The Walt Disney Company is one of those brands that have stood the test of time. Founded on the 16th of October 1923, The Walt Disney Company has experienced the travails of a global economic and financial recession caused by a world war. They have also witnessed the collapse of Wall Street, yet this company continues to thrive in the face of adversity.
The Walt Disney Company is one of the leading international mass media and entertainment companies. Its headquarters is located in the US, but they have a global presence on all continents. This company is made up of five independent segments, namely; Disney Interactive, Disney Consumer Products, Parks and Resorts, Disney Media Networks, and famously The Walt Disney Studios.
However, Disney Media Networks is widely regarded as the most important out of these five independent segments. Some of the Disney Consumer Products consist of magazines, books, movies, television programs, and musical recordings.
The diversity in the product offering of The Walt Disney Company is one major strength of the brand, but there are many other strengths, as seen in the Disney SWOT analysis in this post.
Walt Disney's Strengths
Apart from offering a variety of products to a wide range of consumer groups, some of the other strengths of The Walt Disney Company include;
A strong internationally recognized brand: One thing that Walt Disney has going for it is a very strong global reputation. They have established an international presence with their many Disney theme parks and resorts worldwide. The Disney Channel and movies produced by Walt Disney Studios have also endeared the company to the hearts and minds of a much wider global audience.
A strong and wide product portfolio: Walt Disney has many products on offer. Some of their main products include; cable networks like ESPN and Disney Channel. They also own ABC, a television broadcast network. Both ESPN and Disney Channel cable networks are watched all over the world, with over a quarter of a billion subscribers each.
Increasing localization of Walt Disney products: Walt Disney has recognized the importance of providing more local content in the regions and countries in which they operate. To this end, Walt Disney Studios produces more movies that are best suited to the terrestrial markets where they are being viewed via online streaming or in cinemas.
Expertise in strategic acquisition: The Walt Disney Company has the necessary knowledge in a strategic acquisition. For example, they acquired Lucasfilm back in 2012. Before then, they had acquired Marvel Entertainment (2009) and Pixar Animation (2006).
Pixar Animation is famous for the success of the animated movie - The Incredibles. Lucasfilm is renowned for the Star Wars episodes. At the same time, Marvel Entertainment is known for successfully bringing popular Marvel Comic characters to the big screens with movies like Ironman, Spiderman, and The Avengers.
Diversification of product portfolio: As already mentioned, having five independent segments is a major strength of this global entertainment and mass media brand. The beauty of the five segments is that they run their business in different parts of the world.
Walt Disney's Weaknesses
As successful as The Walt Disney Company is, they also have weaknesses. A couple of drawbacks have been identified, and these can be found in this Disney SWOT.
An overreliance on the saturated North American market: It must first be mentioned that Disney is present in over 200 nations worldwide. However, The Walt Disney Company is still heavily reliant on the North American market consisting of Canada and the US for most of its annual revenue. The numbers reflect this, with over 70% of their revenue coming from only the US.
This is in stark contrast to some of their rivals like News Corporation, which derives about half of its total revenue from abroad. The danger of an overreliance on the North American market is that Walt Disney leaves itself more prone to the effects of economic uncertainty in a financial recession in North America.
Limited acquisition opportunities: The Walt Disney Company has acquired many competing firms that they now need to get approval from the Federal Trade Commission before receiving any other competing company. The major concern of the government is that The Walt Disney Company is monopolizing the entertainment and mass media industry. The brand stands for the possibility of having antitrust issues and facing antitrust laws if they acquire other companies, thereby limiting their acquisition opportunities.
Walt Disney's Opportunities
Even though The Walt Disney Company is constrained by antitrust laws in their drive to acquire firms within their industry of operation strategically, they still have business opportunities that can boost their growth. Here are two opportunities worth mentioning in this Walt Disney SWOT analysis.
Emerging new international markets for subscription-based cable television services: The Walt Disney Company can explore the fast-growing demand for subscription-based cable television services in Asia. The Asia Pacific region is believed to account for over 50% of the world's subscribers for subscription-based cable television services.
What this means in terms of the number of potential subscribers is that this region accounts for over 390 billion active subscribers (as of 2011), with China accounting for over 27% of these subscribers. The percentage of pay-TV subscribers from the Asian region is expected to steadily increase with improvements in the regional economy and people having more disposable income to spend.
The Walt Disney Company can take full advantage of this large market of potential subscribers by increasing the number of subscribers to its subscription-based cable networks (Disney Channel and ESPN).
Expanding Walt Disney Studios presence in more countries around the world: The Walt Disney Company can expand the movie production services of the Walt Disney Studio business segment to many more countries around the world like China and India. By producing local movies in these countries, Walt Disney can tap into a large market and boost its sales revenue in the process.
Walt Disney's Threats
This Disney SWOT analysis would not be complete without highlighting some external threats to the brand's business success. Here are a few worth noting;
- The threat of hackers and piracy: With technological advancement and the availability of highly skilled hackers, there is an even greater risk of piracy. Hackers can hack subscribers' accounts, leading to dissatisfaction, frustration, and a lack of trust in the cable television services offered by Walt Disney. Also, hackers can copy popular and new content, which they then burn on DVDs and make available for sale.
- Competition from rival companies: The entertainment and mass media industry is highly competitive, with rival companies jostling for market shares in the US and abroad. This puts The Walt Disney Company constantly on edge as they compete for content while also trying to offer subscribers a better subscription plan and pricing.
- Cheaper options to cable television: The online streaming services industry with companies like Netflix offers monthly plans that are much cheaper than what most cable television service providers can offer, and The Walt Disney Company is no exception.
This Walt Disney SWOT analysis points out the strengths, weaknesses, opportunities, and threats of The Walt Disney Company. The diversification of the brand's product profile is a key strength, while piracy is a major threat to Walt Disney. One major weakness points out is the overreliance on the Canadian and US market, while a key opportunity for Walt Disney lies with its ability to position itself in emerging markets in the Asia Pacific region.
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SWOT Analysis of Walt Disney
The 22nd of October, 2021, by Ovidijus Jurevicius
SWOT Analysis of Walt Disney