Walt Disney is a globally recognized entertainment brand that most of the world’s population is familiar with since childhood, thanks to the outstanding cartoons the company has created. Meanwhile, in the business world, no player has a guarantee that its success will last forever, relying only on previous achievements. Strengths, weaknesses, opportunities, and threats (SWOT) analysis allows assessing the transformation needed based on a company’s advantages (Gupta, & Mishra, 2016).
Speaking of the internal factors that strengthen Disney’s growth, one may primarily name the popularity and recognizability of its brand that allows the company to operate despite the pressure from the competitors. In 2016, Forbes ranked Mickey Mouse as the most powerful brand (Dill, 2016). Moreover, one may point out Disney’s organizational structure that “facilitates the achievement and maintenance of synergy through the related operations of various business segments” (Panmore Institute, 2019). Finally, another strength lies in the enterprise’s growing portfolio: movies, amusement parks, the corresponding merchandise – they all increase throughout time.
Moving on to the internal factors that, on the contrary, serve as barriers to the development of Disney, it would be fair to speak about the limited innovation presented in the company. In other words, Walt Disney is aware of the uniqueness of its products and, hence, lacks an understanding of the need for technological innovation, even in its theme park. Another weakness corresponds to the strength mentioned above: Disney aims for synergy through its business segments. Therefore, the enterprise lacks diversification, which is destructive in the way that the business diversification concerns the ones in unrelated fields. In a word, Disney does have some strategic management limitations.
Furthermore, addressing the opportunities presented to the enterprise by the business environment, one may first point out the context of the fast-developing technologies. Later, it will be demonstrated how Disney could use the opportunity to overcome the current problems. What is more, growth in other industries could be another chance for the company to increase its income and expand its influence on the market? Considering the strength of its brand, there is a significant possibility that investors could find any new direction of Disney’s business expansion.
As for the external strategic factors that threaten the business performance of Walt Disney Company, nowadays competition in the entertainment industry is extremely harsh. At the age of the streaming services that create original content like Netflix, Hulu, or Amazon, Disney looks more conventional, and it seems to have less pace in catching up. Noteworthy, piracy of digital content poses another threat for Disney as it decreases its potential income. If one could easily download a new movie illegally, there is no reason for them to spend time and money on going to a cinema or acquiring a suitable product.
Finally, the SWOT analysis allows one to propose several strategies to address the evaluation. First, the implementation of innovative digital technologies seems vital for Disney as it could contribute to business effectiveness, especially in the realm of amusement parks owned by the enterprise. It would improve competitiveness, which is also essential in the context of rivalry in the entertainment sphere. Secondly, business diversification is needed to increase product scope. However, one must understand that there are possible limitations: both digitalization and intensified diversification require transformations in core management and strategic approaches. It could be challenging considering the number of interested parties. Nevertheless, such changes could contribute to the prosperity of the company.
To conclude, the SWOT analysis is a great help in assessing the state of affairs in any company, including Disney. It demonstrated that despite the evident strengths like the powerful brand or growing portfolio, the enterprise faces the internal challenge of limited diversification and digitalization. The external environment provides Disney with both solutions and threats while offering technological solutions, it puts the company in the context of harsh competition as well as content piracy. Strategic changes are viral for Disney, but they are only possible in case of a firm management decision.
Reference
Dill, K. Disney tops global ranking of the most powerful brands in 2016. Forbes. Web.
Gupta, G., & Mishra, R. P. (2016). A SWOT analysis of reliability centered maintenance framework. Journal of Quality in Maintenance Engineering, 22(2), 130 – 145.
Panmore Institute. (2019). Walt Disney company’s organizational structure for synergistic diversification. Panmore Institute. Web.