began with a dramatic shift in the strategic context under which the company operates. This shift highlighted shortcomings in the company’s structure and culture. And CEO Michael Eisner’s hands-on, meddlesome approach has thwarted efforts to turn around the company.
Disney’s strategic context. Tushman and O’Reilly define strategic context as three key factors that help managers understand the opportunities and constraints that fie before their organizations. The factors are: (1) the environment in which the organization operates, (2) the resources available to the organization, and (3) the history of the organization. The strategic context is the vital first step in Tushman and O’Reilly’s congruence model. Once the strategic context is understood, strategic choices can be made, critical tasks defined, and alignment checked between those critical tasks and the organization’s people, organization, and culture. If that strategic context is altered, however, choices can be incorrect, critical tasks off target, and relationships misaligned.
Disney’s strategic context has undergone dramatic changes in recent years. Its competitive environment, its customers, its market position, and its history have all combined to alter its strategic context.
Disney used to have the some markets (particularly the kids market) to itself, but in broadcasting Disney is now a “poor third” behind Nickelodeon and the Cartoon Network among kids aged 2 to 11 and in popular kids shows (and related merchandising) Disney has nothing to compare to Nickelodeon’s Blue’s Clues, PBS’s Teletubbies and WB’s Pokemon. In videogames, Disney is an “also-ran.” Disney used to be the only studio to produce animated features, but now Warner, Dreamworks, and Fox all do. Even Disney’s