COMPETITIVE PROFILE MATRIX

Walt Disney Co. Time Warner Inc. CBS Corp. News Corp.
Critical Success Factors Weight
Rating Score Rating Score Rating Score Rating Score
Advertising 0.14 4 0.56 3 0.42 2 0.28 2 0.28
Brand Image 0.12 4 0.48 3 0.36 3 0.36 3 0.36
Diversification 0.11 4 0.44 3 0.33 2 0.22 2 0.22
Product Quality 0.10 3 0.30 3 0.30 3 0.30 3 0.30
Successful New Offerings 0.09 4 0.36 3 0.27 2 0.18 3 0.27
Technological Competence 0.08 2 0.16 3 0.24 2 0.16 4 0.32
Market Share 0.08 3 0.24 4 0.32 1 0.08 3 0.24
Product Distribution 0.06 4 0.24 3 0.18 3 0.18 3 0.18
Price Competitiveness 0.06 2 0.12 3 0.18 2 0.12 2 0.12
Customer Loyalty 0.05 3 0.15 2 0.10 1 0.05 4 0.20
Management 0.04 2 0.08 3 0.12 1 0.04 2 0.08
Global Expansion 0.04 4 0.16 3 0.12 1 0.04 3 0.12
Financial Position 0.03 3 0.09 4 0.12 2 0.06 3 0.09
TOTAL 1.00 42 3.38 40 3.06 25 2.07 37 2.78

Competitive Profile Matrix (CPM) is an analytical tool used by businesses to

understand the external environment and the competition in the industry they belong to [

CITATION Bha15 \l 1033 ]. By comparing itself to its competitors, the company’s strengths

and weaknesses reveal and this could be used as the basis for formulating strategies.

The matrix is composed of: critical success factors, characteristics that are seen as

valuable by customers or provide a significant advantage to the company; weight,

reflects the significance of a factor in the success of the firm which should sum up to 1;

rating, shows how effectively businesses do in each area which 1 is assigned as the

major weakness, 2 as minor weakness, 3 as minor strength, and 4 as the major

strength; and, the score which is the result of weight multiplied by rating.

According to Sommer, Rimscha, Verhoeven, Krebs & Siegert [CITATION Som16

\n \t \l 1033 ], critical success factors in the entertainment industry include contents,

which could refer to diversified products or services, innovative offerings, and product

quality; marketing, such as advertising efforts and customer loyalty; internal processes

which may include the financial position, price competitiveness, and technological
competence; leadership, such as management and brand image; distribution; and,

external evaluation, which could be the market share and global expansion.

On the other hand, the competitors of Walt Disney Company are Time Warner

Incorporated, CBS Corporation, and News Corporation [ CITATION Dav11 \l 1033 ]. Time

Warner, composing of five segments such as America Online, Inc., Cable, Filmed

Entertainment, Networks, and Publishing, is regarded as the major competitor of Walt

Disney. Being an entertainment-diversified company, Walt Disney directly competes

with Timer Warner. Meanwhile, CBS Corporation and News Corporation directly

competes with the Walt Disney Company in terms of the Media Networks segment.

CBS Corp.’s segments are Filmed Entertainment, Television, Cable Network

Programming, Direct Broadcast Satellite Television, Magazines and Inserts,

Newspapers, Book Publishing, and Other. News Corp., meanwhile, has eight segments

which are Filmed Entertainment, Television, Cable Network Programming, Direct

Broadcast Satellite Television, Magazines and Inserts, Newspapers, Book Publishing,

and Other.

Advertising is the placement of announcements and persuasive messages in

time or space acquired in any of the mainstream media by corporate corporations,

nonprofit organizations, government agencies, and people seeking to inform and/or

convince members of a certain target market or audience about their products, services,

organizations, or views [ CITATION Dur11 \l 1033 ]. This is a critical success factor in the

industry for it helps the companies in presenting their new offerings in the market

effectively on a wide scale. Without this, customers will not be informed of what the

companies have recently produced, which will then affect their revenues. Disney has
received a rating of 4 on this factor for Walt Disney Company have continuously

advertising their products and services in a unique way, which is through story telling.

Brand Image encompasses both visual elements and brand associations like

speed, reliability, and quality which are paramount to building credibility and loyalty

among potential customers [ CITATION Thi16 \l 1033 ]. Branding has long been an important

aspect of running a successful business, particularly for larger corporate entertainment

businesses like studios, networks, record labels, and even amusement parks for

customers often associate this with an overall experience. Having the highest market

capitalization in the industry for the year 2009 of $39B, Walt Disney deserves to attain a

rating of 4 in this factor for according to LaMarco [CITATION LaM18 \n \t \l 1033 ] , a

company who has a market capitalization of more than $10B, also called as a Large-

cap company, is historically known to produce high-quality goods and high-quality

services, often tend to dominate their industries, and tend to be easily recognized by

consumers.

Another critical success factor is diversification, which can be divided into two

broad groups: product diversification, which involves the expansion of firms into different

lines of business or industries, and market diversification, which entails the adaptation

of a given product to reach additional customers or users [ CITATION LeH19 \l 1033 ].

Diversification is a distinguishing feature of entertainment companies in the new

century. Major motion picture production and distribution corporations are now part of

diverse conglomerates with holdings in broadcast, cable, and satellite television,

newspaper, magazine, and book publishing, as well as many other sectors unrelated to

their main activities. Walt Disney Company got a rating of four because of the obvious
diversity in its product portfolio. Walt Disney has started with motion pictures or films,

then moved into television, introduced amusement parks, and then produced consumer

products.

Product or service quality, a critical success factor, is defined by Kabir and

Carlsson [CITATION Kab10 \n \t \l 1033 ] as based on two dimensions: technical quality

refers to the end, what is provided or what the client receives from the service or

product, whereas functional quality relates to how the service or product is given. A

rating of 3 is given to the company for it has produced a quality of products or services

almost the same with its competitors for the acceptance in the films and shows they

have produced are near-at-hand.

Successful new offerings are about how the customers view or accept the newly-

released products or services by the company [CITATION Lin \l 1033 ] . It is a critical

success factor for customers to always ask for new and different entertainment content

from the companies. A rating of 4 is given since new content released by Walt Disney

Co. is widely accepted by people because of its powerful reputation.

Technological competence, another critical success factor, is the capacity to

successfully build and use a certain field of technology, achieved via extensive

experimentation and learning in its study, development, and employment in production

[ CITATION Arb19 \l 1033 ]. Now that technology advances have made a lot of things

possible, companies in the media and entertainment industry should keep up for them

to survive by embracing new approaches to the development of content, operations,

distribution, technology, and monetization [ CITATION Shu10 \l 1033 ]. A rating of 2 is given

of technologies, especially from News Corporation who has been moving aggressively

toward digital technologies such as broadband, mobility, storage, and wireless.

Market share is the percentage of customers that a company has secured from a

specific, target market within an industry [ CITATION Leo18 \l 1033 ] . While market share

does not show anything about a company's financial health, knowing the percentage of

the market share offers an indication of the size and competitiveness of the company in

comparison to its rivals. Walt Disney received a rating of 3 while its competitor, Time

Warners Inc., received a rating of 4 since it currently has the highest revenue in the

industry.

Product Distribution is an activity in both selling and delivering products &

services from manufacturer to customer [ CITATION Dis \l 1033 ]. This is a considered a

crucial factor when it comes to companies becoming globally competitive, as this ensure

delivering the best possible services to the consumers and create harmony between the

manufacturers and retailers. Every company is rated a value of 3 as each of them

possess their own distributors and does not require much retailers as to the distribution

of their products and services

Price Competitiveness, a critical factor to account for as it focuses on the ability

of a company to set their prices with the consideration of its other competitor’s prices on

similar products. Walt Disney is rated as 2 with CBS and News Corp in comparison with

Warner’s at 3, this is due to the fact they were considered expensive to the actual

product or services they were being provided.

result of a consistent positive emotional experience, physical attribute base-satisfaction

and perceived value of an experience where consumers choose one’s products and

services constantly over their competitors. Walt Disney had been the industry for 8

decades and this has built considerable amount of emotional attachment to its

characters garnering a rate of 3 in the matrix, but is one lesser from News Corp, as

consumer’s tastes have shifted.

In accordance to Spriegel [CITATION Man \n \t \l 1033 ], management is that

function of an enterprise which concerns itself with the direction and control of the

various activities to attain the business objectives which is a critical factor to be

considered in terms of the capability to achieve its objectives. Walt Disney failed to

properly execute its activities for attaining their goals and showed weak performance

which garnered a score of 2 whereas Warner’s got 3 showing its positive persistence in

their performance.

Global Expansion is establishing operations into multiple countries extending its

reach throughout the markets [ CITATION Dav \l 1033 ]. To a fast-growing company,

expanding its operations is the next level of growth which would be an additional

competitive advantage and a chance to take opportunities. Walt Disney with its

substantial assets and growing segments, has the capability to enter new markets and

expand their operations which then be rated as highest (4) in comparison to other

competitors.

Financial Position is defined as the financial status or health of the entity.

Understanding the Financial Position helps to identify trends, potential problems or

the attainment of the objectives. This factor is rated as 3 for Walt Disney as they had

provided accurate and clear data on the situation of the company, but the results are not

aligned to previous forecasts, causing Warner to have the advantage.

From the Competitive Profile Matrix (CPM) constructed above, Walt Disney

Company scored the highest from its three competitors garnering a total score of 3.40.

Time Warner Incorporated ranked second with a total score of 2.89, News Corporation

as third with a total score of 2.78, and CBS Corporation as fourth garnering a total score

of 2.07. Critical success factors such as advertising, brand image, diversification,

successful new offerings, product distribution and global expansion, are those where

the company achieved the highest rating among the three competitors. Meanwhile,

product quality, market share, customer loyalty, and financial position are those factors

identified as the company’s minor strengths. The minor weaknesses are technological

competence, price competitiveness, and management.

Technological competence and price competitiveness, two of the company’s

minor weaknesses, could be strengthened through investing in Research and

Development. R&D is essentially an investment in technology, which could help Disney

compete in the industry, and future capabilities that could not just produce new products

or services, but also improve business processes. And, by improving existing processes

with the use of technologies, operating costs could be lowered which will eventually

minimize the prices of the company’s offerings. Management, meanwhile, could be

further improved by constant analysis and innovation of the company’s policies,

procedures, and organizational structure.

major strengths. Product Quality could be improved by benchmarking and adapting with

technologies to make the products stand out, Market Share could still be improved

through expansion of the products and services by the company to new markets,

Customer Loyalty could still achieve a higher rate by conducting more effective

marketing, and Financial Position could still be elevated by using new advertising

techniques that would attract customers which will then increase sales.