External and Internal Analysis of Disney World - Assignment Example

Disney World AFFILIATION: Table of Contents Disney World 3 Walt Disney Company 3 Walt Disney World 4 External and Internal Analysis of Disney World 5 Porter’s Five Forces Model 6 Competitor’s Rivalry Degree 6 Power of Buyers 7 Power of Supplier 7 Threats of the Substitutes 7 Threats of the new entrants 8 SWOT Analysis of Disney World 8 Conclusion 9 References 11 Disney World Walt Disney Company In the world of entertainment, Walt Disney enjoys the reputation of being the best entertainment provider to its customers. The company has resonance with numerous animated films, theme parks and resorts. It was started in 1923 with the aim of providing superb experience of entertainment that will fulfill the desire of every person who aims towards thrilling and adventurous experience in their lives (Disney, 2012). The company’s talented and extraordinary management team has strived hard to maintain the distinctive brand image that the company has in the market (Franoceur, 2004) and for that the professionals have focused on two important aspects i.e. taking advantage of the breakthrough innovations in technology and enhance and build upon the skills and knowledge set of their employees. Walt Elias Disney, who is the founder of Walt Disney Company, had a vision of creating the best innovating and globally recognized company in the field of entertainment (DIS, 2012). This is carried forward in the present situation as well. The company has diversified the business into five main segments i.e. Media networks. Studio Entertainment, Consumer Products, Interactive Media and Parks and Resorts (Disney, 2012). The foremost reason that Walt Disney Company enjoys the reputation of providing exceptional experience of magic to all its guests in all areas of operations i.e. theme parks, resorts, restaurants, retail stores etc. is the vision and mission of the company. According to Lang (2012), the vision and mission of the company can be best described as “The Company has mission of becoming the top-ranked producer and provider of information and entertainment across the globe. We strive to create differentiation by making a portfolio of brands that have the relevant content, consumer products and services that our customers are looking for and appreciate. The main aim of the company is to constantly develop innovative, profitable and creative sources of entertainment and similar products internationally”. Walt Disney World Among the most successful creations by Walt Disney Company is Walt Disney World. The theme park was founded on October 01, 1971 in Florida and it was originally called Disney World. Presently, the Disney World employs more than 157,000 employees (Disney, 2012) and there are four theme parks in the Walt Disney World alongwith eighteen holes golf courses. The names of the theme parks are Disney’s Animal Kingdom, The Magic Kingdom, Disney MGM Studios and Epcot Center. According to Barnes (2012) and Walt Disney Company (2012), Disney World of Florida has been the major contributor in the increased profits of the company and the earnings per share in second quarter has shown drastic increase by 53%. The primary reason for such increase is its aggressive marketing strategy i.e. focused expansion strategy and also ensuring that the stakeholders are satisfied with their performance as well. The theme park has reported that guests were also using the services of their hotels and restaurants as well. The main stakeholders of Disney World as identified from the company’s mission statement are the employees, customers and shareholders alongwith the suppliers and distributors. Walt Disney management ensures that the employees are given ample space so that they can make valuable contributions in the business world which will help the company in attaining a prosperous future. Hence, it is important that the company does both internal and external analysis of itself so that it can take account of all the challenges and ensure that proper monitoring mechanisms are in place (Bateman and Snell, 2009). External and Internal Analysis of Disney World The major components that make up the external environment of Disney World are the social, political, economical, environmental and technological elements. The management needs to ensure that it has effective code of ethics as well so that every employee ensures compliance with the rules and regulations of the firm. Since Walt Disney is operating globally, it needs to take into account the diversity issue; it ensures that it does not violate any of the rules and regulations of the respective countries in which it has its operations and promote environmental friendly products and services. Since technological breakthroughs happen on an ongoing basis, Walt Disney ensures that it regularly conducts market analysis so that new technologies can be successfully implemented. The market research is also done on a continuous basis so that any change in the consumer needs can be identified and if the government passes any law in relation to their business activities, then that matter is addressed simultaneously. At the core of Disney World is promotion of diversity and innovation; it ensures that it provides exceptional entertainment experience to all of its guests and for that it is always introducing something new in the market in the form of most thrilling and exciting rides. Almost all the rides are designed and developed with latest technological gadgets. However, the management of Disney World makes sure that all the products and services are done in accordance with the ethical standards and every environmental factor is taken into consideration. In order to ensure that it is able to properly handle all the external environmental challenges, it has developed a well-trained and highly skilled workforce. Each and every employee of Disney World is competent and ensures that their guests are always satisfied with their services as well. Realizing the need of showing that Disney World is aware of its responsibility as a worthy citizen, the company has started setting up Citizenship goals and performance so that it can show that it takes care of each and every stakeholder. Besides that, the management makes sure that everything is properly planned, organized and controlled. The employees of Disney World have a proactive approach and they make sure that they address the issue as soon as it arises and it should get resolved as soon as possible. The company also has adequate amount of money available for expansion as is evident from its Annual Reports that it is making good amount of profit every year. The production facilities of Disney World are extraordinary and it has a strong market presence globally. Every year, the customer base of the company gets expanded and the number of guests in Florida and California at Disney World increase by 7%; about same level of increase was seen in Disney World in Tokyo and Hong Kong. Hence, Disney World has been able to get good market share in terms of sales and profit. Porter’s Five Forces Model Disney World is concerned mostly about its competitors and that is why it needs to remain alert all the time about the happenings that are taking place in the market. The major and direct competitors of Disney World are News Corporation, Viacom, DreamWorks and Pixar. Hence, analyzing the competitive environment in the form of Porter’s Five Forces Model will help in designing the right strategy for Disney World. Competitor’s Rivalry Degree The direct competitors of Disney World which pose threat to its expansion are DreamWorks and Pixar as both of them are also trying to develop attractive theme parks and they are trying to capture the market share of Disney World so that they earn a good stream of revenue as well. The brands need to focus on making animations and it is this strategy that its competitors are using. Although Disney World is unique but DreamWorks has been successful in creating good position in animation industry and the exit barriers are very difficult as they can only leave from the market after affecting other existing products. However, Disney World is still viewed as the best and most popular animation brand. Power of Buyers The power of buyer is somewhat moderate because Disney World is operating in various markets and the brand has a strong presence. Disney World offers numerous discount and promotional offers on its tickets and other aspects so the buyers are satisfied and don’t ask for cutting the prices down. The prices are set in accordance with the buyer’s demands and that is why the revenue stream of Disney World is consistent for the past several years. Power of Supplier Disney World had developed cordial relations with its suppliers and since it does high amount of merchandising, there is a lot of different streams of revenue. For the management, switching to other suppliers will be expensive so the suppliers can increase their prices. Hence, the suppliers’ power is on the stronger side. Threats of the Substitutes Since the buyers have low differentiation between the companies, they can easily switch to DreamWorks in case of the animation studio and films. In the case of Disney World, the guests have substitutes in the form of normal theme and amusement parks. There is no substitute for the families who are looking for complete entertainment package for their kids. Hence, currently, Disney World has low threat from any kind of substitutes. Threats of the new entrants Since the cost of making a whole theme park is high, there is a minimal chance that some other company will enter this market. However, in future DreamWorks or Pixar can enter the theme park market as they are able to create their brand in the animation industry. Presently, Disney World does not need to worry about any new entrant who will enter their market. SWOT Analysis of Disney World Strengths: Strong market presence as people are aware of the Disney brand. Disney World has theme parks globally and movies are also released on a continuous basis that reinforce Disney brand. Disney World uses animated characters to attract the customers globally such as Mickey Mouse, Snow White, Cinderella, Goofy, Donald Duck, Minnie Mouse, Winnie the Pooh and etc. Disney has widened its expansion by acquiring holdings in Mirimax film studio and Pixar Animation Company which has allowed it to promote many other characters and brands. Weaknesses: Disney World has four theme parks within its resort such as Animal Kingdom, Magic Kingdom, Epcot and Disney MGM Studio. In addition, it has opened up two water parks i.e. Blizzard Beach and Typhoon Lagoon. It has expanded its traditional brands by entering into joint venture with ESPN Wide World of Sports. The Walt Disney Company incorporates various other businesses as well. Managing such a diverse range of brand portfolio sometimes become difficult for the company and it can lead to reduction in efficiency along with loss of strategic focus. Opportunities: The opportunity for Disney World is when it uses Imagineering; it is the company’s ability of combining engineering and imagining so that the imaginations can be brought to life. If Walt Disney Company will avail this opportunity, then Disney World will be able to give superb entertainment experience to its customers. Threats: The major threat is from Universal Studios that is located in Orlando as well which is thinking of opening up a theme park very soon. Disney World can lose customers to the theme parks that are being opened up across USA and worldwide. The customers can drop the idea of visiting the Disney World for entertainment and switch to these nearby theme parks in their areas. Conclusion In order to make sure that the company is able to tackle all its weaknesses and threats and capitalize on its strengths, Disney World must ensure that it has a separate management team that works on a continuous basis in conducting the external and internal analysis. This way it can be ensured that it does not have to face any problem when the need arises. Disney World has made sure that it complies with all the government regulations by making available the code of ethics alongwith the business policies so that there are no issues regarding its business operations. In order to have a good focus on its strategy, the management does quarterly reviews so that everything is properly in place and nothing gets out of order. The strategy of Disney World is simple and evident from its mission statement i.e. to provide excellent entertainment experience to the customers so that they can always cherish the memories of having a wonderful time in the theme park. The employees also do market survey on continuous basis so that the company is well-aligned with the demands and changes happening in the market. Disney World has strong virtual presence and in recent times, planning a trip to Disney World can be done with just a few clicks. References Barnes, B. (2012). ESPN and Theme Parks Drive Disney Profits. Retrieved June 6, 2012 from http://mediadecoder.blogs.nytimes.com/2012/05/08/espn-and-theme-parks-drive-disney-profits/?ref=ddisneywaltworld Bateman, T., & Snell, S. (2009). Management: Leading and Collaborating in a Competitive World. (8th edition). New York, NY: McGraw-Hill Disney (2012). Company Information. Retrieved June 6, 2012 from http://thewaltdisneycompany.com/about-disney/company-overview DIS (2012). Information about Disney World. Retrieved June 6, 2012 from http://wdwinfo.com/ Francoeur, B. (2004). Brand Image and Walt Disney: A Qualitative Analysis of “Magical Gatherings”. UW-L Journal of Undergraduate Research VII, Retrieved June 6, 2012 from http://www.uwlax.edu/urc/jur-online/PDF/2004/francoeur.pdf Lang, C. (2012). Facts on Disney World. Retrieved June 6, 2012 from http://www.ehow.com/facts_4883816_walt-disney-world.html Walt Disney Company (2012). The Walt Disney Company reports second quarter earnings. Retrieved June 6, 2012 from http://thewaltdisneycompany.com/sites/default/files/reports/q2-fy12-earnings.pdf Read More