The Walt Disney Company

The Walt Disney Company is the largest media and entertainment conglomerate in the world in terms of revenue.Founded on October 16, 1923, by brothers Walt Disney and Roy Disney as the Disney Brothers Cartoon Studio, the company was reincorporated as Walt Disney Productions in 1929. Walt Disney Productions established itself as a leader in the American animation industry before diversifying into live-action film production, television, and travel. Taking on its current name in 1986, The Walt Disney Company expanded its existing operations and also started divisions focused upon theatre, radio, publishing, and online media. In addition, it has created new divisions of the company in order to market more mature content than it typically associates with its flagship family-oriented brands. The company is best known for the products of its film studio, the Walt Disney Motion Pictures Group, today one of the largest and best-known studios in Hollywood. Disney also owns and operates the ABC broadcast television network; cable television networks such as Disney Channel, ESPN, and ABC Family; publishing, merchandising, and theatre divisions; and owns and licenses 11 theme parks around the world. The company has been a component of the Dow Jones Industrial Average since May 6, 1991. An early and well-known cartoon creation of the company, Mickey Mouse, is the official mascot of The Walt Disney Company. Walt

Disney is one of the best-known names in the world of entertainment. The name is associated with countless animated films, theme parks and resorts--including the Walt Disney World resort in Orlando, Florida. Although this resort is world famous and has been extremely successful, it is still subject to market forces.

The Walt Disney Company s S.W.O.T Analysis

There are four things an organization should consider and analyze during various stages throughout the fiscal year that are crucial to keeping up with the competition and giving a relatively accurate perspective on where they stand. Those four things are the companys Strengths, Weaknesses, Opportunities and Threats (often referred to as the SWOT analysis). A
SWOT analysis can be used to understand the position that Walt Disney World currently occupies in the market. This can be used internally to make decisions about the future direction of the company or by competitors to anticipate what the company might do next.

The SWOT analysis helps an organization understand the current and potential environment for their particular product and service which allows them to adjust their marketing tactics in order to help focus their strategy. When doing a SWOT analysis it is important to recognize that the Strengths and Weaknesses are internal reflections, whereas the Opportunities and Threats are external reflections. In order to understand how Walt Disney World is positioned in the market, it is helpful to conduct a
SWOT analysis. A SWOT analysis is a managerial tool which assesses the strengths, weaknesses, opportunities and threats that a business faces.

The Walt Disney Company s Strengths "I knew if this business was ever to get anywhere, if this business was ever to grow, it could never do it by having to answer to someone unsympathetic to its possibilities, by having to answer to

someone with only one thought or interest, namely profits. For my idea of how to make profits has differed greatly from those who generally control businesses such as ours. I have blind faith in the policy that quality, tempered with good judgment and showmanship, will win against all odds." Walt Disney (Disney Dreamer 2007). Walt Disney had many ideas that helped the Walt Disney Company gain the strength of having such a tremendous foothold in the market to this day; The Walt Disney Company is the second largest media and entertainment corporation in the world, after Time Warner, according to Forbes. In a report by Datamonitor (2007) the Walt Disney Company, together with its subsidiaries, is a diversified entertainment company. It owns media networks as well as parks and resorts. It also makes movies and markets consumer products. Furthermore, the company clearly has developed a very strong and well known "brand-name and image" over many years. Disney has one the most recognized and powerful brand names in the entertainment industry. According to Datamonitor 2007, the Walt Disney Company was ranked 8th in the Top 100 Global Brands ranking of the BusinessWeek Magazine and Interbrand, a branding consultancy, in 2006. Not only does the company have a strong corporate brand, they have additional brands such as ESPN (one of the biggest sports channels in the world), Miramax, Touchstone, and Pixar. These, being other brands of Disney, have high brand equity. Because of this, the availability of entering new businesses and being able to produce new brand products is quite accessible. According to Telephonyonline, the Walt Disney Company is attempting to expand and team with Sprint to create a mobile virtual network operator (MVNO) service that targets families with children and adult Disneyphiles. With this said, they are going a different direction to expand their already broad product portfolio. The company already operates through four different business segments. These segments consist of media networks, parks and resorts, studio entertainment and consumer products.

Walt Disney World's greatest strength is its world famous brand. With theme parks around the world and movies released to generations of children, the Disney brand is one of the most recognizable brands in the world. Beyond the Disney name, Walt Disney World is able to use the brand power of its many animated characters such as Mickey and Minnie Mouse, Cinderella and Winnie the Pooh in order to attract customers. Disney has expanded its holdings to include the Mirimax film studio and the Pixar animation company, giving it access to an even greater number of brands and characters.

Strengths
It is the largest media and entertainment company in the world. It has become one of the biggest Hollywood studios. Disney Company owns 11 theme parks and several channels. Disney employees 150,000 people. Innovative ideas Global standardization It is among the popular brand names in the world. . It has well established divisions Walt Disney Studio Entertainment, Disney-ABC Television Group, Disney Interactive Media Group, Disney Consumer Products, Walt Disney Parks and Resorts, Disney Interactive Studios. Increasing trends in overall revenues and profits. Disney holds US$ 62.497 billion of assets. Popular characters High brand awareness among the people. Differentiation The Walt Disney logo is famous. Walt Disney was ranked 8th in the Top 100 Global Brands.

Strengths
[LIST] [*] Walt Disney: its growing stages so there is good financial position [*] Professional and Committed workforce [*] Low cost than other major entities [*] Successful launching Product Lines

Strength * Global Standardization * Target Customer: Children * Creative Process * Popular Brand Name * Diversification * Disruption * Mickey Mouse likes little boys * paedobear * Secret Nazi Army

The Walt Disney Company s Weaknesses

Two of the Walt Disney Company s main weaknesses relate with a great possibility of problems. The idea of Disney s frequent change in top management and the tremendous amount of employees is where the problems all arrive. As of September 2007, there were 130, 000 people working for Disney in some way or another. By expanding their broad product portfolio and gaining many different niches it gives them a bigger image, but it also means that there are going to be that many more workers. This means greater possibilities for miscommunication and a high chance for a bureaucracy in the company. The most recent weakness of the Walt Disney Company has come from Hong Kong Disneyland Resort. According to many, the resort has yet to live up to the expectations of Disney s resorts and parks. The $1.8 billion theme park has only 16 attractions, only one of which is a classic Disney thrill ride (Space Mountain), compared to 52 at Disneyland Resort Paris. A recent study of Hong Kong Polytechnic University showed that 70% of the local residents had a negative opinion of Hong Kong Disneyland Resort. (Datamonitor, 2007). If the downward sloping performance of this resort continues, the image of the Disney Company will also start to take that direction.

Weaknesses
o
Walt Disney World includes several different theme parks within its resort, including Epcot, Animal Kingdom and Magic Kingdom. Additionally, they have opened up two water parks, Typhoon Lagoon and Blizzard Beach. They have also expanded beyond their traditional brands with the ESPN Wide World of Sports attraction. On top of all of this, Walt Disney World operates several different hotels and a campground. This diverse product portfolio may represent a weakness because managing such different products can reduce efficiency and lead to a lack of strategic focus.
Weaknesses * * * * * * * * * * High sunk cost Excessive Research & Development Constant Up gradation High Investment High Risk Factor Limited range of target audience group Poor Management Cultural Imperialism Media Network Competition anti semetic

Weaknesses
High operating cost

 Frequent change in top management The $1.8 Billion park have only 16 attractions. Religious welfare group protest against the release of material which was found offensive by many people. Poor working conditions in factories that produce their merchandise. Disney was also criticized by animal welfare group for their caring procedure for animals at Disneys Animal Kingdom theme Park. Poor management. Disney has been blamed of having sexual implication or references concealed in some of their animated movies, including The Lion King, The Little Mermaid, Aladdin, Who Framed Roger Rabbit, and Disneys original releases of The Rescuers. High investment with high risk involved. Continuous innovative ideas are required to retain the attention of customers.

Weaknesses
[list] [*] Neglect market share in large market [*] Limited media system in management [*] Excessive Research & Development [*] Constant Up Gradation [*] High Investment [*] High Risk Factor The Walt Disney Company s Opportunities The markets of today are becoming more versatile to outsourcing and globalization. The trend towards globalization is not immune to the entertainment business and The Walt Disney Company is revealing this by expanding outside of the United States and offering theme parks in France, Japan and China. According to Datamonitor, nearly 25% of their operating income comes from outside the United States and Canada (Datamonitor, 2007, pg. 22). Another expansion opportunity from U.S. soil was mentioned earlier regarding the Disney Cruise Line, a service well placed and growing in popularity. Another opportunity for Disney was also mentioned earlier considering Disney and their Imagineering section. Research and Development has promised to provide new attractions such as the Finding Nemo Submarine Voyage presenting an (Datamonitor, 2007, pg. 23). under the sea experience for consumers

Opportunities
o
According to Danjel Lessard and Lauren Northcutt of Pacific Lutheran University, a major opportunity exists for Disney parks and resorts, including Walt Disney World, through the use of "imagineering." Imagineering is a combination of imagining and engineering, developed by Walt Disney. It refers to the company's ability to develop innovative new attractions that bring the imaginary world to life. This provides Walt Disney World with the opportunity to create exciting, new attractions that will draw in new visitors.
Opportunities * * * * * * Merchandise Global Localization: Think global, Act Local Characters of national or regional appeal Cheaper alternatives to soft toys Disney Music Channel Disney School of Management/Training Institute

Opportunities
[list] [*] Merchandise [*] Introduction of innovative products [*] Acquiring franchise in sport sectors [*] Penetration provide capture in media favoritism [*] Global Localization: Think global, Act Local [*] Characters of national or regional appeal [*] Cheaper alternatives to soft toys [*] Disney Music Channel The Walt Disney Company s Threats Threats that are more prevalent 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 the United States when organizations are outsourcing. In Disney s case their theme parks must meet the safety regulations of the countries in which they operate in order to stay in business and maintain their international status. As with any business a main aspect of the Threat analysis is the competition. The analysis of what competitors are selling, how they are selling it, whether or not they are selling it effectively and

profitably and how your product or service differentiates from theirs is a crucial way to know how to attract more customers to your organization. In the case of The Walt Disney Company and the theme park industry there are many competitors, such as Paramount Parks, Universal Studios and Six Flags Theme Parks, as mentioned earlier. However, there are many other less visible competitors that one might not naturally think of when assessing the competitive market in which Disney deals. For example, there are hundreds of water parks and various funplexes that can also be considered as cheaper or more valuable competition for Disney. Competition, in any form, can diminish Disney s market share in the entertainment industry.

Threats
o
According to Danjel Lessard and Lauren Northcutt, a major threat to Walt Disney World is the competition of other resort and theme parks such as Universal Studios, which is also located in Orlando. In addition to competitors in its geographic area, Walt Disney World risks losing customers to the many theme parks that are opening throughout the United States and the rest of the world. These theme parks have the potential to steal away visitors who might otherwise make the trip to Walt Disney World.
2. Threats

* * * * * * * * * * * *

Piracy in movie industry Competitors: National, Regional & Global Employee Retention Highly Demanding in terms of Sales, Creativity and Innovation Unprofitable or hasty acquisition Brand Consistency Product Differentiation Lawsuits Terrorism Natural Disasters Change in the younger generation's preferences Regulations

[list] [*] Competitors: National, Regional & Global [*] Employee Retention [*] Highly Demanding in terms of Sales, Creativity and Innovation [*] Unprofitable or hasty acquisition [*] Brand Consistency [*] Product Differentiation

Threats