Disney SWOT Analysis
The Walt Disney Company is a media and entertainment company based in the US with operations spanning North America, Europe, Asia-Pacific and Latin America. The company operates through its five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive. The media networks segment includes cable and broadcast television networks, television production and distribution operations, domestic television stations, and radio networks and stations. The Company’s Walt Disney Imagineering unit designs and develops new theme park concepts and attractions, as well as resort properties. The studio entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. The Company also develops and publishes games, primarily for mobile platforms, books, magazines and comic books. The Walt Disney was founded by Walter Elias Disney on October 16, 1923 and is headquartered in Burbank, CA.
The Walt Disney Company’s main strength is in its resources, its experience in the business, and its low-cost strategy. Besides, the company has developed clearly a very strong and well known “brand-name” through many years. Disney is known as one of the best entertainment companies and its parks are known as one of the most entertaining places in the world. With different business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media, Disney is performing well in each of the sectors.
The company made huge gains from the movies business, especially from the Star Wars. With the huge success of Star Wars and Marvel, Disney’s consumer products segment has also been benefiting from related toys and products. After The Force Awakens was released in December and has already broken the record fastest movie to earn $1 billion worldwide, Disney finally sees the tremendous profits. Their entertainment division is their third largest sector, and they have a new Star Wars movie planned in December 2017. Given that Star Wars is the highest grossing franchise of all time, the entertainment sector is guaranteed to flourish.
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The Disney brand is known throughout the world, and is regularly listed as one of the best global brands of all time. The company is known to have a wholesome image, as it has built this image for decades through its cartoons and, more recently, through its theatrical releases. Many look up to Disney for its good values and ethics, whether through its Disneyland theme parks or many of its other family-friendly business ventures. As of May 2017, Disney is in the seventh place on Forbes list of The World’s Most Valuable Brands.
A major weakness is the cost of the Walt Disney Company’s products and services. Its plates, clothes and toys are more expensive than its competitors’, its amusement parks are also very expensive and many cable companies do not provide ESPN and the Disney Channel on their basic package. The Walt Disney Company loses a lot of customers because of its high prices.
Although Walt Disney operates in various part of the globe (U.S.A and Canada, Europe, Latin America and Asia Pacific), its main profits are gained from U.S.A and Canada. North American markets are in maturity stage, where they can either remain or proceed to a decline.
Disney is the biggest attraction for the children. Disney needs to diversify its target audience to increase its revenue and to compete with the competitors. After all, adults are the one who pays the money.
Disney has been expanding its geographic reach over the past few years, and we look for this trend to continue. The company’s Parks and Resorts segment already has properties in Paris, Hong Kong, Shanghai, and Tokyo. The company just opened the gates to its first theme park in China, Shanghai Disney. The $5.5 billion investment, the largest foreign investment ever from Disney, is a bet on China’s growing middle class and booming domestic tourism. From its opening through the company’s first-quarter earnings call in early February, the park has totaled more than 7 million visits, with CEO Bob Iger predicting that attendance could exceed 10 million by the park’s one-year anniversary.
There has also been a major improvement over the years regarding internet services which have brought about the rise in the demand for online video, among others. There will be an estimated $40 billion dollars of business in these areas by the year 2020. Walt Disney has been working their way to reaching more clients through online videos. Web-based media will continue to expand in the coming years, and Disney needs to continue to shift its overall strategy to include this growing segment. Read also about NETFLIX SWOT Analysis 2017
Disney has made some investments in new media platforms in recent months that it hopes will allow it to regain some of the cable subscribers it has lost over the past few years. It invested roughly $400 million in Vice Media, an American-Canadian digital media and broadcasting company. Thanks to Disney’s investment, Vice has been able to start its own news channel called Viceland.
There are many threats in the Disney Company, and they emerge as time goes on. The Walt Disney Company is susceptible to recessions. When the recession came in the world, people have less money to occupy on vacations due to forfeiture of jobs or increased prices of essential items such as clothing and food.
There is very high competition in the entertainment industry, which poses a major threat to Walt Disney. There is everything to compete for, ranging from the consumers to the advertisers. Some of its major competitors include Time Warner Inc. and Comcast Corporation in cable and satellite services, cheaper amusement parks like Six Flags Entertainment, Twenty-First Century Fox in the movie business. As one of the biggest and most revered entertainment companies in the world, Disney is constantly engaged in competition with local, national, and international mass media outfits at all times.
The advancement of technology has made it easier for people to watch pirated movies and shows and it is becoming more accessible along with the quality of pirated movies and shows also improving. This is a major threat because this can make the Walt Disney Company lose money from the entertainment industry; it will spend money on creating shows and movies and no one will pay to watch them.
Besides internet piracy, Disney’s media and movie production businesses may suffer from online TV and online movie rental growth. Subscription to online TV streaming and movie rental websites costs much less than to usual cable television providers. In addition, internet infrastructure is often managed by different companies, thus taking power away from cable network providers.
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The SWOT of Walt Disney tells us a lot about the company. The major points are that Walt Disney is still one of the strongest brands in the world. Although it has several threats and weaknesses, the same can be overcome if the company goes local and starts attracting the local crowd and the next generation of developing countries. Over the longer term, patient investors could benefit from future growth potential from the Shanghai Disney resort and the Star Wars franchise, among other potential movie blockbusters from Pixar, Marvel, or Lucasfilm.
- The Walt Disney Company Wikipedia [https://en.wikipedia.org/wiki/The_Walt_Disney_Company]
- Disney: A Short SWOT Analysis [http://www.valueline.com/Stocks/Highlights/Disney__A_Short_SWOT_Analysis.aspx#.WVDOfWiLTIU]
- Walt Disney Co Profile [http://money.cnn.com/quote/profile/profile.html?symb=DIS]
- Walt Disney SWOT Analysis 2017 [http://www.marketingteacher.com/swot-analysis-examples/]
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