Swot Analysis of Walt Disney Company
ESP..Is a multimedia, multinational sports entertainment company that operates eight 24-hour domestic TV sports networks.ESP..
Networks reach customers in 190 countries and territories in 11 languages. ESP.. Has distribution agreements with 27 international sports networks which further enhances its appeal adding positively to its ability to reach a large audience. The company’s ESP.. Cable network had a subscriber base of 98 million in the US at the end of PAYOFF. During the same period, ASPEN, SPEWS, SEPSIS, and ESP.. Classic had 98 million, 74 million, 73 million, and 31 million subscribers, respectively.
In addition, according to Walt Disney, ESP.. Radio Network is the largest sports radio network in the US and is carried on more than 350 stations. The company’s Disney Channels Worldwide cable network operates Disney Channel, Disney Junior, Disney CD, Disney Cinematic, Hungary and Radio Disney. Disney Channel has a strong competitive advantage as it is one of the two dominant cable networks for children, the other being Nickelodeon. Disney Channel airs original and acquired series and movie programming targeting children and families and had a subscriber base of 253 million globally in PAYOFF.
Disney CD airs live-action and animated programs and has presence in 130 countries worldwide. During PAYOFF, Disney CD had 175 million subscribers globally. In addition, Disney Junior had 125 million subscribers globally at the end of PAYOFF. Moreover, Walt Disney’s BBC Family and Soapstone TV networks had a subscriber base of 97 million and 66 million respectively. The A Television Networks (EATEN), part of the company’s cable network operations, includes A&E, HISTORY, BIO, H2O, History En Espanola, Lifetime, Lifetime Movie Network (LIMN), and Lifetime Real Women.
Internationally, A&E programming is distributed in over 1 50 countries through Joint ventures and striation agreements with affiliates. During PAYOFF, A&E, Lifetime Television, and HISTORY TV networks had 98 million subscribers each, while LIMN, BIO, H2O, and Lifetime Real Women had 84 million, 69 million, 68 million, and 16 million subscribers, respectively. Significant customer reach of cable networks operations provides a competitive advantage that is not easily replicable. The company’s content, which is produced, is distributed across a wide base of subscribers around the world.
The large subscriber base therefore enables higher margins for the company. The company’s large customer reach also highlights Walt Disney’s appeal. Such appeal facilitates better bargaining power with multi-channel video programming distributors (Mopeds), the primary revenue source for Walt Disney. Additionally, the companies which have high reach enjoy higher pricing for the advertisement sales on the channel. Accordingly, the company’s large subscriber base and reach provide stability to the company’s operations. Strong brand portfolio The company has a strong brand portfolio.
The company has built a collection of some of the world’s best media brands including Disney, ESP.., BBC, Paxar, Marvel, and Localism that provide enormous opportunities for the company to continue to rate high-quality content. Disney’s ability to noontime its characters and franchises across multiple platforms–movies, home video sales, merchandising, and theme parks”is unparalleled in the media industry. Also, Disney’s theme parks and resorts are not easily replicable, considering the tie-ins with its other business lines.
ESP.. Is a leader in sports programming. It holds a dominant position in college and pro football programming in the US. Further, the company’s BBC brand delivered three of the fall season’s top 10 scripted series, including Modern Family, the number one moody on television; Grey Anatomy, television’s top-rated broadcast drama; and Once Upon a Time, a hit in its second season. Also, Good Morning America officially became the country’s top morning show, and BBC News and BBC-owned stations covered the year’s most important events.
Moreover, the acquisitions of Paxar and Marvel, also added to the company’s repository of strong brands. Paxar bolstered the company’s animation business. The Walt Disney Studios has witnessed massive success at global box office records with Marvels ‘The Avengers’, the year’s number one hit as well as the third-highest grossing film of all time, with more than $1. Frankincense, and Walt Disney Animation Studiousness-let Ralph demonstrated the company’s diverse creative successes.
Further, the recent success of Iron Man 3, is an indicator of the company’s strong brand portfolio. Page 5 Further, with the acquisition of Localism and its Star Wars franchise in 2012, the company can significantly enhance its ability to serve consumers with a broad variety of the highest-quality content. The company plans to release a new feature film Star Wars Episode 7 in 201 5, with more feature films planned, along with television programming, games and merchandise, and an expanded Star Wars presence in the Meany’s parks around the world.
The company’s strong brand portfolio enables it to attract customers. Diversified entertainment businesses Walt Disney has diversified entertainment businesses. The company’s media networks segment engaged in the operation of domestic broadcast TV network; TV production operations; domestic and international TV distribution; domestic TV stations; domestic and international broadcast radio networks; domestic radio stations; and publishing and digital operations. The segment encompasses the ESP.., Disney Channels Worldwide, BBC Family and Soapstone networks.
It also includes the BBC Television Network. Walt Disney’s parks and resorts segment owns and operates the Walt Disney World Resort in Florida; the Disneyland Resort in California, Lanai; a Disney Resort & Spa in Hawaii; the Disney Vacation Club; the Disney Cruise Line; and Adventures by Disney. The company manages and has ownership interests in Disneyland Paris, Hong Kong Disneyland Resort and Shanghai Disney Resort. It also licenses the operations of the Tokyo Disney Resort in Japan.
Similarly, the company’s studio entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings and live stage plays. The segment distributes produced and acquired films (including its film and TV library) in the theatrical, home entertainment and TV markets under the Walt Disney Pictures, Paxar, and Marvel banners. The company also distributes films under the Touchstone Pictures banner. The company produces and distributes Indian movies worldwide through its JET banner.
Walt Disney’s consumer products segment develops relationships with licensees, publishers and retailers throughout the world to design, develop, publish, promote and sell products based on Disney characters and other intellectual property through its merchandise licensing, publishing and retail genuineness. Moreover, the company, through its interactive media segment offers branded entertainment and lifestyle content across interactive media platforms. Walt Disney offers content through multi-platforms such as tablets, mobile and online.
Significant multi-platform presence provides sustainable source of revenues as broad portfolio of entertainment business, Walt Disney is able to target diverse customer segments. Through this, the company will be able to effectively cater to a varied customer base there by enhancing the ability to attract large customer base. Furthermore, the company’s businesses are complementary in nature. The popularity of content can be used for the company’s theme park, retail and merchandise segments to drive appeal for these products and services there by providing opportunities for incremental revenue growth.
Walt Disney maintains a well- balanced revenue stream in terms of its segments. For instance, in PAYOFF, media networks, Walt Disney’s largest segment, generated 46% of its overall revenues. This was followed by parks and resorts (30. 6%), studio entertainment (13. 8%), consumer products Page 6 (7. 7%), and interactive media (2%). Diversified entertainment businesses help the many to cope with a downturn in any particular business. Weaknesses Concentration of operation in the US and Canada Walt Disney is highly dependent on the US and Canada for its revenues.
Although, the company has presence across North America, South America, Europe, and Asia Pacific, it generates majority of its revenues from the US and Canadian markets. Walt Disney generated about 75. 1% of its total revenues from the US and Canada in PAYOFF, which does not truly reflect its global footprint. It demonstrates geographic concentration, which increases its business risk by making it vulnerable to economic and political uncertainties in the reticular market. Further, the company’s global competitor, News Corporation has generated significant amount of revenues from its international operations.
News Corporation, a media company based in the US, recorded approximately 43. 9% of its total revenues (fiscal year ended June 2012) from international regions including Europe, and Australia and other regions. Concentrating on matured markets such as the US and Canada increases the country specific risks to the company and restricts its growth opportunities compared to its competitors. Opportunities Increased focus on expanding presence in emerging economies Walt Disney is soused on increasing its presence in emerging economies such as China and India.
In PAYOFF, the company and Shanghai Shined (Group) Co. ,(Shined) entered into between the company and Shined, in which Shined owns a 57% interest and the company owns 43%. In March 2013, the company unveiled the first image of a model of Shanghai Disney Resort, featuring the resorts theme park, Shanghai Disneyland. Earlier, in April 2012, Walt Disney, the Ministry of Culture’s China Animation Group and Tenant, China’s largest internet service provider, formed a partnership named “The National Animation Creative Research and Development Cooperation” to advance China’s animation industry.
As part of the initiative, the company would provide its expertise in storytelling from concept creation and story development to market research. This partnership would enhance the company’s position in the Chinese animation industry. The company has also invested in India. In January 2012, Walt Disney acquired JET Software Communications, a media and entertainment company based in India. This acquisition positioned the company to become the Indian’s leading film studio and TV producer.
The deal also added six of the country’s most popular entertainment, news, and film channels to the company’s portfolio, aging page 7 it one of Indian’s premier broadcasters as well, reaching more than 100 million viewers every week. The JET deal also positioned the company as a significant player in the digital media space. The company’s increased focus on expanding in emerging economies such as China and India increased Walt Disney’s geographic footprint and will further enhance its subscribers base and market share.
Positive outlook for gaming market The gaming market is expected to grow rapidly in the years to come. According to the industry estimates, the global gaming market reached $70. 5 billion n 2011 and is expected to reach $117. 9 billion in 2015, representing a compound annual growth rate (CARR) of 13. 7% during 2011-15. In the overall global market, Asia-Pacific region is expected to grow rapidly. The increase in high speed internet connectivity, sophisticated gaming techniques, efficient hardware compatibility, increased disposable incomes, are the drivers of growth for the gaming industry.
In particular, the mobile gaming market is gaining traction. According to industry estimates, the mobile gaming market is expected to increase from $12. 3 billion in sales in 2012 to $15. 2 billion by 2015. The rising popularity of smartness and tablets are the growth drivers for the mobile gaming market. The company has been increasing its focus on gaming industry. During 2012, Disney’s Where’s My Water became the leading mobile game in 96 countries, and the various versions of the game was downloaded more than 100 million times.
In PAYOFF, the company launched five leading mobile games and also had tremendous success with its first branded social game, Marvel: Avengers Alliance, which garnered critical acclaim and Infinity, a new gaming platform for people to play all Disney properties any time, any lace, across devices to create their own unique gaming adventures. Positive outlook for gaming market will enable the company to enhance its revenues in the years to come. Threats Competitive pressure The company operates in highly competitive markets.
Walt Disney’s media network business competes for viewers primarily with other TV and cable networks, independent TV stations and other media, such as digital versatile discs (DVD’s), video games and the internet. Its TV and radio stations primarily compete for viewers in individual market areas. The growth in the number of outworks distributed multi-channel video service providers (Moves) resulted in increased competitive pressures for advertising revenues for both the company’s broadcasting and cable networks. The company’s cable networks also faces competition from other cable networks for carriage by Moves.
In addition, the media network business competes for the acquisition of sports and other programming. The market for programming is very competitive, particularly for sports programming. Moreover, its internet web sites and digital products compete with other web sites and entertainment products in their respective categories. Page 8 Similarly, Walt Disney’s theme parks and resorts as well as Disney Cruise Line and Disney Vacation Club compete with other forms of entertainment, lodging, tourism and recreational activities.
The studio entertainment businesses compete with all forms of entertainment. A significant number of companies produce and/or distribute theatrical and TV films, exploit products in the home entertainment market, provide pay TV programming services and sponsor live theater. In the consumer products segment, Walt Disney’s online sites and products compete with a wide variety of other online sites and products. Its video game business competes primarily with other publishers of video game software and other types of home entertainment.
The company’s key competitors include CBS, Fox Entertainment Group, Time Warner, Victim, Liberty Media, Lions Gate Entertainment, News Corporation, Oriental Land, Carnival Corporation, Marriott International, Stardom Hotels and Resorts Worldwide, and Brunswick. Competition in each of these areas may divert consumers from the company’s creative or other products, or to other products or other forms of entertainment, which could reduce its revenue or increase marketing costs.
Such competition may also reduce, or limit growth in, prices for Walt its media networks, parks and resorts admissions and room rates, and prices for consumer products from which the company derives license revenues. Increasing piracy could impact revenues Piracy of motion pictures, television programming, and video content poses significant challenges to several of the company’s businesses. Technological advances allowing the unauthorized dissemination of motion pictures, television programming and other content in unprotected digital formats, including through the internet, increases the threat of piracy.
Such technological advances make it easier to create, transmit and distribute high quality unauthorized copies of such content. As a result of piracy, Hollywood faced a crisis as its most important revenue stream, DVD sales, which declined by more than 20% during 2006-2011. Similarly, according to Cable and Satellite Broadcasting Association of Asia, lack of market transparency and tolerance for illegal connections to cable systems have resulted in big losses in many Asian countries. The proliferation of unauthorized copies and piracy of the company’s products or the products it licenses from third arties will reduce Walt Disney’s revenues.
In addition, developments in software or devices that circumvent encryption technology increase the threat of unauthorized use and distribution of digital broadcast satellite programming signals. Page 9 Copyright of Walt Disney Company SOOT Analysis is the property of Marketing, a Denominator business and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.