Sample Management Paper on Walt Disney Strategic plan

Overview and Objectives

Walt Disney Company is a leading organization in the entertainment industry with a brand that is recognized globally. The ability of the company to improve its brand focused on product differentiation and diversification. They acquired varied businesses that have helped the entity to attract customers, increase revenue, and remain competitive. Specifically, the company’s business segments include amusement parks, media networks, Disney studios, Disney products, and Resorts. Currently, the company is an established organization owing to its mission and vision statement since it describes the entity’s developmental roadmap. In its vision statement, the company underscores that the company seeks to be a world leader in providing and distributing entertainment.

The presence of the Walt Disney business segment globally evidence that they have achieved their vision. The organization has established a strong team that has helped it to develop films and music that attract consumer attention.  According to Walt Disney, “The mission of The Walt Disney Company is to be one of the world’s leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services, and consumer products, we seek to develop the most creative, innovative, and profitable entertainment experiences and related products in the world.” The vision and mission of the company encapsulate the organization’s strategic direction, which has helped Walt Disney to realize its objectives.

Targeting and Segmentation Strategy

The growth and expansion of Walt Disney Company is the ability to diversify its business operations. Currently, the organization operates five segments that include studio entertainment, media networks, interactive media, consumer products, and amusement parks and resorts. The media network of the company includes cable, broadcast, and radio, as well as digital and publishing businesses. The studios comprise of Marvel Studios, Disneynature, Touchstone Pictures, and Lucasfilm. The consumer product segments produce and deliver apparel, toys, and books (Johnson, 2015).  The business segment operates interactive media that develops entertainment such as games. Also, the resorts and parks include vacation locations in Europe, North America, and Asia with 44 resorts and 11 theme parks. Besides, the Disney Cruise Line Ships that offers adventure and vacation packages for families across the globe (Pace, 2017). Arguably, the decision to diversify is an integral strategy that the company adopted to increase profitability and spread risks. The future operations of the company will rely on its ability to merge and acquire businesses that focus on technology to supports its operations. Acquiring operations of Airbnb, TripAdvisor, or luxury retreats will be integral in increasing the revenue and competitiveness (Köhler, 2013). The approach is integral since online business is less costly to manage and have a wider audience. Besides, the company should venture into e-commerce to increase market penetration. The streaming services industry is growing and a potential revenue source for the Walt Disney Company.

External Environment

Amusement Park Industry

The amusement park industry is a growing business under the tourism and travel subcategory with a huge presence in the US. The largest company in the industry includes the SeaWorld Parks and Entertainment, Walt Disney Parks and Resorts, and Cedar Fair Entertainment Company (Merchant, 2014). These companies focus on a niche market to increase their competitive and comparative advantage. Providing special rides for the consumer offer the amusement park companies with better returns. As the industry grows, Walt Disney Company should focus on emerging markets to increase its performance. A market such as Africa has a huge population of younger people, which offers the company an opportunity to expand its operation and edge competition. The main source of revenue in the industry includes fees and advertising for hosting events, commission income from exhibitors, parking fees, sale of merchandise and food, and admission fees (Storr et al., 2012). The company should embrace social media marketing to increase its brand awareness and recognition in emerging markets.

General Environment

The micro and macro environment offer insights on the ability of Walt Disney’s ability to expand its operation and retain competitiveness. The analysis highlights the challenges and opportunities that the company should leverage to sustain its operations. Notably, the microenvironment affects the business of the company directly, which includes the bargaining power of suppliers, buyers, substitutes, the entrance of new players, and rivalry within the industry as espoused by Porte’s five forces.

Micro-Environment

Porter’s Five Forces

The bargaining power of buyers is high for the Walt Disney Company since there are low switching costs. When consumers are dissatisfied with services, admission fees, and attractions, they can easily find alternative sources of entertainment. Therefore, it is integral for the company to focus on delivering high-quality services to its customers. Customer experience, satisfaction, and superior value are an integral component of the company strategy (Ouma & Oloko, 2015). As well, product differentiation and low-cost leadership will help the business to attract and retain customers. Walt Disney should develop mobile applications for its marketing and communication as it will enable personalized messages to customers.

The bargaining power of suppliers is low since the companies constructing rides focus on providing their services for huge theme park firms such as Walt Disney. The approach makes the bargaining power of suppliers to be lower and insignificant. Besides, the company has qualified and experienced engineers who construct the rides and rollercoaster (Pace, 2017). The approach makes it easy to develop products that meet consumer needs at lower costs. To retain competent workers, the company should focus on providing better packages and benefits. As well, a company that provides beverages and food for the amusement parks is partners in the company’s other businesses. Disney Company should focus on training its engineer and produce their food to reduce the bargaining power of suppliers.

The threat of new entrants is low owing to the huge capital outlay required to start an amusement park. Although the amusement park can offer huge returns for investment owing to economies of scale in advertising and operations, market entry is challenging for businesses with low capital capacity. To increase the barriers for entry, Disney Company should focus on differentiation in brand recognition and image. The approach increases customer loyalty and brand equity, which is challenging to overcome for new entrants.

The threat of substitutes is high in the amusement industry since there are varied entertainment activities for families. For instance, families can visit zoos, hiking, museum, vacation abroad, or cinemas. The Walt Disney Company should focus on creating unique experiences for customers, which they will not access when they visit its indirect competitors. The company is well-positioned since it has diversified business offering such as resorts globally, which makes it easy for the customer to switch from amusement parks to vacations abroad. The company should endeavor to make pricing affordable for its customers and enhance the quality of services to attract and retain customers.

The rivalry within the amusement industry is high owing to low switching costs. The companies in the industry such as Six Flags, Universal Studios, and SeaWorld have financial muscles that enable them to extensively market their business. Therefore, Disney should focus on marketing communication to attract customers. They should focus on communicating the emotional benefits and point-of-difference to maintain a strong brand reputation and image.

Macro-environment

PESTEL Analysis

The political and legal environment affects the operations of Walt Disney since it relies on a stable and peaceful business climate. The operations of the company in China are affected by the trade war with the US.  Besides, the Chinese market is controlled heavily by the government; thus, the company should understand the market well before expanding its operation. Entering the Chinese market will require Walt Disney to embrace licensing and mergers. The company should endeavor to set operations where the American government has good relations with the host country since laws such as tax affect its competitiveness.

The economic health of a country or region is a critical determinant in the tourism industry. The consumer disposable income dictates the ability of a business to thrive (Johnson, 2015). Besides, the saving rates, inflation rates, and purchasing power influence the ability of the customer to consume services and products provided by Walt Disney Company. The company should set up operations in the market with high consumer spending and confidence levels, as well as employment rates.

Social-cultural factors play an integral role in ensuring the success of a business since it determines the consumer’s lifestyles. Companies such as Netflix are creating lifestyles where consumers watch movies and film at home rather than go to cinemas or amusement parks, hence it is integral for Disney to market itself as an ideal entertainment venue for families. The company should focus on using social media platforms to communicate, interact, and develop a strong relationship with its customers. Tracking consumer reviews and controlling the buzz is integral for the company to understand customer needs and preferences.

The amusement parks should adopt new technology to remain relevant in the competitive business environment.  The tool is integral in attracting customers, collecting data, and enhancing interactions. The use of artificial intelligence, big data analytics, apps, and digital displays is integral in enhancing marketing and understanding consumer preferences. The tools enhance effective communication as it enables customer targeting using customized messaging.

The environment is an integral component that determines the success of a business. Arguably, consumers support environmentally-friendly businesses, hence Walt Disney should adopt the use of green energy and a clean environment to attract customers. Using recyclable materials for packaging is integral in encouraging environmental preservation. Besides, the company should be aware of the influence of the environmental factors in promoting the operations of amusement parks (Köhler, 2013). The incidences such as rain, excessive heat, tsunamis, hurricanes, and earthquakes influence whether the parks can be opened, hence the need for Walt Disney to develop seasonal activities in areas affected by natural calamities.  Innovation is integral in promoting a clean environment.

Internal Situation

Core Competencies

            The core competencies of Walt Disney include its acquisition, management, innovation, and services that it provides to customers. The ability of the company to acquire successful businesses such as Lucasfilm, Marvel Studios, and Pixar has helped in bringing the entity new content (Storr et al., 2012). The loyal workers and executive teams have helped to strengthen the relationship with consumers and suppliers. The workers are highly trained and competent, which enables the organization to offer quality services. Besides, the unique amusement parks are attractive to customers. The ability of the company to use technology such as animation offers the company an edge over its competitors.

Brand Reputation and Loyalty

The brand reputation is an integral resource that Walt Disney enjoys since it is considered a good corporate citizen with its brands known globally. Brand recognition and awareness help the company to attract customers and partners. In essence, the brand reputation has helped the organization to attract and retain loyal customers (Merchant, 2014). The good customer experience is a rare advantage that Walt Disney enjoys as it helps to pull the crowd to events at its amusement parks.    Customer-Value Proposition

The Disney rides are integral strength that offers immense customer experience. The strong team made of experienced and experts have developed creative rides that increase customer satisfaction. Besides, the company offers consumers with fresh content and exceptional innovation that enhances market stability.  The ability to integrate technology into its services will help drive sales and customer satisfaction.

SWOT Analysis

Strength

A strong brand name gives Walt Disney a competitive advantage as its products and services are known to consumers. The ability to easily recognize the brand globally helps to increase its sales as consumers can trust then products. The company offer products as family-oriented and decent business suitable for all customers. The approach helps to increase customer expectations. Besides, the growth of the brand portfolio such as amusement parks, movies, and merchandise attracts consumers to make purchases (Pace, 2017). The ability to offer a variety of products and services is integral in attracting customers. The approach enhances customer loyalty and brand equity. Besides, the organization structure of the company enables cooperation between its business segments, which is beneficial as it promotes a competitive advantage. The aggressive growth of Walt Disney is dependent on its brand name, growth of product offering, and cooperation between its business segments.

Weaknesses

Limited innovation affects the ability of Walt Disney to edge competitors as it continually uses a similar theme. The use of technology is mostly reactive to the market rather than setting the pace for other players. The lack of emphasis on creativity and new technology can dent the ability of Walt Disney to attract new and retain loyal customers (Ouma & Oloko, 2015). The diversification approach by the company is incapable of enhancing synergy since they are unrelated. Changes in management approach and core strategies are integral in enhancing competitiveness. The company should focus on diversifying its operation on related business segments and adopting the technology.

Opportunities

The advancement of technology offers Walt Disney immense growth opportunities. The use of artificial intelligence and big data analytics besides the use of mobile applications to market business is integral for the company. The approach will enhance its ability to customize communication, understand customer preferences, and develop products that suit consumer needs (Merchant, 2014). As well, there is a growth of developing markets such as Asia and Africa, which offers the company expansion opportunity. Walt Disney should take advantage of the emerging market and establish its presence to take advantage of early market entry besides adopting new technology.

Threats

The increased competition from entertainment and mass media companies creates the need for Walt Disney to embrace innovation, technology, and creativity to develop unique and differentiated products. Technological disruptions affect the ability of the company to expand and compete fairly (Köhler, 2013). As well, digital content piracy is an issue that threatens the profitability and performance of the company. In markets with a weak legal system to protect digital piracy, the company will lose revenue. Arguably, the performance of Walt Disney Company is affected by increased competition, technological disruption, and piracy.

The areas of concern for the company is increasing market penetration, diversifying the business to increase product scope, low-cost leadership, and increase brand image. Brand image is integral in helping the company to attract and retain loyal customers. Therefore, the company should focus on marketing and communication to help consumers understand its products and services (Johnson, 2015). Also, diversification is an integral approach that the company can increase its competitiveness and edge rivals as it helps to spread risks and encourage cooperation between its business segments. Develop low-cost pricing models is integral in enabling the company to remain competitive. Therefore, the organization should embrace using technology to reduce operational costs, increase customer experience, and satisfaction.

Digital TV and Internet-Based Business Models

The changing consumer preferences and technological advancement are integral factors that the Walt Disney Company should focus on to drive growth. The consumer preferences for digital TV and internet-based services highlight the need for the organization to change its strategies. The approach that the company should embrace should focus on driving demand for its products and services (Ouma & Oloko, 2015). In essence, the ability of the company to adopt new technology and adapt to changing consumer patterns is integral in surviving the competitive market. Digital TV and Internet-Based Business Models is integral as it will help the company to reduce operational cost and increase consumption of its products and services.

International Diversification Strategies

Resource alignment and product relatedness between distribution and content are integral for Walt Disney to increase performance. The ability of the company to enhance cooperation between its business segments is integral in enhancing growth and development. The varied business segments help each other to distribute content as they share resources. As well, geographical distribution is critical in enabling the company to reach consumers that are underserved with amusement parks and family entertainment.

Conclusion and Recommendation

Walt Disney is an established company in the entertainment industry as it has diversified its operations globally. The strategy of the company in spreading risks and innovation has helped it to remain competitive. The strong internal resources such as employees, financial muscles, and technology give it a competitive advantage. For future growth, the company should focus on underserved markets such as Africa and Asia as their economies are developing. Besides, the adoption of technology such as mobile applications, big data analytics, and artificial intelligence in its operations is integral in enhancing productivity. The increased competition calls for innovation and creativity to ensure products are differentiated from competitors. As well, the organization should focus on merging and acquiring businesses such as Airbnb to increase their performance.

References

Johnson, R. (2015). A strategy for service—Disney style. Journal of Business Strategy, 12(5), 38-43.

Köhler, I. (2013). Strategic marketing analysis of Walt Disney’s Parks and Resorts. GRIN Verlag: Munich

Merchant, H. (2014). Configurations of governance structure, generic strategy, and firm size. Global Strategy Journal4(4), 292-309.

Ouma, G., & Oloko, M. (2015). The relationship between Porter’s generic strategies and competitive advantage. International Journal of Economics, Commerce and Management, III6, 1058-1092.

Pace, S. (2017). Shaping corporate brands: From product features to corporate mission. International Studies of Management & Organization, 47(2), 197-205.

Storr, J., Loveday, H., Kilpatrick, C., Curran, E., & Cooper, T. (2012). Disney, engagement, action: the Infection Prevention Society’s strategy from development to launch. Journal of Infection Prevention, 13(1), 4-10.