The Walt Disney Company : Competition and Strengths
The Walt Disney Company (company analysis)
The purpose of this report is to analyse the popular company The Walt Disney Company, particularly with respect to its competition and strengths and criticism.
The Walt Disney Company was founded in 1923 and since then, the company has registered tremendous growth not only in terms of key financial numbers but also in terms of its global presence and huge brand recognition amongst the audiences. The company enjoys tremendous fan following of people who are very loyal and diehard fans of the company products.
The year 2017 registered a slight decline in the Walt Disney Company’s financial numbers which can be attributed go seasonality, overall economic sentiment and also to the timing of release of its movies.
While the company stands strong, it also faces controversies and criticism regarding content presented in various formats, especially the animated movies targeted at the children.
All these aspects will be discussed in this report.
The following pages discuss the Walt Disney Company that operates in the mass media and entertainment industry.
According to the US Department of Commerce, this industry reached $1.9 trillion revenues level as of 2016 and the expected revenue value for 2017 stands close to $2.0trillion. The main segments from which revenue is drawn are depicted in following chart:
Source: M&E Market Share, PwC
The report lists the top 10 companies in the industry as of 2017 as follows:
Source: M&E Market Share, PwC
The report also discusses emerging trends in the industry that include increasing hold of piracy, interactive devices, augmented and virtual reality, eSports etc.
Headquartered in California, the Walt Disney Company (NYSE: DIS) is a public company that was founded by two brothers, Walt Disney and Roy Disney in 1923. Popularly, the company is known as ‘Walt Disney’ or ‘Disney’. The company is one of the largest Multimedia and Entertainment Company in the world. The company is currently headed by Robert Iger who is the Chairman of the Board and also the Chief Executive Officer (Company Annual Report, 2017).
As of September, 2018, the company had a market capitalization of $162.8 billion. The company is amongst Top 100 Fortune companies (ycharts.com, 2018).
The company reported revenue of $55.1 million for the year ending September, 2017, a decline of around 1 per cent from previous year. The following chart depicts revenue for past five years:
Source: Hoovers, 2018
The company’s business segments consist of following (Company Annual Report, 2017):
- Media Networks: This segment accounts for various television and distribution networks, radio networks, broadcast operations, etc. These include the well-known ESPN, Disney, ABC Television network, Freeform apart from many others. The company has various competitors in this segment including whoever competes for similar audiences.
- Parks & Resorts: The Company is popular for its theme adventure parks and resorts operating around the world. Some of them are completely owned by the company while some of these have effective ownership interests of the company. These include Magic Kingdom, Animal Kingdom, Epcot, Hollywood Studios, Cruise Lines, Hotels/Clubs/Resorts etc. The company faces competition from various entertainment/recreation and tourism providing companies.
- Studio Entertainment: This segment refers to various live performances, animated motion pictures, musical recordings and stage plays. This includes distribution to Walt Disney Pictures, Pixar, Marvel, Touchstone, Dreamworks etc. Again, the competitors include any company that provides entertainment and recreation.
- Consumer Products & Interactive Media: This segment refers to licensing of characters, content etc., retail merchandise, games and applications, books and comics, etc. The competitors include those providing characters, content, merchandise for sale, comic books etc.
Following chart provides revenue and operating income for the year ending 2017:
Source: Annual Report, 2017
As seen above, the Walt Disney Company has diverse operating segments that have expanded since the founding of the company in 1923. The company’s empire and footprint is massive in the media and entertainment industry. Due to this, the company has large number of diverse competitors.
Some of the major competitors include Time Warner Company, 21st Century Fox, Sony, Comcast and Viacom. As can be seen from the names, the main segment being competed includes motion pictures, TV, cable and other media markets, video games etc.
The competitors in theme park segment include Six Flags Entertainment, Cedar Fair, Universal Studios and Comcast etc. (Investopedia, 2018).
Strengths of the Company
As seen above the Walt Disney Company’s footprint is unmistakable in the mass media and entertainment industry and this is one of the biggest strengths of the company. The company enjoys huge popularity and tremendous fan following in each of the segments. The brand awareness and brand recognition is tremendous and the company reaps its benefits continuously.
One of the largest assets of the company includes its vastly popular characters such as Mickey Mouse, Goofy, and Donald Duck etc. These are the largest revenue generators and provide the company a strong base to expand. These can be said to be the pillars of the company due to their easy recognition and popularity.
Criticisms of the Company
The Walt Disney Company’s movies enjoy large fan following that is equal among children and adults. However, the movies have been frequently accused of depicting racism and inappropriate hidden messages in the animation. Most of the claims have been unfounded but this is not to say that the content is totally free from racism. Some of the most common examples include ‘The Native Americans’ from Peter Pan, ‘The Siamese Cats’ from Lady and the Tramp etc. However, one of the most controversial racist depictions is the black centaur from Fantasia. Sometimes, it is rumoured that Walt Disney himself was quite racist and that is what has carried through the company culture as well.
Further, the company is also accused of distorting historical facts and stories to make them ‘child friendly’. However, this leads to distortion of facts in the young brains which may not be desirable. Further, the fairy tales and princess stories represent females in shallow roles which pertain to physical beauty and affection from the prince. The characters are frequently unrealistic and shallow. This makes them inappropriate role model for the young brains.
The company is also criticised multiple times to have been against hiring women in creative positions and thereby discriminating gender policies in the company (Figueroa, 2018).
Conclusion & Recommendation
As seen above, The Walt Disney Company is one of the largest mass-media and Entertainment Company in the world with tremendous value and market capitalization. The brand value and brand recognition is very high with ardent fan following of various products of the company. The company has different business operation segments and different competitors for each segment.
The company has witnessed growth since inception and continues to grow organically as well as through various acquisitions such as Marvel that contribute to its growth in an important way.
While the company stays strong, it is not free from controversies regarding the content, especially that of the films that hint towards racist attitude, inappropriate role models for the young brains and subliminal messaging.
However, the company has been listening to the feedback and trying to correct many of the flaws. For example, strong female characters in films such as, ‘Moana’, trying to make characters realistic as far as possible, etc.
The company stands strong despite minor controversies and future outlook also looks positive.