Business Portfolio and

Dynamic Capability
Development Report
Fantasy Film
Name : Weerachai Pecharawech
Student number : 124810
 Introduction
Fantasy Film Business Portfolio
Fantasy Film is a successful digital animation studio that specialises in animated feature films, digitally animated
advertising, digital animation software, and digital special effects for live action films.
Headquarter is in Sydney and it has production facilities in Brisbane, San Francisco and Los Angeles.

Fantasy Film has four business units:

• Fantaspace : Produces digital animation feature films. Generated $4.8 billion in revenue and last year the
production team won the Academy Award for best animated feature film “Slippery Bob”.

• Advantage : Creates digitally animated advertising for television and the Internet. Generates $1.9 billion.
Important clients include Amazon, Tesla Motors, and Apple.

• Anisoft : Builds digital animation software generating $200 million in revenue. DreamWorks has just signed on as
a client subscriber.

• DigiFX : Produces special effects for live action feature films. Generates $150 million in revenue. The business
has just been contracted to perform the digital special effects work on the upcoming film ‘Aquaman’.

• In this report will evaluate these business in 3 Matrix such as BCG, GE McKinsey, Synergy Matrix. Will analyze
and give recommendation in both Business Portfolio and Dynamic Capability Development.
BCG Matrix

Market Growth Rate

?
Anisoft Fantaspace

Digi FX Advantage

Relative Market Share

GE-McKinsey Matrix
Growth Growth Selective

High Fantaspace
Industry attractiveness
Anisoft

Growth Selective Harvest

Med Advantage

Selective Harvest Harvest

Low
DigiFX

High Med Low

Competitive strength of
business unit
Synergy Matrix

Benefit to portfolio
Givers

Outgoing:
Advantage

Fits
Altruists Fantaspace

- Incoming:
+
Benefits from belonging
to portfolio
Anisoft

Takers
Misfits
DigiFX Parasites

-
Business categorisation

BCG GE-McKinsey Synergy

Matrix Matrix Matrix
Fantaspace Star High Growth Fits

Advantage Cash Cow Medium Selective Givers

Anisoft Question Mark High Selective Takers

DigiFX Dog Low Harvest Misfits

Fantaspace
Analysis
• Fantaspace has high competitive strength, incoming benefit and outgoing benefit in business
finding.
• Animation film market finding has high growth rate, high attractiveness.
• It generates 4.8 billion from 7 billion Market (67.14%) of animated film industry.
• Star in BCG Matrix.
• Potential to be market leader.
• High growth in GE McKinsey Matrix.
• Fits in Synergy Matrix.
• It is growth phase in business cycle.

Recommendations
• First priority in investment.
• Invest in R&D, Innovation Technology, Skilled employees, create uniqueness and value to
sustain competitive advantage.
• Compare its market share and growth constantly.
• Build solid Foundation.
• Use Academy Award winner as strategic planning to find new clients and reputation.
• Create cross function team to develop and innovate new creative products.
 Advantage
• Analysis
• Advantage has medium competitive strength, low incoming benefit and very high outgoing benefit
in business finding.
• Digital animated advertisement market finding has low growth rate, medium attractiveness.
• Earns 1.9 billion from 2.5 billion Market (76%). High margin in low growth market.
• Cash Cow in BCG Matrix.
• Medium Selective in GE McKinsey Matrix.
• Givers in Synergy Matrix.
• It is in mature phase in business cycle and could turn to be Dog as it has low growth industry

• Recommendation
• It’s second priority to invest money to keep it as market leader.
• Invest in innovation and technology to maintain its current level of productivity and sustain
competitive advantage.
• Create cross function team to develop and innovate new creative products
• Collaborate with other companies to create value in both companies.
• Management need to find new strategy to keep this business going and find more clients.
• Build solid foundation.
 Anisoft
• Analysis
• Anisoft has low competitive, very high incoming benefit and low outgoing benefit.
• Digital software has high growth and high attractiveness market.
• It is a Question Mark in BCG matrix.
• It is High Selective in GE McKinsey Matrix,
• It is Takers in Synergy Matrix.
• 11.11% market share (200 million from 1.8 billion).
• Low market share in high growth market.
• It is in growth stage in business world.
•
• Recommendations
• Requires significant investment to become the star in rapidly growth industry.
• Third priority in investment.
• Potential to grow after DreamWorks signed on.
• It need superior supervise and investment to make it a Star.
• Find new solutions, strategies, new technology and innovation to create uniqueness value and
strengthen competitive advantage to empower this business to compete.
• Company is advised to sell other assets and put investment in this unit.
• Find more clients and subscribers.
• The decision making should be decentralise as it will help in fast decision making.
• Create cross function team to develop and innovate new creative products.
 DigiFX
• Analysis
• DigiFX has low competitive, low incoming benefit and low outgoing benefit.
• Special effect has low growth and low attractiveness market.
• It is a Dog in BCG matrix.
• It is Low harvest in GE McKinsey Matrix,
• It is Misfits in Synergy Matrix.
• 11.53% market share (150 million from 1.3 billion).
• Low market share in low growth market.
• It’s in mature stage.

• Recommendations
• It is a cash trap if put more funds.
• Company is advised to sell this business as it would drag the whole company performance down.
• It’s drain and difficult to compete in the market.
• Focus more on other 3 businesses.
• Merge and transfer knowledge and skilled employees to other business units.
• Sell this business while it is well known to increase benefit.
• Or develop some cross function project to increase its competitive advantage, later sell it in a high
income.
 Conclusion
Fantasy Film is expertise in digital animated film commercial advertisement and special effect.
This company is in mature stage in business cycle from the performance of Fantaspace,
Advantage and DigiFX. The management team aware of this matter. So they create new
business unit such as Anisoft to increase company’s performance.

• Fantaspace is Star of this company and generates main income with high market share in high
growth, attractive market.
• Advantage is Cash Cow and in mature phase with high market share in low growth markets.
• Anisoft is Question mark, has low market share, it’s in a growing stage in rapidly growth market.
• DigiFX is Dog, Low Harvest and Misfits. Company should sell this asset to invest more in other 3
businesses.

• To increase its ability and competitive advantage. This company should create cross function
team. To transfer knowledge, know how, technology and skilled employees. The new products
should combine all core competencies such as animation, software, special effect together.
 Introduction
Fantasy Film Dynamic Capability
• Dynamic capability is an organization ability to fully adapt its resource base. “The capacity
of an organization to purposefully create, extend, or modify its resource base” (Helfat et al.,
2007).

• Fantasy Film is in mature stage. Which is the critical stage in the business cycle. To keep a
business dynamic capability and become market leader. It needs to understand it core
competency and Sensing the trend, market by identify and assess opportunity within and
outside company. Then Seizing by mobilizing its resource to add value from those
opportunities. And last but not least, Transforming to continue renewal.
• Also will analyze and recommend solution for Script Doctor’s case. Which show the lack of
company dynamic capability.
• This report will explain, analyze and recommend how Fantasy Film is sensing, seizing and
transforming it dynamic capability to achieve the ultimate goal by using SWOT analysis.
 Identify and assess opportunities
• Analysis
• Fantasea Film has 4 business units which are Fantaspace - digital animation film, Advantage –
Digital animated advertisement, DigiFX – special effect for live action and Anisoft – digital
software. It is in growing to mature stage in business cycle.

• Strength : It core competency is animation in film and advertisement. While special effect has no
future. It is sensing that digital software market has potential to be the next Star for this company.
But is it enough to create sustainable competitive advantage?

• Weakness : This company shows lack of business dynamic capability in Script Doctor case. It
also shows that its current managerial structure is not suite this company. The ones who have
fully responsibility are senior management team, as those two units would report every process
and progression to senior management to approve both fund and time bound. If this company
could solve this managerial structure’s problem. It would clearly increase its business dynamic
capability.
 Identify and assess opportunities
Recommendations

Opportunity : For the dynamic capability its resource base, This company should transfer, share,
implement knowledge and technology within organization. Especially animation film and digital
software industries are still growing. To be successful in the market this company needs to sense the
new trend or new potential market. Build cross function team to combines other skills to create its
unique competitive advantage. Create software that use special effect and animation together.

There are also many opportunities outside company. Such as collaboration with other companies.
• With Apple – create application to use animation with this virtual reality control by special goggles.
• With Tesla Motors – Create animation to introduce and guidance to use the vehicle. Safety road
animation. Key with eye scanner or finger print scanner.
• Dreamworks – Use Slippery Bob as icon robot that can interact with human. It has ability to
speak, move and show emotion. And sell it as merchandise.
• Amazon – create hologram technology application with Apple to display selling products in
Amazon.com for buyer to see from every angle.

Threat : It is in a fierce competitive market. To compete in this industry by using only its current
competitive advantage is not enough. It needs new market and new opportunity to grab and sustain its
growth.
Mobilise resources
Analysis
• It has problem in managerial structure. It needs to redesign or reengineer command order in
the company. Every level could make decision in real time like successful structure of The
GE workout process.
• After sensing that animated film and digital software have promising future. It needs to seize
these market.
• Fantasy Film has potential to create new business or new product in new market within
company. By creating its own unique competitive advantage from its ability, experiences and
specialization.
• Build cross function team. This team should come from every levels in organization. It needs
to transfer knowledge, technology, and resources to increase ability and creation.
• Collaborate with its clients. Use special connection to elevate both companies value. they
can exchange knowledge, know how, and technology to increase each company’s ability.
• Company should has ability to shift into other business. It need to compete with itself.
• Every product/service has its life cycle.
 Mobilise resources
Recommendations
• Redesign or reengineer its managerial structure. Every management level will get involve in
decision making. Perform lean six sigma to eliminate waste and minimise cost in these 3
businesses. It will increase benefit in return in a long run.
• Management need to find new innovation, technology and strategy to keep this business going
and find more clients.
• Build solid foundation and create cross function specialists. Use it abilities in animation, special
effect and software to create new product.
• Use core competency which is animation and may add software to use with this animation with
special effect result.
• Digitally interactive alien, cute monster as pets in virtually reality control by Fantasy software in
special goggles.
• Amusement or theme park ( Monsters, Aliens) because this company is good in special effect,
animation and digital software.
• Collaborate with other companies as mentioned.
• The capability to shift into other business or industry that performs better relative to its
competitors.
 Transform and reconfigure
Analysis
• If Fantasy Film wants to have enough business dynamic capability on resource base. To reach
transforming and refiguring process. It needs to create solid foundation for business. Change its
organization structure from top down into decentralize.
• Create strategic alliance internal to promote innovation by allowing various skilled employee to
bring together different products and technology to satisfied the unmet need of client.
• Built business culture to respond to the change quickly.
• Scan the environment, Identify the core problem, need to identify where the problem could
happen.
• Evaluate markets and quickly reconfiguration and transform
• Create uniqueness products to increase competitive advantage and bring value to both company
and customers.
• Consider the impact on Portfolio or not Independent unit weather it is good for the whole
organization or not.
• Transforming process to renewal the business benefit.
• It has potential by use its core competencies to create new advance technology products.
• Digital software and animation industry are growing. combine those specialisation and put them
into action.
Transform and reconfigure
Recommendations
- In transforming business. Foundation is very important. Management team should create solid
foundation and business culture and need to build capability to shift business into other industry.
- Decentralized and empower every management level by giving authority and ability to give
opinion and make a decision.
- Process integration – can it be done and how the benefit move? If it could give positive result.
Transform it.
- Company should have ability to learn quickly, new strategies to integrate within company and
existence strategies that increase capability to transform or refigured.
- Continuous improvement, Total Quality Management.
- Organization capability is to deploy resources for desired result.
- Interest in what can provide the basic for competitive advantage.
- A core competency is a capacity fundamental to organization’s strategy and performance
Conclusion
• Fantasy Film can sustain Dynamic Capability on resource base by sharing, transferring
knowledge, skilled employees and innovated technology within organization.
• If analyse by SWOT. Which will show all strengths in digital animation. It could successfully
use its core competency, if redesign the weakness managerial structure into decentralized
structure. This will increase it opportunity and ability to create innovation or uniquely
advanced products to increase potential. It can transform business units to be cross function
team or collaborate with other companies.
• Company should has ability to sense the new trend in market, and seize it by creating
uniqueness and advanced technology products to satisfy the unmet need of clients.
• During that period, build business culture and ability to shift or transform into other industry or
new business.
• Because in the business world can not rely to only one product and service at all time.
Everything has its life cycle. It needs to change quickly to respond to the new trend of needs
and wants.
• The capability to shift to other industry/market that performs better relative to its competitors