The Walt Disney Company has a generic competitive strategy that capitalizes on the uniqueness of products offered in the entertainment, mass media, and amusement park industries. Michael E. Porter’s model indicates that a generic competitive strategy enables the business to develop and maintain its competitiveness in the target market. Disney’s generic competitive strategy is based on making its products different from those of competitors. On the other hand, the corporation’s intensive strategies for growth are focused on developing new products that suit global market trends. The company grows through innovation and creativity that enable the business to compete against large firms. Disney competes with the entertainment businesses of Sony and Comcast (owner of Universal Studios), and the movie streaming businesses of Netflix, Amazon Prime Video, Google’s YouTube, Facebook (Meta), and Apple TV Plus. The Walt Disney Company’s generic competitive strategy and intensive growth strategies address such a competitive landscape. Through corresponding strategic objectives and competitive advantages, the entertainment conglomerate manages challenges in its industry environment.
This business analysis reflects Disney’s strategic management efforts. The company’s generic strategy focuses on developing competitive advantages based on innovation in product development. Disney’s intensive growth strategies are implemented with strategic objectives for maximizing the growth benefits of such innovation. For example, the company grows by introducing technologically enhanced products, such as movies for customers in the international market. The Walt Disney Company’s generic competitive strategy and intensive growth strategies are aligned for product-focused development.
Walt Disney’s Generic Competitive Strategy (Porter’s Model)
Disney uses product differentiation as its generic strategy for competitive advantage. Michael Porter’s model states that this strategy involves unique products offered to many market segments. For example, the corporation offers its entertainment products to practically every person in the world, especially with the core emphasis on family-oriented programming. In this generic competitive strategy, Walt Disney’s operations management prioritizes quality and uniqueness through innovation that differentiates the company’s products from competitors. The subsidiary, Walt Disney Imagineering Research & Development, has dedicated teams to ensure the uniqueness of entertainment experiences at the company’s theme parks and resorts. Disney’s intensive growth strategies and associated strategic objectives are applied alongside this generic competitive strategy, with emphasis on differentiated competitive advantage to support and manage business growth.
The Walt Disney Company’s generic competitive strategy pushes for product-focused strategic objectives. Such a business focus is necessary for supporting product development efforts to differentiate the company from competitors. For example, the strategic objective of developing new augmented reality products adds to the uniqueness of the Disney experience. Based on this generic strategy, another relevant strategic objective is to strengthen competitive advantages through marketing strategies that reinforce the uniqueness of the company’s brand. These marketing strategies relate to Disney’s marketing mix or 4Ps. Also, this generic competitive strategy involves managerial efforts that contribute to the achievement of the goals of Disney’s mission statement and vision statement in the global market for entertainment, mass media, theme/amusement parks, and related products. Brand uniqueness helps in achieving industry leadership. Considering differentiation as a generic competitive strategy, Disney’s intensive growth strategies must involve differentiation to grow the business.
Walt Disney’s Intensive Growth Strategies (Ansoff Matrix)
Product Development (Primary). Product development is The Walt Disney Company’s primary intensive growth strategy. This strategy involves offering new products in the company’s current or existing markets. For example, the company releases new movies with corresponding merchandise to generate more profits from its target customers worldwide. This company analysis also sheds light on the importance of Disney’s organizational structure (company structure), which provides the organizational design to effectively manage product development. This intensive growth strategy links to the generic competitive strategy of differentiation in emphasizing uniqueness in product development. A related strategic objective is to achieve business growth by effectively persuading customers to purchase Disney’s products based on their unique attributes.
Market Penetration (Secondary). The Walt Disney Company achieves growth partly through market penetration. As a secondary intensive strategy, market penetration enables growth by increasing sales of existing products in the company’s current markets. For example, one of the corporation’s strategic objectives is to use aggressive advertising to increase its revenues from products released in the global entertainment industry. The business strengths shown in the SWOT analysis of Disney contribute to success in implementing this intensive growth strategy. A strong brand based on the generic competitive strategy of differentiation creates competitive advantages to attract customers to the company’s media and entertainment products, and to manage customers’ expectations.
Market Development. Market development is an intensive growth strategy that is less frequently used in The Walt Disney Company’s business. In growing the business, this intensive strategy requires the company to introduce its existing products to new markets or market segments. For example, growth is achieved by establishing operations in new markets, such as through a new Disneyland amusement park to capture a regional market. Even with competitive challenges, entry into new markets can increase the company’s strengths to manage the industry’s competitive forces shown in the Five Forces analysis of Disney. A key strategic objective in market development is to use differentiation as a generic competitive strategy to successfully introduce the company’s products into new tourism and entertainment markets.
Diversification. The Walt Disney Company uses diversification as a minor intensive strategy for business growth. Ansoff’s matrix states that developing or acquiring new businesses is the typical approach in this intensive growth strategy. For example, through the establishment of Disney Cruise Line, the company grew by entering the cruise line market of the tourism and hospitality industries. The generic competitive strategy of differentiation develops the competitive advantage of new business operations that use the company’s brand. Under diversification, a strategic objective is to manage competitive challenges by developing new businesses that grow Disney’s presence and brand popularity in the international market.
References
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