Introduction
The media industry is going through a revolutionary period due to the emergence of streaming services. Disney is a global media conglomerate that has its own Disney+ streaming platform. The platform was designed to compete with the industry giants, including Apple TV+ and Netflix. To assess the effectiveness of such an implementation in diversifying media space, critically evaluating the suggestions and internal benefits for the company is necessary.
Disney has both strategic weaknesses and development opportunities in this area, and these indicators will be evaluated by applying PESTEL and VRIO structures. This step proved risky on the part of the company. It forced it to focus on solving the problems of retaining subscribers and constantly introducing innovative technologies in its activities.
Most people have known the Disney company since childhood and have met it by watching cartoons and television programs. The company also has themed amusement parks and products that shape people’s unique perception of the corporation. Because of its saturation and consistent presence as a brand, Disney has become a cult synonym for family leisure and childhood nostalgia. The adults who grew up watching Disney products developed a kind of emotional connection with the eternal characters of cartoons. This manipulation of the human mind is a strong advantage for business, as its recognition automatically increases significantly.
PESTEL External and Internal Analysis
According to the analysis of the structure of PESTEL, Disney has excellent technological capabilities, which are improvements in the delivery of content to end users via Disney+ (Rothaermel et al., 2020). Implementing this streaming platform was a step towards increasing the convenience of users who can independently quickly find the content they need. From an economic point of view, streaming is relatively stable even during financial crises (Rothaermel et al., 2020). Thus, expanding Disney’s activities in this area is a reliable way to ensure stable income security.
However, according to the PESTEL structure, Disney also faces specific threats that may impede its success. The first is the complexity of regulating the content to be shown. This concentration can negatively affect the company and significantly limit its activities. In addition, there are socio-cultural threats posed by the constant change of consumer preferences, which need to be monitored regularly. There is a growing demand among viewers for various content, which may be a challenge for Disney regarding content distribution on streaming platforms.
Five streaming forces impact the company’s success in this area. The most influential, in my opinion, is the negotiating power of service providers and the ability to reduce the influence of content providers on the company’s overall success. Disney owns an extensive library with concentrated content, which is an undoubted advantage. There is also a threat of new competitors, such as Apple TV+, which is a threat to Disney (Rothaermel et al., 2020). New competitors are constantly developing and expanding their activities, with the prospect of crowding out old streaming services.
As for the internal analysis, the structure of VRIO can be considered in this context. The first important aspect is the value of Disney content. The company has an extensive library, including cult franchises such as “Marvel,” which has the advantage of content recognition (Rothaermel et al., 2020). However, companies also have exclusive rights to their content, making the library memorable and making more people use it. This is the reason why competitors cannot repeat the Disney library exactly. Finally, the company pays great attention to the organization of content, as it is the key to easy access of users to materials from the library.
Disney Strategic Flaws
The company’s drawbacks include its limited experience in streaming platforms. Since Disney did not have much experience in streaming, this limited the company’s initial ability to enter the market and succeed. The second weakness is high costs relative to low earnings from streaming. Creating creative and new content to be shown on Disney+ requires significant financial and power costs, which is challenging for businesses.
However, Disney tries to move forward, allowing the company to hold precise positions among media conglomerates. The company’s franchises are widely known and recognized worldwide (Rothaermel et al., 2020). This is also an advantage because the target audience for the content offered is the entire family, from children to older people. One of the pressing problems for Disney, as for the whole media industry, is the disruption caused by companies’ transition to digital broadcasting platforms.
Critical Assessment of Disney’s Transition to Streaming Platforms
For Disney, streaming was a problematic but profitable solution. This step showed the company’s willingness to adapt to consumer preferences and changes in the world of innovation, which allowed it to remain competitive in the market today. Disney has created a unique library that provides company visibility and a good position among competitors. However, production costs for the switchover to digital broadcasting are high. At the same time, companies need to cope with the competition in the market to maintain their positions.
Conclusion
In conclusion, Disney’s entry into streaming was an essential step toward innovation. The company has many technological opportunities but is limited to legislative threats. However, the company’s library is diverse and rich, an excellent competitive advantage. To solve Disney’s immediate problems, you must put much effort into producing content and introducing innovation in its activities. Thus, despite the competition, Disney’s cult work makes the company a severe competitor in the entertainment industry.
Reference
Rothaermel, F.T., Inamdar N. & King, D.R. (2020). The Walt Disney Company. Harvard Business School Publishing.