The Walt Disney Company’s position as one of the world’s leading entertainment, mass media, and tourism firms is achieved through business strengths that address weaknesses, opportunities, and threats, as presented in this SWOT analysis. This entertainment and hospitality business analysis case illustrates the successful management of issues noted in the internal analysis of strengths and weaknesses (internal strategic factors) and the external analysis of opportunities and threats (external strategic factors), based on the SWOT analysis model. Such success leads to the satisfaction of Disney’s corporate mission statement and corporate vision statement, and a strong position in the international market. The SWOT factors in this case focus on issues linked to the family-oriented entertainment branding of the business.Also, the external and internal factors indicate the need for strategies for international business competition, which is a major external force determined in the Porter’s Five Forces analysis of The Walt Disney Company. Despite the issues described in this SWOT analysis, the amusement park corporation’s current strategies enable the business to grow and offer competitive products.
This SWOT analysis of Disney sheds light on the issues that investors and management personnel must take into account when evaluating the business. The mass media and entertainment conglomerate’s strengths and weaknesses (internal factors) must suit the opportunities and threats (external factors) in its international industries. The trends and market conditions outlined in the PESTEL/PESTLE analysis of The Walt Disney Company also relate to the external analysis (opportunities and threats) shown in this SWOT analysis.
Disney’s Strengths (Internal Strategic Factors)
Strengths allow the company to flourish despite opposing competitive forces from firms like Sony, Universal Pictures (a subsidiary of NBCUniversal, which is owned by Comcast), and Warner Bros. Discovery. In the SWOT analysis model, strengths refer to the internal factors or business characteristics that support the positive performance of the tourism, entertainment, and media streaming business. The following internal factors are Disney’s strengths:
- One of the world’s most valuable brands
- Growing portfolio of popular products
- Strong cooperative growth among business segments
Disney has a popular and strong brand, which is among the most recognizable in the world. Through this strength, the company presents itself as a family-oriented entertainment business suitable for all customers. The SWOT analysis identifies this internal factor as a contributor to growth and success, including success in managing customers’ expectations through Disney’s corporate social responsibility strategy and stakeholder management initiatives. In relation, the company’s growing portfolio of popular mass media, tourism, and hospitality products is a strength in this SWOT analysis. For example, Disney releases new movies and merchandise, in addition to its existing theme parks and amusement facilities, such as Disneyland. This internal strategic factor contributes to revenue growth, while also supporting the company’s popularity as a provider of entertainment products. Aside from such strengths, the strong cooperative growth among business segments is a contributor to Disney’s success and competitiveness. In the context of this SWOT analysis, such an internal factor refers to the beneficial synergistic cooperation among various business segments of the mass media and entertainment conglomerate. The organizational structure or corporate structure of The Walt Disney Company facilitates such cooperation. The company’s business segments – such as Marvel Entertainment; ESPN and Sports Content; and Parks, Experiences, and Products – support each other and enhance each other’s rate of success. Also, The Walt Disney Company’s organizational culture or corporate culture supports such cooperative internal business environment through human resources. Overall, the strengths identified in this SWOT analysis indicate the company’s current competitive position in the global market for on-demand digital content distribution (video streaming), mass media, amusement parks, food service, and tourism and hospitality services.
Weaknesses of the Business (Internal Strategic Factors)
Weaknesses impose challenges to the growth and development of The Walt Disney Company. This SWOT analysis evaluates such internal factors as obstacles to the success and profitability of the tourism, entertainment, and content streaming business. The following internal factors are Disney’s weaknesses:
- Limited number of amusement parks, resorts, and hotels
- Limited consumer goods business operations
- Imitable business model for theme parks, resorts, and hospitality services
The Walt Disney Company’s limited number of parks, resorts, and hotels is a weakness noted in this SWOT analysis. This internal factor weakens the business by restricting potential revenues from additional operations, and by limiting the positive contributions of these brick-and-mortar recreation and leisure services to the company’s brand image and popularity. In addition, this SWOT analysis indicates Disney’s weakness of having limited consumer goods operations. Even though the company already has consumer goods sold in its theme parks, such sales are not the main priority of the business. This internal factor weakens the company’s potential profits, and is a missed opportunity for promoting the company’s brand, movie characters, and products through widely circulated merchandise. Also, Disney parks, resorts, and hotels have an imitable business model. Other companies can establish their own theme parks, resorts, and hospitality services. This SWOT analysis identifies such an internal strategic factor as a weakness that can reduce Disney’s competitive advantage. For example, the company may experience challenges in competing in new markets where competitors already operate similar theme parks. The Walt Disney Company’s generic strategy for competitive advantage and intensive growth strategies support efforts for mitigating such weaknesses identified in this SWOT analysis.
Opportunities for The Walt Disney Company (External Strategic Factors)
Opportunities create conditions for business growth and development in the mass media and entertainment industries. In this SWOT analysis, the following external factors function as Disney’s opportunities:
- Expansion of operations in parks and recreation markets
- Growth of consumer goods business
- Further diversification of the conglomerate
The opportunity for expansion of parks and recreation operations pertains to potential increases in revenues, especially as markets continue to open up to international travel and tourism. Such an external strategic factor in this SWOT analysis of Disney can also improve the corporate image, based on the popularity of theme parks and recreation destinations. In relation, the company has an opportunity for growth in its consumer goods business, including merchandise sales at its amusement parks and hotels. Considering the weaknesses identified earlier in this SWOT analysis, such an opportunity is an external factor that can improve revenues through increased sales via market penetration using Disney’s marketing mix or 4P. On the other hand, the opportunity for further diversification can create new businesses and revenue sources for the entertainment firm. Even though Disney is already moderately diversified, additional diversification is seen as a growth opportunity in this SWOT analysis of the conglomerate.
Threats to the Corporation (External Strategic Factors)
Threats are external factors that can decrease The Walt Disney Company’s performance. These external factors can also impose difficulties in growing the media, entertainment, and parks business. This SWOT analysis identifies the threats to Disney, as follows:
- Competition, especially in the market for content streaming services
- Digital content piracy
- Unpredictability of the tourism industry
Competition is the most significant threat relevant to this SWOT analysis of The Walt Disney Company. Considering its various industries, the corporation operates against major competitors, such as Netflix, Apple, Amazon, and Google, which have on-demand video streaming businesses. In addition, Disney competes against film producers, like Universal Pictures, Warner Bros. Entertainment, Sony Pictures, and Paramount Global. Other major competitors include theme park operators, such as Universal Studios, Six Flags, and Cedar Fair; and travel and tourism businesses, like Norwegian Cruise Line, Royal Caribbean, and Carnival. The resulting competitive environment creates a major external threat to Disney. This SWOT analysis also includes digital content piracy as a threat, especially against the company’s TV and movie production business. Piracy of movies and TV shows is an external factor that can reduce Disney’s revenues in markets that lack adequate legal protection against digital piracy. In addition, this SWOT analysis identifies the current unpredictable condition of the tourism industry as a threat to the conglomerate. This external factor is significant because the Disney Parks, Experiences, and Products division relies heavily on travel and tourism.
Insights – SWOT Analysis of Disney
The internal factors enumerated in this SWOT analysis underscore Disney’s strengths for growing its business and achieving a leading global market position. The strong and popular brand is a major competitive advantage of the mass media and entertainment business. Weaknesses, such as Disney’s limited consumer goods operations, are internal strategic factors that prevent business growth in high-growth markets. This SWOT analysis also identifies external factors that present threats, such as competition and digital piracy of the company’s films, like Pixar andLucasfilm movies.
Recommendations are for enhancing Disney’s industry position and market reach by exploiting opportunities in the industry environment. The company can increase the market reach and sales revenues of its consumer goods business through new or additional partnerships with food service firms, such as McDonald’s, Wendy’s, Burger King, Dunkin’, Starbucks, and Hard Rock Cafe. In relation, to address the business challenges identified in this SWOT analysis, Disney can establish new or additional partnerships with food and consumer goods manufacturers, such as PepsiCo, Unilever, and . These recommendations are for the purpose of increasing market reach and creating new revenue streams, in addition to the company’s existing mass media and entertainment operations. Disney’s operations management needs to be strategically positioned to support such changes as recommended, based on this SWOT analysis.
References
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- The Walt Disney Company – Disney Ranks High on Fortune’s 2022 List of “World’s Most Admired Companies.”
- The Walt Disney Company – Leadership, History, Corporate Social Responsibility.
- The Walt Disney Company – Form 10-K.
- U.S. Department of Commerce – International Trade Administration – Media and Entertainment Industry.
- U.S. Department of Commerce – International Trade Administration – Travel, Tourism & Hospitality Industry.