1. Has Disney been able to maintain its competitive advantage? 

2. Conduct a brief situational analysis to identify Disney’s internal strengths and weaknesses and determine external opportunities and threats.

3. Argue for a retrenchment strategy at Disney.

Disney CEO Michael Eisner accomplished much during his storied career: starting the Disney Channel, the Disney Stores, and Disneyland Paris, and acquiring ABC television, Starwave Web services (from Microsoft cofounder Paul Allan), and Infoseek (an early Web search engine). But his strong personality and critical management style created a great deal of conflict with shareholders, creative partners, and board members, including Roy Disney, nephew of founder Walt Disney.

One of the most significant and damaging conflicts of Eisner’s tenure arose between Disney and Pixar Studios and its then-CEO Steve Jobs. Pixar produced computer-animated movies for Disney to distribute and market. But Disney maintained the right to produce sequels to Pixar Films, such as Toy Story, without Pixar’s involvement. Jobs argued that Pixar should have total financial and creative control over its films, and when Eisner disagreed, relations broke down, with Pixar seeking other partners. 

When Eisner left Disney, new CEO Bob Iger immediately set about repairing the damaged relationship between Disney and Pixar. Iger approached Jobs about buying Pixar for $7 billion. More important than the price, however, was promising Jobs and Pixar’s President Ed Catmull and creative guru John Lasseter that they would have total creative control of Pixar’s films and Disney’s storied but struggling animation unit.