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The Walt Disney - Case Study

Autor:   •  September 3, 2017  •  3,318 Words (14 Pages)  •  392 Views

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3. Opportunities

Firstly, the company opportunity can be built Disney theme park in some countries such as Indonesia, India or Malaysia because those countries at most top 10 highest populations in the world. For example, there are many people from southeast such as Malaysian, Singaporean and Indonesian went to HongKong or Tokyo just for holidays, so they must be planned to go to Disneyland for sure. However, people from southeast also might think that to go there must be high costs, so this is the opportunities for the company to expand their business in southeast countries. The company opportunities also can create new products such as the uniqueness of phone cover or case like Mickey Mouse cover and new innovation with new product such as kid toys with the best quality to attract more customers to buy their product that can increase the company profitability. The next opportunities for the company can build some new games in the theme park and Disney cruise line.

4. Threats

The first threat of the company is hard to produce new games against other game production competitors. For example, their target audience are only toddlers to young teenagers. However, these target audiences are not only optioned to play the games that are made by Disney for instance games such as angry bird and other new generation games like Playstation4. The second threat of the company is difficult for audience to buy their original DVD since there are other alternative such as downloading their movies online illegally and pirated DVDs. The company will then not gain a lot of profit from their film production sales due to these other alternatives. The third is localization is the biggest threat to Disney. For example, in Korea Pororo is one of the most popular cartoons in Korea especially for those children, so if the Disney company want to target Korea audience like animated films, for sure Disney will lose because is famous cartoons film in a country. Cartoons which are inclined towards the local culture are being watched more than the global Walt Disney cartoons.

4.0. PESTEL Analysis

The Walt Disney Company operates in a broad “macro-environment” that compromises six principles components:

1. Political Factors:

There are high tax policies in United Kingdom for filmmakers. It affects the business operation of The Walt Disney Company. The government’s film tax credit scheme claims back 20% of the production cost from the movies with expenditure of more than £20 millions. Since 2007 Disney has spent a total of £1.4bn on filmmaking in the UK, which includes the £240m costs of the fourth Pirates of the Caribbean, believed to be the most expensive in history (Sylt, 2014). Furthermore, Stricter Regulation regarding the product safety to the Disney Landy team parks and consumer products such as toys. The company started doing the random and independent testing for the children toys where the products produced by outsourcing manufacturers in 2007 (The Globe and Mail, 2007).

2. Economic Conditions:

Due to Global Financial Crisis, the growth of the company has fallen. U.S. gross domestic product (GDP) fell for the first time in three and a half years in the fourth quarter, declining by an annualized 0.1% in 2012 (Brown, 2013). In 2010 multiple films did both well while others fell flat and ultimately evened out profits with 1.62 billion in revenues but with a drop of 60 percent down to 49 million, this created a lower profitability than desired last year. Besides, an economic growth, per capita income and stage of economic development among different countries like UK, Russian and China need to be also considered.

3. Sociocultural Forces:

The Walt Disney Company needs to be aware of different cultures of each country. For example, The Walt Disney is facing problem for example, the penetration of in Chinese Market. The company must realize that venturing into the Chinese market means that they are moving from a modernized culture to tradition-based culture of the Asian community (Maina, 2011). In addition, Consumer behavior towards recent smartphones, tablets and applications are one of the main influences to The Walt Disney to invest in TV application for their channels. The company plays a significant role for kid’s and family’s entertainment. Parents trust Disney to deliver content, products, and experiences that are safe for children and have the best interests of kids and families at heart (The Walt Disney Company, 2015). Likewise, the changes in public and consumer tastes and preferences for entertainment and products could reduce the demand for the some entertainment productions and Disney’s consumer products. Majority of the consumers are visiting organized formats for variety, easy availability, cleanliness with additional facility of entertainment for children and convenient parking facility and restaurant etc (Gupta and Tandon, 2013).

4. Technological Factors

The company is facing the copyright issues due to technology advances. New technologies such as the convergence of computing, communication, and entertainment devices, the falling prices of devices incorporating such technologies, and increased broadband internet speed and penetration have made the unauthorized digital copying and distribution of their films and television productions (Smith, 2010). The changes in technology affect demand for entertainment products as well as the cost of production. Disney's computer animated movie “Mars Needs Mum" from last year (2011) cost about $150 million to make but only sold $40 million in tickets worldwide (Monitor, 2012).

5. Environmental Forces:

The Walt Disney has good reputation on CSR (Corporate Social Reasonability) on environmental issues. The company announced a grant of $1.5 million to TreePeople, a non-profit organization, to help reforest fire-ravaged areas in the mountains surrounding greater Los Angeles (Size and WIRE, 2008)

6. Legal and Regulatory Factors:

The company follows their Business and Ethics standards. They also do compliance training, including training regarding the Company's Standards of Business Conduct and ethics, is provided to employees. They have got rules for their own security. Security teams needs to follow the Park Security Rules to promoting a safe and secure environment for all of our guests and cast members. Moreover, all the companies who are


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