SWOT Analysis
BUS/475
November 4, 2019
Introduction
Founded on October 16, 1923, Walt Disney Company remains among the most phenomenal organizations navigating the modern mass media industry across the globe (Petersen, 2018). Headquartered in the United States, Walt Disney serves as a leading media and international entertainment enterprise in the world market. The organization operates five distinctive Disney segments: Parks and Resorts, Media Networks, Disney Consumer Products, Walt Disney Studios, and Disney Interactive. Petersen (2018) adds that Disney Media Networks represents an essential segment for the conglomeration. As a tool for strategic planning, SWOT analysis remains a crucial aspect of the company’s administration. The analysis is a technique used in strategic management for effective decision making in business through critical assessments of a company’s existing strengths and weaknesses, as well as current opportunities and potential threats (Petersen, 2018).
Strengths
According to Yang (2019), Walt Disney Company has built a reliable brand name and image across the world. Yang (2019) adds that the company has focused on strengthening its brand and model for more than 90 years, which has enabled the firm to expand and thrive in the international markets. Disney Walt has established an excellent image in the entertainment and media industry, which is why the corporation boasts of a vast subscriber base worldwide. Popularity and global presence is another competitive advantage enjoyed by the firm (Yang, 2019). Other strengths of the firm include localization of products, diversified businesses, and competency in acquisitions (Petersen, 2018).
Weaknesses
The seasonality of business presents a significant vulnerability to the Disney fraternity. Yang (2019) notes that most products produced at the company have seasonal demand, thereby interfering with smooth operation. It implies that such seasonality effects would impose a negative influence on the company’s advertising revenues and media networks. Activities and products have risen at Disney, thereby reducing profit margins through increased expenses and operational costs (Yang, 2019). Other weaknesses include over-reliance on the Canadian and US markets, subscribers’ movement toward the internet, and the fact that acquisitions offer inadequate chances for significant growth.
Opportunities
The technological revolution in the 21st century has influenced great transformation, implying that demand for media and online entertainment is high. Such technological shifts have transformed consumers’ tastes and preferences in a manner that favors companies like Walt Disney (Petersen et al., 2018). Also, emerging economies like China, India, Russia, and Brazil offer Disney with opportunities to expand their operations in such emergent economies. Also, another possibility exists in the notion that Disney into the production of interrelated products and services. While producing media and entertainment products, the company can diversify into new businesses and partnerships (Yang, 2019).
Threats
The media and entertainment industry is characterized by heavy competition across the globe (Petersen, 2018). In this context, stiff competition from other established brands in the entertainment and media industry present significant threats to the success of the company in the long-run. For example, the increasing number of networks supplied by Multichannel Video Programming Distributors (MVPDs) has raised competition for marketing revenues (Yang, 2019). Such competition influences unnecessary financial pressures on the firm. Other threating conditions include changing preferences and tastes from entertainment services and products offered by other companies, increased regulatory pressures, and economic turmoil, among other factors. The analysis worksheet below illustrates the summary of the SWOT analysis
| Strengths:
Excellent brand name and image Popularity and global presence Localization of products Diversified businesses Competency in acquisitions
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Weaknesses:
Seasonality of business Growing operations and products Over-reliance on the Canadian and US markets Subscribers’ movement toward internet Acquisitions offer inadequate chances for significant growth.
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| Opportunities:
Rapid technological advancement Emerging economies Production of interrelated products Diversification
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Threats:
Heavy Competition Change in tastes and preferences Increased regulatory pressures Economic turmoil
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Recommendations
From the SWOT analyses of the Walt Disney Company, specific recommendations are necessary to enhance the firm’s competitive advantages to enable the conglomeration to realize its long-term goals in the global market (Petersen, 2018). Moreover, changes in the organization’s strategies and management must capitalize on the company’s strengths strategically to initiate and maintain constant growth despite the challenges discovered in the company’s weaknesses. However, such strategies should emphasize the effects of threats while at the same time, exploring the perceived opportunities (external factors) in the media and entertainment sector.
Based on the essential issues in the external environment, for example, stiff competition and legal constraints, I strongly recommend the following actions for The Walt Disney Conglomeration: First, the company should penetrate several markets, especially developing economies, to maximize profits from high growth rates. Also, Walt Disney Company should focus on diversification of its business activities, as such will increase product scope for the organization.
Conclusion
Despite stiff competition and technological challenges, Walt Disney Company has managed to build a global brand and reputable image over the past decades. The firm has garnered competitive advantages through acquisitions, diversification, and partnerships. As such, the strengths of the company include its brand image, diversified products, and services, global reach, financial power, and popularity. Nevertheless, market trends are dynamic, hence high competition.
In the same way, competitive and regulatory pressures are also increasing. The company must, therefore, explore emerging markets like China and Brazil. Nevertheless, Walt Disney must encourage partnership and diversified production to survive in a highly competitive industry.
References
Petersen, P. (2018). The Business Model of the Walt Disney Company.
Yang, J. (2019, August). Analysis of Business Operation Management under the Harvard Analytical Framework: A Case Study of the Walt Disney Company. In 1st International Symposium on Economic Development and Management Innovation (EDMI 2019). Atlantis Press.
