The company, Walt Disney Parks and Resorts Worldwide Incorporation, operates in the oligopolistic market structure. The company has unique operational strategies which can be equated to the ideals of oligopolistic strategies, characterised by few competitors dominating the global parks and resort business (Baumol & Blinder, 2011). Strong commitment to quality and product innovation has enabled the company to get the right experience for their customers. This has been possible through the recruitment of employees with the right skills and knowledge. These employees are further trained to understand the company production strategies. Moreover, the company conducts more market research to ascertain customer thoughts and changing demands. For instance, the company has consistently increased its production modification and diversification of products in the market instead of reducing output with intent of increasing prices.
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There are few competitors who dominate the park and resort industry such as Six Flags Entertainment Corp, Universal Pars and Resorts, and Seaworld Entertainment among others. These companies control the fifty three billion dollars industry. The Walt Disney Parks and Resorts Worldwide Incorporation has the largest market control of 24% with the other companies sharing the rest of the market. Since the industry is dominated be few global brands, it is very difficult for a new company to enter in this market and breakeven since the competitors benefit from economic of scale. Besides, the capital requirement for entry is very enormous for a new entrant. Most of products and services offered by the Walt Disney Parks and Resorts Worldwide Incorporation and its competitors are perfect substitutes and tend to have similar price ranges due to standardized operational costing and targeting strategies. Since these companies target similar customer segment, they have limited alternatives in terms of multiple pricing (Witcher & Chau, 2010). The companies use self-advertisement and other forms of media to market different products. The self-advertisement is possible due to their global brand image and active presences in the major markets across the globe.
Industry structure and company strategies
The industry structure affects the strategies used by the Walt Disney Parks and Resorts Worldwide Incorporation in terms of pricing of its products and customer segmentation. Since the main competitors offer perfect substitute products, the company has to ensure that its prices remain competitive to avoid losing customers to some of the competitors. Besides, the company has to constantly remodel and integrate its products to maintain its current top position, which can easily be taken by the few giant competitors (Flynn, McConnell, &Brue, 2012).
Since the market structure is oligopolistic, the financial performance of the Walt Disney Parks and Resorts Worldwide Incorporation has been stable and predictable since it has been able to earn very high profits since the barriers to entry such as large capital and logistic support blocks new entrants from penetrating the market (Marshall, 2004). Besides, the company has been able to use product differentiation strategy by offering series of brands from similar product category such as magic, wonder, dream, and fantasy to ensure that the revenues of the company are above that of its major competitors.
Financial Performance Data
The table below summarized the financial performance of the Walt Disney Parks and Resorts Worldwide Incorporation for the last three years.
|Sales ($ millions)||65,225||78,249||85, 083|
Baumol, W., & Blinder, A. (2011). Economics: Principles & policy. New York, NY: Joe Sabatino.
Flynn, S., McConnell, C., & Brue, S. (2012). Loose leaf essentials of economics with connect access card. New York, NY: McGraw-Hill Education.
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Marshall, A. (2004). Principles of economics. New York, NY: Wiley & Sons.
Witcher, B., & Chau, V. (2010). Strategic management: Principles and practice. Alabama, Al: Cengage Learning.