Walt Disney Case Study: Cultural Challenges And Threats
By the power of storytelling, innovation, and creative minds The Walt Company is famous for its entertainment and inspiration for people over worldwide. Previously, it was known as the Disney brother’s studio whose vision was to provide entertainment through 2D cartoons. The company was established in the year 1923. It is one of the fastest-growing companies among International entertainment companies. It has five different sections including Studio entertainment, Media networks, park and resorts, interactive media and direct to customers, etc. The Disney Land was started in the year 1995 which was launched by The Walt Disney, it is a colorful place where different cartoon characters are found. The company is going through several issues, one of its severe issues is about the maintenance of status which they achieved from the last 10 years. They have to maintain that high level of status in the industry. This includes the two case study which deals about the two challenges that are faced by the Walt Disney Company in the management of the strategies. The company has also faced several competition in the market.
2.0 1st strategic issue
The Walt Disney Company was facing several strategic issues in the market as said by Roper el at. It is being determined that Walt Disney can be pulled off easily from the market and the other competitive companies in the market are taking advantage of the weakness of Walt Disney throughout their strategic management. For a successful company like Walt Disney, these kinds of issues are not a big issue for them. The Walt Disney Company always maintained its technology and quality. When the other competitive companies were providing the sports program at a lower price, Walt Disney didn’t pay attention to them and focussed to maintain their quality in the market. This is one of the reasons where Disney lost most of the youth. Walt Disney also faced several challenges from the companies which were very strong and powerful in the industry. The main focus of Walt Disney is to provide the entertainment and the programs according to the customers' tastes and if the company does not focusses on the changed people’s taste then it may lead to the downfall of the company. To make the company and their brand as the first choice of the customers they need to manage and determine the taste of the customers and according to that serve them the content which should be interesting for them. Walt Disney has achieved several motivational responses from their customers. It also faced some criticism in the market. So, changes were made by the company to attract more customers towards them. The positive thought and the goal of changes of Disney were turned into critics in the market. The feedback that the company got was not pleasant for them. Some complained that the company is presenting the irrelevant program for them and Walt Disney also suffered from their high price of the program and content in the market. The major challenge or threat for the Disney Company was that the other competitive companies in the market were successfully presenting interesting programs to the customers at a comparatively low price in the market. The positive changes that were brought up by Disney were changing into critics in the market. Walt Disney was facing a very hard time to pace with the market and to maintain a good position by focusing on the needs and taste of customers.
2.1 Issue statement
The famous company The Walt Disney is located in America as per the sayings of Massetti et al. For every adult, all Disney characters are part of their childhood. It is one of the famous companies worldwide. The reason for its success is the effective use of external environment during their program. It used to affect the external environment present outside the company. The different Disney characters including the king, queen, prince, and princess were loved to experience by the children. The programs were interesting so much that the people never get bored. The different characters and cartoon’s costumes are easily worn by the Disney people to provide entertainment. The other competitive companies in the market help Disney to grow better and improve themselves to become the best company in the market. The well-known and very famous symbol of Disney is the Mickey Mouse.
The company has to set proper external goals that will help them to strengthen and promote their characters, movies, and cartoons to the customers. Walt Disney started to plan according to the choice and preference of the customers. They collected several feedback of their cartoons and movies to evaluate their updated changes and to check whether they pace with the requirements of the customers or not.
The strength and weaknesses were part of the internal environment of the company. The company faces various internal weaknesses and strength which leads to the emergence of critics in the competitive market. The multinational corporation Disney is well-known for its hierarchy and the workforce principles carried out by it. Disney is the largest global company which have adopted several backgrounds in their programs. Disney has an ample of resources which they have used to balance their power and maintain a hierarchical structure. The company faces several problems and issues as said by DeMicco et al. It has to face the issue of the price of the products and it also faced several problems regarding competition in the market. The number of subscribers in ESPN is reduced. As Disney started to lose its customers it was creating criticism in the market which was challenging for the company.
External environment: opportunities and threats
- Opportunities: The opportunities are determined through swot analysis as said by McCoskey et al. The opportunities are included in the external strategies that increase the revenue of the company in the market. The following listed opportunities should be focussed by the Disney company:
- Growth in different industries.
- Growth in the developing market.
- Growth in the technological innovative ideas.
There were many options available to the Disney Company to adopt the latest technological innovations. The innovation of digital technologies is used for the improvement of the business. For a proper manageable approached business, the company ties up with the other companies in several industries to enhance their growth in the market. The increased growth of market growth helps the company to have an important factor that can create several opportunities for them to develop their business in the market. The revenue can be enhanced by expanding and innovating the company over the other competitive companies in the market.
Threats: Through the swot analysis, the threats can be identified which are required to be handled well by the company. Following are some threats towards the business in the market:
- Privacy of the content.
- Disruption in technology.
- Digital competition in the market.
The movies that are offered by Walt Disney are similar to the movies that are provided by the Disney Marvel Studio. The profit of Walt Disney Company is reduced due to technological disruption in the company. The revenue of the company is also reduced due to Digital Piracy. A proper application of SWOT analysis is required to get all the advantages of technological disruption and piracy in the company.
Internal environment: strength and weakness
Strength: The strength of the company is to protect the business from the issues and problems that will arise in the future. The internal factors are strengthened in SWOT analysis which helps to enhance the business and supports the management of the company that helps to grow the business in the future. Following are some strengths that Walt Disney Company uses to get some strength:
- A strong cooperative growth
- Strong and a popular brand
- A great portfolio includes popular products
A well-known popular brand Disney should use popular products to build its strong portfolio that can strengthen the growing power of the company in the market. The company is trying best to get the highest popularity in the public through several cartoon and movie characters. This is a huge strength of the company in the market.
Weakness: The weakness of the Disney Company is a case studied through the swot analysis method that leads to the downfall of the growth of the company. It affects business growth and development in the market. Following are some weakness of the company that is required to be focussed on:
- Limited innovation.
- Limited diversification.
- Limited expansion of parks.
The weakness of the Walt Disney Company was identified through swot analysis. The company needs to innovate its product for its popularity. Continuous development will enhance the progress of the company in the market. The company has faced various reactive approaches while adopting technology rather than facing an aggressive approach. The different types of parks need to be innovated and focussed on the expansion. One of the weaknesses of Disney is the limited expansion of the park. The Disney Company mainly focusses on the features and qualities of the carried out innovation. As said by Koontz et al. a limited version of diversification is also a great weakness for the company Disney.
Corporate culture: The American culture is related to Business corporate. As said by Xiaoli et al. a business can be successful if it has a corporate culture inbuilt in them to have the power of improving the performance and the profit of the company. The growth strategy is managed and controlled through a corporate culture where the opportunities are also supported to manage the corporation growth in the industry. As Li et al. said, various latest innovation motivates the company to have the products with new technology and match the latest trends of the various industry.
It is highly recommended that the Disney company case study needs to be focussed on the improvement of completeness in the company and it should get success over the other international companies. The issues are required to be focussed. The innovations are needed to be increased with a brand name to keep pace with the competition. As said by Edwards et al. the company should focus the missions and the vision set by it to understand and identify all the threats and issues related to it. The taste and the preference of the customers should be understood well to execute the cartoon and movie characters. This can be carried out by taking proper feedback from the customers or the consumers in the market. The Disney Company is required to buy a cheap system to adopt several operations as other companies have done to reduce the cost of the same quality product in the market. By reducing the price of the product the company will get back the maintained customer which was lost in the competition. The organizational culture is required to be developed. It can be done by supporting the family orientation of the company which is deviated from the market. This kind of flexibility helps to enhance the international position of the company in the market. As people are focusing on the internet so Disney can expand their business by taking this advantage of the internet.
3.0 2nd Strategic Issue
As said by Pelletier-Gagnon et al. the Disney Company faced many huge challenges that affected the formulation of strategy in the process. One of the major problems of Walt Disney is the decreasing number of customers for their network of programs. The number of customers decreased from 100 million to 92 million from the year 2010 to 2015. The decrease in the number of subscribers shows a fall of 2% over 5 years which is a major decline for Walt Disney from the market of the program. The revenue of the media network plans is also reduced in certain years. As the words of Brito et al. said, the income of operation of the company also reduced to 4% of the total income. Due to less advertisement revenue for the company, there is a poor number of customers of ESPN. Now, the Disney Company takes the help of the Star Wars box office for its upbringing in the entertainment section of the market. This a major issue of the network that is required to be deal with. Most of the companies are required to change their TV services to internet services. One of the major issues faced by Disney Company is the decreasing number of subscribers for the ESPN channel. As Aleong et al. said, the number of customers was much higher before the years compared to today’s recent years. There is a major fall in the number of customers for Disney Company. The entertainment and sports network program is left with very few numbers of customers for it in the market. This problem is faced by a particular company because it is not using and applying the latest technologies that the other competitors are using for their program in the market. The other competitors of Disney Company are using the latest technology to provide expensive programs and services to the customers. These services are comparatively flexible for the customers as the same sports or the program is easily accessed by the customer at the internet platform with a very low costing compared to TV. During the adoption of new technologies, the companies generally face several challenges that are required to be adopted with the new technologies because Disney Company only focusses on the quality of the product rather than focusing on the recent trend and preference of the subscribers.
3.1 Issue statement
As earlier said by Warrick et al. through the fundamental practice and knowledge of the Walt Disney Company it can be differentiated with the other competitors in the market. The Disney Company always follows a clear strategy for the corporate sector where it contributes success and importance is given to the brand name. The main goal of the company is to go with the production of magical and exclusive products in the market. One of the major problems that are faced by Walt Disney is the decrement in the number of subscribers for their program. In recent years there is a huge decrement of subscribers to the network named ESPN. The company is also facing problems in adopting some new technologies for the program. The Disney Company is aware of the levels of hierarchy that is adapted by the corporate culture to know the principles of the program in the market. It has been adopted from different backgrounds. The Disney Company is one of the Global Company that is required to be changed into internet services. One of the major things that it should follow is the management of subscribers for their programs as it has been reduced from a certain number of years. The other potential of Disney should be enhanced by creating direct subscribers from the international market. The issues are faced by the company due to several technical problems in the competitive market.
3.2 Analysis of issues
Trend analysis: In the year 2014, the total percentage of gross domestic was found as 4% which reduced to 3% in recent years. As the unemployment rate reduced to 9% the income of the company increased to 9% in the recent 10-15 years. The subscriber spending also increased by the rate of 3% in the market. The total state spending of the company was about 3.2% to 4.8% globally for the domestic product in the market.
Swot analysis: The analysis helps a company to identify the internal factors for the strategy that are required to be strengthened to recover their strength and weakness over the other factors like the threat and opportunities. The internal and external environment can be identified through SWOT analysis.
Strength: The Company’s strength can be identified by determining the internal factor of the organization. The company has achieved a huge popularity ratio from the public in the market. It is one of the important strengths of Disney Company. The company has a good image in the eyes of the public where it also has a flow of cash over the other projects to expand its new upcoming projects in the competitive market. The programs and the services of the companies have reached a large distribution of customers. The company aims to invest in the resources that are required while developing and training processes. The brand of the company is very important to Disney as it helps to motivate them to invent some new products with the preference of customers. The products that require new technology should be strongly brought up in the market to have a strong and brand portfolio. It is the strength of the company as it promotes the product of the company and the customer gain maximum of the benefits from it with their services and programs.
Weakness: According to O’Toole et al. the swot analysis model is used to determine several weaknesses of the company. The Disney World includes a very high cost of structure with a high attrition rate where Disney spend more money than its other competitor over it. The development and training program needs a high rate of cost which is paced by the company. In today’s time, the company is required to use its cash in a better manner to present its way of representing programs in the market. The opportunities are reducing for the company. As Isabella et al. said, Disney Company is focussing on the quality of its programs and movies which is increasing the cost of the program in the market. It is an important factor in the process of innovation. As Voigt et el. said, the company should have relevant programs and movies with interesting characters that can pace with the preference of the customers.
Opportunities: As said by Smagorinsky et al. the swot analysis can be used for the identification of the external models of the factors that are applied for a company to carry its identification process. The opportunities are also identified through this process of development in the company. As said by Kelleher et al. the Disney Company has received many great opportunities for the expansion process. The transportation costing decreases because of the resultant of reduced shipping charges. The company can earn a margin of profit from the consumers to have again in the market shares. The latest technology present in the market helps the company to expand its revenue over the new products. The Disney Company once invested in online internet streaming where it realized the needs of the customers and their preference over it.
Threats: The trades of the company can easily be analyzed through swot analysis. The company is required to be aware of the several threats that a healthy company can experience. As said by Van de Vijver et al. it is important for the company to adopt the latest technology to compete with the threats of industry. One of the threats for the company can be the rising of raw materials in the market. The competitors are successful in making a substitute for the products of Disney at a comparatively lower budget. Technological disruption should be handled care off. It can reduce the profit of the company in the market. The characters or the movies or the programs produced by Disney can easily be shown by the competitors of the market at a lower cost than the Disney Company. It is one of the major and famous companies that required a large capital to enter the market but their competitors have entered the market in a lower capital as compared to the Disney Company.
· The Disney Company case study highly recommend to have a proper strategy that can reduce the expenses of the production of the products and characters of the company in the market. This will help to reduce the price of the product. It will lead the company to provide a low-quality product that can be assumed at a lower cost. It will result in the decrement of customers as they are concerned with the quality product rather than the price of it.
· The company is required to maintain quality and affordable programs for customers. It will help to maintain the position of the company in the market. It will also expand business opportunities.
· The characters and the cartons are required to be as per the preference and taste of the customers to draw interest over it. The choices of the customers may change. If the characters are not being liked by the customers then there will a decline of the company as the customers will not buy the product further which leads to the loss.
· The case study is required to predict the reaction and feedback of customers after introducing the new characters in the market. The feedback is important to know about the customer. It will help to understand the preference so the customers. By reducing the cost customers can be earned back but the moral values cannot be given at cheap prices.
· Different kinds of products and programs should be produced to remain stable in the market. It should earn popularity through innovative and educational products that will provide entertainment to customers. The Disney Company is required to make proper and relevant decisions to expand the strategies to get the desired aim of the company in the competitive market.
From this, we can conclude that as Disney was established in the year 1923, it is a strong, big and popular company in the market. The innovation was started to provide 2D characters o the customers in the form of classical entertainment. It is one of the major leading companies in the entertainment market. It has faced several issues. From the case study of Disney Company, it can be concluded that the company has faced several numbers of issues and problems. Two strategic issues are explained with the report. The company has also faced criticism from the market. It has faced several motivating responses with severe competition in the market. The report has also explained all the internal and external factors of the environment of the Company. Internal environment states the strengths and the weaknesses of the company that faces critics from the market whereas the external environment includes the feedback of the customers about the programs and characters. The external factors include the external effect of the company. Swot analysis is used to identify the external and internal factors of the company which is elaborately explained in the case study. The company needs to face challenges during the formation of strategy. The assignment of Walt Disney Case study is being prepared by the expert of ABC assignment help and provides you the reliable and best service.