Introduction

In this article, a comprehensive analysis on Walt Disney will be performed. The area of analysis will cover how Disney is competing to gain market share globally. In this assignment, various issues regarding corporate strategies at Walt Disney are discussed. In the following sections, there are three main analysis in this context are discussed. Firstly, the macro-environment analysis that involves PESTLE and SWOT will be discussed. Secondly, a concise discussion on industry analysis of Walt Disney is presented. In addition, an in-depth discussion on Disney’s firm specific analysis that engages the topics on operation management, human resource management, marketing management as well as the strategic management (Calandro, 2010).

Background of Walt Disney

Today, The Walt Disney Company (or more famously known as ‘Disney’) is one of the largest media multinational and entertainment companies in the world. Currently, Walt Disney has been improving in various areas such as in motion picture production, TV programming, cartoon animations, and provision of family entertainment destinations. The value offered by Disney today consists of theme parks, motion picture and television studios, a television network, cable and radio stations, record companies, travel departments, cruise line, retailing stores, special effects and engineering corporations, new media businesses, and much more. The company was found by Walt and Roy Disney in the year 1923. Started from its humble beginning, the company is currently having one of the largest Hollywood studios, 11 theme parks, 2 water parks as well as a few television networks. The company headquarter is situated at Burbank, California, USA. It cannot be denied that the Walt Disney Corporation has created an empire that is hardly match-able. The organization is constantly striving for excellence performance and yet is continually changing to adapt to the consumers’ taste and the company is employing the best artists, the most innovative creators, and utilizing the latest technology to deliver remarkable experience to the customers (Bunnell, 2004).

Mission Statement of Walt Disney

According to the Disney corporate web-portal, the company’s mission is to be one of the world’s well-known producers of entertainment and information related services. According to the company management, they are moving forward in using the company’s huge portfolio of various brands to distinguish the company content, services and consumer products, while at the same time striving to deliver the most creative and innovative entertainment experiences to consumers. In fact, it is often cited that both Walt and Roy Disney believed that any organization should embrace creativity and innovation to stay one step ahead of the competition in the competitive business environment (Calandro, 2010).

Macro Environment Analysis

PESTLE Analysis for Walt Disney

In this section, a PESTLE analysis for Walt Disney will be done. This basic analysis is essential in supporting the company to recognize further on the external forces that has an influence to Walt Disney (Pearce & Robinson, 2005).

Political. Understanding the political aspect in the countries that Walt Disney wished to penetrate in is crucial. Disney must evaluate the political views and rulings of government in the specific countries due to the different legal requirements that a foreign investor that has to adhere. This includes the tax requirements that Disney have to follow besides other tariffs that will impact Disney (Calandro, 2010).

Economic. The study of the economic trend globally is another major factor that has impacts on how businesses operate and make decisions. For example, the previous economic crisis that hit globally would have definitely changed the marketing strategies of Disney due to the lower global demand particularly in the hotels and travels. Moreover, exchange rates also impact the costs of exports as well as the supply and price of imported goods in a particular nation (Calandro, 2010).

Social. To be a global multinational company, Disney must carefully examine the cultural aspect; population growth rate and the age distribution that Disney wished to penetrate in. Trends in social factors affect the demand for a company’s products and how that company operates. For example, if the age distribution of a particular country has more towards the mid ages compared to children, then Disney must change their target customers (Bunnell, 2004).

Technological. The availability and advanced technology can help on the innovation of Disney’s R&D. For instance, the technological aspect is also import especially in the area of theme parks. The high tech features in the theme park rides emphasize on the safety features of the whole ride (Greco, 1999).

Legal. Each country and even regionally have different employment law, antitrust law and also consumer law. To maintain the position as the global leader, Disney must have a strong legal team that able to advice on the above to avoid any legal dispute that may result in the lost of rights and account (Greco, 1999).

Environmental. Having awareness on the environmental factor is also essential as it may affect the tourism wing of Disney. Besides that, contributing to the corporate social responsible in the aspect of saving the environment will also help to create a strong brand name as a responsible company (Calandro, 2010).

SWOT Analysis for Walt Disney

In this section, a SWOT analysis for Walt Disney will be performed. Specifically, an analysis on the strengths, weaknesses, opportunities and threats facing Walt Disney will be performed.

Such an analysis is useful in assisting the management to comprehend the current and potential threats or opportunities to the company, after evaluating the firm’s current strengths and weaknesses. It is worthy to note that under the SWOT framework, the strengths and weaknesses element are internal factors specific to the firm, while the opportunities and threats are external factors relevant to the firm (Pearce & Robinson, 2005).

Strengths of Walt Disney

In the following section, the various strengths of Walt Disney will be discussed, namely: (a) Global Standardization; (b) Target Customer: Children; (c) Creative Process; (d) Popular Brand Name and (e) Diversification.

Global Standardization. Walt Disney is a huge company with a lot of diversified assets around the world. The era of information age, improving a company’s operational competitive advantage has become a priority for many companies and Walt Disney has no exception in this. As a multinational company, Disney has been consistently having its highest standard in the business. Every dimensions of Disney promotes not only itself but every other area as well in a mutually supportive rotation and, as Roy Disney stated before “to keeps customers Mickey Mouse minded.” For the attainment of these objectives, Disney already has a critical and significant foot in the door with firms in studio entertainment and theatrical productions for children, teens as well as adults of all ages. Today, Walt Disney is indeed a global organization with operations in the USA, Japan, Paris and Hong Kong proving that Disney is in the global reach (Calandro, 2010).

Target Customer: Children. Children around the world are the target customer of Walt Disney, mainly for the animated series and theme parks. Most of the children in the world would positively have watched the cartoon series of Mickey Mouse, Popeye the Sailorman, Alice in Wonderland and Snow White. Every product of Disney’s animated series, it tells a story and this engaging stories delight and inspire all the customers mainly children. Furthermore, since its inception, Disney has been appealing to young girls through the Disney Princesses Belle, Ariel, Sleeping Beauty, Snow White, Cinderella, and Jasmine. Now, Walt Disney is under continuous pressure to continue growing their Disney Princess Sector. Consequently, Disney is the targeting even younger girls, even those that are still in the crib. Nevertheless, over the years, Disney is also targeting adults as they are the decision makers for their children (Bunnell, 2004).

Creative Process. One of the powers of Walt Disney growing tremendously for the past decade is on having a creative process in business. The innovative approach of experiments in realistic human animation, distinctive character animation, special effects, and the use of specialized processes and apparatus have been the factor of producing admirable animated series. Since the release of Snow White and the Seven Dwarfs as the first animated feature in the Disney animated features canon at the year 1937, Walt Disney have been following a strong tradition of innovation (Greco, 1999). The objectives of the Disney Imagineering section is actually to constantly design and execute new, happy and exciting products for Disney that will deliver happiness to their customers. Besides that, by developing the exciting new rides in Disneyland parks that can move consumers faster than gravity, by provision of new movie technologies offering innovative visual effects, or even combining the two into one gut wrenching, Disney have realized their missions. In short, continues strive for excellence of the invention; it has been attributing revenues to Walt Disney which is worth approximately U.S. $36 billion today (Bunnell, 2004).

Popular Brand Name. Walt Disney is synonyms as the magical world of animated series and exciting theme park. The well-built foundation that have been created decades ago have strong portfolio of brand. Almost everyone that has an interest in animated series knows Disney’s production of celebrated series such as Cinderella, to name one. Besides that, for adults and children, the theme park of Disneyland is one of the must visit place in California. The Disney Resort is also usually been fully booked almost all year round, especially during summer holidays and Christmas as there are many exciting events during the holiday season. Disney’s reach is global, with theme parks in France, Japan, Hong Kong and of course the USA (Greco, 1999). They also have Disney stores around the world selling Disney end users products both within the various Disney resorts and theme parks and in many of the retailers worldwide. In fact, currently, the Disney trademark is popular all over the world, once again keeping consumers “Mickey Mouse minded,” (Calandro, 2010).

Diversification. Walt Disney is a conglomerate company that has mushroomed in various businesses. Disney with its subsidiaries owns media networks as well as parks and resorts, besides making movies and markets consumer products. Disney had many ideas that helped the company having incredible foothold in the various markets today. Walt Disney has many fields in which they participate to make money. Television, studio productions, theme parks, consumer products and cruise lines are to name a few of the successful Disney (Bunnell, 2004).

Weaknesses of Walt Disney

In the following section, the assorted weaknesses of Walt Disney will be discussed, namely: (a) Excessive Research & Development; (b) High Risk Factor and (c) High Cost of Maintenance.

Excessive Research & Development. In the effort for continuous innovation especially in the consumer products as well as the animation series to have the loyal fans to Disney production, Disney has to spend huge resources on research and development. The main resource that Walt Disney splurges is on the professional expertise in the area of research and development. This certainly involves vast time and money to have an excellent result (Greco, 1999).

High Risk Factor. Disney had to do massive investment in constant development of the business which engross on the advertising area. As the business grows gigantic worldwide, there’s a lot of risk involve from every aspect of the business. The management of Disney had to plan ahead to mitigate the various risk factors involved that can tremble the whole company (Greco, 1999).

High Cost of Maintenance. Walt Disney has high cost of maintenance for almost everything they have developed in, mainly for the theme parks, Disney resorts and also on the production of the consumer products. This maintenance is vital as it involve the safety and health requirements for its customers (Calandro, 2010).

Opportunities of Walt Disney

In the following section, the multiple opportunities of Walt Disney will be discussed, namely: (a) Merchandise and (b) Characters of National.

Merchandise. Product stores of Walt Disney should consider entering new countries, especially to the emerging countries in Asia. The Disney stores are not within the reach of customers easily (Greco, 1999). It is a challenge if customers would like to purchase books, toys and miniatures directly from the Walt Disney store. Hence, this aspect of opportunity can be further explored to maximize the company’s profitability in merchandize sales (Wasko, 2001).

Characters of National or Regional Appeal. Walt Disney can incorporate a new Disney character in different operating countries that Disney has presence. For example, Disney in Chinese countries such as Hong Kong and China, Disney can have localized national character of a panda as an icon. This goes similarly to other countries that can resemble their own Disney character with maintaining the highest standard and quality of the character (Calandro, 2010).

Threats of Walt Disney

In the following section, the threats of Walt Disney will be discussed, namely: (a) Competitors: National, Regional & Global and (b) Overseas Legal Requirements

Competitors: National, Regional & Global. In the case of Disney and the theme park industry, there are many competitors. Some of the competitors include, Paramount Parks, Universal Studios and Six Flags Theme Parks are some of the prominent competitors. However, there are many other less obvious challengers that analysts might not easily think of when analyzing the competitive market in which Disney is operating in. For example, there are hundreds of water parks and many funplexes that is much affordable compared to Walt Disney (Wasko, 2001).

Overseas Legal Requirements. Threats that are more common in the era of globalization are the laws and regulations of other countries. There is a need for constant monitoring of the differences in the laws of other countries and USA when organizations are outsourcing. In Walt Disney’s case, their theme parks must meet the safety regulations of the countries in which they operate in order to stay in the business and maintain their international status (Calandro, 2010).

Industry Analysis

Porter Five Forces Analysis for Walt Disney

In this section, a Porter Five Forces analysis for Walt Disney will be performed. Such analysis is important in assisting the company to understand further on the external forces that Walt Disney able to cope with.

The first force to be discussed is the threat of new entrants. Since Disney has been able to secure a very special niche in the industry, the entrance barriers can be considered as relatively high. Walt Disney pretty much dominates the family entertainment market and it would a very difficult feat for a new organization to develop brand recognition and to penetrate in Disney’s existing market (Pearce & Robinson, 2005).

Secondly, the bargaining power of customers has increased over the time especially in the service and in the entertainment industry. For example, the entrance fee charged at Disney theme parks. It has been clearly stated that the customers are only willing to pay the maximum of USD 33. Therefore, Disney has been very careful when dealings with customers as they hold the bargaining power (Bunnell, 2004).

On the other hand, the bargaining for suppliers is an opposite compared to its customers. The restrained power of suppliers is because of the brand name that Disney has created on the unique quality products. Disney has their own preferred supplier that will be able to cope with the demand and the global requirements and standards that Disney have integrated over the years (Wasko, 2001).

Moving on, the threat of alternative products and services is also very low. Disney has already positioned ceiling prices on many of its merchandise. The logo and trademark of Disney itself explains that it would a great challenge for another company to come up with substitute products and services. Furthermore, Disney continuously upgrading and reviewing the product line and service to keep their customers happy and loyal (Bunnell, 2004).

Finally, jockeying among the existing contestants does not play an important role in Disney’s external operation environment. At present, there are no close direct companies to Disney’s operations as the products they have are differentiated and unique on its own (Wasko, 2001).

Firm Specific Analysis

Operation Management

TQM in Disney. Without hesitation, Walt Disney has highest standard of quality in the production of animated series, consumer products and also particularly in the theme park and Disney resort. The strict standard in quality has been one of the major factors contributing the success of Disney (Pearce & Robinson, 2005). For instance, the operations of Disney theme parks in Paris and Tokyo must comply with the global standard from the original Disney theme park in California. Without the towering standard, it can’t be one of the favorite theme parks of all time. As for the Disney Resort, it is well known for the superior service that is beyond par on the hotel industry. This explains the reasons behind the ever successful Walt Disney in having returning customers on its resort. The animated series produced by Walt Disney has an impact to the viewers and mainly for the reason of excellence on the story. The most well known series that indeed leaves a great emotion to the viewers until today are the princess of Disney, which are from Cinderella, Snow White and Aladdin (Wasko, 2001). The quality of the production has been proven from the numerous awards that Disney has won over the years.

Human Resources Management

Employee Training. The Walt Disney Company has started its own University that the workforce in the company must attend and graduate before being allowed to work at a Disney Theme Park. As such, it is not surprising that the customer service of Walt Disney is known as being one of the best in the globe, and Disney University emphasizes two key ideas: “The front line is the bottom line,” and, “its 10 percent product and 90 percent service.” This break down indicates Disney’s commitment to their consumers and their customers’ experiences while embracing the Disney tradition. This applies to other Disney employees worldwide, especially in the hospitality line of the resort world (Bunnell, 2004).

Disney Strategies in HRM. Walt Disney is a multinational company that have enormous amount of employees. However, there’s a frequent change in the top management that has different ways of direction and also administration that makes it more difficult to sustain the valuable employees. As a result to this, the HRM strategies in Disney are to give clearer company direction and also to give extra attention to their employee’s welfare. The goal in providing excellent service to make customers happy is to have happy employees. Hence, Disney has further improved their remuneration package to their employees to make them feel appreciated by the company (Wasko, 2001).

Marketing Management

Market Segment – STP. Without a profit Walt Disney, or any other company for the matter, would not be in business for long. Walt Disney, use their profits to do many things, for instance to expand their market share, research and development for the innovation of new product lines that help to draw more customers. Disney has many other fields in which they participate to make money.

Disney customers’ products and theme parks are very critical to Disney’s ultimate objective of earning money. For instances, the placement of Disney products on school supplies, lunch-boxes and even on the back-packs, in departmental stores across the nation, and within the walls of their marketing-giant theme parks themselves is a constant advertisement for Walt Disney. Disney is a powerhouse in the entertainment field and widely known throughout the globe. They can easily appeal to younger children who identify themselves with the Disney characters and love to see them in full life form. Besides that, Disney can also attract the elder children who still identify with the characters in the form of knowing them and enjoying the movies produced by the firm, but also enjoy the themed rides that feature their favorite movies and characters in them (Wasko, 2001).

Moreover, Walt Disney is in the industry to produce entertaining theatrical productions that are not only family oriented, but also family friendly. Disney is in business to deliver products and soft toys that will promote their theatrical productions that are both entertaining and beneficial for children. In addition, it also inspires enough to attract new consumers. Walt Disney is in business to entertain families with children who love a fun, interactive and safe vacation spot, such as with the Disney resorts and parks (Molella, 2008).

Marketing Mix. Walt Disney is superior at the product and placing aspects of the marketing mix resulting from over decades of experience in the business and still expanding. The past has given them a lead of instinct and skill when it comes to advertising their products. As new the sensational productions are released, it allows for new product lines based off the feature’s characters to be made and sold in strategically placed stores throughout USA and also countries that has presence with the Disney theme parks (Pearce & Robinson, 2005). The stores are located in malls and super centers, in urban locations in order to for them to be visible, and they are nationally located within their theme parks where they will be heavily sought after by eager vacationing families (Bunnell, 2004).

With regards to their strategy in promotion, it has exceeded the level of expectations set by their marketing department. It is entangled all the way through Walt Disney, surfacing in theatrical productions, story books, consumer products such as soft toys and theme parks. Every aspect of Disney promotes not only itself but every other aspect as well in a circular rotation and again this is to keep the consumers “Mickey Mouse minded.”

However given that Disney is a family oriented company, they won’t to be able to attract families of medium incomes. Relatively, Walt Disney had created an image of the luxurious amusing place specifically on the Disney resorts are indeed for the upper class. As a result, Disney’s pricing strategy is essential to change from time to time. It is also known that the prices for admission for the theme park are subject to change towards the holiday seasons. Typically, during the summer holiday and during Christmas, the price for Disney resort is one of the most expensive ever. Nevertheless, Disney commercials on television are often seen offering packages for “round trip airfare for cheap,” “kids fly free,” and “hotel packages” all to attract consumers to their parks and resorts (Molella, 2008).

Strategic Management

Key Success Factors of Walt Disney. The Walt Disney Company has a established history and an widely known brand name, not only in the USA but throughout the globe. Disney utilizes multiple positioning strategies to their advantages, and eventually producing their long, and successful track record. In fact, it can be commented that the strategic position employed within Disney is to deliver the customer benefit which is on a family-friendly, safe, fun environment that is open for business all year (Molella, 2008). Not only that, to be truly caring for the customers, Disney offers specials for families, such as discounts on flights, car rentals and hotel rooms. Some of it is also seasonal which is to entice more people to their parks, and this tactic is already considered in the price and quality base indicating a value bargain to their potential customers. Nevertheless, the most significant positioning base employed by the Disney is the one that distinctly sets them apart from any of their competitors. The uniqueness on Walt Disney clearly separates them with its competitors.

Conclusion

After an in depth analysis, there’s no doubt that Walt Disney is a global leader in the industry of entertainment. It is an endlessly growing business with a strong grip on numerous aspects of business worldwide. As of the affluent range, it enables Disney to have many options and opportunities to expand their product lines and with their reach into many different diverse countries and undeniably their global expansion is also among the tops in the industry (Molella, 2008).

The most basic objective of Walt Disney is, “To ensure customers are happy”. Their capability to appeal emotionally to the feeling of an everlasting childhood; just by mentioning “The Magical World of Disney”; it would seem that they have done a brilliant work in fulfilling that magical mission.

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