The Walt Disney Company is a large group that has four strategic business units (SBUs) including studio entertainment, Disney consumer products, media networks broadcasting as well as parks and resorts (The Walt Disney Company, 2012). These units can further get categorization into 28 groups. Despite all these segments, the key purpose of the company is to give information and entertainment to its customers. Each business action the company undertakes aims at giving its customers information or entertainment. This is in line with the mission and vision of the company: to emerge the most recognized brand in providing entertainment and information to consumers. By considering Disney’s vision, we can show various internal strengths and weaknesses faced by the company (Mystrategicplan.com, 2011). This paper discusses strengths and weaknesses of Walt Disney Company as well as its main competitive advantage.
Strengths of the Company
Walt Disney has strength in its brand. The company has parks in many regions, and it releases its movies to many generations (Plunkett, 2005). This has made the company own the most famous brand in the globe. Besides, Walt Disney integrates its brand power with animated makes like Cinderella and Winnie the Pooh to draw clients (Plunkett, 2005). Using these characters allows the company to exploit and have a typical grasp upon their target customers of kids (The Walt Disney Company, 2012). Disney has also extended its industry to include the Pixar animation firm allowing the company to use extra brands (The Walt Disney Company, 2012). Another reason that has made Disney’s brand famous is the leadership of Walt. When the company started, Walt was the chief executive officer. Walt built a culture of giving customers products with magical moments and unique experiences. This ideology helped to create an enduring brand name the company. This culture of Disney has continued to influence how people perceive the brand. Presently, Disney is a leading brand in the movie industry. Besides, Disney has entered a deal with Apple’s iTunes (Snickars, 2012). This tactic will offer an excellent resource to push the brand ahead, and a trustworthy channel to drive product circulation.
Also, Walt Disney boasts of its strength in innovation. The culture at Walt Disney encourages innovation. Employees, in the company, are innovative, and they create different products. For instance, the company uses animated characters like Cinderella and Winnie the Pooh to draw customers to its products. This allows the company to cope with the current business environment that is competitive.
Lastly, the company has strength in its diversification strategies. Disney is an entrenched multinational company with a firm domination in the entertainment and information industry. However, the company operates through four diverse business segments which include Studio Entertainment, Media Networks Broadcasting, Disney Consumer Products, as well as Parks and Resorts (The Walt Disney Company, 2012). Walt Disney has also spread its products and activities to avoid reducing business in product lines. Lately, the company has ventured into home video, film, theme parks and television. The company has also spread its operations from USA to countries like Japan, USA and Europe.
What is the Main Competitive Advantage of Walt Disney Company?
Walt Disney Company faces competition from Time Warner Inc, News Corp and Liberty Capital Group. Most of these companies run in only a single industry, different from Walt Disney, which operates in diverse sectors. This makes the company own a competitive advantage over other firms, in the movie industry.
Walt Disney operates various theme parks inside its resort such as Magic Kingdom (The Walt Disney Company, 2012). The company also offers campgrounds and hotels with ESPN Wide World of Sports. This diversification allows Walt Disney to have a typical grasp upon their target customers.
What are some Internal Weaknesses of the Company?
Return on investments allocated to the Studio Productions is a key weakness that Disney is experiencing, presently (Ireland, 2008). This is as a result of the issue of copyrights in the movie business (Ireland, 2008). Hence, the decline in income created is a key area of concern for the business.
Also, the Walt Disney Company holds extremely high sunk costs (Ireland, 2008). These could hamper Disney’s financial capacities because it is a multinational company. Besides, there is the incessant cost of renovating all the resorts, cruise ships, parks and hotels, to support its brand quality (Plunkett, 2005).
Again, young adults may shy away from Disney’s products since children constitute a large segment for the company. Lastly, Disney’s efforts to expand its Internet presence for competitive reasons may turn out futile. Disney’s competitors have deals with large companies like YouTube, Google and Face book, which causes more competition.
Other weaknesses that the company experiences include frequent change in top administration and a large labor force. The company mainly operates in the USA and has about 140,000 employees (Plunkett, 2005). This shows that the company has a high administration level and is likely to experience communication problems. This labor force is likely to increase because the company is expanding into more niches and sectors. This will also affect the structure of management since a sizeable workforce requires extra supervision. Presently, the corporate structure of Disney is complex due to frequent change of corporate officers. While several positive elements follow change, adjustment is not always easy to carry out.
In conclusion, the main areas of strength, for Walt Disney, include brand name, innovation and diversity. On the other hand, return on investments allocated to the Studio Productions, high sunk costs, young adults shying away, expanding its Internet presence, frequent change in top administration, and a large labor force.
Moreover, the company faces competition from Time Warner Inc, News Corp and Liberty Capital Group. Most of these companies run in only a single industry, different from Disney, which runs in diverse sectors. This forms the main competitive advantage for Walt Disney. Disney’s effort to gain excellence, as well as its capacity to adjust to change and consider customers needs makes Disney dominate the media industry.
I recommend that Disney should revitalize the organization’s culture regularly. This will cut chances of the company’s culture becoming stagnant and keeping up a high level of innovation. Besides, managers at the company must continue giving employees the room they need for innovation as well as giving rewards to those who succeed in inventing new products for the company. While the modern business environment forces the company to offer diverse products, the company’s managers must make sure that all efforts stay focused on innovation. Walt, who was the founder of the company, stressed on innovation and formed a culture of creativeness, from early days. This is how the company’s brand image has managed to stay on top of other industries.
Ireland, R. (2008). Understanding business strategy: Concepts and cases. Mason, OH: South-Western Cengage Learning.
Mystrategicplan.com. (2011). SWOT analysis. Web.
Plunkett, J. (2005). Plunkett’s biotech & genetics industry almanac 2006: The only comprehensive guide to biotechnology and genetics companies and trends. Houston, Texas: Plunkett Research.
Snickars, P. (2012). Moving data: The iPhone and the future of media. New York, NY: Columbia University Press.
The Walt Disney Company. (2012). Our businesses. Web.