Walt Disney Culture Case Study: Challenges And Threats Faced
Task: This report is based on the case study provided in “Reawakening the Magic: Bob Iger and the Walt Disney Company” and has found two major issues. One of the issues must be from your Part A submission. The report will present and analyse the two issues in depth and provide a set of recommendations using the support from peer reviewed journal articles.
The Walt Disney Company is known for entertaining people and inspiring them through the power of their storytelling, creative minds and innovative technology throughout the world. It was founded in 1923, and was known as the Disney brother’s studio. But before opening the Disney Brothers Studio, Walt Disney worked in many places as an animator and illustrator in Kansas. As mentioned by Friedman et al. (2016), the Walt Disney Company started with the main vision to provide classical entertainments in the form of 2D cartoons. The Walt Disney Company is a leading international family entertainment along with five business sections: Studio entertainment, direct to customers, interactive media, park and resorts and, Media networks, etc. In 1955 Walt Disney launched Disney land in Anaheim, California and it quickly became one of the best places where different cartoon characters could be seen. The Walt Disney Company has faced many issues over the years. The main issue faced by them is that they will be able to maintain their high level of status which they have gained over last few decades. In this Walt Disney culture case study the two challenges and all issues which have been faced by the Walt Disney Company have been discussed.
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2.0 1st strategic issue
As mentioned by Roper et al. (2016), the Walt Disney Company has experienced different strategic issues. The strategic management has determined that its competitors are taking advantages of its weakness and can easily pull the Walt Disney Company behind in the market. When its competitors found a better way to provide sports program at a very low price to the consumer, the Walt Disney Company did not pay attention to keep up with this technology. This is the main reason Disney lost a majority of its youth audience. The Walt Disney Company also faces challenges from its competitors who have strong presence in the market. The Walt Disney Company has focused on providing entertainment programs according to the taste and preference of the customers if the company’s management does not focus on the changes in the taste of the customers then it will easily lead to its downfall. It is the duty of the company to determine its customers taste and preferences to make its brand more interesting. Disney has faced a lot of criticism in the market along with that it also faced motivating response. The company started making changes to attract a large number of customers which may be achieved or can never be achieved. Disney realized that the positive thought have turned into critics. The company got clear message from the people that the company had started to release irrelevant program. The company also faces challenges regarding price of its products. The competitors of Disney are providing the products and programs to the public at very low price comparing to the cost of product of the company and they can act as threat for the Disney Company. Disney did not focus on maintaining the technology and new strategies. The positive changes made by the management of the Walt Disney Company have been transformed from positive to a criticism. This was a very hard time for Disney to maintain their status more specifically maintaining a good position in the market along with the constant focus on tastes and preference of the customers.
2.1 Issue statement
According to Massetti et al. (2016), Disney is located in America and is a well-known company. Disney characters have played a significant role as an influence and entertaining figure in the lives of most adults these days. This is one of the most famous companies in the world and the reason behind this is it has used its external environment effectively to achieve its goal. External environment are event of outside a company which can easily affect an environment. All children love the experience to be a princess or queen and king or a prince. The people who visit Disney land are never bored. Disney land allows visitors to meet their favourite Disney characters, be it animated or live action. The company has many competitors. The competitors of the company enable them to improve and get better and better. Mickey mouse has been characterised as the unofficial mascot of the Disney company for decades.
The company also wants to promote more characters, cartoons and movies. For this they have to analyse all the external factors to set new goals. The management of Disney also started planning according to the needs of the customers and according to their feedback after watching the cartoons and movies to achieve the goals.
Internal environment of the company include strength and weakness. Disney is a multinational corporation facing internal weakness and strength. Internal environment of Disney totally enclosed its strength and weakness with which the company has faced much criticism. The corporate culture of Disney circulates at all the levels of hierarchy and its workforce is aware of its principles. It has adopted different backgrounds. It is one of the largest multinational companies. It has generic hierarchical structure and also has a maintained balance of power and additionally it has a large amount of resources. As opined by DeMicco et al. (2016), the company faces challenges regarding price of its products and also faces a strong competition in the market. Disney has started losing a good number of subscribers for ESPN. The company faced much criticism in the market along with that it also experiences motivating response.
External environment: Opportunities and Threats
Opportunities: According to McCoskey et al. (2018), these opportunities can be determined through the SWOT analysis. In Disney opportunities are the external strategies factors which lead to increase revenue. The Walt Disney Company needs to focus on the following opportunities:
- growth in various industries
- growth of developing market
- technological innovation
The Walt Disney Company got an opportunity to adopt all the new technologies for example digital technologies for improvement of the business. The Walt Disney Company also got an opportunity of growth in various industry which leads to grow its business through the managerial approaches. The growth of developing market is an important factor which also creates an opportunity for the company to develop their business into the market. Through expansion, innovation and diversification the company can grow its revenue.
Threats: The threats have been identified through the SWOT analysis. The Walt Disney company management needs to handle the following threats towards business:
- Competition- digital
- content piracy
- technological disruption
The competitors of the Walt Disney Company offer movies which are similar to the ones provided by the Disney-Marvel studio. Technological disruptions present in the Walt Disney Company and can reduce the profit of the company. Digital piracy reduces the revenue of the company. The Walt Disney Company needs to apply SWOT analysis increase its advantages against technological disruption and piracy.
Internal environment: strength and weakness
Strength: Strength of the business protects the company from the problem in future. In SWOT analysis the internal factor strengthen the growth of the business by supporting the strategies of management which leads to grow the business. The following are the strength which gives strength to the Walt Disney Company:
- Grand portfolio of popular products
- popular and strong brand
- strong cooperative growth
Disney is a very popular brand all over the world. The portfolio of popular products is growing and this is one of the important strength of the business. The company's movies, programs, amusement park, cartoon characters and services are increasing. As opined by Holcomb et al. (2017), the company has gained high popularity from the public. This is one of the most important strengths of the company.
Weakness: The SWOT analysis given in this Walt Disney case study determines the weakness of the Walt Disney Company which leads to downfall of the company and can affect the business growth and development. The following are the weakness of the company on which the Disney needs to focus:
The Walt Disney Company has faced many weaknesses which have been identified by the swot analysis the company have many limited innovations the company needs to innovate continuously for the development of the product. In adopting new technologies the company has faced reactive approaches instead of aggressive approach. The company needs to focus on expansion of its amusement park and all other different types of park. Limited expansion of park is a weakness for Disney. According to Koontz et al. (2019), the company has focused on quality of product and features instead of focusing on continuous innovations. Limited diversification is also a weakness which has been identified during this analysis of Disney.
Corporate culture: Business corporate culture is related to American culture. According to Xiaoli et al. (2019), the business is successful because it has a corporate culture that gives power to the employee to improve their performance and profit of the company. The corporate culture gives support in managing the growth strategy and opportunities to the corporation. As per Li et al. (2018), this culture puts emphasis on the innovations which motivates the company to develop its product which matches with the new technologies and trends in the entertainment industry, mass media industry and in the amusement parks and resorts industry.
It is recommended in this Walt Disney case study that the company needs to focus on improving the competitiveness it needs to focus on how to get success in the international markets and it also needs to focus and resolve all the issues associated with the organisation. It is recommended that the company needs to continue its innovations to increase its brand image in the market and to stay in the competition. As per Edwards et al. (2018), the company needs to focus on its mission and vision and also needs to identify threats. The company should release movies and characters according to the taste and preferences of the consumer and after getting their feedback. It is recommended in this Walt Disney case study that the company needs to buy the cheapest system which has been adopted by the company, means to adopt any operation so that it reduces the price with the same quality. Reducing price with the same quality help the company to maintain its customers and will bring back those customers which have been lost to competitors. The company needs to improve its organizational culture by providing support for deviation from family orientation. This support allows the company flexibility in some part of the international market. People are focusing on internet more than TV this is the opportunity for Disney to expand its market. The company could be doing better by considering the share from acquisitions and by considering the slow growth of the divisions which includes ABC.
3.0 2nd Strategic Issue
As opined by Pelletier-Gagnon et al. (2017), the Walt Disney Company faces many challenges in formulation of strategy. The biggest problem the Walt Disney Company has been facing in recent year is decreasing in subscribers to its network, ESPN. In 2010 it had 100 million subscribers, the figure dropped in 2015 to 92 million. This shows the decline of the Walt Disney Company and its revenue in media network parts fell by 2% year over year in 2017. According to Brito et al. (2018), its operating income also decreased by 4%. Star wars franchise and box office help the studio entertainment section bring Disney back in the game. This represents a major problem that networks needs to deal with. The company needs to convert TV to internet services. One of the important strategic issues that the world Disney has been facing is it losing a good number of subscribers in the ESPN. As per Aleong et al. (2018), when the company began its journey it had more number of customers compared to the recent years. It is holding very few customers in entertainment program and sports program network. The company is facing this issue because it is not applying the new technologies which have been applied by its competitors that is the reason it is facing a tough competition in the market. The company faces challenges in adopting the new technologies, competitors of the company has already adopted the new technologies but the Walt Disney Company has focused more on providing quality product and in making strategy instead of focusing on the recent trend and taste and preference of the consumer.
3.1 Issue statement
According to Warrick et al. (2017), the Walt Disney Company can be differentiated by its fundamental practice and knowledge. Disney has a clear corporate strategy which has been contributed to the success of the company and gives importance to its brand image. The company's strategy is to make exclusive and magical products. The biggest problem the Walt Disney Company has been facing in recent year is decreasing number of subscribers for their ESPN network. The company faces challenges in adopting the new technologies. The corporate culture of the Disney circulates at all the level of hierarchy and its workforce is aware of its principles. it has adopted different backgrounds. It is one of the largest multinational companies in the world. The company needs to convert TV to internet services. Disney has announced a creation of direct customer in international unit. The company is facing this issue because it is not applying the new technologies which have been applied by its competitors and it is one of the reasons for the growing competition in the market.
3.2 Analysis on issues
Trend analysis: In trend analysis in 2014 the gross domestic product was 4% and next 5 years it became 3%. The unemployment rate had decreased by 9%. Disposable income of the company increased by 9% in next 10 years and in 2013 its consumer spending increased up by 5%. State spending went up globally 3.2% - 4.6 % of gross domestic product (McCoskey et al., 2018).
Swot analysis: SWOT analysis model helps an organization in identifying the internal strategic factors such as strength and weakness and external strategic factors such as opportunities and threats. The Walt Disney Company has applied SWOT analysis model to identify its internal and external environmental factors.
Strength: The strength of the company can be identified by the SWOT analysis which has been applied to determine the internal factor of the organization. The company has gained high popularity from the public. This is one of the most important strength of the company. The brand of the company has a very great image in the eye of the public. The Walt Disney Company has strong cash flow which helps the company to expand its new projects. The company has a lot of products and services and has developed a large distribution network. Company invested resources in the development and training process of the employee and the workers .the brand of the company is very important and the company wants to introduce new innovative products in the market in this the strong brand portfolio is very important. It is also one of the strength of the company because they only promote the product of the company which the customer look for and can gain maximum benefits out of the products and services.
Weakness: According to O’Toole et al. (2016), the SWOT analysis model has been applied by the organization to determine the weakness of the company. The Walt Disney Company has high cost structure and has high attrition rate and it needs to invest a lot of money compared to its competitors in development and training programs of the employees. The current asset ratio represents that the company needs to use its cash in a better manner the way it's doing at present. Due to high rate of its product it's losing its opportunities. As per Isabella et al. (2017), the Walt Disney Company is focusing on quality of the goods not on the rising price which is not good for demand forecasting. The most important factor which can lead to downfall of the company is its inability to adopt continuous innovation. In the viewpoint of Voigt et al. (2017), the company is releasing irrelevant programs and characters which public does not like. The company needs a large amount of capital in executing an innovation and entertaining and development program of its employees.
Opportunities: According to Smagorinsky et al. (2016), the swot analysis model has been used to identify the external factors and the model has been applied by the company to identify the opportunity so that the company can attain those opportunities for its development. As opined by Kelleher et al. (2016), the Walt Disney Company has got many opportunities in expansion of its business. The cost of transportation decreases because of less shipping price and this is an opportunity for the Walt Disney Company’s products by which the company can earn profit and can provide benefit to its consumers to gain market share. New trends and technologies in the market is an opportunity for the company to expand its business by building new revenue stream in their new products. The Walt Disney Company also invested money in online streaming through this the company gets to know more about the needs of the customer. The government free trade agreement and deduction of new technology also provide an opportunity to the Walt Disney Company to enter into a new market (Haslanger et al. 2019).
Threats: SWOT analysis tool has been used to identify the threats of the company. This is important for the advancement of the company to be aware about the threats in the market. In the viewpoint of Van de Vijver et al. (2016), the new technology which has been adopted by the competitors can be a threat to the industry. Rising price of raw materials can also be a threat to the profit of Walt Disney Company. The competitors of the world Disney Company can easily make substitute of the products provided by the Disney. Technological disruptions present in the Walt Disney Company and can reduce the profit of the company. The games, movies and characters which have been produced by the Walt Disney Company can easily be shown by the competitors at a less cost comparing to the Disney's cost. The Walt Disney Company is a very popular company and need a large amount of capital to enter into a market but its competitors has the advantages that they can easily enter into the market with a low capital.
- This case study of Walt Disney Company recommends that the company should make a strategy which reduces the expenses during the production of their products in order to decrease the price of the product. This will enable the company to provide a quality product to their consumer at a very low price. If the company provides low quality products to the consumers then it will lose its consumers who give value to quality products rather than price.
- The company needs to maintain the quality along with an affordable price. This way the company will be able to maintain its position in the market and it will continuously get new opportunities to expand its business. As opined by de Aguillar Pinho et al. (2017), it has been recommend to the company to find out alternative strategy.
- The company needs to release the cartoons and characters according to the interest and preference of the consumers because the interest of the audience may change. If the consumers do not like the characters and entertainment films then there will be a decline in income of the company and customer will not purchase the product.
- It is recommended in this case study of Walt Disney Company that the company needs to predict the reaction of the public introducing the new characters before releasing it. The feedback and response from the customer will help the company to understand their interest.
- The company should produce different types of products in order to remain stable in the market. The company should attract the market through their innovative and educational product which is easy rather than providing entertainment forms of products. The management of the Walt Disney Company needs to make relevant decisions for the expansion of the strategies to achieve the goal of the company.
The Walt Disney Company was established in 1923 and it is a very popular company and a strong company. They started the Walt Disney Company to provide classical entertainments in the form of 2D cartoons. The Walt Disney Company is a leading International family entertainment conglomerate. The Walt Disney Company has faced many issues. Two main strategic issues have been explain in the above report. Disney has faced much criticism in the market along with that it also faces motivating response and has faced tough competition. The external and internal environment of the company has been explained in the above report. External environment are events outside a company which can easily affect the internal environment. Internal environment of the Walt Disney Company includes its strength and weakness with which the company has faced a lot of criticism. The SWOT analysis has been explained to identify the internal and external factors of the organization. In the above Walt Disney case study. The Walt Disney Company faces many challenges in formulation of strategy. It has been evaluated that the trend analysis and SWOT analysis is very important tool which has been used to analyse the different factors of the organization and recommendations has been made which is very important for the company to adopt. The company should focus on the recommendations made in the above case study of the Walt Disney Company. Walt Disney case study assignments are being prepared by our management assignment help experts from top universities which let us to provide you a reliable assignment help online service.
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Appendix 1: Walt Disney Revenue
Appendix 2: Earning history OF Walt Disney Company
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