Introduction

The success of any given business depends on its ability to utilize strategic analysis research findings and implementing the proposed strategic changes. Over time, organizations are changing their mode of operation to maintain their comparative competitive advantage either locally or internationally. For example, a critical industry, stakeholders’ and competitor analysis provides information that allows organizations to understand the market abilities of the competitors, stakeholders needs and industry trends both locally and internationally. Through insightful strategic analysis, organizations such as Disney can realign its internal operations with the trends in the external environment. Furthermore, strategic management allows large organizations such as Disney to assess the risks and trends in the market, make proper planning and make feasible investments. This paper seeks to give a strategic evaluation of Disney concerning its competitors, industrial landscape and business level and suggest the best strategic intent that Disney Television can adapt to increase its competitive edge.

Background Information about Disney

Walt Disney Company, established in 1923, has over 10, 000 estimated size of employees with its headquarters located in Burban, CA (The Walt Disney Company 2019). It is categorized as a leading media organization. The firm produces creative content for public consumption distinct to age and gender. The activities undertaken by Walt Disney Company are the creation of media and entertainment content. Content sharing through media works include numerous broadcast, publishing, cable and radio show under the Disney Television unit. Besides Disney Television, the organization also offers consumer products, experiences, and parks through innovative Disney narratives, apparel, books, franchises, and characters. An example of this consumer brands includes Disneyland Resort, Tokyo Disney Resort, Walt Disney World, Disney Paris, and Hong Kong Disneyland among others (The Walt Disney Company 2019). In this view, the Disney Company is continuously at par with the radical technological changes that allow expanding into new market segments. Robert Iger, the Chief Executive Officer, and the chairman lead a dedicated team that envisions the company’s objectives through creativity. Over an extended period of about 90 years, best Disney videos, movies, and stage plays have been created at Disney Studios. Also, Disney provides Direct to Consumer International media services. An international consumer can stream customized Disney content increasing the consumer experiences. Although Disney engages in a lot of material, it is subject to international labor standards, sustainable sourcing strategies and brand safety.

PESTLE Analysis of Disney’s Operating Landscape

Pestle analysis provides a vivid interpretation of the macro environment in which Walt Disney operates. The fundamental elements to discuss this section include Political, Economic, Social, Technological, Environmental, and Legal factors. It is significant to recognize that a change in one of the elements influences the Disney performance similar to other media entertainment players.

Political Factors

Political influence determines the perpetual life of businesses and returns on investment both in the short-term and long-term basis. Disney, being a large media company operating in different nationalities, experience different political system, and the environment. Political regimes bear different risks to a company operating multinational corporations. Currently, global politics are changing towards sustainability and international cooperation. In a totalitarian political system, a media company faces stiff restriction in sharing digital content as opposed to a democratic political system that grants freedom to entertainment companies to share digital content. According to Mirlees (2013:105), most states in the European Union control media content especially TV broadcast to ensure what is shared has a good proportion of European content. In Japan, media broadcast is subsidized while in the United Kingdom, media content is continuously regulated to conserve the cultural values using designated government agencies. Therefore, Walt Disney Company needs a country’s political stability, the tendency to civil war, government interference with the entertainment industry, intellectual property rights, trade partnership, pricing, and Taxation laws.

Economic factors

The Key economic factors that influence the entertainment industry globally include foreign exchange rates, inflation rates, interest rates, aggregate demand, and supply. Other economic growth determinant factors include Gross Domestic Product, and Per capita income. By understanding the global consumer purchase behavior, it becomes easy to forecast the organization’s return on investment in the entertainment industry by Walt Disney Company. Furthermore, Walt Disney, need to consider a country’s financial market, labor expenses, exchange rates and overall stability of the economic system such as employment rates and discretionary income.

Social Factors

The tourism promoted by Walt-Disney contributes to the growth and development in the entertainment industry. The company manages amusement parks that depict the themes and characters portrayed in the movies it produces. Social media is used by customers to advertise the firm’s services, and it also gives the customers an opportunity to interact with the firm’s management. Walt-Disney understands the customers within a specific market domain and some of the factors it should focus on include: culture; attitudes; leisure activities; demographics and skill levels; education; and entrepreneurial spirit.

Technological Factors

Technology has a strong influence on the development and growth of the entertainment and amusement industry. The Walt-Disney world resort should integrate the latest form of technologies to give the customers an enhanced and high-quality experience.  Technology has helped Walt-Disney reach the target market. The company uses social media platforms such as Facebook and Twitter to inform and connect to its customers on the services provided.

Environmental Factors

The United States environmental protection laws guide Walt-Disney on how to manufacture its licensed products and the management of its theme parks. The Disney amusement parks focus on waste management, and they do so through the re-use and recycling of items to protect the environment. Walt-Disney also engages in corporate social responsibility, and it ensures that the theme parks re eco-friendly. Further, the company uses efficient energy solutions in the theme parks.

Legal Factors

Strict laws and regulations guide the entertainment and amusement industry. The Federal Communications Commission laws are central given that they regulate the content produced by Walt-Disney. The content meant for young audiences has to strictly adhere to the rules which discourage the use of indecent material or Walt-Disney risks a fine of $325,000 for each reported case. Copyright and intellectual property have proved to be another legal issue affecting Walt-Disney.

A Five Forces Analysis of Disney Television

Porters five forces analysis illustrate the operational landscape of the competitors; thus, Disney Television will be able to diversify its strategy to cope up with competitors’ operating landscape, increase competitive advantage and profitability.

The threat of new entrants

Disney is the leading entertainment companies, and the risk of new entrants is low. The reason for this dominance is that Disney has a huge investment, which is not possible. However, some companies have entered the industry, and they might become a threat soon. To deal with the risks, the company will have to introduce new products and services; build economies of scale to lower the company’s prices, and provide unique value proposal to the customers. Walt Disney has to manage these threats if it wishes to safeguard its competitive advantage.

Bargaining power of the suppliers

Disney’s bargaining power of suppliers is moderate. Its suppliers include media companies, technology companies, and other vendors.  These include Hulu, Philips, Tumblr, Imax, Nokia, and ESPN.  Based on their brand names and influence, the suppliers’ impact on Disney is restrained. However, Disney cannot easily switch from these suppliers into new ones because the options are not available from new suppliers.  To tackle the suppliers bargaining power, Disney needs to: develop an efficient supply chain with numerous suppliers; get suppliers that only sell to the company; and start their own raw material production companies.

Threats of substitute products or services

Disney has a low risk to substitute services or products. The company has a more significant influence than most of its competitors. But, smaller theme parks and other businesses related to those of Disney have sprung up, and they serve the needs of customers who cannot be able to pay for the services and precuts offered by Disney. Although not immediate, the threat of substitution can materialize in the long run. Therefore, Disney has to become more service oriented instead of being product oriented; increase the customers’ switching costs, and understand the needs of the consumers.

Rivalry among existing firms

The competition among the existing brands in the entertainment and media industry is very high. Major names in the entertainment sector such as Fox and Universal studios among others and companies that deal with amusement services and theme parks are the major competitors of Disney. Most of the brands have gained popularity over the years and are giving Disney a run for their money. So, Disney should build a sustainable differentiation; collaborate with the competitors, and develop a scale to help it compete better.

Bargaining power of the buyers

The buyers’ bargaining power in Disney is weak thanks to the popularity the brand enjoys. Disney has created a unique experience that has enabled it to attract loyal, wealthy customers. Over the years, the company has increased the admission fee for its theme parks without losing any significant number of customers. Most of the customers are the children of celebrities, politicians and other wealthy and influential people.

Strategic analysis of Disney’s Consumer products

A strategic analysis looks at the operations of a company’s primary business units. Walt Disney has five major business units namely: Disney consumer products; Media Networks; Disney Interactive, Walt Disney Studios, and Parks and Resorts. In this case, Disney’s consumer products are analyzed.

The company’s consumer products segment is divided into; merchandise licensing, retail, and publishing. The merchandise licensing division ensures that Disney’s intellectual property is authorized before being used in its products. Examples of the intellectual properties that the segment handles include Mickey Mouse, the Disney Fairies, and Disney Princesses. The division also collaborates with the retailers to come up with particular promotional advertisements.

Retail is another segment of the company’s consumer products. Disney’s retail businesses consist of retail shops and online platforms that sell the company’s products to consumers.  The stores are found in numerous stores across the United States, Japan and in Europe. Consumer products also entail publishing. Disney Publishing Worldwide publishes children media globally.  The products are presented through various types of media such as books, magazines, eBooks, and Smartphone and tablet applications. The content published by the company is categorized as either storytelling or learning material depending on the work published.

Disney Strategic Intent

Walt Disney needs to come up with a strategic intent to maintain its high position in the entertainment industry and its competitors. As part of its strategic plan, Disney has acquired one of the major entertainment companies, Twenty-First Century Fox.  In 2018, Walt Disney announced that it had entered an amended acquisition agreement with Twenty-First Century Fox, for a $ 38 per share in stocks and cash. The company’s $71 billion acquisition of most of the shares of the Twenty-First Century Fox Company gives the two firms a lot of control in the favorite shows and programming. The acquisition means that Disney will cut off some of its suppliers such as Netflix who have been streaming some of the company’s movies. As a result, Disney is expected to launch its movie streaming services. For example, one can watch the latest movies such as “Iron Man,” “Black Panther” to name but a few using its channel distribution which it hopes to develop soon. Other than decreasing competition, the acquisition of the 21st Century Fox is sure to bring a lot of profit to the shareholders from the two companies as well as increase the number of the customers from the two fan bases.

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