Fahim ShahSWOT Analysis of Walt Disney Company (Disney SWOT)
This is a detailed SWOT analysis of Walt Disney Company (Disney SWOT). It addresses a number of issues i.e. strengths, weaknesses, opportunities, and threats that could be very crucial for the company’s future strategic planning. It sheds light on these issues which Disney’s stakeholders should consider while evaluating its current position and future prospects.
Strengths of Walt Disney Company
Market experience
The Walt Disney Company is an international family entertainment and media enterprise. It is widely known as Disney. Two brothers Walt and Roy O. Disney founded it around 100 years ago. Certainly, it has an enormous amount of market experience which is a great strength.
Brand image
The Walt Disney Company has a very powerful brand image which is loved around the world. It ranks 6th on Fortune’s list of ‘World’s most admired companies’ (Fortune, 2023). In fact, it was one of the top 10 companies in the Fortune list in the past many years.
Diversified portfolio
Disney has a diversified business portfolio which includes parks, studio entertainment, television, music, films, consumer products, and video games. The Disney+ streaming service has been an immense success.
Disney’s diverse portfolio of assets enables it to generate revenue from multiple sources and reduce its reliance on any single business segment. This diversification is further enhanced by the synergies between its various divisions, which allow it to capitalise on its vast array of intellectual property and create unique, cross-platform experiences for consumers.
Strong financial position
Disney has a strong and consistent financial position which has helped it initiate and complete new projects successfully and generate returns on capital expenditure. According to Statista (2023) the company generated a total revenue of $64.7 billion in the fiscal year 2022.
Skilled workforce
Disney has a highly skilled workforce, and it invests heavily on training and development. Most of its employees consider working for it as their dream job and feel like living in a fairy tale. This makes them very loyal and motivated to perform better.
Corporate social responsibility (CSR)
The last strength to address in this SWOT analysis of Walt Disney Company (Disney SWOT) is the issue of CSR. Disney is very committed to its social responsibility. It takes pride in providing safe and fun experiences for both adults and children. It is also very committed to several important issues such as human rights, waste minimization, and conservation of water resources.
Disney spent over $800 million with diverse suppliers; directed over $140 million to programs dedicated to underrepresented communities; and hired over 12, 500 veterans through its Heroes Work Here program in 2022 (Disney, 2023). These are very good examples of CSR.
Weaknesses of Walt Disney Company
Weakness is the next issue to be addressed in this SWOT analysis of Walt Disney Company (Disney SWOT). The key weaknesses are as follows:
Expensive
Certainly, the Walt Disney experience is quite expensive. Therefore, it is not accessible to everyone. This leads consumers to find cheaper alternative forms of entertainment for their families.
Lack of new characters
There is a lack of new characters and stories. This can provide competitors with a good opportunity to capture some of Disney’s market share by introducing new and different characters.
Criticisms
The Walt Disney Company was criticised a number of times in the past over a wide variety of issues. The issues that were at the forefront of the controversies included stereotypical characterization of non-white characters, prejudice, inclusion of animals at theme parks, and allegations of plagiarism. These controversies have damaged the reputation of the brand.
Staff layoffs
Cain (2023) reports that Disney has recently announced a sweeping corporate restructuring that may cause around 7,000 people to lose their jobs. While the company has defended it as a cost-saving strategy, it has affected the brand’s market reputation of stability.
Opportunities for Walt Disney Company
New experience
Due to its global reputation, Disney has the opportunity to expand into more countries. It should consider creating virtual theme parks and entertainment experiences in line with the new normal trend due to the current restrictive situations around the world.
Streaming activities
Disney should take advantage of the increase in streaming activities and consider more options in order to increase revenue. Likewise, new trends in consumer behavior give it an opportunity to build new income streams and also venture into creating new products.
Threats to Walt Disney Company
Competition
Threat is the last topic of discussion in the SWOT analysis of Walt Disney Company. New and cheaper products and entertainment provided by competitors can lead to a loss of revenue for Disney.
New technologies
Likewise, new technologies built by competitors could pose serious threats to the company. Disney’s major competitors of different sizes in various markets are CBS, Sony, Comcast, Time Warner Inc., Fox, AMC Network, Universal Studios, Cedar Fair, Six Flags Entertainment, and DC.
Global economic circumstances
The current global economic situation has led to many individuals losing their jobs and income. Therefore, they may not consider spending on non-essential products and forms of entertainment.
During economic downturns, and high inflation, consumers may be less likely to spend on discretionary items such as theme park visits, movie tickets, or merchandise, which can negatively impact Disney’s revenues.
Currency fluctuations
Since the Walt Disney Company operates in many countries, it is exposed to currency fluctuations. In volatile political scenarios, it may face a high risk with regards to these fluctuations. Likewise, price increases in raw materials and disruptions in supply chain could lead to an unforeseen increase of the company’s costs.
Summary of SWOT Analysis of Walt Disney Company (Disney SWOT)
The above analysis shows that Disney is a company with a strong brand, diverse portfolio, and global presence, which has allowed it to maintain its position as a leader in the entertainment industry.
However, Disney must also contend with various weaknesses and threats, such as its expensive offerings, lack of new characters, high inflation and economic downturns, and intense competition.
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Last update: 17 April 2023
References:
Cain, S. (2023) Disney announces 7,000 layoffs while teasing Toy Story and Frozen sequels, available at: https://www.theguardian.com/us-news/2023/feb/08/disney-job-cuts-savings (accessed 14 April 2023)
Disney (2023) Our Businesses https://thewaltdisneycompany.com/about/#our-businesses (accessed 14 April 2023)
Fortune (2023) World’s Most Admired Companies, available at: https://fortune.com/ranking/worlds-most-admired-companies/ (accessed 14 April 2023)
Statista (2023) Global revenue of the Walt Disney Company in the fiscal years 2006 to 2020, available at: https://www.statista.com/statistics/273555/global-revenue-of-the-walt-disney-company/ (accessed 12 April 2023)
Author: Fahim Shah
Fahim Shah has been working in the UK as a visiting lecturer in Business and Tourism for the last 10 years. After completing a Bachelor’s degree in Business and Marketing, he went on to gain an MBA from the University of Bradford, the UK. He is a Fellow of Advance HE (FHEA) and a full member of the Association of Business Executives (ABE).
M Rahman
