfully used and commercialization. Since external law agencies cannot provide 100% security, Disney has implemented its anti-piracy department, which takes care of the IP efficiently. The overall objective of Disney is to provide lifetime experience for its customers. This goal can be achieved through making sure the entertainment offerings by Disney are not available anywhere else in the world, no matter how small and negligible they are. To deter the infringers of its policies, Disney can file lawsuits and proceed legally to prove itself as a strong competitor, set the right environment, and give a warning message for any parties that may try to cross its borders (The Walt Disney Company, 2019).

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