SWOT Analysis of Disney | Disney Strengths, Weaknesses, Opportunities and Threats
1. What is Disney?
The Walt Disney Company is a multinational conglomerate that was founded by brothers Walt and Roy O. Disney in 1923.
It has grown to become the world’s largest entertainment company, with four business segments: media networks, parks and resorts, studio entertainment, and interactive media.
The company also owns and operates the ABC television network; cable television networks such as ESPN; publishing houses such as Hyperion Books; record labels such as Hollywood Records; theme parks in California, Florida, France, Japan America (Tokyo Disneyland), China (Shanghai Disney) Hong Kong (Hong Kong Disneyland); video game companies like LucasArts Entertainment Co., Ltd.; online properties including StarWars.com and Pixar.com; radio channels like RadioDisney; publishing brands including Marvel.
Disney company is headquartered in Walt Disney Studio Complex in Burbank, California United States.
The current CEO of the Company is Bob Chapek.The Company is publicly traded on the New York Stock Exchange under the stock code DIS.
Disney has interests in movie studios, television networks, and publishing holdings. Disney’s lead Paint Studio is well known for producing animated films, marketing toys, and marketing comic book characters.
2. How is Business Model for Disney?
Disney is a household name and one of the most recognizable brands in the world. They have created many timeless classics that we all love to watch.
However, they’re not just in movies and theme parks; Disney has diversified their business model and expanded into other industries such as television, music, video games, hotels and much more.
Disney’s success over the years can be attributed to their ability to keep up with changing trends while staying true to themselves. They make money through;
Disney’s advertising operations produce a wide range of materials, including printed and broadcast advertising, direct marketing to consumers, licensing agreements with others for the promotion of products and services.
Disney has licensed its characters to other companies for use in consumer products.
Walt Disney Studios mainly produces animated films, including high-grossing animated features such as “Beauty and the Beast” (1991). The subsidiary also develops live-action films with its Touchstone Pictures unit.
Disney’s cross-selling activities are significant in the context of both media and entertainment. They include Disney Stores, its retail stores that sell Disney films, toys, clothing, accessories, etc.
Disney also has a full-service event planning business which works with both internal and external clients
The Walt Disney Company operates theme parks around the world at major tourist destinations including California, Florida, Paris, Tokyo and Hong Kong. Its Disneyland Resort is in California.
Each Disney Store operates its own unique merchandise. They are stocked by merchandisers not by Disney.
Currently, Disney Stores are in operation in America, Great Britain, Hong Kong, the Netherlands, Germany, Norway and France.
In line with demand from home users, Disney keeps producing audio and video products in digital format. In 2001, it produced its first piece of digitally mastered animation in full DVD-Video format.
In 2002 it produced its first 40 minutes feature entirely in Digital Cinema Package (DCP) digital format.
3. How does Disney makes money?
Disney makes money through the four revenue sources;
a) Media and entertainment: Disney has broad holdings in the media and entertainment market. It owns ABC, ESPN, A&E Television Networks, minority interests in Touchstone Pictures and Miramax Films. Disney’s content television channels include ABC Family Channel (an offshoot of the main network), Disney Channel, Disney Junior (offshoot of the main network) and Toon Disney (predecessor to Jetix)
b) Advertising, publishing and promotions: Disney’s advertising, merchandising and promotional activities result in a significant amount of revenue for the company.
C) Film production: Disney’s film production business, known as “Walt Disney Pictures”, accounted for 29% of the company’s operating income and. Its film production operations include Touchstone Home Video and Miramax Films.
d) Cross-selling: (Disney Stores (Disney Corp.): Disney’s retail stores sell Disney films, toys, clothing, accessories, etc.
e) Theme parks: The Walt Disney Company operates theme parks around the world at major tourist destinations including California, Florida, Tokyo and Hong Kong.
e) Event planning: Disney also has a full-service event planning business which works with both internal and external clients
f) Consumer loyalty: Disney has also developed an extensive customer loyalty program. The Disney Movie Club program was started in 1985. It consisted of a free Disney DVD rental every month for customers who had signed up for the program. By the end of 1992, 5 million people had signed up for the program, which had more than doubled its base each year since 1985.
4. Revenue and Financials
In the third quarter of 2021, The Walt Disney Company’s media and entertainment segment generated about 12.68 billion U.S. dollars in revenue, up from about 10.7 billion dollars compared to the same quarter of the previous fiscal year.
The main reason for Disney’s lower revenue was the coronavirus outbreak. With theme parks closed and movie releases delayed or canceled, the company’s financial results were bound to suffer.
In 2020.the revenue was decrease from US$69.388 billion with an operating income of decrease US$5.108 billion, the Company had a net income of decrease −US$2.864 billion.
The total assets was increase US$201.549 billion with a total assets of decrease US$88.263 billion.
Disney had 223,000 numbers of employees.
5. Competitors of Disney;
a) NBC Universal: NBC Universal is one of the world’s leading media and entertainment companies in the development, production, and marketing of entertainment, news, and information to a global audience. NBC Universal owns and operates a valuable portfolio of news and entertainment networks, a premier motion picture company, significant TV production operations, a leading television stations group with NBC and Telemundo network affiliation, as well as cable programming services. NBC Universal is owned by Comcast Corporation.NBCUniversal.Com Inc.
b) Comcast: Comcast is the second largest cable company in America.
c) Viacom Inc.: Viacom Inc. (originally “Viacom International Inc.”) is the leading producer and distributor of entertainment content for television, motion picture, consumer interactive media, and marketing services in all 50 United States and Puerto Rico. The company owns Paramount Pictures Corporation (a subsidiary of Viacom), which has continued to be a major producer of motion pictures since its inception in 1912.
d) Time Warner: Time Warner is currently the largest media conglomerate in the world. The company’s holdings include Cartoon Network, HBO, CNN, Time Magazine, Warner Bros. Entertainment Inc., DC Comics, New Line Cinema and Turner Broadcasting.
e) Canonical: Canonical is a company that deals with all kinds of comic books including Marvel Universe Comic Books, Image Comic Books and more. Canonical are also are on of the biggest distributors of Superhero Movie merchandise as well as other movies/TV shows including Avatar and Stargate SG-1 TV Shows.
f) 21st Century Fox: 21st Century Fox (FOX) is an American multinational mass media corporation. It is the parent company of Fox Broadcasting Company, Fox Filmed Entertainment, Fox Television Stations Group, and the National Geographic Partners division of 21st Century Fox.
g) Sony: Sony Corporation, commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Kōnan Minato, Tokyo. Its diversified business includes consumer and professional electronics, gaming, entertainment (motion pictures and music), finance services and broadband.
6. Partners of Disney
a) Marvel Entertainment: Marvel Entertainment, LLC (“Marvel”) is an American multinational entertainment company founded in June 1998 and based in New York City. It is a subsidiary and a wholly owned indirect subsidiary of The Walt Disney Company and one of the largest and fastest growing entertainment companies in the world.
Marvel Entertainment Co/Ltd is an affiliate company under The Walt Disney Company
b)Pixar: Pixar has already created some of the world’s most memorable and beloved fictional characters and stories and has delivered some of the highest grossing animated films of all time: “Toy Story,” “Finding Nemo,” “Monsters, Inc.,” “The Incredibles,” and “Cars.”Pixar Animation Studios is an affiliate company under The Walt Disney Company.
c) Lucasfilm: Lucasfilm is the American film and television production company based in San Francisco, California. It is a subsidiary of The Walt Disney Company, used primarily to produce and distribute live-action and animated motion pictures in the fantasy, adventure and science fiction genres, including Star Wars. Lucasfilm also holds a permanent license in the “Star Wars” franchise from George Lucas, having produced all seven of the Star Wars prequel films under an agreement with him.
d) Star: Star Entertainment Holdings Limited is the largest entertainment distributor in China. Star’s subsidiaries include StarTV, Viacom18, Shaw Entertainment and 20th Century Fox.
e) 20th Century Fox: 20th Century Fox is an American film studio and television channel to itself, as well as a division of The Walt Disney Company (through which it owns a stake in Hulu). Its major owners are The New York Times Company and News Corporation.
F) National Geographic & ESPN: National Geographic is an American media company that publishes magazine articles, books, TV programs, web content and other products relating to the world’s physical, cultural and scientific Holy Land. National Geographic Channel Inc. is a subsidiary of National Geographic Partners LLC.
g) News Corporation: News Corporation is an American multinational mass media company that operates through two main segments: publishing and television production. The chairman of News Corporation is Rupert Murdoch who has overall control of the company along with his father Lachlan Murdoch.
7. SWOT Analysis of Disney
Strengths of Disney
a) Huge brand equity: Disney has built up its brand equity in a short time. Although the Disney animation is well accepted by the public, it is one of the most expensive animation product ever developed. Disney’s latest animated film, “Beauty and The Beast”, is expected become one of the best-selling movies worldwide this year.
b) Strong balance sheet: Due to the company’s strong balance sheet, Disney has enough capital to invest in new business opportunities and still return profits back to shareholders each year.
c) Growing portfolio of popular products: Disney has also invested in some of the most popular movies and movies franchises in the world including Star Wars, Marvel, Pixar and more. Each franchise has its own unique fanbase. This allows Disney to expand their portfolio of popular products over time which means more money can be made with each new release.
d) Strong cooperative growth among business segments: Disney has also grown its subsidiaries into powerful assets that can stand on its own as separate entities. The subsidiaries that Disney holds inside of itself include: Walt Disney Studios and Pixar Entertainment. This means that, if one of these subsidiaries should fail, the other one will still be doing well and will continue to keep the other companies alive.
e) Media Networks: The Media Networks segment consists primarily of cable television (through ESPN) and broadcast television (ABC TV stations). This segment is responsible for most of Disney’s revenue due to high demand for cable television services in the USA.
f) Creative team: The creative team within Disney has also proved that it is leading the market when it comes to animation products. Disney’s animation team can create highly entertaining products for all age groups, which explains why their animated films are popular with both children and adults alike.
g) Low taxes: Disney has also taken advantage of low corporate taxes in the USA which means more money can be made with each new release.
e) Disney has a strong worldwide presence: Disney broadcasts its products through all forms of media including television stations, films, music and more. This allows Disney to expand their reach and market their movies and franchises to a global audience, thus increasing the revenue of each new release.
f) It is an innovator in product development and delivery: Disney are not afraid to innovate with products where other companies are hesitant to do so. This means that Disney can come up with new products that other companies aren’t willing to take on because of the risk.
Weaknesses of Disney
a) High cost of production: Disney is one of the most expensive animation products. The reason behind this is because it is a very difficult process to develop quality animation products and Disney does not want to get any of the highly talented workers in its company so they can keep their work for higher salaries.
b) Poor financial planning: Disney is also quite poor at planning for the upcoming events. Due to the fact that Disney has invested in films based on popular characters, they are always getting sued or sued by other production companies (such as DreamWorks). If Disney had planned out their company better, they would not be having these problems today.
c) The company does not engage in proper marketing and promotional activities. It can be a significant weakness of a company that needs to survive in a highly competitive market.
D)Limited expansion of amusement parks: The company also has limited expansion of their amusement parks due to the fact that it is a massive job to upgrade and maintain these parks every year and it is more cost-effective for them to focus on new projects and expansions of their existing parks.
e) Disney is also focusing very heavily on the ESPN brand. This means that, if they did not manage to do well with ESPN again, then there would be a chance that Disney may get into serious financial meltdown.
Opportunities of Disney
a) New Franchises: A large part of Disney’s expansion strategy is to continue with their current franchises and expand them. This means that, if a profitable franchise were to stop making money, Disney would not have a problem because they have a lot of other successful franchises that can make money until a new one becomes popular again.
b) Strengthening the online streaming services: Disney have also worked to strengthen their online streaming services. Disney has also introduced the Disney+ service which will be a direct competitor to Netflix. Because of this, it is extremely important for them to succeed with this new development because there are so many people who are already signed up with the streaming services so the company does not want to lose these customers.
d) Expanding its cable network: Another expansion strategy for Disney is to expand its cable networks so more people can watch their content online.
e) Expansion into Cloud gaming sector: Disney is also expanding into the Cloud gaming industry. This means that, if Disney can get new customers on their Cloud gaming services, this will mean more money for Disney because they will be able to get more customers for their online streaming services and it will also help them to grow their cable television networks.
f) Expanding of new parks: Disney is also working to expand all of its current amusement parks so it can diversify the company and make more profits.
Threats of Disney
a) Competition: Disney faces extremely high levels of competition. Its biggest competitor is Time Warner (Warner Bros) who has many successful franchises like Harry Potter, Batman and more. Disney also faces competition from others like Comcast (Universal Studios), Viacom (Nick Jr.), Lions Gate Entertainment (Twilight Saga) and more.
b) Technological disruption: Another threat to Disney is the technological disruption. Disney is also turning its attention on new technologies such as virtual reality and augmented reality, which means they will be trying to expand their services with these types of technologies in order to keep up with their competitors.
Disney has faced a lot of financial struggles in the past and these problems have been important enough for them to look into outside investments and acquisitions which is why we see that they have expanded so much in terms of amusement parks and online streaming services.
c) Digital content piracy: Disney has also faced huge issues with the increasing amount of digital content piracy. This has damaged Disney because they are not able to charge for digital content in order to generate more income for themselves. Disney is also facing a lot of competition in the online streaming market so it is very important that the company continues to expand its services in this sector so it can increase its profits.
d) Problem of bubble explosion: Disney is still facing a risk of the bubble explosion. This is because Disney’s entertainment business is relatively more mature and they do not have very many new ideas to develop. This allows for competitors like Comcast and Time Warner to take on some of Disney’s viewer base and steal some of their profits because their content is cheaper and equally as good quality if not better in most cases.
e) Global Pandemic: Disney also has a risk of a global pandemic where the whole world is affected by a deadly disease which can impact their business by stopping people from going to their amusement parks and parks.
8. FAQS of Disney.
a) Where is the headquarters of the company located at?
The headquarters of the company are located at Burbank, California, United States.
b) What is the current status of the company?
Disney currently has a market capitalization of $186.4 billion. This means that it is one of the largest companies in terms of size and it is one of the most profitable companies in terms of revenue.
c) What is the name of the CEO?
The current CEO of Disney is Bob Chapek.
d) What is the main business of the company?
Disney’s main business is its entertainment content and they have been very successful in this area.
They own some of the most famous franchises such as Star Wars, Marvel, Frozen, Spiderman and more.
In addition to this, Disney also holds some of the most expensive theme parks on earth with many different parks in various locations around the world including California, Paris and Tokyo.
e) What is the main website of the company?
The main website of Disney can be accessed via http://disney.com .
f) How many people are employed by the company?
Disney employs over 223,000 people in countries around the world. This means that they have a large number of employees working for them so they can provide quality entertainment content for all their customers.
g) What are the main revenue streams of the company?
Disney has four main revenue streams which are its amusement parks business, its media networks business, its consumer products business and its interactive gaming business.
h) What is the longest running film franchise at Disney?
The longest running film franchise at Disney is the Star Wars franchise which began in 1977 and continues to be one of the most popular franchises around.
i) What are the main competitors of Disney?
Disney faces a lot of competition from other companies such as Comcast (Universal Studios), Viacom (Nick Jr.), Lions Gate Entertainment (Twilight Saga) and more.
j) Is Disneyland Open in 2021?
Disneyland will be opening in 2021. It’s going to be open for a period of 6 months and the company is going to extend the park for another 6 months.
k) Can you bring food into Disney World?
For those who are planning to go to Disney World soon, you can bring food inside the premises as long as it is inside a clear plastic container.
Also, it would be good if the container is not larger than 12 inches x 12 inches x 6 inches and that there is no alcohol or glass bottle.
l) Can you use cash at Disney 2021?
For the 2021 Walt Disney World Resort, you can use cash inside the amusement parks.
m) Is there free water at Disney World?
There is free water inside the Disney world amusement parks however you have to request the water from the restaurant so they can give you free water.
n) Do I have to pay for parking at Disney?
You do not have to pay for parking when you are in Disneyland Resort. You can park for free.
o) What payment methods does Disney accept?
The Disney online store accepts different payment methods for customers to use including other online payment methods.
p) What are the opening hours of Disneyland?
Disneyland opens at 9:00 am till 10:00 pm. The last entry will be at 8:00 pm. People can enter the theme park starting from 1 hour early before the actual opening time.
m) What are the job openings at Disney?
There are many job openings at Disney including Cast Members, Transporters, Merchandisers and more.
o) How does Disney make money?
Disney has a very complicated and unique business model, making it difficult to explain in one paragraph.
They have three main products: media networks (ESPN), parks and resorts (Disney World) and studio entertainment (Pixar).
The company also owns ABC, which produces TV shows that are aired on the network as well as movies that are distributed by Disney’s film studios.
They make money through advertising revenue from their media networks like ESPN, sales of tickets for theme parks, sales of merchandise at those parks and resorts, rental income from vacation homes they own in Florida; royalties on various products sold around the world including DVDs of their films; licensing agreements with third parties who sell goods using Disney characters.