SWOT analysis of Walt Disney
This is The Walt Disney Company SWOT analysis
for 2013
Company background
Name
|
The Walt Disney Company
|
Industries served
|
Mass media
|
Geographic areas served
|
Worldwide
|
Headquarters
|
U.S.
|
Current CEO
|
Bob Iger
|
Revenue
|
$ 42.278 billion (2012)
|
Profit
|
$ 5.682 billion (2012)
|
Employees
|
166,000 (2012)
|
Main Competitors
|
NBC Universal Media, News
Corp., Time Warner Inc., Viacom Inc.
|
The Walt Disney Company is a leading international entertainment
and media enterprise founded in U.S. It operates five separate Disney segments:
Media Networks, Parks and Resorts, The Walt Disney Studios, Disney Consumer
Products and Disney Interactive. Disney Media Networks is the most significant
Walt Disney business segment. Disney products include television programs,
books, magazines, musical recordings and movies.
You can find more information about the business in its official website or Wikipedia’s article.
You can find more information about the business in its official website or Wikipedia’s article.
SWOT
Walt
Disney SWOT analysis 2013
|
|
Strengths
|
Weaknesses
|
1.
Strong product portfolio
2.
Brand reputation
3.
Competency in acquisitions
4.
Diversified businesses
5.
Localization of products
|
1.
Heavy dependence on income from North
America
2.
Few opportunities for significant growth
through acquisitions
|
Opportunities
|
Threats
|
1.
Growth of entertainment industries in
emerging markets
2.
Expansion of movie production to new
countries
|
1.
Intense competition
2.
Increasing piracy
3.
Strong growth of online TV and online
movie rental
|
Strengths
1.
Strong product portfolio. Walt
Disney’s products include broadcast television network ABC and cable networks
such as Disney Channel or ESPN, which is one of the most watched cable networks
in the world. Combining the significant audience reach of these cable networks,
(ESPN has nearly 300 million and Disney Channel 240 million subscribers) and
the solid growth of cable television, Disney’s product portfolio provides a
competitive advantage for the company over its competitors.
2.
Brand reputation. Walt Disney brand has been known for more
than 90 years in US and has been widely recognized worldwide, especially due to
its Disney Channel, Disney Park resorts and movies from Walt Disney studios.
The company is perceived as the primary family entertainment provider and was
the 13th most valuable brand (valued at $27.4 billion) in the world in 2012.
3.
Competency in acquisitions. One of the strongest sides the company has
is its competency in acquisitions. The Walt Disney Company has acquired Pixar
Animation Studios in 2006, Marvel Entertainment in 2009 and Lucasfilm in 2012.
The former 2 acquisitions have already proved to be very successful in terms of
revenue and profit growth. The third acquisition is expected to be just as
successful because Disney has acquired rights to all of the Lucasfilm previous
works including Star Wars. Few other Disney competitors have had such record of
successful acquisitions.
4.
Diversified businesses. The business operates five different
business segments: media networks, parks and resorts, studio environment,
consumer products and interactive media. These company’s segments are operated
online and offline, in many different economies and are generating their income
using different business models. Due to such diverse operations, Disney is less
affected by changes in external environment than its competitors are.
5.
Localization of products. Recently, Disney has started adapting its
products to suit local tastes. Besides the parks and resorts, company’s movies
and consumer products are adapted for Chinese market to attract more visitors.
This is rarely initiated by the movie studio itself and is something that few
other studios are doing.
Weaknesses
1.
Heavy dependence on income from North
America. Although,
Disney operates in more than 200 countries, it heavily depends on US and Canada
markets for its income. More than 70% of the business the revenues come from US
alone, while the major Disney’s competitor News Corporation receives less than
50% of revenues from US, making it less vulnerable to changes in US market.
2.
Few opportunities for significant growth
through acquisitions. The
Walt Disney Company is the largest entertainment provider in the world and has
become so due to acquisition of competitors. The last Disney’s acquisition had
to be approved by Federal Trade Commission so that the company wouldn’t have to
deal with antitrust problems. This means that the size of the Disney’s business
has become a concern for the government due to significant market concentration
and that the company has very few opportunities to acquire competitors.
Otherwise, Disney may become a subject to antitrust laws.
Opportunities
1.
Growth of paid TV industries in emerging
economies. The
Asia Pacific region accounted for more than 50% market share of the world pay
TV subscribers (394 million) in 2011. It was expected to grow to more than 55%
by the end of 2016, where China would account for more than 27% of the market.
The similar growth is expected in India as well. Disney Company has already
entered these markets and should continue to strengthen its position there to
benefit from such high industry growth.
2.
Expansion of movie production to new
countries. Disney
has an opportunity to expand its movie production to such countries as India or
China, where movie production industries have developed good quality
infrastructure. This would result in lower movie production costs and more localized
movies for India and China’s markets.
Threats
1.
Intense competition. Disney operates in very competitive
industries such as media, tourism, parks and resorts, interactive entertainment
and others. The competitive landscape changes quite drastically in the media
industry, where news and TV go online and new competitors with new business
models compete more successfully than incumbent media companies. Disney’s parks
and resorts business segment also receives strong competition from local
competitors who can offer better-adapted product. This results in growing
competitive pressure for Walt Disney Company.
2.
Increasing piracy. The advancements in technology allow
copying, transmitting and distributing copyrighted material much easier. With
an increasing number of internet users and the speed of internet, this poses a
great risk to Disney’s income, as fewer people would go to watch movies in a
cinema or buy its DVD, when it’s freely available online.
3.
Strong growth of online TV and online movie
renting. Besides
internet piracy, Disney’s media and movie production businesses may suffer from
online TV and online movie rental growth. Subscription to online TV streaming
and movie rental websites costs much less than to usual cable television
providers. In addition, internet infrastructure is often managed by different
companies, thus taking the power away from cable network providers.
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