Walt Disney SWOT Analysis - Case Study Example

Analysis (Name) (University) Walt University Executive Report Walt Disney has over the years received tremendous publicity owed to its effective management approach in its operation. Disney World and Film production, its signature strength has enabled it champion the entertainment industry. Tentatively, it owes its success to a competitive approach in the entertainment industry. This paper, therefore, explicates Walt Disney’s approach while analyzing critical organizational functions. 1.0 Company Introduction Founded by Walt Disney and Roy O, in 1923, Walt Disney had its headquarters in Burbank, CA. As such, it is a growing international entertainment and media company with five discrete segments namely; studio entertainment, interactive media, parks, and resorts, as well as customer product. The company’s board of directors include Susan Arnold, John Chen, Jack Dorsey, Robert Iger, Fred Langhmmer, Aylwin Lewis, Monica Lozano, Robert Matschullat, Sherly Sandberg and Orin Smith. The customer segments at Disney operation are majorly children. However, most children are accompanied by older individuals that guide them through various activities. Nonetheless, its experiences are governed my customer satisfaction at all functional levels. This is aimed at providing value for its clientele. Table 1: Financial Returns Source: New York Times FNY Revenue Collected 2010 $ 38, 062 million 2009 $ 36,100 million 2008 $ 37, 800 million 2007 $ 35,500 million Mission Disney seeks to be a world leader in producing entertainment and information. Hence, it uses its brand portfolio to differentiate content services and consumers’ product in developing most creative and innovative entertainment experience (The Walt Disney Company 2014). 3.0 Company Analysis 3.1 Globalization Strategy Disney has centered on increasing its international presence, since its inception. This has been realized through creating its brand presence in different markets globally. As such, it has established foundations for long-term growth in emerging markets such as India, China, Russia and Latin America. Its brand name has facilitated its penetration in new markets, compounded by increased differentiation of its products. 3.2 Competitive Advantage The entertainment industry is characterized by high risk hence; Walt Disney has extensively diversified its product and service range. In this respect, it has shifted from the production of animated films to vocational property, interactive media, and theme parks, to name a few. Tentatively, its differentiation approach enables it to offer a wide variety of heterogeneous products significantly satisfying a broad consumer demographic. Its low reproduction cost allows it to use a temporary price discrimination in which per-viewer contribution is considerably reduced (Reuters, 2011). It can charge different premiums for different products. Tickets for its parks are relatively expensive, while its business success. However, the experience in its theme parks cannot be easily duplicated by other companies. 3.3 SWOT ANALYSIS 3.3.1 Walt Disney’s Strength i. The Company has a strong and popular brand name enabling it to penetrate new and international market. Such new entrants supported by a robust research and development strategy that attunes the market needs to the company’s product. ii. It has a robust diversification with a large size of operation iii. It is globally standardized, compounded by a well-established division 3.3.2 Opportunities i. It can expand its business through further diversification ii. It con enters into new markets through international growth iii. The company has an increased media network and music channel iv. It can develop Disney school of management and training 3.3.3 Threat i. Retaining skilled employee is problematic while a competitive industry ii. A dynamic consumer preference iii. Complication of maintaining product differentiation iv. Increased concerns about content over quality 3.3.4 Weaknesses i. The business needs a high investment typified by sunk cost, R&D cost, entertainment production ii. Frequent change in top management iii. Resorts and parks are not easily accessible iv. Interactive media is highly unprofitable v. The brand name is associated with specific target – children 3.4 Mergers Evidently, Walt Disney has successfully merged with different companies. These include Tapulous, Playdom, The Disney Store Japan, Marvel, AETN (lifetime merger), Jetix Europe, Disney Online Studios and UTV. This has enabled it to increase its market share in different segments. 3.5 PESTLE Analysis 3.5.1 Political A number of laws and regulations are evidenced. Media broadcasted to children is highly restrictive on the type of advertisement strategies that can be used. Contrariwise, having limited protection laws threats the very success of the business. 3.5.2 Economic The 2008 recession resulted in the adverse impact in various industries. Entertainment is conceived as recession proof since consumers pay less for vacation, implying that they spend less time watching television and movies (Roettgers, 2008). 3.5.3 Social The present global trends tend to shift to increased environmental concerns. Customers are centered on the effects of certain services and products on the communities. Tentatively, diversification and the roles of women in the workplace have tremendously changed. 3.5.4 Technological Technological changes affect various aspects of entertainment such film production. Thus, the company is attuned towards technological improvements in various functions. 3.6 Priority Matrix Immediate Not Immediate Critical Not Critical 4.0 Human Resource 4.1 Organizational Structure Its organizational structure is designed as a strategic business unit organizational structure consisting of five different family entertainment segments (Gendron, 2014). Evidently, its organizational structure has been designed in a manner that stimulates creativity and innovation. Therefore, its organizational structure is not based on the traditional hierarchical structure (Gendron, 2014). Instead, it is based on a set of the chronological steps that ascertains that all staff positions are designed in support of each process (Gendron, 2014). All sections have equal footing, where the organizational structure can support a creative process. 4.2 Human Resource Strategic Plan 4.2.1 Succession Planning Periodically once a year, the company’s CEO meets with non-management directors in order to evaluate potential successors for the CEO position. Confidential written procedures are often documented for the purpose of future referencing in case of immediate changes. The procedures for possible succession are reviewed by the Governance and Nominating Committee and the chairman of the Board (The Walt Disney Company 2014). 4.2.2 Recruitment Strategies Weinstein asserts that the company uses multiple avenues in recruiting potential employees that include print media, advertisement and cast member referrals (Weinstein, 2008, p. 14). Once potential employees apply, the company’s recruiters select the best applicants who are posted in various sections. 4.2.3 Training and Development Strategies The company’s training process is a comprehensive strategy crafted to promote and reinforce the company’s value, history, and philosophies. In this respect, it follows a five training stage process line of business preparation, global orientation, on-the-job training and ongoing career management (Weinstein, 2008 p, 14). The objective of the training is aimed at instilling proffered management practices to the employees. Compliance training on all aspects of regulations is extensively conducted. 4.2.4 Compensation and Benefits Walt Disney is accustomed to the values of retaining competent employees. An extensive reward program is in place, where employees receive offers likened to resort guests. On the other hand, 50 different reward initiatives are in motion. “Partners in Excellence Program,” is notably one of the most prestigious reward programs (Partners in Excellence, 2014). Nominated employees are invited to a special dinner, where they meet top management executives. 4.2.5 Performance management Walt Disney’s HR department uses performance appraisals and performance surveys in measuring service quality. This approach is designed to offer employees a broader insight of his/her accomplishment from the previous years. As such, the company uses a citizenship performance summary consisting of 65 short, medium and long terms targets in showcasing performance (Disneyland Public Affairs, 2012) 5.0 External and internal factors affecting The HR department External i. Workforce Demographics The replacement of the older generation by a newer workforce implies that has to use the new approach to attracting proffered candidates. In this respect, new compensation plans have to be created in increasing its competition. ii. Labor market Conditions A central measure of an organization’s effectiveness is its propensity to compete for a high caliber human resource. Evidently, higher income tax and lower compensation are contributory aspects of “Brain Drain”. It is imperative, therefore, to value employees’ input with respect to a fair pay. Location and climate are aspects that affect a firm’s physical environment such as hosting, living costs and commuting, which can significantly help or limit a firm’s capability to attract a new workforce. The labor market is highly dynamic, unstructured and unpredictable. Organizations should, therefore, be in a constant evaluation and monitoring trends that affect supply and demand of human resource. iii. Economic Environments Economic environment has a substantial impact on business. Economic conditions influence supply and demand for services and products offered to consumers. This directly impacts the labor force by affecting the number of employees needed for the job. A healthy economy allows the hiring of a competitive workforce while reduced payments and benefits typify economic downturns. Internal Factors i. Organizational Culture Organizational culture is simply the core values, assumptions and beliefs that are shared by the members of the organization. All managers are tasked with HR responsibilities that are vital to the organizational functions. Having a positive culture influences recruitment and retention. Genuine concerns about the employees are conceptualized through training and orientation of programs, provisioning of unique packages and the promotion from within policies. ii. Organizational Climate This refers to the prevailing organizational climate. The HR department is instrumental in maintaining a positive climate within the organization. In the case, when the organization fails to adjust its climate with respect to the changing environment, difficulties are bound to occur. 6.0 Overall Analysis Viewing the company’s present context of HR practices, it is evident that the practice is somewhat effective and above the industry practices. Evidently, its training and development strategies are geared towards the development of a competent team. Managing a large number of workers is problematic, and the HR department has effectively attuned its work functions to the organization’s goal. This is witnessed by the employee’s relative strength in increasing the firm’s operational success. Employee’s management, on the other hand, showcases that all employees are given equal opportunity when assigned tasks within its operation. Employees are tasked with duties with regard to age and appearance whenever casting is done in film production. Tentatively, the employees at Walt Disney function under the Service Trade Council Union, consisting of six unions. As a global company, it operates in different countries. As such, identifying different traditions and cultures is imperative in enhancing an improved organizational setting. Conflicting cultures met the establishment of Euro Disney. The French takes great pride in culture and language, unlike Walt Disney approach that brought about emotional unrest among the people. In this respect, multifaceted approach to cultural inclusion of international markets should be adhered in a more profound way. Disney’s greatest weakness is its wages and time management approach. With a dynamic economic climate, changing wages is almost impossible. Hence, time management training should be undertaken in order to alleviates the disconnect among employees. References Bhargava, R. (2010). 7 Magical Marketing Lessons from Disney World. Retrieved from http://www.rohitbhargava.com/2013/02/7-magical-marketing-lessons-from-disney-world.html Boorstin, J. (2008). Is Entertainment Recession-Proof? Retrieved from http://www.cnbc.com/id/26295375 Disneyland Public Affairs. (2012).The Walt Disney Company Releases Citizenship Performance Summary. Retrieved from http://publicaffairs.disneyland.com/the-walt-disney-company-releases-citizenship-performance-summary/ Gendron, G. (2014). No Hierarchy Here: Walt Disney’s Wild Org Chart. Retrieved from http://www.inc.com/the-build-network/no-hierarchy-here-walt-disney-org-chart.html New York Times. (2014).Disney’s Third-Quarter Profits Soar, on Marvel’s Back. Retrieved from http://www.nytimes.com/2014/08/06/business/media/disneys-third-quarter-profits-soar-on-marvels-back.html?_r=0 Partners in Excellence. (2014). Retrieved from http://www.partnersmn.com/ Roettgers, J. (2008). Recession Scorecard: DVDs Down, Hulu & Pirate Bay Up. Retrieved from http://gigaom.com/2008/11/21/recession-scorecard-dvds-down-hulu-the-pirate-bay-up/ The Walt Disney Company. (2014). Corporate Governance Guidelines. Retrieved from http://thewaltdisneycompany.com/content/corporate-governance-guidelines Walt Disney Co (DIS) Company Profile. (2011). Business & Financial News, Breaking US & International News. retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=DIS Weinstein, M. (2008). Keys to the Kingdom, Part I: Disney Delivers Quality Training. Training , 45(7), 8.  Weinstein, M. (2008). Managing the Magic at Disney. Training , 45 (7), 14. Read More