The Walt Disney Company was founded in 1923. Since then, the company and its associated companies have been committed to manufacturing incomparable entertainment occurrences based on the rich inheritance of superior creative content and brilliant storytelling. The company is the major entertainment company catering for family interests with a focus on four business segments known as studio entertainment media networks, resorts, parks and consumer products. The company has developed into global recognition on animated motion pictures and related innovations.
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The Walt Disney Company has a mission of being among the global foremost manufacturer and suppliers of entertainment and information, making use of its assortment of products to distinguish its content and commodities. Disney’s vision is to be the preeminent leader in the field of family entertainment. The company has employed massive efforts to work in line with the stated mission and vision. This is evident by the fact that they strive to follow high standards of quality and excellence through all lines of production. Their productions have been on family ideas and positive aspects consumable by past, current and future generations. On the other hand, productions conveyed through stories are delightful and inspirational. In addition, they are on high decency. This trait has earned the company the honour and trust of consumers.
Various factors have affected Disney’s performance in various ways. Based on Porter’s model below are various factors that directly affect the company.
Rivalry among competitive firms poses an external challenge. There exist a tug of war between Disney and other competing firms in the industry. This is caused by the struggle to share customers in the market for enhanced profits. Competition gets strong especially due to Disney’s strategies which have given it advantages over the other rivals. The greater rivalry has been witnessed with growth in the numbers of competitors. The result is a declining demand for Disney’s products and related cost effects.
Another factor of strong competition is the entry of new rivals. New entrants have flooded the market leading to increased competition on Disney’s products. However, the company has the potential to create obstacles to such entries in several ways. The obstacle could include among others building strong loyalty from their customers as well as rebranding. Disney must however consider the periodic change of strategy as new entrants have in most cases introduced reduced prices with improved quality products. New marketing strategies have also been witnessed affecting Disney’s revenue.
It has also been noted that competition has not only evolved in parallel industry, rather there has emerged growth of potential substitute products. Other companies have developed the tendency to offer products with either similar purposes or characteristics. Other products even offer better alternatives for Disney’s products. Disney has therefore faced stiff competition over time because it cost barely anything to switch from one product to another. For instance, switching between entertainment companies is free of any cost.
Supplier’s roles are vital in any manufacturing industry. Disney is no exception as they also manufacture various products in the entertainment and media-related industry. The quality of raw materials dictates the quality and value of the final products. Higher negotiation powers of supplies influence the strength of competition. This is especially so when there are massive numbers of suppliers, reduced accessibility of raw materials versus the cost of changing raw materials and supplies.
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Bargaining powers of consumers who are also the end-users or the products is another external factor influencing Disney’s performance. This has been especially a problem whenever competing firms offered discounts to vast numbers of consumers who also engaged in large quantity purchases. Other firms would also offer longer periods of warranty and free services hence switching Disney’s loyal customers. Adam (2009) claims that the capacity of the consumers to bargain is enhanced when products are undifferentiated and easily accessible.
An intensive strategy is a form of production that involves continuous use of the same resources (Birou, Schlegel & Henry, 1977). Companies can penetrate markets by exports, licensing, joint adventure or direct investment. Disney employed diverse strategies in accessing new markets and customers for improved performance. On the other hand, they have also done market surveys to define the feasibility of engaging in new productions. Disney used different means to penetrate different markets under different situations. For instance, Disney used different strategies for different markets. For example, their mode of entry into Japan was licensing while the mode of entry into Europe was through direct investment. This illustrates the importance of adjusting strategies for different market locations.
SWOT analysis is a tactical planning tool that helps in evaluating the strengths, weaknesses, opportunities, and threats that defines the running of a business. In the construction of Disney’s SWOT analysis, this paper will look at the four aspects. Globally, Disney is the largest media firm. It owns numerous theme parks and channels employing more than 150,000 employees. The company boasts of innovative ideas and global standardization. Other strengths are eminent characters, improved product awareness, a well-known logo and growing revenues. The weaknesses are massive operational costs, management staff turnover, and protests from religious-affiliated groups concerning the release of potentially offensive material. The company is also faced with high risks which leads to high investments and inadequate variety of audience, especially children. Disney has the opportunity of shifting into diverse segments. Untapped markets also exist in other nations and this can be done through various online websites. Besides, the company can build more attractions and reduce operational costs. Babbes and Zigarelli (2006) state that Walt Disney has the opportunity of research which could help the company tap into other exciting alternatives. Various threats such as terrorism affecting security also exist. Other threats include increased rivalry, massive government policies, recession, piracy, staff members’ retention and high challenging markets.
Disney has been constantly criticized for their programming track. Criticism claim that Disney’s programming has shifted from the characters that guided the Walt Disney Company. Others have also criticized the marketing strategy for targeting only pre-teens and teenagers. Besides, they also claim that the initial aim of the company was to entertain but has since changed to exclusively make money. For the next five years, Disney ought to improve its corporate responsibility policies to include long-term environmental goals, all family categories, child support, and community outreach and employee diversity. The company should also consider available improvement opportunities for greater performance.
The work done by Walt Disney brings attention to special qualities that came with the work that he did. This also helps us better in understanding how he related with others. Most of his works were inspirational considering that he viewed challenges as opportunities. He was successful in creating happy surroundings for families and homes. Hi, work has helped us understand the level of opportunities that exist for people who courageously follow their dreams.
Babbes, G., & Zigarelli, M,. (2006). The Minister’s MBA: Essential Business Tools for Maximum Ministry Success. H & B Publishing group, Ontario.
Birou, A., Schlegel, J. & Henry, P. (1977). Towards a Re-definition of Development: Essays and Discussions on the Nature of Development in an International Perspective. Pergamon Press, California.