The Walt Disney Company positions itself as one of the leading firms in the entertainment, mass media, and amusement park industries. This position is achieved through business strengths that address weaknesses, opportunities and threats (the SWOT factors) in the global market. Disney’s case is an example of successful management of internal and external factors, such as the ones ascertained in this SWOT analysis of the business. The SWOT analysis tool informs managers about the internal factors (strengths and weaknesses) and external factors (opportunities and threats) pertinent to the business. In this business analysis case, The Walt Disney Company’s SWOT factors focus on issues linked to the family-oriented entertainment branding of the business, and on the strategies for addressing international business competition. The conglomerate needs to address the challenges identified in this SWOT analysis. Such efforts must consider changes in the global market, and the strength of the Disney brand in the long term.
This SWOT analysis of Disney sheds light on the issues that investors and management personnel must take into account when evaluating the business. For example, strengths sufficient for exploiting opportunities in the mass media industry present potential success of strategic growth initiatives. The corporation’s strengths and weaknesses (internal factors) must suit the opportunities and threats (external factors) in its international industries. The Walt Disney Company must possess the strengths to withstand the negative effects of weaknesses and threats in its industry environment. This SWOT analysis serves as a guide for understanding such business issues.
Disney’s Strengths (Internal Strategic Factors)
In the SWOT analysis model, this aspect refers to the internal factors that strengthen business growth. In this company analysis case of Disney, such factors support management strategies to grow the business amid aggressive competition in the global entertainment and mass media industries. For example, business strengths protect the company against the aggressiveness of Comcast Corporation (owner of Universal Pictures), Sony Corporation, Time Warner Inc., and other firms. The following internal strategic factors are the strengths of The Walt Disney Company:
- Popular and strong brand
- Growing portfolio of popular products
- Strong cooperative growth among business segments
Disney has a popular and strong brand, which is among the most easily recognizable in the world. Through this strength, the company presents itself as a decent and family-oriented business suitable for all customers. This internal factor helps manage customers’ expectations, which tend to be positive relative to the reputation of the Disney brand. This SWOT analysis also considers the company’s growing portfolio of popular products as one of the strengths of the business. For example, the variety of the company’s movies and corresponding merchandise and amusement park services gradually increase throughout time. This internal strategic factor contributes to revenue growth, while supporting the company’s popularity. In addition, The Walt Disney Company’s organizational structure facilitates mutually beneficial cooperation among business segments. This strength enables synergistic cooperation to ensure competitive advantage. Overall, the enumerated strengths in this aspect of the SWOT analysis of The Walt Disney Company support long-term growth despite aggressive competition.
Disney’s Weaknesses (Internal Strategic Factors)
This aspect of the SWOT analysis model evaluates the internal strategic factors or weaknesses that function as barriers to business growth and development. The Walt Disney Company’s organizational culture is partly responsible for these weaknesses. Also, branding strategies impose limitations on the multinational business. Disney’s management must address the following weaknesses of the business:
- Limited innovation
- Limited diversification
- Limited expansion of amusement parks
The weakness of limited innovation is associated with Disney’s business strategies. The company does innovate through continuous product improvement. However, rapid innovation involving advanced technologies is limited in the company’s operations. For example, Disneyland theme parks tend to have a reactive rather than an aggressive approach in adopting new technologies. The Walt Disney Company’s generic strategy for competitive advantage and intensive strategies for growth focus on quality and uniqueness of product features, with limited emphasis on rapid technological innovation. This internal factor is a weakness because technological innovation is a differentiator and competitive advantage in the international market. Limited diversification is another weakness considered in this SWOT analysis of Disney. This internal strategic factor is based on the company’s aim of synergy through its business segments. Synergy requires businesses that are closely related, and not diversified businesses in unrelated industries. This aspect of the SWOT analysis shows that addressing The Walt Disney Company’s weaknesses require some changes in core strategies and management approaches.
Opportunities for The Walt Disney Company (External Strategic Factors)
In this aspect of the SWOT analysis, opportunities facilitate business growth. In Disney’s industry environment, these opportunities are external strategic factors that lead to higher revenues in the company’s global entertainment, mass media, and amusement park operations. For example, expansion opportunities can improve the revenues of Disneyland operations. The following opportunities are among the main managerial concerns in growing The Walt Disney Company:
- Technological innovation
- Growth in various industries
- Growth of developing markets
Technological innovation affects all industry environments. This trend is an opportunity in this SWOT analysis. The Walt Disney Company has an opportunity to adopt new technologies to improve its global business. For example, digital technology implementations can improve business efficiencies and output quality in amusement parks and resorts. Also, the external factor of growth in various industries is an opportunity to grow the corporation’s business through diversification and related managerial approaches. In relation, the growth of developing markets is an external strategic factor that creates the opportunity to expand the company’s operations, such as through market penetration in the mass media industry. The opportunities in this aspect of the SWOT analysis show that The Walt Disney Company can grow its revenues through innovation, diversification, and expansion.
Threats Facing The Walt Disney Company (External Strategic Factors)
In the SWOT analysis model, this aspect focuses on the external strategic factors that have potential to reduce business performance. In Disney’s case, these factors are the threats that come with trends related to entertainment firms and other players in the international industry environment. For example, competitive forces involving Viacom Inc. and CBS Corporation can bring down business performance. The Walt Disney Company’s management efforts must tackle the following threats to the business:
- Technological disruption
- Digital content piracy
Competition remains the most significant threat relevant in this SWOT analysis of the Walt Disney Company. Aggressive competition is especially observable in the international mass media and entertainment industries. For example, aggressive firms compete by offering movies similar to the ones from Disney’s Marvel Studios. Also, the external factor of technological disruption has potential to reduce the company’s profits. For instance, technological changes in online product delivery in the entertainment and mass media markets continue to shift some profits to businesses that offer online media channels and networks. Moreover, digital content piracy reduces the company’s potential revenues, especially in markets with weak legal protections against this threat. This aspect of the SWOT analysis points to external strategic factors that require Disney’s managers to increase competitive advantages while protecting the business against technological disruption and piracy.
Summary & Recommendations – SWOT Analysis of Disney
Summary. The internal factors enumerated in this SWOT analysis underscore Disney’s strengths to continue growing its business and maintain one of the leading positions in the global market. For example, the company’s strong and popular brand is a major competitive advantage. However, weaknesses impose limits on potential growth. The corporation’s limited diversification is an internal strategic factor that prevents new business ventures in high-growth industries. This SWOT analysis also identifies external factors that present barriers to the company’s growth. Managers need to address the external strategic factor of growth in developing markets, such as through market penetration, to improve The Walt Disney Company’s financial performance. Moreover, adjustments in strategies can address issues linked to competition and digital content piracy in the entertainment and mass media markets.
Recommendations. The recommendations based on this SWOT analysis of Disney are focused on improving business competitiveness and long-term success in the international market. Changes in the company’s management and strategies must focus on using its strengths as internal strategic factors for ensuring growth despite the company’s weaknesses. These strategies must also address the impacts of threats, while exploiting opportunities based on the external strategic factors in the conglomerate’s industries of operations. Focusing on the most significant issues in the industry environment, it is recommended that The Walt Disney Company:
- Further penetrate markets, especially developing markets, to benefit from their high growth rates.
- Further diversify the business, even in limited ways, to increase product scope.
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