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Walt Disney: SWOT, PESTEL and Porter analysis

Extracts from this essay...

Introduction

SUBJECT: WALT DISNEY: SWOT, PESTEL AND PORTER ANALYSIS INTRODUCTION 2 PESTEL ANALYSIS 2 POLITICAL FACTORS 2 ECONOMIC FACTORS 3 SOCIAL FACTORS 3 TECHNOLOGICAL FACTORS 4 ENVIRONMENTAL FACTORS 4 PORTER'S FIVE FORCES MODEL 5 NEW ENTRANTS 5 BUYERS 5 SUBSTITUTES 6 SUPPLIERS 6 COMPETITORS 6 SWOT ANALYSIS 7 STRENGTHS 7 WEAKNESSES 8 OPPORTUNITIES 9 Improvement of customer relations strategy 9 Advertising Growth 9 Differentiation 9 The further introduction of ICT technologies 9 Superior market segmentation 10 THREATS 10 Economic conditions 10 Winnie the Pooh trial 10 STAKEHOLDER ANALYSIS 11 CONCLUSION 12 REFERENCES 13 APPENDIX I - PORTFOLIO VS CORE COMPETENCE PERSPECTIVES 14 INTRODUCTION Walt Disney is a developer, producer and worldwide distributor of feature films and television programs, cable network programming and character-based merchandise. Besides, its theme parks are the most popular in the world. The current forces in the market create certain challenges for future success of the company's development. The presents analysis starts with the discussion of current environmental and industry factors. This analysis produces the holistic view of the macro factors that affect the industry players and the company. The second step comes to the analysis of the business environment competitive environment and the way the company develops and maintains its competitive advantage. This analysis creates a picture of internal capabilities of the companies. Basing on the evaluation of external and internal factors the analysis of strengths and weaknesses is delivered. It creates a framework for devising possible strategic intent of the company and identifies possible vulnerable points that can affect the feasibility of the strategy. Basing on the analysis of the environmental factors and company's capabilities the paper reviews current opportunities and threats. PESTEL ANALYSIS According to Grant (1998), in order to identify the key success factors and the company's opportunities and threats it is important to study environmental factors that effect the firm's strategy on the industrial level.

Middle

The other important capability is the ability to develop new innovative solutions to meet changing demand. The development of Mission: SPACE is the good example of the application of latest digital technologies to enhance the entertainment experience of theme park visitors (Datamonitor, 2004). From the portfolio perspective, the company's strength is in its experience of international operations. According to Bennet (1999) the development of local knowledge along with learning curve might create potential synergies over different strategic business units. The other strength is a diversified portfolio. Walt Disney is involved in various areas of the media distribution, including television and cable, book publishing and filmed entertainment, character merchandise and internet content delivery. The company's wide-ranging interests protect it somewhat from the effects of adverse market conditions in any one of the sectors within which it operates. Its presence in a large number of markets gives the company a more balanced and stable portfolio of assets, and therefore a more secure business. The diversity of the media portfolio creates a strong advertising potential. The company operates with six domestic sports channels, reaching 85 million viewers, and has several brand extensions including ESPN Radio, which is the largest radio sports network in the US. Its A&E Television Networks, featuring cultural and entertainment programming such as The History Channel, reach 77 million homes. Lifetime Television is devoted to women's lifestyle programming and reaches 83 million cable subscribers. Its Toon Disney channel, targeted at 2-11 year olds, is available in 26 million homes and began carrying advertising in 2000. Disney's SoapNet channel was also launched in 2000, and now reaches more than 18 million homes (Datamonitor, 2004). Weaknesses One of the strong weaknesses of the company is the dependence of theme park distribution on seasonal component.

Conclusion

CONCLUSION The analysis of the current PESTEL factors identified the particular importance of socio-cultural, political and legal, economic, technological and environmental factors on the environment. All of these factors determine the success of operations. If socio-cultural and economic factors affect the demand patterns and vulnerability of strategic development, other factors create the conditions for value chain architecture. The review of environmental factors identified the opportunities to improve financial health, capitalize on the growth of advertising market and develop further differentiation using technological solutions. At the same time economic conditions and copyright issue create serious threats to the company. The analysis of five forces identified the strong power of buyers and the analysis of strategic capability defined the following strengths: diversified portfolio, fast and intensive transfer of operational capabilities and the experience of running the international operations. At the same time the current portfolio management and the dependence of certain business units on various external factors were defined as major weaknesses. The paper identified various feasible opportunities. The analysis of current capabilities along with the further development of technological solutions create strong case for the development of customer relations management based on database marketing techniques. Besides the company might pursue the development of new ICT technologies. The current success of Mission: SPACE attractions show vast market opportunities with regards to the introduction of new entertainment experience. The company may develop superior market segmentation. The high influence of social factor and the influence of fashion trends on market demand and product life cycles create the space for niche market strategies. The stakeholder analysis defined three types of key stakeholders, as shareholders, employees and customers, who might exert sufficient influence on the strategic development of the company.

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