The strategic decision making capabilities of business ventures depends on the evaluation of the position that the company holds while operating in diverse global markets. The identification of the position of businesses assists the same in understanding the strategies that might be undertaken by the same for upholding the value of sustenance. The discussion will be focusing on evaluating the strategic position of the Disney Company through an assessment of the internal and external environments.
The assessment of the external and internal environments of the organization will be helping to identify the capabilities for expanding in the developing economies. Therefore, the purpose of undertaking the research is dependent on the identification of the relative factors that will be helping The Walt Disney Company to sustain in the highly competitive global markets.
2. Organizational background of Disney
The Walt Disney Company is an entertainment providing organization, which aims at making the target audience happy. The organization operates through Media Networks and recreational parks. The diversity of the services that are provided by the organization has helped the same in maintaining their competitive edge while operating in diverse international markets. The media networks of the organization consist of ABC, ESPN and the like. On the other hand, the organization holds recreational parks in different nations of the world like USA, France, Hong Kong and China (Khalili and Duecker 2013). It has helped the organization in supporting the sustainable approach of the same.
3. Environmental analysis of the organization
The environmental analysis of the organization will be helping to evaluate the different market holdings and thereby understand the different issues and opportunities for growth of the organization. The section aims at studying the internal and external environments of the business in order to identify the strategic position of the same while operating in diverse global markets.
3.1 Internal environment evaluation
The global entertainment company, Disney with their two major segments of media networks and recreation has been facing difficulty since 2012.As reported, revenue has decreased by 3% than the previous year based on the sales of smart phone gaming applications. In order to explore the opportunities and combat the potential threats it is important to evaluate the current internal environment of the company. Internal analysis deals with company’s strengths and weakness. Based on which management decides the strategic orientation of the business.
3.1.1 Strengths of Disney
The strength of the company is their ability of operating multiple operations successfully since its initial days. Walt Disney has been supervising a large amount of culturally diverse workforce across all their theme parks situated in different countries like USA, Japan, France and Hong Kong. Besides, company owned Cruise Line, and media outlets like ESPN, Pixar and Walt Disney studios are the results of their effort and efficiency in performing in different fields of business.
According to the report of fiscal 2012, the total revenue increased by no less than 18% on that year for Disney. Consequently, media networks and park and resort facilities had secured a generous amount of both the revenue and profitability too. Due to the release of super hero movies income raised by 17% in the year 2012 (López-Gamero and Molina-Azorín 2016). Besides, they sponsors no less than 90 kids channels across 169 nations enabling large variety of audiences to watch and understand as the channels were available in almost 33 different languages (Garcés-Ayerbe, Rivera-Torres and Murillo-Luna 2012).
Apart from the media networks and television channels, Disney has proved themselves as one of the top ten companies operating amusement parks across the world. As comparing their amount of debt with increased revenue it has been noticed that last nine or ten years was crucial for Disney in terms of maintaining an appropriate ratio between them (Kwon, Lee and Shin 2014). More events like ‘Monday night football’ are signing contracts with Disney influenced by their excellent performance to be telecasted through their media channels.
3.1.2 Perceived weakness of Disney
Apart from entertain media, Disney has expanded its territory to explore opportunities of interactive media as well. Due to weak market research, Disney’s plan to deliver game application to smart phones has been gaining negative market response since consecutive three years. The organization has been invested a large amount in goodwill accounting for one third of the total company assets. Total amount of $2.5 billion has been invested to work which are on progress and postponed due to scarcity of space in new park (Muller 2012).
Shanghai. There are some issues regarding acquisition of Lucas film as well. There is a scarcity in employee strength too, which has been considered as the central reason of their dealings with various cultural differences. Revenue generated by international theme parks are decreasing as compared to domestic parks. The Cruise Line is deteriorating in terms of business too as Walt Disney owns only 4 ships currently. Disneyland in Paris has turned out to be a failed attempt by losing its income by 25%. Simultaneously, unit sales of DVD is also down by same percentage (Hofmann, Theyel and Wood 2012).
3.1.3 Evaluation of internal environment
As it has been observed that Disney has numerous strong cards to play with, in terms of foreign expansion Disney is open. With such a good business profile Disney can look forward to mitigate internal weakness in order to function more effectively and explore opportunities of business expansion as mentioned before. Behind such failure it has been perceived that their service and traditional attractions have not received a conceptual upgrade since decades. Therefore, a tendency has been developed among people not to spend money for the same theme and services (Chen et al. 2012).
Rather, they are being attracted towards domestic parks. As far as failure of game application is concerned, smart phones have become more personalized and work oriented. Disney mostly designs games, which have attributes suited for children. Therefore, they need to developed high definition logical gaming application to attract the users of smart phones towards such recreation. Besides, they need to improve their sector of corporate social responsibility by investing their interest in charity and environmental well being too. People will realize their contribution towards environmental sustainability and society by spending their resources on such amusement.
3.2 External environment evaluation
The external environmental evaluation of the organization is based on the assessment of the threats and the opportunities that are encountered by the same while operating in diverse global markets. The increased attendance in the amusement parks by 5.8% will be helping the organization in maintaining the efficacy of the propositions (Baranenko et al. 2014)
3.2.1 Opportunities of Disney
The external environmental evaluation of the organization is based on the assessment of the threats and the opportunities that are encountered by the same while operating in diverse global markets. The increased attendance in the amusement parks by 5.8% will be helping the organization in maintaining the efficacy of the propositions. On the other hand, the increasing demand of the people will be helping the organization in undertaken a wide expansion in the global markets. The increasing population in US by 10% again holds an important role for the expansion of the company (Bocken et al. 2013). The increasing issues relating to malfunctioning in the Carnival Cruise have helped the organization in promoting their Cruise services to the potential customers, which has helped the same in expanding their propositions to the target customers.
The geographical position of the recreation parks has also helped the organization in attracting the attention of customers from California, Mexico and Florida. The increasing number of smart phones and development of different applications has helped the organization in facilitating expansion through the utilization of digital applications. The opportunities for growth of the organization in the different economies have helped the same in maintaining the proficiency of the propositions through an assessment of the needs of the target audience.
3.2.2 Threats encountered by Disney
The growing needs of the target customers and the increased potentiality of the same in affording the service propositions of the concerned company has helped the same in undertaking dynamic growth in the different market sections. However, Disney also faces different threats that have restricted the wide expansion in the different regions of the world. The organization operates in a market competing with well known players like Paramount Pictures, NBC Universal and CBS for television shows and sports (Hanim Mohamad et al. 2012).
The different challenges that are faced by the concerned organization are based on the quality of services that are offered by the same while operating in diverse international markets. On the other hand, the revenue streams of Carnival Cruise Line was found to be around $15.38 billion as compared to the revenue collected by Disney parks and resorts of $12.9 billion (Chen et al. 2014). It has affected the operations of the organization as compared to the existing players in the field of proposing cruises as per the needs of the customers (De Giovanni 2012).
The revenue streams of organizations depict the demand that is faced by the same and the operational costs that might be utilized for the growth of firms. Issues relating to piracy in the existing economies have affected the organizational operations while expanding in the global markets. Piracy of contents that are created by the concerned organization has maximized the threats for the organization as the lower costs of the substitutes attract the attention of the potential customers more viably.
The developmental operations of the organization are restricted through the different aspects of unemployment, which has affected the potentiality of the target audience of the business around the world. The modifications in the organizational operations are based on the assessment of the potentials of the target audience. It helps the organizations in maintaining the efficacy of designing the processes as per the capabilities and competencies.
3.2.3 Evaluation of the external environment
The assessment of the different opportunities and threats that are faced by the concerned organization in the external environments will be assisting the business in making different modifications in the product and service offerings. On the other hand, the assessment of the external environment of the concerned business will be helping the same in understanding the prospects of market expansion.
The different strategies that might be framed by the organization is dependent on the identification of the position of the same as per the assessment of demands of the customers (Kajanus et al. 2012). The identification of various market- oriented threats that might be encountered by the concerned organization assists in understanding the activities for upholding a sustainable position in the global markets. The concerned organization encounters a tough competition in the global markets, which has affected the objective of expansion in the different economies. On the other hand, degradation of potentials in the target audience has affected the market demands of the concerned organization.
The major threat that is faced by the organization while operating in US and Hong Kong’s market is due to the piracy of the entertainment shows. The low cost substitutions of resorts and parks that are provided by the organization for the entertainment attracted the attention of the target audience. The resultant of the threat has affected the loyalty of the target audience (Wang, Chen and Chen 2012). The identification of the different threats that might be encountered by the organization while operating in the diverse economies will be helping the same in maintaining the proficiency of the operations that are undertaken by the enterprise.
4. Strategic position of the business
As derived by the vision statement, it can be easily assumed that the company motive is to income through spreading happiness among people. Therefore, one can spot the organization to be involved in every possible grounds of entertainment. Starting from telecasting shows and producing movies which can be enjoyed along with family; Disney produces cartoon shows, amusement parks both in domestic and international market which represents their wish to fulfill their vision of making people happy (Boons, F. and Lüdeke-Freund 2013).
With such wide brand recognition, Disney perceived to be the most trusted and creative in terms of delivering entertainment services among the competitors like Time Warner and Fox group. Considering themselves as the exclusive media company which combines products, varied services and experiences for mainly children and their parents. Acknowledging the juvenile nature of every human being Disney claims itself as the most amusing place to visit with friends and family. Its global presence try to make children believe that magic is real and adults can have their childhood back visiting their parks and recreation centers in a turbulent era of higher levels of stress and social disturbance.
However, the position of the company is competitive in market. It used to be positioned in the market aggressively as it was attractive and industry was stable as well. The recent market tendency has been changed and the shift has become prominent in last three years. The industry is attractive now but growing as a relatively unstable business. Although, they have enough competitive advantage in market yet the scarcity of employees indicates low rate of employee engagement.
Acknowledging the fact, Disney must consider ways to protect successful products and at the same time try to penetrate the market with more creative approach in order to be positioned in a higher place as compared to its competitors. The new entrants in the market have affected the position of the business through fierce competition. The key changes that are undertaken by the organization is based on the assessment of the needs of the target audience.
The preferences of the target audience from the shows that are held by the concerned organization to the web series that are developed by different competitors has affected the service proposition. On the other hand, the collaboration that is undertaken by the competitors with different entertainment media has helped the same in maximizing the outputs. However, the stiff competition that is faced by the concerned organization in US and Hong Kong’s markets have affected the aggressive expansion strategies of the same. The piracy of the services that are proposed by the concerned organization has affected the loyalty of the target audience. However, the quality of the services that are offered by The Walt Disney Company has helped the same in adding a competitive edge to the operations of the same. It has helped the organization in maintaining the sustenance of the same.
5. Conclusion
Therefore, from the above discussion it can be stated that the different changes that might be undertaken by The Walt Disney Company will be helping the same in undertaking different steps in order to uphold the competitive advantage of the same. The discussion identifies the different internal and external environments of the concerned organization in order to understand the current position of the enterprise. On the other hand, the enumeration of the different threats and opportunities of the business will be helping the same in framing efficient strategies for the smooth functioning of the business venture. The discussion thereby undertakes an assessment of the different external and internal opportunities and challenges that are encountered by the organization while supporting the sustenance of the firm.
References
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