Walt Disney Company SWOT Analysis

Walt Disney Company Analysis

The Walt Disney Company, together with its subsidiaries is a global corporation, which is diversified in the entertainment industry in five business segments: media networks, theme parks, entertainment studios, consumer products, and interactive entertainment. In December 2012, the Company completed the acquisition of Lucasfilm Ltd. LLC (Lucasfilm), including the rights to the Star Wars franchise. The company operates in the consumer sector. In general, it strives to exceed expectations of customers with its products. The Disney Company is active in 172 countries and uses 1,300 radio and television stations that are broadcasted in 53 languages (Walt Disney Company, 2017). Disney is one of the world’s largest licensors and the biggest publisher of children’s books. The company was chosen to be analyzed by means of the SWOT analysis because Disney videos top the list of distributors in Europe and Latin America; thus, the experience of the company can be effectively analyzed.

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Innovations

Most products of the Walt Disney Company are offered offline. Nevertheless, nowadays, people and the lifestyle change. The biggest audience of the company is definitely children; today, kids spend most of their time on the Internet. Therefore, the Walt Disney Company should develop the online sphere; for example, launch a YouTube channel with the useful, interesting, and informative videos about the cartoon industry or to develop online games with the most popular cartoon characters. In addition, the company should pay attention to their audience, because it is strictly limited today. As the solution to this problem, the company can use old characters; for example, it can create the cartoon about their adult life. Such types of innovations will help it compete in the market more effectively and attract a wider range of viewers.

SWOT Analysis

SWOT analysis allows understanding the inner system of a particular business. It takes into consideration weaknesses, strengths, threats, and opportunities of the company with the view to analyzing the existing plan of the company development in order to find out what aspects of the company’s operation should be improved. The analysis provides an in-depth insight into the business and identifies the possible factors that can influence the development of the business either negatively or positively (Colgate, n. d.).

Strengths

The biggest strengths of the Walt Disney Company include its traditional characters. Mickey Mouse, Ariel, and Donald Duck, for example, are famous worldwide. Because of these characters, the company is known all over the world. Another strength point is the brand image. The company started to build its image in the middle 50s and extended the brand with the creation of the amusement park, Disneyland. In addition, the values of the company are among its strengths. Disney pays great attention to the ethics and values. The main product of the company is cartoons, and they are created mostly for children, who should learn the ethic and values of this world with their help. These cartoons teach children to be kind, to understand what is good and what is bad, to be happy with parents and friends, and to take care of others.

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Moreover, the business of the company is rather diverse. This aspect can also be related to the strengths; it will definitely help Disney keep going for years. Disney is present in retail, entertainment, media, and theme parks sectors of the business, which are flourishing nowadays. The innovations mentioned above can provide one more sector to the Disney business. It is an online sector, which is now almost absent in the operations of the company. Another innovation, which was proposed, is the idea of broadening the audience. Disney has realized the need of extending the number of the viewers and has produced Beauty and the Beast and the Jungle Book movies. The business of Disney spins around the charm and appeal of its stories and characters; the rerelease of the Beauty and the Beast will lead to the emergence of the new audience in different parts of the world. Those, who have grown up with the cartoon about Bell, now, will have a possibility to go to amusement parks with their children and recall the own childhood, as well as make children interested in the Disney brand. As a result, the popularity of the brand will be passed over to the next generations (Noonan, 2017). The company has all the capabilities and opportunities to develop new spheres of the business. Almost everyone in the world knows the brand; a broad audience is excited with the products of the company. The technological resources of the Disney definitely do not stay still. In such a manner, viewers can observe how the quality of the image and special effects of cartoons are growing with each year.

Weaknesses

Just as many other corporations, the Walt Disney Company is not perfect and has some weaknesses. One of the main ones is that all its movies and cartoons are available only offline. The life has changed. Today, children prefer surfing the Internet and spend most of their time online. It is a so-called push and swipe generation, and the business of the Walt Disney Company should accustom to the new demands of the target audience. In terms of the audience, it is also a weakness of the company. The target audience is limited. The amusement parks are for children and the youth. However, teenagers are the last audience, and it is a problem. The Walt Disney Company should attract more adults because adults pay money. In addition, the prices for toys and entrance tickets to amusement parks are rather high. Meanwhile, smaller amusement parks and country’s cartoon production offer lower prices. Moreover, most cable companies do not include the Disney channel and ESPN into their basic packages. As a result, many clients are lost.

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Another weakness of the company is some kind of conservatism in creating the Disneyland. All the colors and structure of the park are getting boring. It is not only the case with the amusement parks. “Some people dislike a world, which is drawn by Disney. People are bored with making everything alike in every cartoon,” asserts Rick Foglesong (as cited in Showley, 2011). The main problem with innovations, including online videos and games, is that they should be free at first. However, the company is willing to get the highest income from every innovation. However, with such an approach, the problem with the audience will intensify, as most people, except the most loyal fans, will not pay for the innovation, which they do not know. All these issues mentioned above result in disadvantages in competing with other companies in the market as the possible target audience, which is lost due to not solved weakness, will choose products of competitors. As a result, there is a need for introducing innovative ideas, which will help the company retain its customers and increase their satisfaction.

Threats

To some extent, the Disney Company depends on the economic situation of the particular country or world, in general. If there is an economic recession, which leads to the decrease in salaries and job opportunities, the company will experience financial difficulties, as well. It is so, because parents will pay for the amusement of the children less due to the economic situation. In addition, as it was already mentioned above among the weaknesses of the company, the price of the entrance tickets can give a chance to smaller amusement parks with much lower prices to attract more visitors. Therefore, the Walt Disney Company should balance the price and make it more affordable for the middle class; thus, it will be able to protect its reputation of the happiest place in the world. Moreover, among the threats, one could mention the high demands for innovations in the modern world. Today, children are more willing to fight against monsters in video games; meanwhile, stories about princes and princesses are becoming more and more outdated. However, the threats mentioned above are not as dramatic as the competition in the media industry. There are many market players, which dominate and do their business better than the Disney does. The company has no sources to compete online, and their business rivals get benefits from this fact. For example, the Nickelodeon network has announced a new project, which is called the Pocketwatch. This project will provide video content to children in the age of between 2 and 11 years. It aims at reaching young individuals, who are discovering new characters through videos on mobile platforms (Reuters, 2017). Such high competitive rates can be a considerable external barrier for online innovations, which were introduced at the beginning.

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Opportunities

Taking into consideration all the weaknesses, strengths, and threats, the company has still opportunities to develop. The Disney Company can extend its movie production to other countries, for example, India. The Indian movie industry has developed a high-quality infrastructure. Such cooperation may result in lower prices and will allow making more specialized movies for India. This move will lead to the expansion of the audience, which is one of the proposed above innovations for the company. Moreover, Disney can build its amusement parks in the slowly developing countries. In addition, theme parks can be optimized and improved with new features. More attractions, more characters, and more countries can be added. For example, when the new movie appears, new characters and attractions should be immediately added. This strategy will definitely attract more visitors.

Today, it can also be observed that the company uses and rereleases old characters, but there is a great opportunity to create some new ones, which will be interesting for the new generation of children. The Disney Company can also launch some learning programs, which will make children interested in the education; for example, Ariel can teach kids to count or read. By involving such possibilities of using characters, young parents will also get interested in in the Disney brand. Schools and training for the company’s staff can be opened, as well. This will help them develop a teamwork and be able to generate new ideas quicker. Moreover, the technologies are not staying still, and the workers should master them as quickly as possible before the competitors do the same.

Table 1: SWOT Analysis:

Helpful
To achieving the objective
Harmful
To achieving the objective
  • Worldwide renowned characters;
  • A recognized brand image;
  • Ethics and values;
  • The diversity of businesses.

STRENGTHS

  • Offline production;
  • Limited audience;
  • Conservatism.

WEAKNESSES

  • Extend the localization of production;
  • Create learning programs for children;
  • Launch staff training.

OPPORTUNITIESOPPORTUNITIES

  • The dependency on the economic situation;
  • High demand for the innovation;
  • The great potential of competitors;

THREATS

Conclusion

The SWOT analysis helps to understand all the peculiarities of a company. In general, the provided above SWOT matrix, shows that the Disney Company faces some solid threats; however, at the same time, has good opportunities for the successful develop. It should also be emphasized that company has more strengths than weaknesses; thus, the current situation is very perspective for the Disney. The risks for launching innovations are definitely present, but their level is acceptable. The history witnessed many companies, which are very conservative and do not consider new demands of the modern society. As a result, these businesses become outdated and go bankrupt. Moreover, contrary to those market players, there are companies, which want to be very popular. Some of them earn huge incomes while forgetting about the aim and the primary task of their business. For the Disney Company, the innovations, which are proposed above, are vitally important, as they will help to attract the attention of new generations and increase the audience. However, the company should try to find the balance between innovations and modern technologies and the brand reputation and ethics of the company. By using opportunities, which are mentioned in the SWOT analysis provided above, the Walt Disney will be on the top of the movie industry for ages.

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